Because the “too big to fail” policy of the U.S. Government is a shelter for banks to take risks with massive amounts of money, crises like 2008 become a self-fulfilling prophecy.

 

Rashad Abdel-Khalik, Professor of Accounting at the University of Illinois, reaffirmed this in his comments that the causes of financial crises are self-reinforcing. Bankers make profits. They don’t care where the profits come from. Mortgage loans are packaged in many complex instruments that even the regulators and compliance officers don’t fully understand. Bankers package these mortgages into financial instruments called “derivatives”. These complex instruments can be securitized multiple times but there isn’t always an adequate counterparty with collateral to offset risk. An example of this would be naked derivatives. In short, our nation’s top four banks are making substantial profits from trading derivatives. Over 90% of all derivatives activities are concentrated in just four banks, J.P. Morgan Chase Bank NA, Goldman Sachs, Citibank NA and Bank of America NA.  This is how banks grew so large.

 

Closing out the forum were panelists Michael Winston, famed as the Countrywide Whistleblower; Richard Ebeling, BB&T Distinguished Professor of Ethics and Free Enterprise; the Citadel; and Marianne Jennings, Professor Emeritus of Legal and Ethical Studies, of Arizona State University. They gave the following reasons for the high probability of a repeat of the financial crisis of 2008:

 

• The “too big to fail” philosophy of our federal government began when the Federal Deposit Insurance Corporation intervened on behalf of the Continental Illinois National Bank and Trust Company. Too big to fail is rooted in our financial system. The problem with this is that failure is critical to capitalism. Taking the pain out of capitalism is like taking sin out of religion.

• Banks trading securities like derivatives are supported by government favors. This is all a part of today’s entitlement culture.

• Politicians in Washington are bought and paid for by banks. Virtually all the lenders that were offering predatory loans in 2008 are back in business offering predatory loans today.

• There is no restriction on the Fed and the Fed puts no restriction on manipulating the money supply, interest rates, or the housing market.

 

A final reason why there is a likely chance to repeat the financial crisis of 2008 is the history of the U.S. government and others to make no serious changes without a crisis.

 

From a theological perspective, Christianity explains that catastrophic events like the financial crisis of 2008 and the Orlando massacre at the Pulse nightclub are the consequence of a world subject to evil.

 

The Bible tells us there is one God and He is good. He created and sustains the universe and is accessible for a relationship with his creatures through the sacrifice of His Son Jesus Christ. He supernaturally intervenes wherever and whenever He chooses. So, why is there evil?  For starters, God created mankind good in his image. He created mankind with a free will, which is also a good quality. God does not destroy all evil in this world as He would have to destroy all freedom.  Unfortunately, mankind used the good quality of free will to rebel against his Creator. This decision led to the corruption of all humankind as noted by the Apostle Paul, “Therefore, just as sin entered the world through one man, and death through sin, and in this way death came to all people, because all sinned . . .” (Rom 5:12 NIV).

 

Many theologians such as Augustine, Thomas Aquinas, C.S. Lewis and Norman Geisler have pointed out that evil is not a substance itself. Evil is the corruption of a good substance like disease on a plant or pollution in a river. Evil exists as a corruption of a good thing.  When the first man made a free choice against God’s command, man’s nature was corrupted. But, the Bible teaches that one day all evil will be defeated without vanquishing free choice. This is what Christianity calls the “blessed hope” which is the second coming of Jesus Christ. He will eradicate suffering, pain, sorrow, misfortune and death forever. He will ultimately renew this earth without the presence of evil. In the meantime, humanity makes great progress through science and technology and is good in many other disciplines such as economics, the arts and humanities. But, evil lurks within all of mankind intensifying the impact of catastrophic events.