What is the basis of God's Goodness/Righteousness?

Christian theologians have been divided on the issue of balancing God's sovereignty and man's freedom. If we construct a strict sovereignty then we fall in the danger of determinism and fatalism, that inevitably raises the question on God's moral nature and his sincerity. If we overemphasis on man's freedom then we might diminish God's sovereignty. The Reformed and Calvinistic theology has often been accused as determinism which makes man into puppets in the hands of God. The other prominent branch is "Molinism" after the name of a Spanish Jesuit of the Counter-Reformation Luis Molina (1535-1600) which is considered to be the root of "Arminianism" after the name of Dutch theologian Jacobus Arminius (1560–1609). Here is an excerpt by Dr. Craig's article from ReasonableFaith:

Everyone acknowledges that we have at least the illusion of free will. I take it that my sense of freely choosing is not mere appearance only, since if it were, nothing I think or do is of any significance whatsoever. Even the decision to believe in determinism would be meaningless, no more significant than having a toothache. Since freedom of the will is a necessary condition of the meaningfulness of my life, I may as well assume that I do have it. After all, if I do not have free will and my life is meaningless, who cares?

So I think that determinism is incompatible with free will, but that determinism has not been demonstrated to be true. So what does it mean to have free will? Some thinkers have said that it is the ability in causally identical situations to choose either A or not-A. It seems to me, however, that this so-called Principle of Alternative Possibilities is not a necessary condition of willing freely. I’m persuaded by illustrations like that given by Harry Frankfurt to show that freedom does not require the ability to choose other than as one does. Imagine a man whose brain has been secretly implanted with electrodes by a mad scientist. The scientist, being an Obama supporter, decides that he will activate the electrodes to make the man vote for Obama if the man goes into the polling booth to vote for Romney. On the other hand, if the man chooses to vote for Obama, then the scientist will not activate the electrodes. Suppose, then, the man goes into the polling booth and presses the button to vote for Obama. In such a case it seems that the man freely votes for Obama. Yet it was not within his power to do anything different!

Such thought experiments have been criticized on the grounds that no one could know what the man was going to do before he actually attempted to do so; hence, his free decision must be aborted by the activation of the electrodes. But while this objection seems cogent against human examples of prevention or intervention, it occurs to me that if God has middle knowledge and so knows what a person would freely do in any set of circumstances God might place him in, then the objection has no force. Suppose, for example, that had God known that Pontius Pilate would not send Jesus to the cross, He would not have placed Pilate in such circumstances. In that case, Pilate did not under the circumstances have the ability to let Jesus go. Yet he freely sent Jesus to the cross, since nothing determined him to do so.

This suggests that what is critical to free will is not the ability to choose differently in identical circumstances but rather not being caused to do something by causes other than oneself. It is up to me how I choose, and nothing determines my choice. Sometimes philosophers call this agent causation. The agent himself is the cause of his actions. His decisions are differentiated from random events by being done by the agent himself for reasons the agent has in mind.

This understanding of free will has relevance to the case of God Himself. Jesus, being divine, was impeccable (could not sin). Therefore, there was no possibility of his yielding to Satan’s temptations in the wilderness. Yet he resisted sin freely because nothing external to him determined his choices. Like the man with the electrodes implanted in his brain, Jesus could not have chosen to sin, but he freely resisted sin. Again, God cannot choose to do evil, yet He freely does the Good because nothing outside Him determines Him to do so.

So, to return to the case of human agents, certainly a free choice influences physical events, most obviously in the case of basic actions in my own body, like freely lifting my arm. We are not causally determined to make all the choices we make; rather many choices are up to us and are therefore free choices. We are held accountable for such choices because they are not the result of random brain events but are undertaken for reasons which we weigh and act upon.

I’m not sure what you mean by “some ethereal and unintelligible source,” but if you are referring to God, I agree that if God secretly determines my every thought and action, then I am but a puppet whose actions are meaningless. But a God endowed with middle knowledge of what persons would freely do in any set of circumstances God might place them in can be provident over human affairs without infringing on human freedom.

also read a concise comparison of Molinism and Calvinism.