10/20/2008 05:12 am ET Updated Nov 17, 2011

Religion, Greed & Wall Street

The one thing everyone from Jim Wallis to John McCain seem to agree on is that rampant greed is a main cause of the financial collapse.

I don't buy it. I'm not saying greed is good, just that greed is. It's a constant. It's part of human character and I find no evidence that the intensity of this basic human instinct suddenly increased in the last ten years.

What's changed is that the checks on greed have dissipated.

Yes, that partly means government regulation. One of the things that pure free marketers rarely understand is that government regulation enables capitalists to be whole-heartedly greedy. If the regulators are watching, business people can push the envelope to make more money - and that often is a source of great economic creativity. I don't want a system in which we're relying on the internal ethical code of investment bank presidents to balance growth with national interest. The government should say: you go ahead and be greedy. We'll make sure that your greed helps, not hurts, the rest of us.

More important, this crisis results from a failure of memory. On my office wall, I have some cover stories I wrote for Newsweek in 1990: one called "Bonfire of the S&Ls" and the other called "The Real Estate Bust." The lessons: a) insufficient regulation allowed bad loans b) problems in the housing and financial markets feed each other and c) economic models that assume that prices will always go up, well, don't work. Sound familiar?

And it's not just big-shots who choose to forget: everyone who took out a sub-prime mortgage was making a bet that real estate and their incomes would keep appreciating.

Which brings me to religion. When I asked Dilshad Ali, one of Beliefnet's editors who is Muslim, how her faith affects her finances, she said that because of Islam"s strong cautions against debt and usury, "we try so hard to pay credit cards on time, not take loans, etc -- it's a challenge, but it also keeps us financially stable and on our toes."

But isn't Dilshad the exception? Historically, all of the faiths have warned against greed. Greed was not only listed as one of the seven deadly sins, it's often thought of the mother of all of the others. But combating greed is hardly a focus of American spirituality these days. You have The Secret, whose message that if you visualize that house you can get it (never mind whether you should get it.) Prosperity Gospel ministers teach that if you're rich, it's because God is favoring you. At a minimum, pastors are focused on other things. Do a search at for sermons about sex you'll get 252 results. On greed? 37 results.

Greed is not worse than ever. The problem is that we've surrendered our best anti-greed weapons.