Posted by: skokiecentralchurch | October 17, 2010

2010.10.17 – ENOUGH – Sermon 1: “Faith in the Midst of Financial Crisis” – Psalm 46: 1 – 2

Central United Methodist Church

Enough: Discovering Joy Through Simplicity and Generosity

Sermon 1: “Faith in the Midst of Financial Crisis”

Pastor David L. Haley

Psalm 46: 1 – 2

October 17th, 2010

 

God is for us a refuge and strength,

a helper close at hand, in time of distress.

So we shall not fear though the earth should rock,

though the mountains fall into the depths of the sea;

even though its water rage and foam,

even though the mountains be shaken by its waves.

The Lord of hosts is with us; the God of Jacob is our stronghold.

– Psalm 46: 1 – 2, Grail Translation

It was Thursday, September 18th, 2008. Just a few days before, the Wall Street firm of Lehman Brothers declared bankruptcy. Unfortunately, no one thought it would end there. Others – including insurance giant AIG, whose financial tentacles reached everywhere – were at risk. Though Treasury Secretary Henry Paulson had – up to this point – opposed a governmental bailout, he could now see no other option.  Even then – according to Andrew Sorkin, in his book, Too Big to Fail – Paulson was in his office throwing up in his trashcan, afraid that the new plan would either not be approved or not work, and the entire economy would crash.

Shortly thereafter, Paulson and Fed Chairman Ben Bernanke met with key legislators to propose a $700 billion emergency bailout, which would be called the Troubled Asset Relief Program (TARP).  Bernanke reportedly told the legislators: “If we don’t do this, we may not have an economy on Monday.”

Later, in an interview on C-Span, Rep. Paul Kanjorski of Pennsylvania explained what Paulson and Bernanke had told them during that closed-door session:

On Thursday Sept 15, 2008 at roughly 11 am, the Federal Reserve noticed a tremendous draw down of money market accounts in the USA, with money being removed electronically, to the tune of $550 billion dollars in an hour or two. The Treasury tried to help, opened their window and pumped in $105 billion, but quickly realized they could not stem the tide of what amounted to an electronic run on the banks. So they decided to close down the accounts. Had they not closed down the accounts, they estimated that by 2 PM that afternoon, $5.5 Trillion would have been withdrawn, the entire economy of the United States would have collapsed, and within 24 hours the world economy would have collapsed as well.

        According to this account, though unknown to most people, that’s how close we came to complete financial meltdown.  

        Though a complete meltdown would have been worse, some might wonder how it could have been any worse than it has been.  Many have lost jobs, and given up hope of finding another any time soon. Some have lost their homes, and for all, housing prices have plummeted. Others worry about threatened pensions, or shrunken investments. Many lie awake in bed at night, worrying about worst-case scenarios.

        For a long time in church we ignored the problem, until the repercussions of the financial crisis trickled down through all levels of society: business and industry, state and local governments, education, and – yes – churches.  To survive, some churches have had to sell assets, lay off staff, and cut programs. Despite your generous giving, even here at Central we’ve barely had enough money to do what we need to do, not to mention what we would like to do.  On the other hand, how much can you ask from people who have seen their jobs ended or threatened, their wages frozen, their pensions cut, their investments evaporate?      

        Last Sunday, I discussed two areas of “new normal” under which we live, those two being “forever war” and in an economy in crisis. Today we begin a series to examine and address the financial issues before us, which for some of us have been a problem for a while, but which have distracted and distressed all of us for the last three years.

        This series was developed by Rev. Adam Hamilton at the United Methodist Church of the Resurrection in Kansas City, which he has made available to the larger church. It is entitled, “Enough: Discovering Joy Through Simplicity and Generosity.” I believe that by the time we reach the end, every one of us will have greater wisdom in regard to our relationship to God, to ourselves, and to our finances.

        Today, as a general approach to the topic, I’d like to address faith in a time of financial crisis, and ask three questions: First of all, what happened? Secondly, what was at the core of the crisis?  Thirdly, what was our role in it?

        First of all, what happened? Kind of like the guy who said, “Did anybody get a description of that truck that ran over me?”  Ever since I read Rep. Kanjorski’s account, I’ve tried to understand what brought us to the edge of disaster. 

        Two disclaimers: first of all, I know almost nothing about economics. I didn’t take that course, intentionally. Secondly, even as I’ve tried to understand what happened, it’s not been easy. I’ve had to ask my accountant wife a lot of questions; like, “Why do you associate with those people?” In fact, as some have pointed out, part of the cause of the crisis was that many of the leaders at financial institutions, including the regulators who were supposed to supervise them, did not understand what was going on either.

        To greatly oversimplify, as I understand it, here’s what happened.  Set loose by deregulation, the financial industry came up with what they thought were innovative ways to make money, mostly for themselves. One of those ways was to buy up home mortgages, including those made through subprime lending, in the form of securities and derivatives, which Warren Buffet as early as 2003 called “financial weapons of mass destruction.” Never thinking that the housing bubble would burst, or that through predatory lending, people who never should have signed on the dotted line did, and that therefore the day would come when foreclosures would skyrocket (after all, it had never happened before) the financial industry loaded up. When the bubble did burst and foreclosures mounted, they discovered that despite their methods of creative accounting, they owned a lot of worthless paper, and suddenly their liabilities outweighed their assets, never a good situation for any institution, but especially banks. The crisis hit its peak (we hope) in September and October 2008, when several major institutions either failed, were acquired under duress, or were subject to government takeover, including Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac, Washington Mutual, Wachovia, and AIG. Because of the potential national and global consequences of their failures, they were deemed “too big to fail,” and an unprecedented situation occurred, in which the government felt, in order to save the economy, they must be bailed out.

Despite the bailout, which as we all know remains controversial, there were still repercussions. Essentially, banks froze credit.  Without credit – the oil that lubricates the engine of the economy – nobody – industry, business, or consumers – could operate. Without money, business and industry could not produce goods and services, workers were laid off and benefits scaled back, resulting in even more home foreclosures, completing the cycle. To make matters worse, as a result of the fear pervading the economy, nobody was buying big ticket items anyway.

        Two years later, I wish I could tell you everything is better, and some things are. The crisis seems to have passed, and the stock market is showing signs of life, although unemployment remains high, and foreclosures continue.  (I have heard that Skokie has one of the highest rates in the northern suburbs.)  Last week, the story broke that much of the foreclosure paperwork may be either fraudulent or missing, with the result that all 50 states have launched investigations, which threatens financial institutions yet again.

        Second question:  what was the core of the crisis?  Different people answer in different ways, but at its center it was a crisis of confidence. Paul Krugman, Nobel prize winning economist, wrote in the New York Times on February 15th, 2008:

“Why has a crisis that began with loans to a limited group of homebuyers ended up disrupting so much of the financial system? Because, ultimately, it’s more than a subprime crisis; indeed, it’s more than a housing crisis. It’s a crisis of faith.” (Paul Krugman, “A Crisis of Faith,” The New York Times, February 15, 2008)

        What Krugman meant was not faith in the sense of faith in God, but faith in our institutions, and in each other. When we can’t trust our financial institutions, the stock market, our banks, or our government we find ourselves afraid, and that fear leads to either cynicism or panic. Honestly, after all we’ve heard, it almost makes you want to enact Jesus’ parable of the foolish steward and put your money in fruit jar and bury it in the backyard.

But really, it’s not a question of “if” but “when” the stock market will recover. When we look at past market trends and identify those years when there was a significant drop, within a few years there was always a significant rise. While we wait for that rise, the economic reality is that some people may lose their jobs and others may lose their homes. Some may need to sell their cars because they can no longer afford the payments. Some may need help and support. Others may not feel the effects of the financial crisis at all. But none of us should allow ourselves to be controlled by fear, because not only the market, but more importantly, the scriptures and our faith in God reassure us that we are going to be all right.

A few minutes ago, I mentioned that at the center of the economic crisis is the extension and abuse of credit. Do you know that credit comes from the Latin word credo, which means, “I believe” or “I trust.” To extend credit to someone is to believe or trust that he or she will repay. When we invest in something, whether a business or a church, we basically extend credit to them, our belief in them.

But as Christians, our ultimate credo or trust is in God. The Apostle’s Creed begins, “I believe (credo) in God the Father Almighty, maker of heaven and earth.” Throughout the Bible, almost from beginning to end, we find words of hope and promise that remind us not to fear. Almost all of these words, I would remind you, were not written in easy or prosperous times, but during troubled times, times of crisis. For example, Psalm 46: 1 – 2, which we recited in our Call to Worship: 

God is for us a refuge and strength,

a helper close at hand, in time of distress.

so we shall not fear though the earth should rock,

though the mountains fall into the depths of the sea;

even though its water rage and foam,

even though the mountains be shaken by its waves.

The Lord of hosts is with us;

the God of Jacob is our stronghold.

(Psalm 46: 1 – 2, Grail Translation

        And just this summer we heard Jesus warn us: “Take care! Protect yourself against the least bit of greed. Life is not defined by what you have, even when you have a lot.” (Luke 12: 15, The Message)

        Our faith in the economy or the stock market or financial institutions may be shaken, but the ground upon which we stand, the confidence we have in life, the hope that sustains us is not the stock market or the economy or our 401ks.  That’s not what we ultimately trust in. “We believe in God the Father Almighty, maker of heaven and earth.”  The last time I looked, “In God We Trust” was still on our money: 

        Third and final question I want to ask is, what was our role in the crash and the circumstances leading up to it?  Well, we say, mostly as innocent – now angry – victims. And yet, I wonder if that’s completely true.

The current economic crisis is a spiritual issue stemming from at least five of the seven deadly sins: gluttony, greed, sloth, envy, and pride.  There has been a lot of justifiable anger towards the greed and arrogance shown by Wall Street executives taking seven and eight figure bonuses while running their companies into the ground, and then receiving a government bailout, only to do it again.

But we also have to look at ourselves.  Because too often, we were also the ones wanting more: more money, more credit, a bigger house, a second mortgage, to buy the things we were convinced – with a little help from the advertising industry – that we not only wanted, but needed. So, we spent more and saved less, and like the bankers, were soon in over our heads, such that and the rainy day came, we were in a bad way.  Meanwhile, our charitable giving, our giving back to God and to others, has suffered correspondingly.

At its heart it is a spiritual crisis, calling us back to such basic values as trust, truth, fairness, frugality, simplicity, and generosity. No government can enforce such values, but without them, any government can fail.

Finally, it’s not our confession of what we’ve done wrong that’s most important, it’s what we are called to be as God’s people, Christ’s church, the followers of Jesus.  We are called to be a beacon of light, light and salt in the world, inviting people to find and to live the hope we have. In this time of crisis, many are hurting, and in need of a word of comfort and hope.  Do we have one to give them?

Before the next crisis hits, before we become more vulnerable than we already are, let’s see if we can turn this around, by saying “Enough,” and creating for ourselves a life in which we discover true joy, through simplicity and generosity.

Prayer:  O God, earth and heaven and everything in them are yours.  All that we have is a gift from you. When times are uncertain and our finances are hurting, forgive us for panicking and listening to the wrong voices, rather than to you and your Word. Forgive us for giving in to fear and allowing anxiety to keep us from being the wise stewards you would have us to be. Prepare our hearts and minds for the coming weeks of study. May we be open to your reproof, your instruction, and your guidance.  As we learn to be better managers of our resources, we put our trust in you.  We trust you, Lord, with our lives, and with all you have given us.  Amen.

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