Thursday, October 08, 2015

The Sub-Prime Mortgage From Heaven

Christians are used to getting blamed for a lot of things. Imprisoning Galileo. The Inquisition. The Crusades. But this is a new one.

Hanna Rosin at The Atlantic theorizes that Christians tanked the American economy:

“There is one explanation [for the 2007-2009 recession] that speaks to a lasting and fundamental shift in American culture — a shift in the American conception of divine Providence and its relationship to wealth.”


Now mind you, this is the “prosperity gospel” Rosin is talking about: the exceedingly unbiblical notion that God predictably and consistently heaps not just spiritual but financial blessings on those who exercise faith.

The prosperity gospel is the conflation of a number of other elements with the truth of salvation: the Old Testament promises of prosperity to the nation of Israel predicated on obedience (accompanied by numerous curses for disobedience that are generally ignored by the prosperity folks), the incorrect perception among some minorities that the affluence of Western nations originates in concepts taught by Jesus Christ, and the bafflegab of TV evangelists like Oral Roberts, who had the habit of misusing verses like 3 John 2 to imply God would reward donations to his ministry a hundred times over.

We’re not talking about a huge segment of evangelicism here, though a Pew survey indicates 73% of religious Latinos agree that “God will grant financial success to all believers who have enough faith”. Rosin says the prosperity gospel is primarily a phenomenon in the Southern U.S. where foreclosures were most prevalent when the housing bubble burst at the end of 2008.

The mechanism Rosin posits for the crash is a familiar one: risk-taking. Business Week says the risk-taking that burst the real estate bubble originated with the Clinton administration, which:
“… went to ridiculous lengths to increase the national homeownership rate. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It’s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place.”
Steve Denning at Forbes wants to make sure that private sector lenders get their share of blame for the crash as well:
“It is clear to anyone who has studied the financial crisis of 2008 that the private sector’s drive for short-term profit was behind it. More than 84 percent of the sub-prime mortgages in 2006 were issued by private lending. These private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Out of the top 25 sub-prime lenders in 2006, only one was subject to the usual mortgage laws and regulations. The nonbank underwriters made more than 12 million subprime mortgages with a value of nearly $2 trillion. The lenders who made these were exempt from federal regulations.”
But we cannot end the blame game with President Clinton, Fannie and Freddie, as Hanna Rosin points out. Any contract, including a mortgage, requires two willing parties. You cannot force people to buy homes. President Clinton may have pushed home ownership for those who could not afford it, and lenders may have offering sub-prime loans to those who did not qualify, but it was the prosperity gospel, Rosin says, that spurred thousands of poor blacks and Latinos to see the chance to buy a home as not just opportune but God-given.

As a spiritual imperative.

In 2004, Jonathan Walton, a professor of religious studies at University of California, was researching a book on black evangelists. He says:
“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.’ This trope was so common in these churches that I just became immune to it. Only later did I connect it to this disaster.”
Rosin’s is an interesting theory, and one that may well have some substance to it.

Got Questions points out the difference between the prosperity gospel and the teaching of the New Testament:
“In the prosperity gospel, the believer is told to use God, whereas the truth of biblical Christianity is just the opposite — God uses the believer. Word of Faith or prosperity theology sees the Holy Spirit as a power to be put to use for whatever the believer wills. The Bible teaches that the Holy Spirit is a Person who enables the believer to do God’s will.”
Or, as the apostle Paul puts it, it is people who are “depraved in mind” and “deprived of the truth” that imagine godliness is a “means of gain”:
“Those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction.”
If Rosin’s theory about the market crash of 2008 is correct, it’s certainly a reminder of how unwise and potentially destructive to faith it can be to attribute to God things that have nothing whatsoever to do with him. If God directs loan officers to ignore bad credit, where is he when the bank forecloses?

One possibility, of course, is that your faith has failed, and God has ceased to bless you.

The much more reasonable conclusion is that the offer of a sub-prime mortgage never originated in Heaven at all.

1 comment :

  1. With reference to your post yesterday:

    I enjoyed reading Nate Silver’s “The Signal and the Noise”.

    For at least 2 reasons: it helped me to understand a little more of probability, and all the related things; and it helped me understand more clearly why so many errors are made and stated in the press.

    He has a section dealing with the reasons for the “sub-prime market” implosion. Greed, and failure to distinguish between the signal and the noise were major factors.