Infectious Greed

I wrote earlier about Alan Greenspan and his libertarian trust in unregulated financial markets to do the right thing. It seems as though Mr. Greenspan has changed his mind. He was called to testify before the House Oversight Committee on Thursday, October 23.

Listen to Mr. Greenspan's new "enlightened" views:

• He described the current financial crisis as a "once-in-a-century credit tsunami" and acknowledged that the crisis has exposed flaws in his thinking and in the workings of the free-market system.
• He told the House Oversight Committee that his belief that banks would be more prudent in their lending practices because of the need to protect their stockholders had been proven wrong by the current crisis. He called this a "mistake" in his views and said he had been shocked by that.
• He said he had made a "mistake" in believing that banks in operating in their self-interest would be sufficient to protect their shareholders and the equity in their institutions.
• He called this "a flaw in the model that I perceived is the critical functioning structure that defines how the world works."

Mr. Greenspan shouldn't have been shocked. In 2002 he appeared before Senate and had this to say:

"Why did corporate governance checks and balances that served us reasonably well in the past break down? At root was the rapid enlargement of stock market capitalizations in the latter part of the 1990s that arguably engendered an outsized increase in opportunities for avarice. An infectious greed seemed to grip much of our business community."

"The trouble, unfortunately, is that the shock of what has happened will keep malfeasance down for a while. But human nature being what it is -- and memories fade -- it will be back. And it is important that at that time appropriate legislation be in place to inhibit activities that we would perceive to be inappropriate."

"It is not that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown so enormously.''

The human condition hasn't changed through the centuries. Greed, if left unchecked, consumes everything around it. It's never satisfied.

This is why Jesus told His followers in Luke 12:15:
"Watch out! Be on your guard against all kinds of greed; a man's life does not consist in the abundance of his possessions."

The only solution is a transformed heart. Greed and selfish interest can be changed to generosity, gratitude and humility by the power of Jesus Christ. He is able to deliver us from ourselves. The human heart is capable of all kinds of evil. External legislation and laws are needed to create moral boundaries for protection, accountability and stability.

We shouldn't be "shocked" that given the chance, individuals and corporations pursue profit-taking. We shouldn't be shocked when we seek corporate executives on lavish vacations even as they seek government bailouts. We shouldn't be shocked that banks and credit institutions sold sub-prime mortgages in order to turn short-term profits. We shouldn't be shocked to learn that in 2005, for the first time since the Great Depression, personal savings rates were in the red for an entire year! You see, we have met the enemy and he is us!

As Jesus instructed us, we need to "watch out" for all kind of greed. We need to "be on our guard" for infectious greed!