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Marketplace Scratch Pad

Religion and the economy

Scott Jagow Jan 12, 2010

Today in California, religious leaders are meeting with Bank of America to encourage the bank to modify more home loans. A prayer vigil will follow. Religious groups are also getting involved in the campaign against high credit card rates. But I also read an article that looks at whether a relatively new strain of Christian belief actually helped cause the financial crisis.

The Boston Globe examines the recent intervention by churches and other faith organizations:

Many faith-based groups say that, in the mire of the nation’s financial malaise, they have been galvanized by religious themes such as forgiveness (for homeowners unable to keep up with mortgage payments) and the sin of usury (lending money at exorbitant interest rates)…

The Greater Boston Interfaith Organization, based in Dorchester, recently launched a campaign to lower rates, which can exceed 30 percent and have been devastating in low-income communities…

“The three major traditions, Christian, Judaism, and Islam, all of them carry major prohibitions against usury, exacting interest in the kind of way that causes people harm and forces people into debt,” said the Reverend Hurman Hamilton, president of the Boston-area group.

Meanwhile, CNN highlights a Georgia church that set up a job-seeking network to help people connect with employers. Church groups around the country are stepping up to help parishioners and others in need.

But a recent article in The Atlantic asks: Did Christianity Cause the Crash? It looks at the growth of the “prosperity gospel.” Instead of preaching the Protestant ethnic of the self-made man, these churches tell believers that Jesus will bless them with riches:

…it really took off during the boom years of the 1990s, and has continued to spread ever since. This stitched-together, homegrown theology, known as the prosperity gospel, is not a clearly defined denomination, but a strain of belief that runs through the Pentecostal Church and a surprising number of mainstream evangelical churches, with varying degrees of intensity. In Garay’s church, God is the “Owner of All the Silver and Gold,” and with enough faith, any believer can access the inheritance. Money is not the dull stuff of hourly wages and bank-account statements, but a magical substance that comes as a gift from above.

The Atlantic cites the work of religious studies professor Jonathan Walton, who studied these churches and warned in 2008:

Narratives of how “God blessed me with my first house despite my credit” were common … Sermons declaring “It’s your season of overflow” supplanted messages of economic sobriety and disinterested sacrifice. Yet as folks were testifying about “what God can do,” little attention was paid to a predatory subprime-mortgage industry, relaxed credit standards, or the dangers of using one’s home equity as an ATM.

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.”

Many mainstream evangelical pastors have attacked the prosperity gospel as “baloney.”
But that doesn’t mean it didn’t catch on, especially among immigrant groups and the poor. It just so happens that most new prosperity-gospel churches were built in the Sun Belt, particularly in California, Florida and Arizona:

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.

The Atlantic visits one church in Virginia where, during the boom times, the preacher “spoke in very specific terms during church services, promising that a $100 offering would yield a $10,000 return: “This is not my promise. It is God’s promise, and he will make it happen!” he would say.”

And now? He tells the congregation their prospects are “good and going to get better.”

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