The financial crisis and morality

Every issue has a moral component. Besides all the suffering the economic crisis is rendering, what’s the deeper lesson?

Look at Dante’s Divine Comedy, as First Things does.

Being a banking law professor, I couldn’t help but speculate about which circle of hell Dante would have found most appropriate for the various actors in the meltdown. Some clearly belonged with greedy “hoarders and spendthrifts” in the fourth circle: banks lending to borrowers with incomes insufficient to support repayment; investment bankers reaping profits on derivatives they did not understand; politicians burying their heads in the sand for the sake of substantial political contributions from the financial services sector; and homeowners buying homes they could not afford. Others clearly belonged in the eighth circle with the “perpetrators of fraud”: predatory lenders engaging in outright deception or exploiting vulnerabilities generated by need or lack of access to legitimate banking sources. But in this era of unrestricted interest rates, would anyone be condemned to the seventh circle where Dante placed the “usurers,” as perpetrators of violence against God and nature?

Good questions.

Understanding the different types of behavior that got us to this point is crucial to crafting an intelligent plan for digging us out of this hole and preventing us from falling back into it in the future. Can appropriate limits to greed be legislated without compromising the vitality of our markets?

At core, this is about morality in our exchanges, business or otherwise. An article like this can be cumbersome for most of us looking for quick reads, especially if we don’t understand the world of banking and finance and lending laws. But it has good and important references to the principle of subsidiarity. That’s key to a rightly ordered society.

It’s sort of the basis for community organizing.