Ken Connor must have been channeling Jim Wallis when he wrote his article, "But Regulation IS a Good Thing" (http://townhall.com/columnists/KenConnor/2008/11/23/but_regulation_is_a_good_thing).  It must be that any time a person purports to be about social justice, their head goes mooshey.  The errors in Connor's article are so numerous, one is challenged as to where to start. First, I'll comment that the truly free market is the BEST restraint for greed -- in essence its own regulator. No one can make an ongoing living cheating anyone, Hollywood's characterizations notwithstanding, unless they have government assistance. The trend-line of success in a free market is greater and greater value at smaller and smaller prices, over the long-haul. Even the current crisis has a relatively short time horizon, and the issue is the GOVERNMENT as both instigator and sustainer of bad behavior. At every turn, we see injustice initiated and abetted by the very government Mr. Connor imagines we now need to provide justice. The litany of Biblical principles of justice violated is pretty extensive, beginning with the distortions caused by loose Fed policy (violating the biblical principle of just weights and measures - money became cheaper through Fed manipulation, causing miscalculation and malinvestment), which had massive amounts of loanable funds chasing a progressively poorer quality of borrower. The average person, and even most businessmen, have no idea how interest rates get lowered, but it occurs when the Fed injects money onto the balance sheets of member banks who can loan it to customers or to other banks.  These "Open Market Transactions," as they are called, involve the Fed purchasing government bonds that are part of the reserves of the member banks.  The purchases are funded by nothing except the Fed's authority to manage the currency.  In other words, the Fed "prints" the money to make the purchases withour actually printing physical bills -- it's all a paper transaction, but all too real nonetheless.  This increased supply of loanable money reduces the "cost" of loans -- the interest rate (an increase in supply of anything means it will cost less).  The banks, by law, can lend 10 times the amount of their cash reserves.  By the time they loan to each other, as they do, the money supply can grow (again, out of thin air) by 10,000 times.  Stay with me on this --- it really isn't too complicated.  What do banks do "for a living"?  They make money by loaning money.  So let's say that a bank manager who believes what the Fed has done is unwise decides to "stay on the sidelines" -- not to go hog-wild lending money.  His investors will not normally allow him to do so -- if he doesn't lend it, somebody else will.  He should at least lend it to other banks.  The investors, who also don't realize the government is setting up a house of cards, want in on the action.  So what the government does concerning money will always play out in the economy (see Hunter Lewis' concise, excellent book: How Much Money Does an Economy Need for a more complete treatment).  Because of this "behind the curtain" manipulation by government regulators (for the primary charge of the Fed is to regulate the quantity of money), it is rather difficult to blame the "average joe" for greed in failing to realize the reason that his credit terms were so good, not to mention why his house value was seemingly inexorably rising (particularly when Joe got his economic education, if any, through a government school). And speaking of rising house prices, that distortion was also aided by government tax policy which favored real estate over other asset classes. Where else in the economy was a gain of $500K tax-free (violating a second Biblical principle: favor neither the rich - in this case home owners- or the poor)?

Regarding "favoring the poor", the Community Reinvestment Act did so by mandating the lowering of borrowing standards, ably assisted by the GOVERNMENTALLY SPONSORED ENTERPRISES, Fannie and Freddie. This further fueled lending across the economic spectrum as the financial system recognized the imprimatur of government backing, and hence the supposed safety, of the loans purchased by the GSEs.  Home building grew out of all proportion to what would have been demanded in the absence of these signals.  Again, the average person was blissfully unaware that their seemingly prudent decisions were being made within a willfully distorted environment.