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Greed raises its ugly head when individuals and groups (such as corporations or retirement funds) seek an unrealistic gain at the expense of others and then use illegitimate means to gain what they want. Given the nature of this fallen world and the reality of human sinfulness, we should expect that greed will be a constant temptation. Greed will entice the rich to oppress the poor, partners in transactions to lie to one another, and investors to take irrational risks. All of these are evident in this current crisis.

Christians should think seriously about this economic crisis and ponder what it would mean to come to a Christian understanding of what it means to be participants in this economy. As Adam Smith recognized, the economy is a moral reality. Human beings actualize their moral selves in making economic choices and through participation in the economic system — and we are all participants.

Indeed, one of the defining differences between the current crisis and the crisis of the 1920s and 1930s is that the vast majority of Americans are now, in effect, investors. Our retirement accounts are, by and large, mingled with the investments of the titans of industry. Through their pension funds, school teachers are investors right alongside Warren Buffet. This was not the case in the run-up to the Great Depression. We all want and need the stock market to do well, and the outcome of any market crisis effects both Bill Gates and the worker in the local medical clinic.

Christians should look at the economy as a test of our values. The Bible values honest labor and dedicated workers, and so should we. The Bible warns against dishonest business practices, and we must be watchful. False valuations are, in effect, lies. Dishonest accounting practices are just sophisticated forms of lying. Insider information is a form of theft.

The Bible honors investment and thrift, and Christians must be wary of the impulse for short-term gains and pressure for instant profit. Over the long-haul, the entire economy must prosper if the vast majority are to do well and realize a responsible gain.

Thus, the current crisis sheds light on what happens when things get out of control, when various pressures distort the proper operation of the markets, and when irrational valuations entice investors to make poor investments. Dishonesty enters the picture at many levels, and the individual investor is too often left in the dark.

When these things happen the economy is threatened by a lack of trust, and trust is the most essential commodity of all when it comes to economic transactions. Without trust, the entire system collapses.

The big debate in Washington is over the extent of government intervention. Prudence would indicate that the less government intervention, the better. Adam Smith was confident that a "hidden hand" within the economy would rectify excesses and punish bad actors. I think he is basically right, but the government is, like it or not, one of the actors in this economic system.

The problem with letting the markets solve this problem and letting the "hidden hand" punish the bad actors and unwise decisions is that, in this situation, the small investor is crushed along with the tycoon. Furthermore, the entire economy could face a crisis of confidence.

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September (Web-only) 2008, Vol. 52