Monday, August 25, 2008

Sermon: "Making It and Faking It in America" (Delivered 8-24-08)

The late William Sloane Coffin, one of the greatest prophetic ministers of the second half of the 20th century, used to advise that a minister should preach holding a Bible in one hand and a newspaper in the other.

Newspapers over the past six months or so have been dominated by stories about the economy. Whether it is the price of gas, hits to the stock market, foreclosure rates, the national debt, personal debt, massive downsizing, the price of basic staples, or other issues, the economy is at the forefront of people’s minds, perhaps only second to our interest in the media’s reporting about the political arena. Of course, there is a definite overlap: the economic vision, plans, and policies of the candidates has risen to the highest level of importance in the opinion of many.

If you turn to the Bible you find even more about economics than you find in the Kansas City Star business pages. When we think of books like Leviticus, Numbers and Deuteronomy we tend to think of laws about food purity, gender roles, and sexual morality. And yet, if you slog through these books (and it is a slog) you find that economics are treated at much greater length than food or sex. These books contain extensive instructions about the issuing and forgiveness of debt, our duty to the vulnerable in society’s midst, and what constitutes upstanding business practice.

If you chafe at the idea of scouring the five books of Moses, turn instead to the Hebrew prophets, where the same issues are considered. The prophet Amos issued a fiery statement, saying, “Hear this, you that trample on the needy, and bring ruin to the poor of the land, saying, ‘When will the new moon be over so that we may sell grain… We will make the ephah small and the shekel great, and practice deceit with false balances, buying the poor for silver and the needy for a pair of sandals, and selling the sweepings of the wheat.'”

The authors of the Hebrew Bible were unafraid to take on these economic issues head on. This morning, as we embark on a four part sermon series, we will summon the courage to do the same.

Last Spring I traveled to Seattle on behalf of the Unitarian Universalist Minister’s Association Executive Committee to meet with colleagues in Oregon, Washington, Idaho, and British Columbia. While visiting I spoke with two ministers whose churches were gearing up for capital campaigns. On account of the state of the economy one church had decided to postpone the campaign until the economy turned stronger. Another minister reported that the church he served had decided to do exactly the opposite. He felt extremely confident in their ability to raise several million dollars cash because, according to him, “I believe we can meet our gift goal from members whose own personal finances are so insulated from the ups and downs of the market that the state of the economy has no connection to their lives, their future, or their ability to give generously to a campaign.”

If you remember your ancient Greek, you know that the word economy comes from the binding of the word, “Oikos” meaning “household” with the word “nomos” meaning law. Economy is then literally the laws of the house, the management of the household. I think it is worth remembering the root of the word because it makes thinking about the economy more concrete than abstact. It is worthwhile to pay attention to what is happening in the house and, perhaps, pay a little less attention to the green and red numbers scrolling across the screen on cable news.

It is not too difficult to predict with some degree of certainty that economic policies and promises will be the key issue in this November’s election. In fact, just this past week, the financial lives of the two candidates for President came into play. I offer the disclaimer that I adhere to a strict policy of not endorsing any candidate seeking office, but this back and forth between the campaign staffs of Barack Obama and John McCain tell us something. The Obama campaign sought to capitalize on McCain’s gaffe in which he was not able to say how many houses he owns. (McCain was raised by a long generation of high-ranking military officers but did not rise to the level of the super-wealthy until he had the good sense to marry into money, marrying a woman who inherited $100-million from her father’s lucrative beer distribution business.) When Obama’s campaign criticized McCain for not knowing how many houses he owned, McCain’s campaign went on the counter-attack, issuing a response that said, "Does a guy who made more than $4 million last year, just got back from vacation on a private beach in Hawaii and bought his own million-dollar mansion with the help of a convicted felon really want to get into a debate about houses?" Of course, the McCain campaign might have forgotten that only a few days earlier John McCain had joked in an interview with mega-church pastor Rick Warren that to be rich you needed to make more than $5 million per year, and, under that definition, Obama, who earned a mere $4.2 million last year would not qualify as rich.

The point of my bringing this up is not to lift up one candidate or put down another. Even though I do have personal feelings, from the pulpit I maintain a policy of strict neutrality. Rather, I bring this up to point out that the United States economy is facing some serious challenges and yet it is so easily avoided by both candidates who get sidetracked comparing their own houses.

This morning we embark on a series of four sermons on “The Economy, Your Wallet, Your Faith, Your Life.” In September I will preach the second sermon in the series, on “The Economy of Fear” in which we will turn to Franklin Delano Roosevelt’s famous line from his inaugural address as he assumed the presidency during the Great Depression. September will also bring us the third sermon in which I will muse about “The Future of the American Dream” and predict some short and long term effects of a struggling economy. In October, I will conclude with a sermon on the “Economy of Faith” in which I will ask what our faith as Unitarian Universalists has to say to the economic problems we face as a nation.

I am no economist. I hope my words will result in lots of discussion and even disagreement. More than that, I hope to provoke. If you feel uncomfortable, I take that as a sign of success.

Let the anxiety begin with the act of dividing people into groups, which is always a dangerous and potentially offensive thing to do. The economy is experienced differently by different people. There are those people, like the donors to that capital campaign in that UU church on the West Coast, who really are so insulated that the state of the economy does not really touch them at all. Sure, their investments may be losing money and their home or homes may depreciate in value, but their personal connection to the economy is only seen on the computer screen which tells them this is the case. The rising cost of gasoline, utilities, travel, and food is not felt; the economy changes nothing for them. A gallon of gas could cost $40 or $400 and there are people for whom that would not cause a dent.

Also, on the more well-off side of the equation are those who live on a solid financial footing. These people live not only at a comfortable level but are also well prepared for challenges. They are positioned to be able to face a job loss or a medical emergency. Bad luck won’t bankrupt them. The economy has caused people in this group to make some basic changes, but nothing drastic. The volatility of the stock market has inspired them to set aside extra savings. Perhaps they are delaying a major expenditure such as home remodeling or buying a new car. Perhaps they are slightly scaling back on vacations and choosing a little more wisely about how they dispose of disposable income. Maybe, to paraphrase one observer, they used to begin the morning with a $4 cup of coffee and a $3 gallon of gas to get to work. Now that the gallon of gas costs $4, they buy a $3 cup of coffee instead.

On the opposite end of the economic spectrum, it is clear that those who are hurting the most are those who already were not making it in America. If you were dependent on social services and charities, you face the dual reality of those services and charities being cut back and a greater competition for those very resources and services that you depend on because of increased numbers of people seeking them out. For the poor whose every last cent goes to the basics of food, shelter, and transportation to and from a job, a dramatic increase in the price of food and the price of gasoline means that living this way, which was never sustainable to begin with, is now impossible.

In the middle, between those who are making it in America and those who were never making it, lies a vast economic stratum, impacted in all sorts of ways by the state of the economy. And it is that broad middle I want to speak about in the most depth this morning. Before I do so though, I want to make a couple of comments about two demographic groups. One group that is hit hard are retirees whose retirement savings are being drawn down more and more quickly because of an increase in prices and a flagging market. This generation is among the most vulnerable in a tight economy. The other group I want to mention is those in Generation X or Y. Those of us who are forty-ish and under enter the work world with the distinction of being the first generation in American history to be expected to enjoy a lower standard of living than their parents’ generation. Some of us will do much, much better than our parents while many of us will do far, far worse. One of the reasons for this is the accelerating shift of manufacturing jobs away from our country. Many professional fields continue to grow increasingly lucrative, but a greater percentage of the other available jobs are service-based positions that will never provide the same economic opportunities that careers in industry once did.

Between the two poles of those people who are unquestionably making it in America and, on the other end of the spectrum, those who were never making it in America to begin with, there dwells a diverse and enormous subset of the American population.

I want to make a couple of bold claims. These claims might even be taken as offensive. The first claim is that ups and downs in the market, in the value of the dollar, in the rate of inflation, and in the price of consumer goods are things that always occur in capitalist systems. The ability to adjust, adapt, thrive and survive the valleys is linked to the pre-existing health of those in society and to the quality of the safety nets created by society. To employ an analogy: If there is an outbreak of a strain of flu, those of compromised immunity will be the ones most susceptible. The more robust the public health infrastructure, the more successful society will be at minimizing the harm and avoiding epidemic.

The current economic downturn is unusually severe because of the chronic financial illness of millions of Americans and because societal safety nets have grown increasingly threadbare and porous.

One need only look at the financial situations of millions of Americans before the price of gasoline skyrocketed and the stock market tanked. Rates of personal savings had been declining for years, to the point where there was a negative savings rate in our country. Concurrently, levels of debt had been rising with more and more of this debt concentrated in high interest credit cards and other forms of bad debt. These practices were fundamentally unsustainable, but on the surface they didn't seem like a crisis when the economy was soaring. I’ve coined the term “Faking it in America” to refer to those financial practices that were inherently unstable but were easily masked when house prices and the stock market were climbing, when interest levels were dropping, and when credit was cheap. But, for millions, this turned out to be an illusion. They were not actually "making it in America" after all.

Combine the dangerous personal financial practices of millions of Americans with a moth-eaten security net and you are inviting disaster. In an economy where job changes are more frequent, health insurance is often not portable and people find themselves going through stretches of vulnerability and risk. In addition, the cost of health insurance has increasingly been passed on to employees and health plan benefits have become more limited. Likewise, company pensions have given way to 401(k) plans and other forms of retirement savings that place greater levels of risk on employees. Some will argue that these 401(k) plans benefit employees by giving them greater control over their investments and, to a degree, this argument is valid. At the same time, this is a strategy that places more of the risk on the employee and minimizes the risk to the employer.

America’s very rich have always been able to stitch together their own safety nets. Some have even been able to line those safety nets with imported silk. Business and government sharing the responsibility for providing safety nets to those who cannot provide their own is not only morally right, but it is also good for business.

In preparation for this sermon I interviewed, on condition of anonymity, a former employee of “Nova Star,” a company that specialized in sub-prime mortgages and a company with the depressingly ironic name of an astral body that is beautiful and exciting, but actually signifies instability, danger, and the threat of complete explosion. Now out of business, Nova Star found most of their customers through internet advertising. Nova Star mortgage lenders would then call these people, collect information and offer a mortgage. Nova Star did not offer fixed-rate mortgages. They only sold sub-prime. In the Summer of 2005, when a 30 year fixed rate mortgage to a first time homebuyer was around 6 and 1/4, Nova Star was selling adjustable rate mortgages that started at 8 and 3/4 and could rise to far higher levels over a short period of time.

I asked the former employee if she knew how bad the mortgages were. She said she knew full well. However, at $2,000 commission per sale, the money was hard to pass up for many of the employees. Others rationalized it differently. If they weren’t selling them, somebody else would be. Still, the person I interviewed talked about the toll the job took on her. When she found herself begging customers not to take one of their mortgages, telling them that they were being taken for a ride and that they would most likely lose their home within a few years, she knew that it was time to quit, and she did.

I followed up by asking her to tell me about her customers. Who were they? I asked. Were they ignorant and innumerate? Were they foolish? Were they deceiving themselves? She answered that self-deception was certainly a part of it, but it was a different kind of self-deception. These people who called her worked hard; in fact, they worked extremely hard. They looked at how hard they worked and came to believe that this entitled them to a nice house. Indeed, that is the lesson they were always taught: “Work hard and the American Dream will be yours.” Not only did they feel entitled to a nice house, but their idea of a nice house was influenced by their friends. So and so has a deck and a hot tub; I work just as hard and deserve the same. So and so has granite countertops and tile floors; I work just as hard and deserve the same. So and so has a finished basement with a fancy entertainment center; I deserve it just as much as they do. These sentiments led people not only to accept predatory lending, but also to dig themselves into a deeper hole by borrowing more money than the house was worth in order to make fancy additions, or to cash in years of equity for pricey upgrades.

What was most telling about the interview was something that she said at the end. You would think that someone who worked in this business would be a discerning consumer. And yet, the house that she bought was a lot bigger than she needed and she admits to having to cut back on other things in order to afford her house payments.

I understand these temptations. When I purchased my own home a little over three years ago, I encountered these same temptations despite the fact that I had imagined myself to be beyond such materialistic urges. I remember the process vividly. I remember my jaw dropping when I was told what I could “afford” to borrow in a mortgage. The home I did wind up purchasing was between $50,000 and $70,000 less than what my mortgage lender told me I could afford. I purchased a newly renovated duplex unit near UMKC and was told by the developer that I could add all sorts of bells and whistles, everything from fancy countertops to fancy appliances, to extra finishing in the basement. I looked at my own amortization schedule and realized that if I added in these things I might spend the first 3 to 4 years of the mortgage paying off the bells and whistles. I also realized, through some fairly rudimentary budgeting, that adding stainless steel appliances would mean giving up lots of other things that I would enjoy a lot more. Then again, I was not your most conventional homebuyer. I remember at one point having a serious discussion with my realtor about whether it was actually necessary for me to have a refrigerator. I wasn’t convinced that I needed one, so needless to say a Viking range didn’t hold a lot of temptation.

By way of conclusion, there are three points I wish to make.

The first point is how tied to emotions this entire conversation is. It is completely understandable if, during my sermon this morning, you found yourself experiencing emotions of anger, anxiety, jealousy, shame, envy, disappointment, or another strong emotion. These emotions, I would argue, tend to close us down from fully engaging in addressing our own economic well-being honestly and substantially. Just look at the two candidates for President and how a necessary and serious conversation about the economy turned into a spitting match about who makes what and whose palace is bigger.

Along these same lines, I would caution anyone who feels the urge to pass judgment this morning to be cautious with that instinct. In my years as your minister I have had visits with so many of you and been invited into so many of your homes. At times it is tempting to make assumptions about the financial status of our fellow members or friends, but we truly only see but a small part of each other’s lives. Remember, Warren Buffett, the second richest man in the world lives in a home built in the sixties that is far less impressive than many of the homes being built in South or West Johnson County. There are people living in Mission Hills who are living on the brink of foreclosure.

My final, and most important point, is that our society that gives us all kinds of messages about the size of the home we should have, the zip-code in which we should live, the kind of oven we should buy, the kind of car we should drive, and so many other things. It takes an act of faith, literally an application of our principles and highest values, to sort through which of these messages are healthy and which of these messages are sub-prime. Resistance to these messages is perhaps one of the hardest things to do. As Unitarian Universalists, we like to pride ourselves on being somehow above the sway of advertising and peer pressure. We are not. In fact, there are even messages in advertising that tell us that we are too sophisticated to give into advertising and then instruct us on what to buy that will show the world that we are unique and self-determining.

And yet, our faith calls on us to be questioning. It calls on us not only to question articles of belief but also to relentlessly question, critique, and challenge the culture in which we are situated. This is by no means easy. But, liberation is never easy. It wasn’t for the ancient Hebrews. It wasn’t for African Americans living under the law of Jim Crow. And, in the buyer-beware world in which live, achieving our own liberation from ways of living that are all image but devoid of substance will not be easy. It will not be easy.

And, thus, the perennial question: what things are of value? What things are important? What really serves to increase happiness as opposed to those things that make false promises and leave us feeling empty and unfulfilled?

I can tell you that these questions are so, so very important. May we have the strength to not only answer these questions in the thinking of our own minds, but let us also join in community and talk openly with one another, unafraid to admit our own fears and our own struggles. And finally, in the words of Ralph Waldo Emerson, let us always remember to be careful about what we worship in our day to day lives, for what we worship we are destined to become.