Did Osteen-like Prosperity Gospel Factor Into The Economic Downturn?
Well, some of “our” fringe fanatics sure make Christianity an easy target. More likely, good ol’ fashioned American greed caused the crash.
um… for a fringe they can pack out stadiums and get lots of cable air time - granted, greed lies to you always tempting you to reach for more than is wise. But, the lies of some preachers are a lot less subtle about it - greed is a doctrine. And while obviously i think it’s a cheep shot to say that the downturn is totally due to bad preaching, I know people who have lost their homes because preachers told them that God wanted to bless them and wanted to see if they had the faith to go out on his promises… and get bad loans.
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Ever heard of this one? http://en.wikipedia.org/wiki/Tulip_mania
Think about it …. wasn’t it kind of obvious that housing was priced way too high?
Christian prosperity gospel the blame for the last one? The last bubble had many parents. Root of all …. GREED
At the peak of tulip mania in February 1637, tulip contracts sold for more than 10 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubbleHere’s some others: http://en.wikipedia.org/wiki/Economic_bubble#Examples_of_bubbles_and_pu…
Think about it …. wasn’t it kind of obvious that housing was priced way too high?
Christian prosperity gospel the blame for the last one? The last bubble had many parents. Root of all …. GREED
I think it’s plausible that sentimentalized Christian ideas were a major contribution… one of them being that it just isn’t fair if some people can’t afford to own homes, so we should give them loans they cannot afford. Slogan-driven “social justice” notions were a huge factor in the subprime mortgages bubble which, in turn, greatly exacerbated problems in “the financials” in general.
Views expressed are always my own and not my employer's, my church's, my family's, my neighbors', or my pets'. The house plants have authorized me to speak for them, however, and they always agree with me.
[Aaron Blumer] Slogan-driven “social justice” notions were a huge factor in the subprime mortgages bubble which, in turn, greatly exacerbated problems in “the financials” in general.I’m curious why you take this view Aaron. While this isn’t my precise issue, my work has afforded me a ringside seat to the banking mess. My impression is that CRA-related lending has played an extremely minor (perhaps even de minimus) role in the crisis. In fact, CRA obligations can in most cases be met without any lending at all.
In my view, this was a sort of perfect storm. You have loosened lending standards, corporate greed, individual irresponsibility and greed (on the part of consumers, mortgage brokers, and high finance types), cost (risk) externalization, unsustainable upward price pressures in real estate, and outrageously deceptive risk rating in securitization coming together at about the same time. I’m probably not even including everything there.
Though, to reiterate, I work operations risk, not financial risk issues in the industry.
If you have Conterfeit Gods by Tim Keller, read the chapter on greed. Should give a little better understanding, in layman’s terms, of why the bubble burst. Bottom line: people could make big bucks getting loans to those who really couldn’t afford them. The garbage loan would then be sold with several good loans…the seller makes his fortune…the buyer loses his shirt…the “homeowner” loses his house. So, you’ve got greedy homebuyers who want something they can’t afford…lenders who want to make a quick buck…and so on.
He tells the interesting, but sickening story, of the investment bank Credit Suisse that lent $375 million to the founder & largest shareholder of the Yellowstone Club. The guy immediately put $209 million into his personal accounts (the loan allowed for this). When the downturn came, the guy’s company filed for bankruptcy, which would stiff the lender, but he would apparently be able to keep the $209 million. The other fallout is that the Yellowstone Club would close & hundreds of people would be out of work. Well, come to think of it…maybe the rich guy is an Osteen follower just wanting his best life now!
He tells the interesting, but sickening story, of the investment bank Credit Suisse that lent $375 million to the founder & largest shareholder of the Yellowstone Club. The guy immediately put $209 million into his personal accounts (the loan allowed for this). When the downturn came, the guy’s company filed for bankruptcy, which would stiff the lender, but he would apparently be able to keep the $209 million. The other fallout is that the Yellowstone Club would close & hundreds of people would be out of work. Well, come to think of it…maybe the rich guy is an Osteen follower just wanting his best life now!
Jack, no doubt my take is a layman’s oversimplification. I only had one course in microeconomics. And my view of what’s “major” and “minor” may have more to do with “the factors that bug me the most” vs. “the factors I don’t care about.”
As for greed, though, I don’t think it’s that big of a factor. That is, everyone wants to prosper and be comfortable and even accumulate a legacy for future generations. Greed has to do with these normal desires either getting excessive or simply failing to have their proper context in our desire for God and His glory. But I’m inclined to downplay greed because it doesn’t, in itself, result in different choices from normal self interest. One guy buys a car because he needs one. The other guy buys a car because his life is about buying things. But they do the same thing, and maybe even buy the same car.
So if you have wise policy and faithful enforcement, it doesn’t really matter if the economic actors are “greedy” or just “trying to improve their quality of life.”
And if a person lacks a solid set of internal moral convictions, he’s liable to cheat and steal for gain regardless of whether he is greedy or just wants to feed and clothe his family.
It just seems to me that “greed” is a sort of empty bucket term… easy to badmouth because nobody disagrees that it’s bad, but what does the word mean? For many, it’s just a smudge word to use to vaguely impugn whatever particular acts we don’t approve of, when in reality greed may not be involved at all. It is too often the language of class envy and envy is just as bad as “greed.”
Edit: one more thought. Just as a thought experiement, I find it interesting sometimes to replace the “200 million dollars” and figures like that we hear in news stories with numbers like “$1.99” and see if I feel differently about it. Because when it comes to greed the size of the money pile involved is irrelevant. “Thou shalt not covet thy neighbor’s ox.”
As for greed, though, I don’t think it’s that big of a factor. That is, everyone wants to prosper and be comfortable and even accumulate a legacy for future generations. Greed has to do with these normal desires either getting excessive or simply failing to have their proper context in our desire for God and His glory. But I’m inclined to downplay greed because it doesn’t, in itself, result in different choices from normal self interest. One guy buys a car because he needs one. The other guy buys a car because his life is about buying things. But they do the same thing, and maybe even buy the same car.
So if you have wise policy and faithful enforcement, it doesn’t really matter if the economic actors are “greedy” or just “trying to improve their quality of life.”
And if a person lacks a solid set of internal moral convictions, he’s liable to cheat and steal for gain regardless of whether he is greedy or just wants to feed and clothe his family.
It just seems to me that “greed” is a sort of empty bucket term… easy to badmouth because nobody disagrees that it’s bad, but what does the word mean? For many, it’s just a smudge word to use to vaguely impugn whatever particular acts we don’t approve of, when in reality greed may not be involved at all. It is too often the language of class envy and envy is just as bad as “greed.”
Edit: one more thought. Just as a thought experiement, I find it interesting sometimes to replace the “200 million dollars” and figures like that we hear in news stories with numbers like “$1.99” and see if I feel differently about it. Because when it comes to greed the size of the money pile involved is irrelevant. “Thou shalt not covet thy neighbor’s ox.”
Views expressed are always my own and not my employer's, my church's, my family's, my neighbors', or my pets'. The house plants have authorized me to speak for them, however, and they always agree with me.
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