Complicating the Greedy vs. Chump Subprime Narratives

Reader John D sent a link to an Atlantic Monthly story that appeared in its December issue, “Did Christianity Cause the Crash?”. Although this piece is arguably dated, I though it was worthy of consideration. It makes an argument I haven’t seen made elsewhere; a quick search of the blogs to which I subscribe confirms it received far less attention that it deserved. One reason might be the headline; it overstates the article’s thesis. But as likely is that the article complicated the tidy narratives that many people seem to have constructed about subprime borrowers.

Whenever this blog has brought up the idea of mortgage mods or bankruptcy cramdowns, the response has tended to be wildly polarized. Some readers are pro some form of resolution regarding severely stressed borrowers, whether for reasons of efficiency (as banks used to do mods before the age of securitization; it can be a better economic outcome to restructure a debt than foreclose, not just for the borrower, but also for his neighbors) or the belief that a fair number of borrowers had bad luck (medical bankruptcy, job loss, etc.). Another set of readers is vociferously opposed, generally for reasons of fairness and morality (these readers themselves often consider themselves to be prudent; the arguments are sometimes personalized: “I saved to make a sizable downpayment, I’ve never missed a loan or credit card payment. Why should these people who lived beyond their means get a break?”).

But underlying these debates is generally (not always, but generally) the long-standing “deserving poor versus undeserving poor” thread, that the unfortunate should get help only under certain circumstances. But drawing that line may not always be so easy.

What happens when people seek out advice from people they trust or think are experts and are led astray? What if those people benefitted from their at best misguided, and often self-serving advice? And worse, what if some of those people were religious leaders?

This line of reasoning may seem like a stretch, but Hannah Rosin shows it operated in “prosperity churches” that came out of the Oral Roberts lineage:

In June, the Supreme Court ruled that state attorneys general had the authority to sue national banks for predatory lending. Even before that ruling, at least 17 lawsuits accusing various banks of treating racial minorities unfairly were already under way. (Bank of America’s Countrywide division—one of the companies Garay worked for—had earlier agreed to pay $8.4 billion in a multistate settlement.) One theme emerging in these suits is how banks teamed up with pastors to win over new customers for subprime loans.

Beth Jacobson is a star witness for the City of Baltimore’s recent suit against Wells Fargo. Jacobson was a top loan officer in the bank’s subprime division for nine years, closing as much as $55 million worth of loans a year. Like many subprime-loan officers, Jacobson had no bank experience before working for Wells Fargo. The subprime officers were drawn from “an utterly different background” than the professional bankers, she told me. She had been running a small paralegal business; her co-workers had been car salespeople, or had worked in telemarketing. They were prized for their ability to hustle on the ground and “look you in the eye when they shook your hand,” she surmised. As a reward for good performance, the bank would sometimes send a Hummer limo to pick up Jacobson for a celebration, she said. She’d arrive at a bar and find all her co-workers drunk and her boss “doing body shots off a waitress.”

The idea of reaching out to churches took off quickly, Jacobson recalls. The branch managers figured pastors had a lot of influence with their parishioners and could give the loan officers credibility and new customers. Jacobson remembers a conference call where sales managers discussed the new strategy. The plan was to send officers to guest-speak at church-sponsored “wealth-building seminars” like the ones Bowler attended, and dazzle the participants with the possibility of a new house. They would tell pastors that for every person who took out a mortgage, $350 would be donated to the church, or to a charity of the parishioner’s choice. “They wouldn’t say, ‘Hey, Mr. Minister. We want to give your people a bunch of subprime loans,” Jacobson told me. “They would say, ‘Your congregants will be homeowners! They will be able to live the American dream!’”

Rosin spends most of the article discussing one church in Charlottesville, VA, and some of its parishoners:

It can be hard to get used to how much [pastor] Garay talks about money ….Garay was preaching a variation on his usual theme, about how prosperity and abundance unerringly find true believers. “It doesn’t matter what country you’re from, what degree you have, or what money you have in the bank,” Garay said. “You don’t have to say, ‘God, bless my business. Bless my bank account.’ The blessings will come! The blessings are looking for you! God will take care of you. God will not let you be without a house!”…On the altar sat some anointing oils, alongside the keys to the Mercedes Benz.

Later, D’andry Then, a trim, pretty real-estate agent and one of the church founders, stood up to give her testimony. Business had not been good of late, and “you know, Monday I have to pay this, and Tuesday I have to pay that.” Then, just that morning, “Jesus gave me $1,000.” She didn’t explain whether the gift came in the form of a real-estate commission or a tax refund or a stuffed envelope left at her door. The story hung somewhere between metaphor and a literal image of barefoot Jesus handing her a pile of cash. No one in the church seemed the least bit surprised by the story, and certainly no one expressed doubt. “If you have financial pressure on you, and you don’t know where the next payment is coming from, don’t pay any attention to that!” she continued. “Don’t get discouraged! Jesus is the answer.”

And the areas worst hit by the subprime crisis were also ones where the prosperity churches were well represented:

Demographically, the growth of the prosperity gospel tracks fairly closely to the pattern of foreclosure hot spots. Both spread in two particular kinds of communities—the exurban middle class and the urban poor. Many newer prosperity churches popped up around fringe suburban developments built in the 1990s and 2000s, says Walton. These are precisely the kinds of neighborhoods that have been decimated by foreclosures, according to Eric Halperin, of the Center for Responsible Lending.

Now this does NOT mean that the prosperity churches were the main cause of the subprime crisis. But simple black and white narratives that overlook ugly nexuses of gullibility and greed can impede coming up with the best (or more likely, least bad) remedies.

You can find the entire article here.

Update: Independent Accountant e-mailed some supporting links:

3 Hebrew Boys’ Guilty In $82 Million Ponzi/Affinity Fraud Scheme

California Man Guilty In $62 Million Ponzi Scheme

Fraud trial begins for ex-execs of Baptist Foundation

He adds: “Yes, people do not want to brand religious leaders as fools or corrupt. About four or five times a year one of my clients will ask me about one of these programs. Invariably when I tell him it looks like a scam, he gets angry with me! What’s wrong with you that you are so unenlightened you can’t see the promoter has “God’s favor”?

“So far none of my clients has lost more than a few thousand dollars in any of these scams.”

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  1. jeremiah 5:26-31

    For wicked men are found among My people,
    They watch like fowlers lying in wait;
    They set a trap,
    They catch men.
    Like a cage full of birds,
    So too their houses are full of deceit;
    Therefore they have become great and rich.
    They are fat, they are sleek,
    They also excel in deeds of wickedness;
    They do not plead the cause,
    The cause of the orphan, that they may prosper;
    And they do not defend the rights of the poor.
    “Shall I not punish these people?” declares the Lord,
    “On a nation such as this
    Shall I not avenge Myself?”
    An appalling and horrible thing
    Has happened in the land:
    The prophets prophesy falsely,
    And the priests rule on their own authority;
    And My people love it so!
    But what will you do at the end of it?

  2. Independent Accountant

    Reporting from the Bible belt. We have many “name it and claim it” churches here. They have been party to various “affinity group” scams in which these churches pastors are misled by smooth-talking con men into having their congregants “invest” in something which proves to be fraudulent. That mortgage officers would market through such churches does not surprise me. A few years ago a Baptist church in Phoenix was “ground central” for a $456 million fraud.

  3. David Merkel

    Yves, I am an evangelical. The “health and wealth” preachers attract their crowds, but do not preach the true gospel, which is that Jesus died so that the sins of those who trust in him will be forgiven.

    I have no doubt that among those that believed that wealth is a sign of God’s favor, much as the Pharisees did in Jesus’ day, that people would take on foolish debts in order to live a rich lifestyle, temporarily.

    This stuff bothers me. I wish Christians would grow up, read their Bibles in entire, and avoid such patent nonsense. This is garbage in a way that all people can grasp, but for Christians, who are trusting, they get taken by charlatans.

    1. Tertium Squid

      The LDS church has been preaching against indebtedness for probably at least the past century. (Though there isn’t a similar inveighing against lending.) Members are counseled to circumscribe their lifestyles to match their expenses, and save money and supplies for the unexpected.

      …not that this stops many LDS from going up to their eyeballs in debt…

      1. Tertium Squid

        Whoops, my above was a reply to forecasts.

        Glad you are part of a congregation that doesn’t go in for prosperity nonsense.

    2. tyaresun


      I was born a Hindu and I can assure you that this problem is not specific to Christianity. You can simple Google to find out fraud committed by so called Hindu preachers.

      I believe that in all societies it is the vulnerable who are most likely to seek religious help. Unfortunately, many of them will be taken advantage of.

    3. Sid

      Besides requiring a pretty far-fetched interpretation of Scripture, by “name it and claim it” logic, aren’t the royal family of Saudi Arabia the holiest people on earth?

      Not only are they rich beyond the dreams of avarice, they do not have to lift a finger for their wealth. It literally comes out of the desert sand.

      Anyway, I am not now, nor have I ever been, nor have I any present intent to be or become an “evangelical.” But I don’t think the problem is “religion” per se. Communism also promised its adherents pie-in-the-sky while expressly disclaiming God. Plenty of other hucksters throughout history have sold unearned wealth without using religion.

      The problem is us.

    4. alpwalker

      This is not reflective of Christianity. This is faith-o-tainment.

      Perhaps there are more “name it and claim it” and “health and wealth” churches in areas with high foreclosure rates because those communities suffer from having a higher proportion of self-centered, greedy people looking for divine justification.

      The church needs a good cleaning. Where is Martin Luther when you need him?

  4. forecasts

    Great post – I think this story should get more play than it has (I read it when it came out last month).

    I live in Orange County, CA – what might be called the epicenter of the crash. The “name it, claim it” type churches are very popular here – and on a huge scale.

    Many older school churches do speak out against this philosophy to some degree.

    However, what is truly amazing is that none – and I mean no churches, speak out about debt. Debt is condemned far more frequently than virtually all of the lesser sins that seem to be widely focused on. As Nassim Taleb (of Fooled by Randomness fame) points out, all three of the major monotheistic religions condemn and prohibit debt very strongly.

    I wonder why this has been dropped?

  5. IF

    Why is this called Christianity? I am an Atheist, but have to defend Christians here. At least old world Churches as I grew up with. They had various, nonmaterial objectives (and problems).

  6. esb

    Anyone who holds the belief that a salesperson of any sort qualifies as a advisor simply deserves to experience a full separation from his or her net worth, an event which is now underway for a significant segment of the American middle class. Having learned nothing, many will be lined up at the con-game window a few years out, begging “do it to me one more time.”

    Further, how in the name of all we hold holy did it become common for people to sign off on multi-hundred-thousand dollar indentures without the input of a competent attorney?

    Oh, I forgot. Home prices always rise so the legal details matter not.

    1. bob

      ‘Anyone who holds the belief that a salesperson of any sort qualifies as a advisor simply deserves to experience a full separation from his or her net worth’

      And the salesman deserves the money? Merit pay I suppose you would call it.

      ‘how in the name of all we hold holy did it become common for people to sign off on multi-hundred-thousand dollar indentures without the input of a competent attorney?’

      As per your first comment, in many cases it was legal. Attorneys are not paid to tell you if you are getting a good deal.

      Just because something is legal does not make it right, in the name of all we hold holy.

      1. Skippy

        which gives me an

        ah well thats why I joined the

        Skippy…Churches were some of the first private banks and now their offspring wish your tithe too! Its gods will, Load Bankinsfeld said so!

        The refusal to bring tithes and offerings to the Lord’s ministers is sin. Often, it is the sin of covetousness which prevents one from rendering his tithes and gifts to the Lord. The love of money hinders many from being able to express gratitude to God for all His benefits. How much are the blessings of God worth? How much is your eyesight worth? your hearing? your limbs? and what of your home, your clothes and food? Covetousness undermines thankfulness, until one is rendered a helpless slave to his own possessions. Judas is not the only one who has traded his eternal heritage for a few pieces of silver. Another most common reason for failure to obey God in tithes and offerings is a government-despising spirit. When one brings his tithes, he is acknowledging a higher authority. He is confessing his submission to the authority which Christ has established in his church, in the person of the man who receives the tithes. By acknowledging the greater one, he places himself in a position to be blessed by God, as Abraham was blessed by Melchizedek when he acknowledged his authority and rendered tithes to him. If one patiently observes those who refuse to bring their tithes to the Lord, he will in time discover the real motivation for their rebellion.

        or better yet

        PS Ive been with “The World”.
        Im tired of the “Soup D’Jour.
        No one around here comprehends my potato. I guess Im just a spud boy looking for a REAL tomato.

        1. Skippy

          Traditional Jewish law and practice has included various forms of tithing since ancient times. Universally, Orthodox Jews practice ma’aser kesafim (tithing 10% of their income to charity) and take challah. In modern Israel, Jews continue to follow the laws of agricultural tithing, e.g., terumah, ma’aser rishon, terumat ma’aser, and ma’aser sheni. In Christianity, some interpretations of Biblical teachings conclude that although tithing was practiced extensively in the Old Testament, it was never practiced or taught within the first-century Church. Instead the New Testament scriptures are seen as teaching the concept of “freewill offerings” as a means of supporting the church: 1 Corinthians 16:2, 2 Corinthians 9:7. Also, some of the earliest groups sold everything they had and held the proceeds in common to be used for the furtherance of the Gospel: Acts 2:44-47, Acts 4:34-35. Further, Acts 5:1-20 contains the account of a man and wife who were living in one of these groups. They sold a piece of property and donated only part of the selling price to the church but claimed to have given the whole amount and immediately ‘fell down and died’ when confronted by the apostle Peter over their dishonesty.

          The tithe is specifically mentioned in the Book of Leviticus, the Book of Numbers and also in the Book of Deuteronomy. The tithing system was organized in a 7 year cycle, corresponding to the Shemittah cycle. Every year, Bikkurim, Terumah, Ma’aser Rishon and Terumat Ma’aser were separated from the grain, wine and oil (as regards other fruit and produce, the Biblical requirement to tithe is a source of debate). Deuteronomy 14:22 The yearly tithe to the Levites could be consumed anywhere. Numbers 18:31On years one, two, four and five of the Shemittah cycle, God commanded the Children of Israel to take a second tithe that was to be brought to the city of Jerusalem. Deuteronomy 14:23 The owner of the produce was to separate and bring 1/10 of his finished produce to Jerusalem after separating Terumah and the first tithe, but if the family lived too far from Jerusalem, the tithe could be redeemed upon coins. Deuteronomy 14:23Then, the Bible required the owner of the redeemed coins to spend the tithe “to buy whatever you like: cattle, sheep, wine or other fermented drink, or anything you wish.” Deuteronomy 14:22-27 Implicit in the commandment was an obligation to spend the coins on items meant for human consumption. According to the Hebrew Scriptures, the second tithe could be brought to Jerusalem any time of the year and there was no specific obligation to bring the second tithe to Jerusalem for the Festival of Sukkot. The only time restriction was a commandment to remove all the tithes from one’s house in the end of the third year. Deuteronomy 14:28

          The third year was called “the year of tithing” Deuteronomy 26:12-14 in which the Israelites set aside 10% of the increase of the land, they were to give this tithe to the Levites, strangers, orphans, and widows. These tithes were in reality more like taxes for the people of Israel and were mandatory, not optional giving. This tithe was distributed locally “within thy gates” Deuteronomy 14:28 to support the Levites and assist the poor.

          The Levites, also known as the tribe of Levi, were descendants of Levi. They were assistants to the Israelite priests (who were the children of Aaron and, therefore,a subset of the Tribe of Levi) and did not own or inherit a territorial patrimony Numbers 18:21-28. Their function in society was that of temple functionaries, teachers and trusted civil servants who supervised the weights and scales and witnessed agreements. The goods donated from the other Israeli tribes were their source of sustenance. They received from “all Israel” a tithe of food or livestock for support, and in turn would set aside a tenth portion of that tithe for the Aaronic priests in Jerusalem.

          Skippy…Yep tithe to your priests, both spiritual and monetary or barren will your world be. slavery of the mind and wallet.

          1. CaitlinO

            Skippy – Thanks for a very nice history on tithing.

            I wonder whether a similar history could be put together chronicling the corruption in churches. It might be unfair to hold our church leaders to higher moral standards than leaders of other organizations, they are mere mortals after all, but we do.

            Maybe the saddest legacy of this crisis will be the exposure of deeply seated corruption throughout so many of our institutions. I don’t see how faith in these institutions can avoid becoming anything but corrosive cynicism.

          2. Skippy


            Thank you for your reply.

            I hold all organizations to the same light, that profess leadership/steerage of humanity, who’s pockets are heavy or light post the interaction and I personaly hold the educated/experianced above their lessors full stop.

            Skippy…churches are just another form of goverment with out debate, out side the dogma.

          1. Skippy

            In my book, if an organization, business or political, leans toward an ideology by the numbers representational of its employees, especially in leadership positions, its fair game.

  7. craazyman

    It’s not entirely surprising because money is the spirit force that breaks down tribal consciousness and empowers individuation and democratization, because we know from contemporary analysis that money = property = force = protection = saftey = survival = procreation = the wine of God and the blood of the Lamb = the great hallelueah Love of Jesus like sunshine on the fertile fields of grain = the end of the abomination of the Grain God sacrifice ritual pyschosis through the ascension of the Gnosis through the 7 chakras. So money is so close, in its basic psychic structure, to the the spirit of the Lord that it’s no wonder the Preachers fall into the pits of snares and the congregation too. Straight is the gate and wide is the way that leads to destruction, but Narrow is the gate that leads to Life and few therebe that find it.

    When I appeared at Davos to give my presentation titled: Money and Spirit: A Holistic Quantum Approach to Monetary Theory and Shoedinger Waveform Frameworks for Economic Wave Analysis and Preservation of Equilibrium in Non-Stochastic Dynamic Systems, they told me to go skiing. So I headed downtown and spent a few days hanging out in the cafes. It’s OK. I’m used to it.

  8. steelhead 23

    I think Dante would have the money-grubbing pastors one circle in from the subprime banksters in the Inferno. Pity the true believers. These poor souls will get to lose their house and their faith at the same time.

  9. Cynthia

    I get the feeling, though I’ve got little evidence to back it up, that the Christian Right is playing an enormous role in keeping the trickle-down propaganda machine running in tip-top shape. So it wouldn’t weird me out in the least to learn that our moneyed elites are paying ministers of the Christian Right to brainwash many middle-class Americans into believing that they can get much further in the world by sucking up to the rich than by banding together as a single force to regain whatever economic ground they’ve lost from the Reagan years to the present. They are brainwashing their congregations into believing that organized labor and anything else than smells of socialism for the masses is ungodly, if not downright satanic. So I must say that it breaks my heart just knowing that whatever progress made by both FDR and LBJ towards improving the economic status of our middle class has been all but snuffed out by first Clinton and then Obama and their band of neolib thieves!

    1. Cynthia

      Instead of “than”, I should’ve written “that” to read: “… and anything else that smells of socialism for the masses is ungodly, if not downright satanic.”

    2. JTFaraday

      “Christian Right to brainwash many middle-class Americans into believing that they can get much further in the world by sucking up to the rich than by banding together as a single force to regain whatever economic ground they’ve lost from the Reagan years to the present.”

      The middle class doesn’t need “The Christian Right” to tell them that–they get up in the morning, get dressed and go to work in hostile anti-people environments. Shut up and do as you’re told, ie., kiss up and kick down. It’s good for the executive suite.

      I don’t know a single “Christian Right” person. Not one.

  10. Jim S

    What worries me is what this says about our larger society; when religious leaders are more focused on worldly things than on spiritual things, it seems to me that the question an economist ought to ask is if they are a leading or a trailing indicator for secular society. Certainly the so-called “Prosperity Gospel” is at odds with the teachings of Christ, who flatly said that wealth is a barrier to heaven, but nonetheless it’s wildly popular. Are Christians who follow it being wilfully ignorant, or are they honestly ignorant of this difference? Has regard for the spiritual simply declined across the nation? (Well, that one may be too easy.)

  11. DoctoRx

    forecasts 3:08 AM nailed it.

    It’s the debt, stupid.

    Issuing and trading debt is even more profitable than Windows is to MSFT or Lipitor to Pfizer. Debt is air: promises, promises. It is nothing.

    Debt is ruining America faster than carbon dioxide in the atmosphere.

    1. DownSouth


      You say: “Debt is air: promises, promises. It is nothing.”

      In America, promises are everything. The nation is built on trust. Promises are the glue that holds the nation together. If too many promises get broken, and too many promise-breakers go unpunished, it essentially marks the end of our way of life:

      The men of the American Revolution, on the contrary, understood by power the very opposite of a pre-political natural violence. To them, power came into being when and where people would get together and bind themselves through promises, covenants, and mutual pledges; only such power, which rested on reciprocity and mutuality, was real power and legitimate… They themselves still knew very well what made them succeed where all other nations were to fail; it was, in the words of John Adams, the power of “confidence in one another, and in the common people, which enabled the United States to go through a revolution.”


      In other words, what had happened in colonial America prior to the Revolution (and what had happened in no other part of the world, neither in the old countries nor in the new colonies) was, theoretically speaking, that action had led to the formation of power and that power was kept in existence by the then newly discovered means of promise and covenant. The force of this power, engendered by action and kept by promises, came to the fore when, to the great surprise of all the great powers, the colonies, namely, the townships and provinces, the counties and cities, their numerous differences amongst themselves notwithstanding, won the war against England. But this victory was a surprise only for the Old World; the colonists themselves, with a hundred and fifty years of covenant-making behind them, rising out of a country which was articulated from top to bottom—from provinces or states down to cities and districts, townships, villages, and counties—into duly constituted bodies, each a commonwealth of its own, with representatives “freely chosen by the consent of loving friends and neighbours”, each, moreover designed “for increase” as it rested on the mutual promises of those who were “cohabiting” and who, when they “conioyned [them]selves to be as one Publike State or Commonwealth”, had planned not only for their “successors” but even for “such as shall be adioyned to [them] att any tyme hereafter”—the men who out of the uninterrupted strength of this tradition “bid a final adieu to Britain’ knew their chances from the beginning: they knew of the enormous power potential that arises when mutually pledge to each other [their] lives, [their] Fortunes and their sacred Honour”.
      Hannah Arendt, On Revolution

      [W]ealth is an order and procedure of production and exchange rather than an accumulation of (mostly perishable) goods, and is a trust (the “credit system”) in men and institutions rather than in the intrinsic value of paper money or checks…
      –Will & Ariel Durant, The Lessons of History

      1. wayupnorth

        In my very old inherited Waverly Pictorial Dictionary, I find the following, additional, definition for the word TITHING: “Also meant, in Anglo-Saxon times a group of ten householders who were responsible for each other’s good behavior.”

        Best regards.

    2. DownSouth

      The possible redemption from the predicament of irreversibility—of being unable to undo what one has done though one did not, and could not, have known what he was doing—is the faculty of forgiving. The remedy for unpredictability, for the chaotic uncertainty of the future, is contained in the faculty to make and keep promises. The two faculties belong together in so far as one of them, forgiving, serves to undo the deeds of the past, whose “sins” hang like Damocles’ sword over every new generation; and the other, binding oneself through promises, serves to set up in the ocean of uncertainty, which the future is by definition, islands of security without which not even continuity, let alone durability of any kind, would be possible in the relationships between men.
      –Hannah Arendt, The Human Condition

      Morality is all about intentions, not about outcomes. Damocles’ sword should fall on those who knowingly and willfully entered into contracts (promises) that they knew beforehand 1) They could not honor, or 2) They knew their counterparty could not honor. There are ample cases out there where this is blatantly the case, and yet, to this date, the sword has not fallen.

      There are of course ambiguous cases, and cases where the “sinner” clearly deserves forgiveness.

      The nation seems to lack the political and moral will to sort through the promise-breakers to determine those deserving of forgiveness from those who are not.

  12. DownSouth

    Things have gotten so complicated.

    Up until a couple of years ago the ranks of the “undeserving” were populated strictly by poor people. But since 2007, many rich people have joined the ranks of the undeserving, as well as millions of middle-class households that loaded up on debt they have no way of ever repaying.

    Oh for a return to those halcyon days. Life was so much simpler when we could blame everything on the poor, who obviously weren’t members of our own congregation.

  13. Michael

    Well I don’t know about you, but if I was looking for a group of gullible, easily misled people, pretty much any church would be a pretty good start. Full of people who are trained at least weekly not to think like adults.

    Add in the requirement that they wont be able to pay their bills as well, and it would really nail it down.

    These sort of scum who prey on the weak and vulnerable are really the lowest of the low. And the bankers aren’t too hot either.

  14. Don Loritz

    It’s not surprising that those in desperate need of salvation turn indiscriminately to religion and loan sharks. The power of the churches and the banks simply reflects the GINI index, especially in countries where there is Freedom of Religion and Freedom of Finance.

  15. Dan Duncan

    This is quite silly, and it all stems from the title of the article: “”Did Christianity Cause the Crash?”

    Thus the discussion is framed in such a way that it attracts the provocative insights that one would expect from 1st year college students questioning the “God, Country and Apple Pie” narrative.

    If the article was, instead titled: “Christianity, Not Immune from Scammers Looking to Cash in on Real-Estate Boom”, it would be met with a shrug…

    Tell us something we don’t know.

    Additionally, one could say the same thing about charlatans in connection with Race and Nationality…and not just religion.

    It’s a sad reality: Residential real estate is rife with Identity Representation. Many Black borrowers, will simply seek out black loan officers…as will Chinese, Korean, Mexican, etc. Happens all the time. This type of Identity Representation breeds an environment where the seeker is often exploited. [Ask any loan officer about this financial version of “Black on Black” crime.] This phenomenon is not limited to Christians…

    But talking about this shit for what it is…that’s a minefield that the Atlantic wants no part of. Think about this story-line for the editors of the Atlantic:

    [In addition to the “dumb, White Christians”]…let’s also include Racial and ethnic minorities as being exploited by others within their own tribe…on the basis that the loan officer is “doing God’s work”…or that he is Black and “will protect you from The System and The Man” …or that she is from Korea and therefore “has a kindred bond with each of the other 25 million souls from the Homeland”.

    No…Much safer to just talk about those “dumb, White Christians”. Plus, this kind of analysis has such intellectual cache(!) and, thus, is the proverbial bell-ding to the Pavlovian Left…which is GUARANTEED to have its salivary glands kick into over-drive at the mere mention of:

    “Dumb, White Christians Caused the Real Estate Crash!”

    1. JTFaraday

      Clearly the era of George Bush, the “born again” former alcoholic 12 stepper identified with a lower strata protestantism his father largely disavowed, was a time when such “evangelicals” came to the fore as an identity group–and one might add, a hot topic in sophisticate publications like the Atlantic and Harpers.

      I think this works in the direction you indicate. Banks looking for loans to package sought out churches like any other niche market, going into markets where they no longer had fear of treading because they knew they would blame things like the CRA, which they (and Republicans) starting doing immediately and still do, knowing it would make it easier to twist government arms if required to be able to hold certain kinds of politically palatable threats over their heads.

      So, it’s politically useful that Rosin is pointing out this presumptive “right wing” identity based constituency, but it seems to me they “caused the crash” about as much as any other such group.

      In fact, the one group I would like to see highlighted more is everyone in the mortgage/ real estate industry who collaborated in originating loans they must have known people would not be able to pay. People who sacrificed their professional standards–and who were bidden to do so by their institutional superiors– in order to get paid, is one theme that is consistent across this whole scandal.

      Probably, the most accurate headline is that the 1980s S&L scandal caused the crash. ie, It’s an inside job, with a lot of political scapegoats ready at hand–some of whom should have known better than to make themselves so useful.

      I just don’t think you do this every day, day in and day out, without having some sense that you *know* what you’re doing.

    2. DownSouth

      I think Yves beat you to the punch when she said: “One reason might be the headline; it overstates the article’s thesis.”

      In newspaper and magazine publishing, those who write the headlines are not the same as those who write the stories.

      And I don’t think the article dodges the ethnic or racial question at all. Your charge that “Dumb, White Christians Caused the Real Estate Crash!” certainly has no basis in the actual content of the article. Where is the intent on the part of Rosin to single out white folks? Quite the contrary, there’s the foto of a moreno (the term they use here in Mexico for a dark-skinned person) on page 1 of the article. And then there’s the very first paragraph that reads:

      LIKE THE AMBITIONS of many immigrants who attend services there, Casa del Padre’s success can be measured by upgrades in real estate. The mostly Latino church, in Charlottesville, Virginia, has moved from the pastor’s basement, where it was founded in 2001, to a rented warehouse across the street from a small mercado five years later, to a middle-class suburban street last year, where the pastor now rents space from a lovely old Baptist church that can’t otherwise fill its pews.

      And there’s this about black churches:

      In 2004, Walton was researching a book about black televangelists. “I would hear consistent testimonies about how ‘once I was renting and now God let me own my own home,’ or ‘I was afraid of the loan officer, but God directed him to ignore my bad credit and blessed me with my first home,’” he says. “This trope was so common in these churches that I just became immune to it. Only later did I connect it to this disaster.”

      You’re setting up straw men that aren’t there, and then knocking them down.

      On the other hand, Rosin is certainly no religious scholar, and the blurring between Godly rewards in this world and those in the other world certainly didn’t begin with the Gilded Age or with Oral Roberts. To explore the roots of that theology, we’d have to go back to the 16th-century Puritans and trace its development through the colonial period–its blossoming and transformation upon reaching the “Promised Land” of America—and through the tumultuous 19th century. Rosin picks up the story in the late 19th century, but she gets enough of it to see that in America the secular meshed with the religious to synthesize what here in Mexico they call el sueño Americano–the American dream. Rosin captures the essence here:

      In their new congregation, their pastor slowly walks them through life in the U.S., both inside and outside of church, until they become more confident. “In Mexico, nobody ever told them they could do anything,” says Lin, who was himself raised in Argentina. He finds the message at prosperity churches to be quintessentially American. “They are taught they can do absolutely anything, and it’s God’s will. They become part of the elect, the chosen. They get swept up in the manifest destiny, this idea that God has lifted Americans above everyone else.”

      The snapshot Rosin gives us is only the latest manifestation of the American religious-secular ethic that has existed since the days of the American colonies. And perhaps it is more virulent and crass than ever before. But when she speaks of “a lasting and fundamental shift in American culture—a shift in the American conception of divine Providence and its relationship to wealth,” she demonstrates a rather remarkable ignorance of the history of both Protestant Christianity and of the United States. What Rosin has portrayed is not a shift away from the historical American ethic and the abounding confidence and exuberance of the young nation and its people, for we’ve seen this movie play out many times before in the US. On the other hand, what she may have portrayed is a shift away from the boundless natural wealth and abundance that have always been the hallmark of the US, along with the nation’s ability to fulfill the materialistic sueño Americano.

      And indeed, the cultural manifestations Rosin describes may become more extreme as the gap between the American dream and the American middle-class reality grows wider. In an era of increasing uncertainty, the flowering of a neo-baroque culture to fill in the void between ideals and reality should come as no surprise. Nothing expresses the “uncertainty better than the art of paradox, the art of abundance based on want and necessity, the art of proliferation based on insecurity, rapidly filling in the vacuums of our personal and social history…with anything that is found at hand,” Carlos Fuentes writes of the baroque.

      1. Dan Duncan

        You’re right, DownSouth…I should not have put in the stuff about “White”. But, even without that, the Rosin piece was stupid. Christianity is not the issue.

        The exploitation of a religious, racial or ethnic identity on the basis that it is shared by the loan officer…that’s the issue.

        Rosin doesn’t go that far, though…because it’s an easy appeal to her Leftist audience to just talk about religion.

        1. JTFaraday

          I agree. Why not tackle the whole balkanized market for cultural politics that has been so expertly exploited by mortgage brokers as a market for financial services AND as a means of deflecting attention off their own actions and into the usual, partisan culture wars.

          So, is Rosin really an analyst or is she a culture warrior? Doubtful the answer is cut and dried–or even necessarily either/or–but it’s fair to pose the question.

    3. CaitlinO

      The comparison is not the same. We hold our religious leaders to a higher ethical standard than secular members of our tribe. It’s a betrayal to be preyed upon by another member of your demographic but it’s not faith shattering.

  16. Maggie Knowles

    Wells Fargo used the same strategy with Tavis Smiley and the black community. “As TWI has reported, Wells Fargo & Co. teamed up with talk show host and commentator Tavis Smiley for “Wealth Building” seminars in black neighborhoods beginning in 2005. A suit by the Illinois attorney general contends Wells used the seminars to market high-cost and risky subprime loans to minority borrowers.”

  17. John

    It doesn’t matter whether the borrower was greedy or a chump. It’s almost always in the borrower’s best interest to walk away. So the government shouldn’t allow any borrower to get a mortgage mod because it’s not in the borrower’s financial best interest to do so. Mortgage mods exist to help the banks, not the borrowers.

    The real problem is that most of these idiots (whether they were greedy or chumpy) don’t know that they should be thankful that they can’t get a mod.

  18. Unsympathetic

    This topic’s ties to prosperity christianity does make sense – because the only people who buy into the prosperity nonsense are, quite frankly, morons. Drawing a conclusion about the church is, however, more of a correlation rather than a causation.

    “Prosperity” Christianity is not centered on Jesus. God never promises prosperity – he does promise rewards in heaven, but NOT on earth. That is the entire point — life is hard. Prosperity Christianity is for people who can’t accept that the christian life is by definition a struggle. They want something easy! Romans 13 – go read it.

    The set of people duped into bad subprime loans does probably encompass many prosperity church congregations. However, the discussions about people falling for bad financial advice go far beyond any religious characterization.

  19. IQ on your sleeve

    If you’re looking for people stupid enough to commit to a negatively-amortizing mortgage with escalating payments, one obvious place to start is people who have an imaginary friend in the sky who helps them whenever they ask nicely. So of course there’s a xtian connection. It’s a dupe-rich environment.

  20. forecasts

    This was a very good thread. I can’t help but feel that many generally good, nice people were misled by those who they held to be in authority.

    This is true for Christians – especially the Prosperity Gospel types – but it is true of us as American’s in a larger sense. Didn’t George Bush tell us all to go out and spend more after 9/11?

    I think part of the solution for this type of problem is a) learning to think for oneself (vs. relying on what others want us to do) and b) if we do follow a religion/creed – actually looking into what our beliefs say.

    No person who actually bothered to read the Bible (or Koran for that matter) could have taken out a sub-prime or Option ARM in good faith…

  21. Suffern ACE

    As someone who still has my small Thrivent (formerly Aid Association for Lutherans and Lutheran Brotherhood Mutual Insurance) life insurance policy that my parents bought for me when I was a baby, I’m surprised these arrangements by financial services companies to market to churches don’t show up more often.

    To state that church authorities might be a bit naive about finances themselves goes without saying. They are indeed human. (Link is to Suffern ACE’s hometown catholic church sadly taken in by the promises of payoffs from Nigerians. I’m not one for organized religion any longer, but I take no pleasure when people are taken in by con-men introduced to them by people they trust).

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