You haven't actually made any cogent argument, just a strangely emotional, mocking, cynical, and hand-wavy remark that doesn't address anything (you also say "we've dealt with" as if you personally lived through it).
Yes, there actually is a distinction between ecclesiastical authority and secular authority. The same person can hold both secular and ecclesiastical offices. The Church - the institution - wasn't deciding policy in the Papal States, and it is not deciding it in the Holy See today. It is simply nonsensical to claim that.
Of course, the Church does maintain that all states must conform their laws (ius civile/lex) to the natural and divine law, but that's a general moral claim. I think most sane people would reject positivist conceptions of law as crazy and tyrannical, and would agree that the civil law should be a determination of general moral principles according to particular circumstances within a jurisdiction, and not arbitrary. Policy thus properly belongs to the state which is guardian of the particular common good of its jurisdiction. So, yeah, I would expect someone holding both offices to enact policies that coherently agree with the teaching he is transmitting through his ecclesiastical office. But as I said, the Church already expects all secular authority to conform prudently to the natural law at the very least, and the fullness of the Church's teachings if they are a Catholic confessional state.
But more to the point, it is irrelevant, because even if the Church had been directly deciding policy in the Papal States, it wouldn't follow that the Church has the authority to enact policy just anywhere. Its authority rests above it, like a referee.