According to Travelujah, a record 752,000 tourists visited Israel in the first three months of 2012. The 3.4 million tourists who visited Israel in 2011 contributed $47 billion to the Israeli economy. Over two-thirds of the tourists were Christians.
Contrary to expectations, sales of printed books in the US were up significantly in January 2012 compared to January 2011, according to a report from the Association of American Publishers. Sales of e-books grew even more quickly. Sales were particularly strong for “religious” (mainly Christian) books, with e-book sales up 151 per cent in January 2012 to $6.7 million and sales of hardcover books up three per cent to $39.6 million, but sales of paperbacks were down 10 per cent to $5.3 million.
HarperCollins publishers has announced that it has made plans to acquire Christian publisher Thomas Nelson. HarperCollins is the combination of the American company Harper & Row and the British publishing house William Collins, Sons and Co Ltd. The Collins company was originally founded in 1819 in Glasgow, Scotland. Thomas Nelson was founded in 1798 in Edinburgh, Scotland.
With this acquisition, HarperCollins (already owning Zondervan) will control 50 per cent of the Christian publishing market. “We are excited to be joining HarperCollins Publishers,” said Mark Schoenwald, President and CEO of Thomas Nelson. “We believe this transaction represents an attractive strategic fit for our company. With HarperCollins’ resources and capabilities to draw on, we will capitalize on the many opportunities in this rapidly changing world of publishing.”
What should Christians be doing about the current economic crisis? CC.com consulted a number of economic and socio-political leaders for faith-based perspectives on the subject. Second in a series.
The current economic crisis has raised a number of questions.
Is there something inherently wrong with the capitalist system?
In the capitalist system, “there is an inherent tendency to lead to inequality unless there is state intervention,” said Joe Gunn, Executive Director of Citizens for Public Justice.
Since the 1970s, there has been less state intervention as the international economy has been increasingly globalized and deregulated, said Mary Corkery and John Dillon of Kairos. (Corkery is Executive Director and Dillon is Global Economic Justice Program Coordinator of the organization, which is supported primarily by mainline Canadian churches.)
Globalization has resulted in the Canadian government lowering business taxes so that Canadian businesses can compete with the US and other countries, said Gunn, but there have also been other changes. A half-century ago, the owners and managers of large companies “lived and went to church in the same community” as their workers; now they may live in some other country. It is not that business executives are less ethical than their counterparts in the past but that their primary purpose now is to “provide shareholder profits.” Even when churches and unions own stock in larger companies, they often invest in order to gain income, don’t ask sufficient ethical questions or are told they have no right to ask ethical questions.
“Economy” originally meant “how a household is organized,” said Corkery, and the Christian values on which an economy should be based are “valuing God’s creation and people’s contributions,” not “the creation of wealth.” People talk about the economic system as if it is “a framework from which we can’t stray.” But, she said, governments and companies planned and created the current system, and they can also plan an economy that operates “for the common good.”
Elwil Beukes, Professor of Economics at King’s University College in Edmonton, agreed that the economy should be about “the collective pursuit of the common good,” but added, “That doesn’t mean the government has to do it all.”
Beukes favours “a responsible free enterprise economy, but added that “a responsible free enterprise economy is one that responds to human need.” “The markets assist efficiency,” Beukes continued, but “efficiency should not be pursued at all costs, disregarding all other values. You can have a very efficient killing machine, for instance.”
The area of government control of the economy is one “where Christians differ quite a bit,” said Carsten Hennings, Assistant Professor of Business Administration at Tyndale University College and Seminary in Toronto. “Christians have a strong investment in freedom,” and there is a “creativity that comes from allowing people to pursue their goals,” he said. No “planned/communist system” can achieve the efficiencies that a free market can. However, there is still “a need to set some boundaries.” We simply can’t assume that “the sum total of self-interested decisions” will produce good in the long run.
“Christians ought to have a preference for a market economy,” said John Boersema, a Business Professor at Redeemer University College in Ancaster, Ont., and author of the book Political-Economic Activity to the Glory of God. However, he suggested that especially when economic entities get too large, it may be necessary to regulate them. Boersema also added that the free market system “doesn’t require you to be selfish and greedy.” Christians could use the freedom the market provides to serve others rather than trying to serve themselves.
How much intervention is best?
“Government is a huge part of the solution because government can help us be better,” said Gunn. He pointed out a number of large-scale programs that only governments can do.
Many of the experts pointed out that Canada has escaped the worst of the current economic crisis because of better regulation. In Canada, “we have a mixture of free enterprise and government control.” said Lorne Jackson, president of the Canadian National Christian Foundation.
For instance, while the US government was continuing to rack up annual budget deficits of hundreds of billions of dollars, the Canadian government has had surpluses in recent years. As well, Canadian banks are much more closely regulated than US banks. They didn’t make as many risky loans, and they didn’t buy enough risky loans from US banks to seriously affect their overall viability. “The Canadian systems are more tightly regulated, the banking culture is more conservative and the business climate is less open to risk taking,” said Hennings.
Therefore, while the financial bubble has burst in the Canadian housing, commodity and stock markets, the financial crisis has not greatly affected the real Canadian economy. However, as the financial collapse elsewhere starts to affect the real economy there, it will inevitably affect Canada as well. In particular, Canada is going to feel the pinch as the US, Canada’s best customer, stops buying Canadian products.
While all the experts we talked to agreed that there is a need for regulation, several also warned that this won’t necessarily solve all problems. The collapse of the sub-prime housing market in the US was not caused by lack of regulation, but because the regulatory bodies in place failed to do their job, said Paul Williams, David J. Brown Family Associate Professor of Marketplace Theology and Leadership at Regent College in Vancouver.
In fact, part of this collapse was due to “government-mandated lending practices,” said Hennings.
“The ability of government to fine-tune the economy is limited, “said Boersema, noting that governments have been unable to prevent periodic recessions.
What should Christians be doing about the current economic crisis? CC.com consulted a number of economic and socio-political leaders for faith-based perspectives on the subject. Third and last in a series.
1. Get out of debt
One of the key things Christians should do in the current economic crisis is to “get out of debt,” says Lorne Jackson, president of the Canadian National Christian Foundation (CNCF). Government efforts to stimulate the economy by making it easier to borrow are only going to make things worse in the long run since that is “what got us into the problem in the first place,” he argues, noting that the combined government, business and individual debt in the US is $32 trillion, several times the amount of money in circulation. The average American’s credit card debt is $8,000, and “the majority of people have more liabilities than assets.”
People should “never borrow to buy coal,” that is, to buy things that will burn up or deteriorate and be forgotten, says Jackson. Yet much of the current debt is “consumer debt,” debt incurred to buy things that people hope will make them happy but never do. The only acceptable reasons to go into debt, he says, are to buy a house or to expand a business or to buy a car, but only if it is necessary to get to work — something that will make people better off in the long run.
Another key thing churches should be doing is teaching, says Jackson: “The Bible talks more about money and possessions than any other subject.” Yet Jackson was in three churches recently where the people in the pews were worried about losing their jobs and investments, yet nothing was said from the pulpit — which, says Jackson, is one reason people think the church is irrelevant.
Many pastors lack experience and expertise in financial matters or are afraid of looking like they are just trying to raise money, says Jackson. If that is the case, they should call in financial advisors such as those affiliated with the CNCF to do the teaching.
Christians need teaching on the subject because they buy the same cars and live the same lifestyle as non-Christians, but “every financial decision is a spiritual decision,” says Jackson. If God owns everything, before every financial decision, people need to be taught to ask, “Is this going to help me draw closer to the Lord and enable me to give more and bless people?”
“Churches should impress on their members that their economic lives are one of the most important ways we tell people how we serve God,” says Elwil Beukes, professor of economics at King’s University College in Edmonton.
There is nothing wrong with being rich and successful, since Abraham was rich and blessed, he says, but “our actions as consumers, workers, businesspeople and civil servants should contribute to an economy that serves life.” In the Bible, God repeatedly tells people to “serve Me in the way you eat, drink, care for your fields and flocks and care for each other.”
It is important for churches to “talk about a variety of spiritual issues,” says Carsten Hennings, Assistant Professor of Business Administration at Tyndale University College and Seminary in Toronto. One of them is self-worth — “what makes me valuable if I lose my job.”
It is important for the church to “stand in the gap and supply people’s psychological and physical needs,” says Paul Rowe, associate professor of political and international studies at Trinity Western University in Langley, BC. “In previous recessions, it is the church stepping in that has made the difference for a lot of people.”
But while the church has often taken on more of a social role during tough economic times, and certain church institutions have expanded, Rowe says it is also important for churches to ensure that they do not lose their fundamental moral and spiritual role either.
Teaching on economic issues may require significant changes, suggested Joe Gunn, executive director of Citizens for Public Justice. “Churches have been part of the problem. Our church parking lots look like a Wal-Mart parking lot two hours later.”
Rowe says there is “a strong materialistic strand in American Christianity,” and the “prosperity gospel” has helped fuel the over-consumption that created the economic crisis.
3. Practise the sabbath
Paul Williams, an associate professor of marketplace theology and leadership at Regent College in Vancouver, centres his advice around three biblical concepts: sabbath, jubilee and hospitality.
The concept of the sabbath has two parts, he says. The first is to establish a boundary, exercise self-control, cease striving and say enough is enough. This speaks directly to the compulsion to over-consume which has driven our long-term economic troubles, and is a call “to live within our means.”
What should Christians be doing about the current economic crisis? CC.com consulted a number of economic and socio-political leaders for faith-based perspectives on the subject. First in a series.
In discussions about the ongoing financial crisis, the word ‘greed’ keeps popping up. But that is the simple answer. According to some experts, the situation is more complex than that.
There are both a “short-term cause and a long-term cause” to the current problems, according to Paul Williams, associate professor of marketplace theology and leadership at Regent College in Vancouver.
The short-term cause was the collapse of the sub-prime housing market in the United States.
Essentially, said Williams, “banks sold mortgages to people with poor credit ratings on less desirable properties.” Often, these mortgages offered very low introductory interest rates (as low as two percent) for the first couple of years, after which the rates would rise to above-average interest levels.
The buyers were told that, after a couple of years, the house value would rise. They would then have equity — i.e. they would own part of the house — and they could then negotiate a mortgage with a better interest rate. Often, the mortgage given was for 100 percent or more of the purchase price and/or value of the house — again on the assumption that houses would continue to go up in value.
The problem was compounded by new means of spreading the risk. These means have been called “recently invented financial instruments” by Carsten Hennings, assistant professor of business administration at Tyndale University College and Seminary in Toronto.
Williams explained that banks are normally limited in how much money they can lend by the “capital ratio” — which means that a considerable proportion of the money they lend out must be supported by money they have on deposit.
In this case, regulators allowed the banks to ‘sell’ the mortgages to other investors, and then agreed that these mortgages would not be included in the banks’ capital ratios. This enabled the banks to issue mortgages many times the value of the money they had on deposit. The mortgages were bought by other banks and investors both in the U.S. and around the world. Bond rating agencies rated these investments as ‘safe,’ since they were backed by tangible assets — i.e., the houses.
This system worked for a while. The massive infusion of credit into the U.S. housing market kept driving house prices higher. However, eventually borrowers who were unable to make the mortgage payments began to default on their loans. This caused house prices to drop, and “the whole pyramid scheme started to collapse,” Williams said. Several things began to fall: the value of the investments, bank profits and stock prices.
Something similar occurred with the stock market, Hennings said. Investment money had poured into the market, driving up stock prices and making big profits for investors. However, the investments did not increase the real value of the companies being invested in; because of this, stock prices eventually began to fall.
“What we often call investing is not what economists call investing,” said Elwil Beukes, professor of economics at King’s University College in Edmonton. Much of the ‘investing’ that was going on was “financial investing,” he said — i.e. bidding up the price of stock and houses; very little investment was put into “the real economy.”
Real investing, Beukes clarified, increases “the capacity of the economy to produce more”; but even while stock prices were going up, real industrial capacity was dropping. As jobs were shifted overseas to increase profits and stock prices, “U.S. industrial indices have been in recession for a long time.”
Virtually all of the experts CC.com consulted agreed that the ‘bubble’ in the stock market and the housing market were bound to burst, and that a recession was inevitable. However, the recession is now affecting more than the financial markets. Those who lost houses or lost money in the stock market slowed their spending, and this began to affect the ‘real economy.’
As soon as banks started to report losses on their mortgage debt, said John Boersema, a business professor at Redeemer University College in Ancaster, Ontario, people started selling bank shares — and that precipitated the stock market crash.
As well, since the transfer of debt from one financial institution to another had caused such problems, “banks were afraid to lend to each other or anyone else,” said Williams — and this also affected the real economy.