The economic numbers for the first quarter of 2008 showed that while the U.S. is not yet in a recession, we're sure darn close. The quarter's scant 0.6 percent growth rate suggests that ridiculously high commodity prices (oil, corn, pork bellies) should fall back to earth as Americans cut their spending, reducing demand. But as recent earnings reports show prices have skyrocketed. Since last August, the price of a barrel of crude has gone from $70 to over $110, despite six months of stagnant economic growth. The same is true for other commodities like copper, where trading volume has remained stable, suggesting that the price hike is not entirely due to speculative investors.

While economists make fine arguments in support of the belief that the rise in commodity prices is a symptom of bad monetary policy, it's also hard to dismiss the fact that high prices could simply be a matter of supply and demand—or at least expected supply and demand. One Wall Street Journal writer suggests that there are many similarities between today's economic conditions and those in the '70s, including low interest rates, a weak and falling dollar, market interventions, and high oil prices. But, he says:

there is an important difference between our troubles today and those of the 1970s. In that decade, aggregate supply sagged as oil producers scaled back production and anchovies disappeared off the coast of Peru. The 2000s have been about demand expansion. Millions of workers in China, India and Vietnam, among others, have joined the world trading system.

So, while there may be other factors influencing the rise in the price of oil, metals, and food. A fundamental reason for this price increase is a matter of basic economics: supply and demand. Indeed, despite oil prices that would encourage massive production, oil giant Chevron said it pumped less oil in the first quarter of this year than in the first quarter of 2007. And when ExxonMobil announced its production expectations, investors were shocked to hear that the company said it would pump no more oil over the next few years than it does today despite increasing its exploration and production budget by 25% to between $25 billion and $30 billion a year over the next five years. Business Week explains how astounding the announcement is:

Ponder that for a minute. Texas-based Exxon is the largest publicly traded company in the energy business. In fact, it's the most profitable company in the history of capitalism, earning a record $40.6 billion on sales of $404 billion last year. Yet even with prices at the pump near all-time highs, Exxon isn't planning on producing any more oil four years from now than it did last year.

It would be as if Steve Jobs said that though people were willing to spend nearly four times more for a Mac than they had been eight years ago, Apple would not build any more. Why is one of the best run oil companies, and most profitable company ever, declining to increase in production? Business Week explains, “Since 2000, Exxon's oil output from two of its largest regions, the U.S. and Europe, declined a startling 37%. That's 500,000 fewer barrels a day in just seven years.” In other words, its getting harder and harder to find oil. The most money being made in oil exploration is by those who can drill miles beneath the ocean floor.

While it may not be accurate to say that the world is running out of oil (a cartel dedicated to keeping prices high has too much to say about the world's oil supply to suggest the world is running out), it is accurate to say that for the moment supply is having trouble keeping pace with demand.

While supply remains stagnant, demand has spiked. “World consumption is projected to rise 35 percent, to around 115 million barrels a day, in the next two decades,” according to The New York Times. Most of the growth will come from China, India and oil-producing countries in the Middle East.”

As developing countries prosper, their citizens seek to emulate developed countries. They eat wheat instead of rice; meat instead of beans. They commute in cars from their homes miles away from the office. They buy cell phones and other electronics, increasing demand for copper and microchips. Some commentators suggest that those of us in the developed world must either quickly abandon our energy guzzling, wasteful ways or get used to a lower standard of living. Most likely, we'll have to do a little of both.

But how should American Christians react to a world in which those resources we've become used to having mostly for ourselves are suddenly in demand across the globe? Can we learn to share our global resources? Must we see a lower standard of living in our future?

Many Christian traditions have taught the lessons of simple living. Living simply, and thereby consuming less, does not necessarily correspond to a decrease in living standards. Those skills in simple living, it seems, are more needed these days as billions more people are now competing for a shrinking supply of resources. While some researchers foresee nationalistic competition in a scramble for limited resources, possibly resulting in war, Christians can be leaders not only in wisely exploiting creation but also in justly sharing it.

Of course, actually accomplishing that task takes more than words. But in a world where energy and other resource dependencies have allowed terrorists to breed and genocides to freely proceed, where people go hungry because they can't afford food, the ability to do more with less is another resource in which demand outweighs supply.

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Posted by Rob Moll at May 4, 2008 | Comments (19)

Capitalism runs on capital. So, what do you do when your religion forbids loaning money, but your economy is flush with cash due to rising oil prices?

Islamic scholars are debating just how to get around the ban on usury, or lending with interest. And a recent ruling by an Islamic scholar has thrown a wrench in what had become accepted practice. The International Herald Tribune reports,

Islamic banking assets outside Iran totaled $400 billion to $450 billion in 2006 and are projected to rise to $1 trillion by 2010, according to a recent report by McKinsey & Co. Total assets, including those in Iran, totaled $750 billion in 2006, a small fraction of global financial assets, but one that is growing quickly.

Experts say growth has been driven by booming Persian Gulf oil revenue, Muslims' growing preference for an expanding range of Shariah-compliant products and increasing acceptance of Islamic banking practices by financial regulators around the world.

Unfortunately for the industry, "one of the world's leading Shariah finance scholars recently rattled the market by saying 85 percent of Islamic bonds, or sukuk, are not Shariah-compliant. Sheik Mohammed Taqi Usmani argued that, in essence, they were structured too much like conventional bonds."

These bonds are structured in a way that gives the lender a share in future profits, but they also include a promise to pay back the original loan. The promise to repay makes the arrangement similar to a traditional bond, Usmani said.

Christians should pay attention to this debate. While the church has long since become comfortable with loaning money with interest, it can be helpful to see another religious group wrestle with modern capitalism. After all, why was it that for centuries Christians forbade usury and then heavily regulated it?

Hmm, maybe the mess created by the sub-prime mortgage lenders has something to do with it.

Posted by Rob Moll at January 14, 2008 | Comments (5)

Last summer, Brotherhood Mutual Insurance Company denied the West Adrian United Church of Christ in Michigan insurance because its denomination supports same-sex marriage and the ordination of practicing homosexuals. Wall Street Journal reporter M. P. McQueen writes,

"Based on national media reports, controversial stances such as those indicated in your application responses have resulted in property damage and the potential for increased litigation among churches that have chosen to publicly endorse these positions," Marci J. Fretz, a regional underwriter for Brotherhood Mutual -- one of the nation's largest insurers of religious institutions -- wrote in a letter to the church last summer.

McQueen writes that churches have sometimes been denied or have had coverage revoked because of specific acts of violence. "Some churches in the South reported cancellations after a wave of arson attacks in the mid-1990s." But this would be the first instance of the denial of a claim due to fears that a controversial stance would provoke a violent backlash.

Founded in 1917 as a mutual-aid organization by evangelical Mennonites, Brotherhood Mutual is now the largest provider of insurance to churches in the country. A spokesperson "didn't have any examples of violence attributable to a church's support for gay clergy or same-sex marriage," McQueen writes. She did note that disputes over gay marriage have led to church splits and resulted in costly lawsuits.

Michigan banned same-sex marriage in 2004. The church has not specifically endorsed the denomination's position on same-sex marriage and ordination of homosexuals. The article says that as long as insurance companies abide by non-discrimination and other laws, they are free to set their own guidelines for accepting or rejecting applications.

A couple of things to note: Brotherhood Mutual rejected the church's application not because of moral or religious opposition to the church's stance, but because the stance might increase risk to the insurer. So this is not precisely a religious freedom issue. One wonders if the company didn't want to do business with supporters of same-sex marriage and risk seemed a better explanation for its refusal. But are churches that support same-sex marriage really more prone to being victims of vandalism? The article says there is no evidence one way or the other. The story doesn't mention any other ways in which Brotherhood Mutual does business with supporters of same-sex marriage. Does it screen its investments of companies that offer benefits to partners of employees? Presumably, if/when same-sex marriage and homosexual ordination became less controversial, Brotherhood Mutual would then accept applications from churches that supported that stance.

Also, there is no lawsuit. West Adrian didn't sue Brotherhood Mutual over the denial, so the situation would set no legal precedent in regards to religious freedom. If same-sex marriage does gain national legal acceptance, there will probably be exceptions for clergy and churches to discriminate according to their religious teaching. The real test, however, will lie with for-profit companies like Brotherhood Mutual.

Posted by Rob Moll at January 8, 2008 | Comments (4)

Pastors’ attempts to ward off the Christmas spirits of consumerism and busyness are so predictable, they’re easy to ignore. So many churches are looking for creative ways to reinvigorate members to take the energy they usually put into holiday-season spending and convert it into compassionate giving.

Such is the Advent Conspiracy, a self-described “emerging international movement” began in 2006 by Rick McKinley, senior pastor of Imago Dei Community, a 1,500-member emergent church in Portland, Ore. Sick of the de-emphasis on Christ during the weeks leading up to Christmas, McKinley challenged his congregation to give like God does.

“It’s called the Advent Conspiracy because Jesus’ birth . . . was done in secret, almost hidden,” said McKinley to Nancy Haught of The Oregonian. “He didn’t come posturing for power. . . . He came giving himself away to others. Ultimately, he gave the greatest gift of all—his life for our life. We think Christmas should be celebrated the same way.”

In response to McKinley’s challenge, Imago Dei and four other congregations—Ecclesia in Houston, Windsor Crossings Community Church in Chesterfield, Mo., New Providence Community in Nassau, Bahamas, and Fellowship Church in Anthem, Ariz.—collected $430,000 last Christmas season. The majority of the collection was given to Living Water International, a nonprofit group working to dig clean wells in impoverished countries.

In the months following the conspiracy’s first-year success, news of its efforts spread over the Internet. It received hearty praise from the likes of megachurch pastor Rick Warren and evangelical missions organization World Relief. This year, about 490 churches from 10 countries have joined the conspiracy, reports Jeanne McKinley, who directs the program with her husband, Rick. On its website, the conspiracy provides downloadable print materials and videos for use in church services and small groups.

World Relief has also volunteered another 500 churches to join the campaign, while 17,000 individuals have pledged online to put the campaign’s credo—“Worship More, Spend Less, Give More, and Love All”—into practice this Christmas.

While believers can and should actively resist consumption and busyness for busyness’s sake, especially at a time both are so pervasive, one wonders if the proper way for churches to help this resistance is to create a program to join, especially (and ironically) one rife with slogans and logos. The way Christians can really make their Advent celebration countercultural is not by aligning themselves with a movement, even one that may have godly intentions. In its press release, the conspiracy says it wants to restore the “scandal of Advent,” by worshiping a God who calls us to constantly give away instead of hoard. Sure, that’s a bit of a scandal for most of us. But if the conspiracy wants to be truly scandalous, it will have to call us back to put aside all our programs and movements and wait, with joy and terror, for the Christ child who is coming to reconcile the world to himself.

More coverage of the Advent Conspiracy:

• For Christmas, Fishers church urges donations as part of Advent Conspiracy | Fishers church joins Advent Conspiracy urging donations in the spirit of Christmas (The Indianapolis Star)


• Organization wants less spent on Christmas and more donated to others (The Kansas City Star)


• 'Advent Conspiracy' urges Christian giving (Religion News Service, via The Ledger, Lakeland, Fla., alt. site)


• Find true meaning of Christmas -- in August (Hank Arends, Statesman Journal, Salem, Ore.)


• WWJD? Treat giving differently, that's what (Wendi C. Thomas, The Commercial Appeal, Memphis)

Posted by Katelyn Beaty at December 11, 2007 | Comments (3)

Sen. Chuck Grassley, R-Iowa, the ranking member of the Senate Finance Committee, is investigating several major church-based ministries known for their leaders' lavish lifestyles and prosperity teachings.

"Recent articles and news reports regarding possible misuse of donations made to religious organizations have caused some concern for the Finance Committee," Grassley wrote to the ministries in letters asking for detailed financial records.

None of the ministries targeted -- those led by Kenneth Copeland, Creflo Dollar, Benny Hinn, Eddie Long, Joyce Meyer, and Randy and Paula White -- are required to file the financial disclosure Form 990 with the IRS because they are are designated as churches.

The rest of this article is now posted on CT's main site.

Posted by Ted Olsen at November 6, 2007 | Comments (28)

In today's Wall Street Journal, reporter Valerie Bauerlein chronicles the effect the sub-prime mortgage bust had on an Atlanta lending company that integrated its loan business with Christian faith. At HomeBanc,

executives opened companywide gatherings and internal meetings with Christian prayers. Every branch office kept a chaplain on call. The company's $365,000-a-year human-resources chief, Dwight "Ike" Reighard, was the founder of a mega-church in an Atlanta suburb. He says he encouraged employees to pray, put others first and become better workers -- and also performed weddings and funerals for employees. "People who never attended church would tell me, you're my pastor," Dr. Reighard said in an interview on Saturday. ...

On Thursday, HomeBanc filed for bankruptcy-court protection. It fired most of its 1,100 employees on Friday and is shuttering its 22 branches and 139 kiosks in real-estate and builders' offices, exiting the mortgage-loan origination business and processing no new loans, including ones in its pipeline.

Some people complained of a cult-like atmosphere at the company. Others said it simply allowed people of faith to integrate their beliefs with the business.

"I don't think they saw God as a magic genie that was going to insulate them from the marketplace," said the Rev. Victor D. Pentz, the senior pastor of Peachtree Presbyterian Church, an 8,500 member congregation whose leadership includes several HomeBanc executives. Instead, he said HomeBanc was "a place where the deeper expressions of their values are welcomed as a part of the mix. People want to relate at a deeper level than 'I stand next to you at the copy machine.' "

Barbara Aiken, a human-relations executive who'd been with HomeBanc for 14 years, says, "Everybody said we were a cult, they said, 'You drink the Kool-Aid.' But I really believe the uprightness with which the company held itself really bothered people."

Still, it wasn't enough faith to save HomeBanc. A few former employees are suing the company for unpaid overtime. Efforts to turn the company around as the mortgage crises deepened earlier this year weren't enough. HomeBanc's stock closed on Friday at 4.8 cents.

I have three comments: Reporter Bauerlein doesn't allege that the company's focus on faith had anything to do with its collapse. After all, the sub-prime lending bust has taken down some of the most successful members of Wall Street. Yet, it does hint at the problems of involving religion too heavily in the workings of a company. Undoubtedly, the 1,100 employees who were laid off, yet prayed together and saw their work as an expression of their faith, feel, at least to some extent, betrayed both by the company and by God.

Second, Bauerlein does write that employees felt that religious devotion was valued over productivity. Third, the article exposes the tendency of religious groups (and not only those) to create insular communities where external forces--like the lending crisis--can be ignored or viewed as an attack to be met with more devotion instead of business strategy.

Posted by Rob Moll at August 13, 2007 | Comments (2)

Yesterday the Senate passed an energy bill mandating stricter fuel economy standards for autos and more production of ethanol. As someone who grumbles every time I drive past a gas pump (much less when I shell out $50 to fill my tank), who worries that U.S. dependence on oil from overseas is not in the national interest, who loves the outdoors, and who believes that human beings are to be good stewards of God's creation, I've got to say that the tank is half-empty on this thing.

The Associated Press notes:

"The legislation would require ethanol production for motor fuels to grow to at least 36 billion gallons a year by 2022, a sevenfold increase over the amount of ethanol processed last year.

"And it calls for boosting auto fuel economy to a fleet average of 35 miles per gallon by 2020, a 40 percent increase over current requirements for cars, SUVs, vans and pickup trucks.

"The legislation also calls for:

"Price gouging provisions that make it unlawful to charge an 'unconscionably excessive' price for oil products, including gasoline. It also gives the federal government new authority to investigate oil industry market manipulation."

I'm no expert on these issues, but it seems to me we have a long way to go--Democrats and Republicans--before we have a realistic energy policy. A few random thoughts:

-- Why is there no talk of increasing our national commitment to nuclear power, which, compared to foreign oil, is clean, efficient, and carries no risk of stirring up the bin Ladens of the world?

-- Do the senators know that our already massive commitment to producing ethanol for gasoline contributes to inflation for the many food products made with corn, and that the resulting corn shortages hurt the poor in the developing world?

-- Why is there no discussion of increasing the number of oil refineries in the U.S. as a way to increase the supply of available gasoline? The system that we now have is stretched to the limit and is extremely vulnerable to events that swiftly drive up the price of oil, such as refinery fires.

-- Why don't legislators ever talk about giving back some of their own record "windfall profits" from taxes, which go up proportionately with the cost of a gallon of gas?

-- Why don't politicians come up with new and creative ways to encourage mass transit? Where I live and want to go there are virtually no transportation options except for the automobile.

-- While increased auto fuel economy would be helpful (at least for those with the means to buy new cars), are they willing to acknowledge that this will inevitably lead to more highway deaths as people drive smaller vehicles?

Yes, go after the oil companies if they are breaking the law. But remember that without the profit incentive, there would be no oil wells. We can't simply respond to the demand for oil. Let's also work on the supply side. Allow the laws of supply and demand to work. If demand is sufficient, new supplies should eventually drive down the price of oil.

Unless we simply don't want people to drive automobiles at all. For senators who get chauffered everywhere, that may not be a problem. For the rest of us, however, affordable gasoline is a moral issue.

Posted by Stan Guthrie at June 22, 2007 | Comments (11)

Doug Lockhart is stepping down as president and CEO of Zondervan. A press release from the company quotes him saying,

“I consider it a great privilege to have served in this role and to have been a part of the tremendous Zondervan family, which is truly the most dedicated, loyal and mission-minded team of people I have ever worked with. I look forward to a smooth transition and will pray for the continued success of the organization as it strives to achieve its mission and continue its leadership in Christian publishing.”

PW Daily unsuccessfully asked why:

Erin Crum, spokesperson for HarperCollins, parent company of Zondervan, declined to elaborate on the reason for Lockhart's departure. "We don't usually discuss personnel matters," she said. Lockhart was not available for comment. Zondervan's sales declined after the enormous success of The Purpose-Driven Life several years ago, but HC CEO Jane Friedman had said that the company was "recovering" in the third quarter.

Longtime Zondervan leader Bruce Ryskamp, who worked at Zondervan from 1983 to 2005 and served as its president for the last 12 years of his tenure, will return from retirement to serve as interim president and CEO.

Posted by Ted Olsen at May 23, 2007 | Comments (1)

BusinessWeek reports

In recent years, a range of businesses have made financing more readily available to even the riskiest of borrowers. Greater access to credit has put cars, computers, credit cards, and even homes within reach for many more of the working poor. But this remaking of the marketplace for low-income consumers has a dark side: Innovative and zealous firms have lured unsophisticated shoppers by the hundreds of thousands into a thicket of debt from which many never emerge.

There may be money to be made lending to the poor. It may make business sense, though the recent sub-prime lending collapse shows the risks in lending to the poor. And it may allow the poor to buy things they couldn't otherwise afford. But is it right?

Posted by Rob Moll at May 14, 2007 | Comments (13)

Got a necklace that looks like this?

The Oriental Trading Company has sold about 132,000 of them for about 70 cents each. Turns out there's quite a bit of lead in them, so there's a recall.

Posted by Ted Olsen at May 3, 2007 | Comments (0)

Of all the lines in the widely circulated letter against Richard Cizik's work on global warming, I found one section particularly surprising:

Cizik’s disturbing views seem to be contributing to growing confusion about the very term, “evangelical.” ... We believe some of [the] misunderstanding about evangelicalism and its “conservative views on politics, economics and biblical morality” can be laid at Richard Cizik’s door.

As I've said before, I found that surprising because most evangelical activists I know of have been eager to define evangelical theologically or sociologically and oppose use of the word as a political descriptor. But while you can talk about trends in evangelical political behavior (which is quite a bit different than talking about "evangelical politics"), I was stumped on what the letter's signatories thought evangelical views on economics are. Granted, 50 years ago there was a strong anti-Communist streak in evangelical Protestantism. But today?

Well, I just found an answer, at least in part, in the journal Social Science Research. (More after the jump)

In the June 2007 issue, Pennsylvania State University sociologists Jacob Felson and Heather Kindell write about "The elusive link between conservative Protestantism and conservative economics." For the full article, you'll have to pay $30. But here's the abstract (emphasis mine):

Research on the political attitudes of conservative Protestants has yielded inconsistent results. We know that conservative Protestants (CPs) tend to be more socially conservative than members of other religious groups and have tended to vote Republican in recent years, but we are less certain of their attitudes toward the size and role of government in matters unrelated to religion. Despite theoretical expectations and qualitative research supporting a link between conservative Protestantism and conservative attitudes about the size and role of government, quantitative work has failed to find a consistent relationship. The present study interprets conservative Protestant issue preferences in the context of research on non-attitudes, arguing that we should not expect ideological constraint among the less educated segment of the population. However, among better educated members of the population, we should expect to find ideologically consistent attitudes. Results from the General Social Survey suggest that better-educated evangelical Protestants are consistently more economically conservative than other Protestants. Among Protestants with lower levels of education, there is no consistent relationship between conservative Protestantism and economic policy preferences. Since the better educated are disproportionately politically active, politicians may be especially likely to pay attention to their interests. This may help to explain why the Republican coalition between social and economic conservatives has endured for several decades and shows no signs of abating.

Since I didn't pay the $30, I can't tell if the study took into account that the better-educated evangelical Protestants are likely to have higher incomes--something that would no doubt also influence their economic views. But the bottom line here is that talking about the "evangelical view on economics" is even more problematic than talking about evangelical politics. There is a group that is both evangelical and economically conservative. And certainly it would be interesting to find out more about that group, and whether its influence is proportional to its size. But please don't confuse the part with the whole.

Posted by Ted Olsen at April 25, 2007 | Comments (4)