Religion & Ethics Newsweekly Anchor Bob Abernethy interviewed Rev. Jim Wallis from Sojourners and Father Jim Martin from America Magazine about the current crisis and the religion response.
Read an excerpt below:
BOB ABERNETHY: Now, the financial crisis and proposals to solve it. What do religious voices have to say?
What are the religious principles that all of us should bear in mind as we try to evaluate the different proposals for getting out of this crisis?
Father JIM MARTIN (Editor, America Magazine): Well, I'd like to go from the general to the specific. You can start with the Jewish and Christian principles of caring for the poor, which is very important in both the Old and the New Testaments. Jesus speaks about that very forcefully. More specifically, the Catholic tradition in their social teaching documents talk about solidarity with one another and the common good. It's not just every man in it for himself, or every woman. You know, we Jesuits talk about not making decisions in a time when you're freaking out. So there's a sort of discernment that's needed. And then, finally, I think that the role of conscience needs to play in this. There's a reason why people feel uncomfortable with so many people making money and with the bailout possibly helping only the wealthy, and I think the reason people feel that sort of uncomfortable feeling is conscience. I mean, it's telling us that something's wrong when only the wealthy benefits, so I think those are some of the principles.
ABERNETHY: But, Jim Wallis, whatever we do has to be something that, first of all, is practical, perhaps. Does it work? Does it work for the whole economy, and does it also work for the very poor?
Reverend JIM WALLIS (Editor-in-Chief and CEO, Sojourners Magazine): Well, I'm an evangelical convert to Catholic social teachings, so I'm going to agree with Jim about all this. You know, this crisis is structural and spiritual both, and this has come about because private gain, greed, has prevailed over the common good. We've lost sight of what the common good is, and it's true, there's a conversation going on about rewarding the people who are indeed most responsible for the crisis.
ABERNETHY: And lots of people are very angry about that.
Rev. WALLIS: And they should be. I think God's angry at that. Someone suggested the other day, I thought it was a good idea, the CEOs should be paraded down Wall Street in sack cloth and ashes. I think that's true. So rewarding them while you leave people in my hometown of Detroit -- my brother has a $130,000 mortgage; his house is worth $60,000 now, so this is wrong. So the principle is common good and justice. But also I would say this is a moment, a teachable moment to talk about habits, practices, assumptions about greed that we've lost conversation about for a long time.
Read the rest of this article here:
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Well, they were somewhat right but mostly wrong in there assessments. The research coming in on this whole problem seems to point at the actions of Fannie and Freddie making 50% of their portfolios sub-prime paper. Financial institutions were forced by 1990's government regulators to change qualification standards and make very risky loans. These sub-prime loans were bought up by Fannie and Freddie, securitized and resold on the equity markets. Implicitly, these same regulators said that this Fannie and Freddie paper would be guaranteed by the government, so a win win right?
Way wrong answer. Fannie and Freddie were cooking the books in the late 90's and early 2000's. This is where the greed comes in. Lot's of bonuses were given based on inflated asset values. This is the reason Wallis' brother got a loan for 130,000 on the 60,000 house! No right minded banker would ever make that loan! These houses were artificially inflated by Freddie and Fannie irregularities. The government forced this on America and concentrating more power in the hands of the enablers seems oppressive.
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