Thursday, December 30, 2010

Can You Gain Time by Giving Up Devices?

I'll start with a confession: this Christmas, I've had dreams of smart phones, iPads, and Kindles dancing around in my head. One reason these devices are so alluring is that they promise more time. I'd really like to be able to access every book ever written, immediately, with a small touchscreen machine in my hand. Forget all the time walking through libraries, all the hassles of checking out books, all the delays while waiting for them to be shipped. It's a dream!

In my waking hours, I've read a couple of old-fashioned printed books--a technology I still adore--that share stories of giving up modern technology.

Can one forsake time-saving technologies and gain back time? That's the lesson from these two authors.

Colin Beavan, in No Impact Man, spent a year scaling back his ecological footprint. After giving up cars and taxis, he tells a story about walking around New York City in the rain with his young daughter Isabella:
And on this rainy day, here is what happens when I treat my body as something more than a means to transport my head, when I finally learn to treat the landscape as something more than the space that stands between where I am now and where I want to be later: 
I take Isabella down from my shoulders and let her jump in a puddle, soaking her shoes and pants. For fun, I jump in the puddle, too. Isabella laughs. She stretches out her arms with her palms facing up to catch the rain. She opens her mouth, sticks her tongue out and leans her head back. I try it, too.
When did the child in me disappear? 
People are running past. They look desperate, miserable, trying to get out of the rain. What has happened to us (pp. 87-88)?
Slowing down, connecting to the weather, to natural rhythms, can open up time. As Beavan puts it,
The mechanized boxes that transport our brains from here to there and the portable electronics that keep us constantly connected have robbed us of the ho-hum. Those periods that interrupted the everyday rush, like a red light constantly bringing the quiet of stopped traffic, have been excised. Now peak moment follows peak moment, and they have all been accordioned together (p. 89).
My translation: we can't experience the fullness of time or kairos time as a constant succession of peak moments. Peak moments can't be engineered to happen constantly. Kairos time (deeply meaningful time) normally emerges in cracks, gaps, or interruptions of chronos (24/7 clock) time, and we need to savor those cracks, gaps, or interruptions.

This might sound a bit pie-in-the-sky, but Eric Brende made some hardheaded calculations during his year without technology (as reported in Better OFF: Flipping the Switch on Technology).

Having committed to 18 months of farming Amish-style, with minimal technology, he was a bit overwhelmed by the high point of the summer threshing season, which was spent picking up sheaves of wheat with a pitchfork and pitching them into a threshing machine under a hot sun. In fact, he got heatstroke in his first day of threshing, much to his neighbors' delight (and they worked communally on all such large tasks).

But he did some time-motion calculations and estimated that he and his neighbors spent "nine hours and twenty minutes actual labor in the [threshing] peak season," which "lasted approximately two to four weeks" (p. 162). Combine this with the frequent breaks during the work, the pleasure of working with others, a pleasant off-season filled with down time, and the fact that all the farmers in the community were debt-free, this seemed like a pretty good bargain to him.

Later in the book, he waxes poetically about this discovery of more time (gained with the elimination of allegedly time-saving devices):
Even in the busy season we had more time. This was another way to say that we had fallen in time, taking our time. The relaxed rhythms of manual labor, like some unseen conductor's beat, coaxed into synchrony the oddest array of harmonizing parts. We had drummed our wooden spoons against the kitchen kettles, mingled with the brass and winds of the barn animals and soared cerebrally to the accompaniment of string beans. And after much arduous polishing and practicing, we had finally struck a chord with the whole collection.
The secret lay, much as in anything, in simultaneity. Things that technology had separated were reunited. The results were more than efficient; they were symphonic. In an orchestral performance an oboe warbles beside a viola and the two produce a lush blend. On the porch of a working household, you visit with your mother-in-law while pushing the centers of tomatoes into a bowl, and the breeze brushes against your face, and the leaves rustle--and likewise music emanates. And when your part is done, there is plenty of time to breathe during the rests (p. 217).
Although I could never express it so eloquently, I have experienced this kind of grace--beauty, time abundance, connection to others--when I've turned off my devices and taken a sabbath nap, when I've worked with others, when I've taken time to enjoy the weather, and when I've just been open to God's presence.

Even if we could download a "kairos time app," we'll never be able to schedule the Fullness of Time with our devices. And that's good news.

Wednesday, December 29, 2010

The Best Book (Yet) on the Global Meltdown

It's the Christmas season. And that has me thinking again about the global financial crisis, the subject of several earlier posts (just click on the chapter 3 tag here or at the bottom of this post).

The links there might not be entirely obvious, but there are two good reasons why this is a good time to dwell on financial globalization. First, Chapter 3 of my book is about lessons from the Christmas season for global finance, where I feature the 2007-2008 crisis as a case study. Second, the holiday season allows for more time to catch up on reading, and I've just had time to review Nouriel Roubini and Stephen Mihm's Crisis Economics: A Crash Course in the Future of Finance.

In a series of three posts in July and early August, I reviewed five other books that diagnose the crisis and explain it to readers. All of them were worth reading. Compared to these, however, I think Roubini's book is the best analysis, combining well-researched rigor with clear writing. It's a serious tome of 300 pages, and it certainly lacks the humor of John Lancaster's I.O.U. and the storytelling of Michael Lewis' Big Short or David Faber's And Then the Roof Caved In.

But it makes up for these deficits with helpful historical analogies drawn from previous financial crises and with sharply realistic prose devoid of ideology or wishful thinking. Other than a little chest-thumping at the beginning (crediting Roubini with predicting the crisis well before it began), the book rebuts the presumption that our current financial crisis was completely unexpected or unique. Instead, the authors argue, what happened from 2006 to late 2008 was entirely predictable; indeed, Roubini himself predicted much of what followed.

They argue in Chapter 2 that the crisis nicely fits Hyman Minsky's model of financial crises--a model made famous in Charles Kindleberger's Manias, Panics, and Crashes. Like Joseph Schumpeter and other Austrian economists, Minsky believed that booms and busts were a recurrent reality of the financial sector in global capitalism. This time was no different.

The authors spend five chapters in the middle of the book describing the long-term structural causes, the string of bank failures from 2006 to 2008, the spread of the crisis globally, the Fed's response, and the responses of the Bush Administration and Congress.

But a real strength of the book, which goes beyond its predecessors, lies in its final third, where the authors lay out a program of reforms and policies that could help prevent another nasty meltdown. As their subtitle suggests, they want to offer some guidance on the "future of finance." It's doubtful that we'll be able to predict the future in detail, but these two have given us a good grasp of what just happened, along with some thoughts on how to prevent it from happening again (or at least contain the damage). With the benefit of a little more time, they've given us insight that earlier books couldn't offer.

Right now I'm thinking that this will be the text of choice for covering global finance in my international political economy course next fall--unless a reader out there discovers a text that might be better. If you do find a better book, please let me know.

Tuesday, December 28, 2010

When Time Slows Down

Third in a series (first post on Christmas)

It's the week between Christmas and New Year's Day, a time when many (though not all) Americans can lay around the house guilt-free. You get a chance to pause and spend time with family or friends. And much of the time you are feasting, eating all kinds of goodies in between large meals and festive parties. Time slows down during these holidays.

Like Thanksgiving Day, Christmas Day is one of the only society-wide feast days in the United States. Feast days are those that break from the normal 24/7/365 work world of Western consumer society. Even fast food chains and gas stations close on Thanksgiving Day and December 25. There are no other days where this would fly. But on these days we understand and make an exception.

Over the break, I've been reading several of the books that I mentioned in my last post. Among them, Colin Beavan in No Impact Man talks about eating dinners with his grandparents who were both extremely frugal and extraordinarily attentive to the natural world around them.
 They insisted I climb back up the stairs to the bathroom to turn the light of if if I'd left it on. They taught me to take only what food I would eat and never to throw trash on the ground. They wore sweaters and kept the heat down low (p. 36).
They also took their time eating dinner, waiting until after sunset to start. After dinner,
when my grandmother washed the dishes, I would stand beside her and we'd look out the window together at the New England stone wall in her backyard. Chipmunks had burrowed there. "That's the father," my grandmother would say. "Those are the babies." The birds would come. A red-winged blackbird, Grannie would tell me. A goldfinch (p. 42).
Looking back, he thinks that gratitude connects their frugality and their attentiveness toward Creation:
My grandparents' no-waste rules seemed pointless when I was young. You should this. You shouldn't that. And for the sake of . . . what? Piety? Sanctimony? But something about their intention not to waste and their emphasis on cultivating gratitude--Depression-era thoughts or not--seems connected to making time to watch the sunset and the chipmunks (p. 43).
The slower time of a feast season like Christmas brings us closer to the fullness of time--kairos time--where we can appreciate more deeply the gifts of God's Son and God's Creation given for us and for our salvation. Thanksgiving is the general posture of the entire twelve days of the Christmas season.
Today, December 28, is the Feast of Commemoration of the Holy Innocents, which reminds us of how those gifts are not to be taken for granted. When Herod's soldiers slaughtered the young children of Bethlehem (see Matthew 2:13-18), they created a stark reminder in the Christian calendar that our gratitude for the gifts of God necessarily involves concern for others. The Episcopal Collect for this day makes this link explicit:
We remember this day, O God, the slaughter of the holy innocents of Bethlehem by the order of King Herod. Receive, we beseech thee, into the arms of thy mercy all innocent victims; and by thy great might frustrate the designs of evil tyrants and establish thy rule of justice, love, and peace; through Jesus Christ our Lord, who liveth and reigneth with thee, in the unity of the Holy Spirit, one God, for ever and ever. Amen
This emphasis--mercy for innocent victims, justice for the oppressors--builds on the Advent theme of the Kingdom. Even as we celebrate during this season the good gifts we have received, we long for the day when there will be no more injustice, when God's Kingdom will reign here on earth.

Thursday, December 23, 2010

Advent: There Are Alternatives

Second in a series on the seasons

"There is no alternative" to globalization. It is inevitable. You may not like it, but there is nothing you can do about it. If you oppose globalization, you are opposed to human progress. All of these are common beliefs among those who track globalization. (See Thomas Friedman's books on globalization.) Bob Goudzwaard once lumped these beliefs together under the TINA (There Is No Alternative) label.

But one of the main lessons of Advent is that God breaks into human history to redeem His people in unexpected ways. We are not abandoned or alone. So we hope. We wait for the Lord. We know that someday the Kingdom will be fully and finally established on earth. Now, there is an alternative.

When I first started writing on globalization, I hadn't yet internalized this lesson of Advent. Nor had I read enough about hopeful practices that demonstrate practical alternatives to globalization. Instead, I tended to share the assumption that globalization was a juggernaut that operated whether or not we liked it.

Now, by Advent 2010, a number of authors have demonstrated the power of alternative practices in their own personal, individual journeys. They show us that even the individual alone can do things (not to mention whole communities).

There are authors who track down the laborers who toil to stitch our clothes:
There are authors who eat locally for a year:
There are authors who live with less technology or with minimal environmental impact:
There are authors who learn to minimize their consumption (in general or of "Made in China") for a year:
There are authors who investigate child labor and slave labor practices that go into making our stuff:
There are authors who practice nonviolent ways of reconciling differences in Iraq or Afghanitsan
I could go on, but hopefully the point is clear.

There Are Alternatives.

Saturday, December 18, 2010

An Advent Parable

Advent is just about over, but there is still time to start the practice of blogging on each liturgical season, during that season. So here goes the first installment of an occasional series. . .

Last Sunday evening, on the Third Sunday of Advent, a student of mine was driving with friends to St. Paul's Episcopal Church in downtown Canton for a special service of Advent meditations, music, and visual art. As the sun was setting, the weather was turning cold and nasty, with bitter Arctic winds and snow swirling around. As the guys drove down Market Avenue, a major four-lane thoroughfare, they saw an older woman walking against the flow of traffic, scuffling along the gutter of the street with her walker, nearly sliding into the path of oncoming cars. She wasn't wearing a coat or decent shoes. She was clearly disoriented. 

So, God bless them, they stopped their car and returned her to the nursing home from which she had wandered. As a result, they arrived at the Advent service quite late, unable to enjoy it fully.

One of the young men was deeply upset, overcome with the injustice of a system that discards the elderly and cares little for them. This particular woman was obviously overlooked at this particular nursing home, which is not exactly posh -- a forgotten woman in a forgotten place. As the student sat in the Advent service, he was crying in frustration. He confessed that he wasn't able to focus on the service because he was so overcome with the injustice of it all.

But he had had just lived through an Advent parable. 

After all, this is the season in which we cry "come, Lord Jesus, come." The tears of that young man were properly Advent tears--the tears of a season in which we lament the injustice and oppression of this world while yearning for justice and liberation.

On this Third Sunday of Advent, Isaiah's prophetic vision was read out loud in many churches around the world:
Then the eyes of the blind shall be opened, and the ears of the deaf unstopped; then the lame shall leap like a deer, and the tongue of the speechless sing for joy. For waters shall break forth in the wilderness, and streams in the desert (Isaiah 35:5-6). 
Advent is the time when we recall that we are longing, like Isaiah and Mary, for God to redeem his people, to put things right, to rescue us, to heal us, to bring us back to Zion, to bring justice, and to liberate us all from the yoke of spiritual, physical, social, political, or economic oppression. We say "come, Lord Jesus, come," because we hope he will return to make things right.

But in the meantime, we live in a fallen world that often lacks this healing. In between Christ's first and second Advents, between the "already" of the Kingdom and the "not yet," we wait. 
Wait for the Lord, whose day is near
Wait for the Lord 
Be strong, take heart.
These words from one of my favorite Taize songs remind us to wait patiently for the Lord, even while we, like my student, impatiently long for God to reign on earth as He already does in Heaven. 

Marantha. Come, Lord.

Wednesday, December 8, 2010

FIFA Member Admits World Cup Decision Was Political

Jerome Valcke, the General-Secretary of FIFA, told reporters on Monday that the decision to choose Russia for the 2018 World Cup and Qatar for the 2022 World Cup was indeed political, as I argued in my previous post

While he denied rumors that Qatar's bid committee paid $1.5 million to two members of FIFA's executive committee or was ready to pay almost $80 million to Argentina's national soccer organization, he did say frankly that the decision was "political." 

Russia deserves it, and Qatar will be an interesting story. We have eight years until Russia hosts it, with a huge commitment on the part of Putin. And 12 years for Qatar, which has huge resources.
So, it really was a combination of self-interested politics and "an interesting story." The Middle Eastern angle plus "huge resources" won out over a more environmentally friendly bid from the U.S.--a bid which would have also built on the increasing interest in soccer among Americans who celebrated Landon Donovan's last-minute-of-extra-time, "shot heard around the world" goal to beat Algeria  and win Group C this summer.

How many Americans will make the trip to tiny, hot Qatar? I hope to be among them, but I suspect there won't be many of us. It's disappointing for Americans who love soccer that FIFA wasn't interested in building a fan base here. That, along with a lower environmental impact, would have also made a great story--and would have saved everyone a lot of money.

But that's politics. It constantly surprises us.

Friday, December 3, 2010

Why FIFA chose Russia and Qatar for the World Cup

Yesterday, the governing body of international soccer, FIFA, announced which countries won the right to stage the World Cup in 2018 and 2022. (Brazil will host in 2014.)

Many observers were shocked that they chose Russia for 2018 and Qatar for 2022. It was the Qatar decision that was the real shocker for me. After all, the U.S. was contending for 2022, and we had Henry Kissinger, Morgan Freeman, and Bill Clinton negotiating for us (and Barack Obama sending a final video testimonial). Like many Americans, I was hoping to be able to watch a game in person in my home country, but I'm slowly overcoming my shock and disappointment enough to be able to analyze the decision.

As a political scientist, I've been trained to analyze political choices, and, trust me, FIFA is a highly politicized body. A general rule of thumb or theory coming from my field is that decisions combining material self-interest and cultural identities tend to win out. 

Material self-interest? Well, Russia and Qatar have lots of oil and natural gas money to pay for construction of new stadiums, and to wine and dine the members of the FIFA board, who make the decision. A whole academic sub-field could be devoted to corruption (or at least influence-peddling, vote-trading, logrolling, etc.) in international sports decision-making.

But the cultural identity part makes for a good story (and definitely plays into decisions, when combined with self-interest). This will be the first time they'll ever play the World Cup in Russia, and, more symbolically, the first time they'll ever play it in the Middle East. The folks at FIFA really believe that they contribute to harmony, peace, and understanding. What better way to send that message than to choose post-Communist Russia and a tiny Gulf emirate that's on the move. Integrating Russia and the Middle East into the world community? A nice image.

I love the Middle East, and I'm already thinking of booking my flights to Qatar for 2022. But as a soccer purist, I'm appalled to learn that they'll be playing in air-conditioned, open-air stadiums. The Persian/Arabian Gulf in June and July will be running daytime temperatures around 120 degrees Fahrenheit, so there's no other way to make the bid plausible. Qatar will now have to build 9 new stadiums that they are promising to dismantle and share with developing countries after the tournament is over. But Qatar insists that their approach is carbon-neutral, and won't contribute to greenhouse gas emissions. (Really?!) To keep green grass alive in that climate will require massive inputs of energy, in a tiny country the size of Connecticut with less than 400,000 actual citizens (as opposed to the 2 million expatriate workers).

This was a fascinating decision by FIFA, and all too political.

Thursday, November 18, 2010

In Defense of Actual Reality (as opposed to financial numbers)

Today, a chunk of General Motors shares are going on sale at $33 a piece, which should allow GM to pay back billions of dollars to the Federal Government and cut the government's ownership share to 26 from a previous 61 percent. Good economic news for once.

Which may be why yesterday Warren Buffet issued a thank you note to Uncle Sam, giving credit to the Feds for helping rescue the U.S. (and world) economy from possible collapse. We usually complain about government, but Buffet points out that both the Bush and Obama administrations have done a lot to keep banks and businesses alive. Meanwhile, the citizenry thanked the incumbent regime by electing the Tea Party.

But the supposed good news about GM also prompted author Paul Clemens, a Detroit resident and former autoworker, to reflect on the difference between actual reality and the numbers games of financiers, in a piece on today's New York Times Op-Ed page. As part of the bankruptcy restructuring, a part of GM was shunted off into an "old GM," which is designed to sell off old assets, i.e., the many plants that are being shuttered forever--or being dismantled.

Like Michael Moore, who will forever be saddened about GM's abandoning Flint, Clemens is troubled by the abandonment of Detroit. (Full disclosure: Like Clemens, I was born in the Detroit area and grew up in Michigan during the 1970s and 80s, so I feel deeply for communities devastated by the loss of car manufacturing plants.)

I encourage you to read the whole piece, but the concluding paragraphs capture Clemens' main theme in a powerful way (I'll underline the best part):
ACROSS the nation, as in Detroit, there is an economic disconnect, a split between what the economic numbers say and how things feel on the ground. The economy is growing, but the unemployment rate hasn’t budged. The recession officially ended in June 2009, but more jobs have been lost than have been added since that “ending.”
Handling this disconnect requires political acuity. It brings to mind something Philip Roth once said about those who have little feel for literature and the texture of lived experience it provides and so “theorize” it. Mr. Roth imagined a scene of a father giving his son this advice while attending a baseball game: “Now, what I want you to do is watch the scoreboard. Stop watching the field. Just watch what happens when the numbers change on the scoreboard. Isn’t that great?” Then Mr. Roth asks: “Is that politicizing the baseball game? Is that theorizing the baseball game? No, it’s having not the foggiest idea in the world what baseball is.”
It’ll be fun, for a day or two, to look at the scoreboard, and to see what G.M.’s shares are going for: $26? $29? $33? $35? The numbers on the exchange will change; it’ll be great, and a welcome, temporary relief from the numbers, still difficult to comprehend, of jobs lost and plants closed. Soon enough, though, we’ll have to go back to watching what’s actually happening on the field, where there’s still a blowout in progress, with the home team way behind, and no one, seemingly, with the foggiest idea what to do about it.
Like Clemens, I want to defend those of us who live on the ground, in actual material reality, next door to car plants, on the field, playing the game--as opposed to the financiers who think that their numbers games are more real. (Chapter 3 of the book attempts to make this case.) A purely quantitative analysis of society is like "having the not the foggiest idea in the world" what social life is.

The Pontiac dealership just down the road from me is now closed (due to GM's restructuring plan). Should I celebrate today?

Tuesday, November 16, 2010

The Mortgage Mess: Worse Than We Thought

It turns out that using mortgages as collateral to back bonds sold globally was a bad idea. Financiers sold mortgage-backed securities as lucrative, risk-free investment vehicles. It was supposed to be a win-win for everyone.

But now it appears that these wonderful new financial products could undermine a large chunk of the U.S. housing market. A new report issued today by the Congressional Oversight Panel that oversees the Troubled Asset Relief Program (TARP bailout) suggests that the electronic mortgage-processing systems at the heart of this mess may call into question 33 million mortgage loans. Oops, sorry about that.

In an earlier post, I summarized an article by Professor Christopher Peterson of the University of Utah Law School. His analysis now sounds cautious. The new Congressional Oversight Panel report suggests that our entire financial system might be undermined: 
Clear and uncontested property rights are the foundation of the housing market. If these rights fall into question, that foundation could collapse. Borrowers may be unable to determine whether they are sending their monthly payments to the right people. Judges may block any effort to foreclose, even in cases where borrowers have failed to make regular payments. Multiple banks may attempt to foreclose upon the same property. Borrowers who have already suffered foreclosure may seek to regain title to their homes and force any new owners to move out. Would-be buyers and sellers could find themselves in limbo, unable to know with any certainty whether they can safely buy or sell a home. If such problems were to arise on a large scale, the housing market could experience even greater disruptions than have already occurred, resulting in significant harm to major financial institutions (COP "November Oversight Report," p. 5).
Oops, sorry about that. It really does come down to who owns the promissory note in your mortgage. Unfortunately, for 33 million people the answer to that question is not clear.

Friday, November 12, 2010

Did American TV Bring Down Communism?

"J.R. Ewing Shot Down Communism in Estonia." This is the arresting headline of a film review by Stephen Holden in this morning's New York Times, of an Estonian documentary entitled Disco and Atomic War.

As this cute five-minute trailer for the film shows, Estonia is about 70 miles south of Finland--close enough to pick up broadcast TV signals of Finnish television. Like many Americans in the early 1980s, Finns in Helsinki were captivated by the TV show Dallas and the exploits of its main character, J.R. Ewing (right). So, too, were the Estonians who could pick up the signal from Finland on their rooftop antennas. 

Estonia was then under Soviet control, and Communist authorities wasted no time in trying to crack down on this infestation of Western propaganda. Obviously, they failed. Images of decadence and material abundance--the giant mansions of rich oil tycoons, their fancy cars, their well-coiffed wives, the warmth of sunny Texas--enticed the Estonians in their bleak Communist world.

I noted in a previous post about basketball in Turkey that we should recognize the power of compelling images to capture the imaginations and desires of viewers. For example, while Dallas never quite captured my imagination, I will confess that Knight Rider, another show of the era, did . . . for a few weeks, anyway.

I worry, as a former TV junkie, that advertising, television, and movies are a powerful force of cultural globalization--at times, more powerful than the church (see chapter 10 of the book). 

But I also think that the challenge for the church is not to make the message of the full gospel (in all of its complexity) more compelling than the attractions of a souped-up, black TransAm (at least to a middle-school boy in the early 1980s). That would be allowing popular culture to dictate the terms of success. It would be a bit like trying to create worship services that compete with rock concerts to grab the attention of bored youth. (Oh, wait, lots of churches are doing that!)

Rather, the challenge is to keep presenting the message with integrity, in the confidence that the Holy Spirit takes our frail efforts to communicate and makes them truly universal. Of course, we should try to speak to the felt needs within all segments of our culture, but let's not worry too much about current fads in entertainment. 

After all, I cringe when I see old Knight Rider videos today. And all of us who ever watched Dallas cringe when someone alludes to the "who shot J.R." season-ending cliffhanger. Pop culture gets stale and cheesy very quickly. 

We should always communicate in ways that capture the imagination and orient it toward the Kingdom, trusting that this Kingdom will endure, while cheesy 1980s TV shows will fade away. 

Saturday, October 30, 2010

A Telling Foreclosure Story

In my previous post, I looked at the legal complications of using mortgage debts as collateral for additional debt. From the time I first heard about this practice--creating collateralized debt obligations or mortgage-backed bonds--in Thomas Friedman's book The Lexus and the Olive Tree (1999), I was troubled. Friedman takes a "gee-whiz-isn't that-cool" tone and looks forward to a day when "everything will be for sale" and can be turned into a bond.

But a story from Thursday's New York Times business section illustrates why turning mortgages into collateral is, in practice, a mess. At the end of the piece, the authors, Andrew Martin and Motoko Rich, tell the all-too-typical story of one family:
Charlotte and Thomas Sexton, of Carlisle, Ky., fell behind on their mortgage payments because the payments on their adjustable-rate mortgage spiked upwards and Ms. Sexton lost her job.
They tried unsuccessfully to sell the home, to refinance it and to modify their mortgage payment. When the Bank of New York Mellon filed a foreclosure notice last summer, they went to a local lawyer, Brian Canupp, who, with the help of a forensic accountant, found a problem in the foreclosure filing.
Last month, a judge tossed out a foreclosure judgment after Mr. Canupp argued that the mortgage trust that claimed to own the Sextons’ promissory note —Mortgage Pass-Through Certificates Series 2002-HE2 — did not exist.
Instead, another trust, called IXIS Real Estate Capital Trust, Series 2005-HE2, claimed to own the Sextons’ note, court records show.
Ms. Sexton said that regardless of who owns her promissory note, she just wants to stay in her home and hopes that the bank will eventually agree to a loan modification.
“We found a mistake,” she said, “that gave us a light at the end of the tunnel.”
So who owns their mortgage (or, more specifically, their promissory note)? The Bank of New York? The bondholders who own IXIS Real Estate Capital Trust Series 2005-HE2? Both? Neither?

The wizards didn't quite think through the simple question of who owns what. So our real estate market is a mish-mash of unclear title ownership, clogged courts, and messed-up foreclosures. It's going to take a long time to sort this all out--and nobody is happy about that (except maybe the Wall Street wizards who cashed out their profits a long time ago).

Friday, October 22, 2010

Who Really Owns Your House?

Who really owns your house? If your mortgage was securitized (used as collateral to back bonds that were sold worldwide) and you still owe on it, then the answer may be no one. Literally no one. As a matter of law, it isn't clear if the legal entities used to securitize mortgages can really assert ownership and foreclose on your house. Neither you, nor they, nor a bank, nor a diffuse group of bondholders can claim title. 

So how can banks foreclose on you if you go into default? Legally, they can't. This is the real reason why some of the big banks stopped foreclosure proceedings recently. Although recent stories focued on "robo-signers" signing tens of thousands of foreclosure notices a month, the story of this deeper legal morass is the real reason that bank shares are tumbling: investors are terrified that banks might not even be able to sell off foreclosed properties to cut their losses on mortgage-backed securities. The banks don't own the the underlying mortgages. Nobody does.

Floyd Norris of the New York Times, leads his column on Tuesday with this question: 
Was the great securitization machine that made hundreds of billions of dollars in mortgage loans based on a legal foundation of sand?
And the answer is Yes

In chapter 3 of my book, I made a passing reference to a judge's ruling in Cleveland that mortgage "trusts" couldn't actually claim title to homes. It turns out this is a major problem for any mortgages that were processed through MERS, the Mortgage Electronic Registration System, which is really a shell company set up by banks in the 1990s designed to bypass the traditional title registration process. (If you know anyone whose mortgage was processed through this system and who might be headed toward default, now is a good time to alert them to their rights.)

For those who want to delve into the legal details on this, Norris' column refers to a forthcoming paper by Christopher Peterson of the University of Utah Law School (click on the PDF download to read it)  that picks apart the fraudulent legal fiction called MERS, whose slogan is

As Peterson puts it, 
MERS is two-faced: impenetrably claiming to both own mortgages and act as an agent for others that also claim ownership.
MERS no legal right to both foreclose on you (as if it owns your mortgage) and act on behalf of banks (as if it is an agent of banks or trusts, to whom you owe a promissory note, promising to pay off what you owe). It cannot both assert property rights over your house and claim to be acting as a trustee of banks or bondholders who have a lien on your home. It has to be one or the other, but cannot be both. Yet MERS tries to do both. 
When financiers talk to investors, they claim to own mortgages in order to convey the sense that they own what they are selling. But when financiers talk to the government they claim not to own what they are selling so as to not be obliged to pay fees associated with owning it. MERS and its members prevent recording fees from being paid on assignments—that was the whole point of MERS—but then attempt avail themselves of the protection that having taken such an action would have afforded. 
The "whole point of MERS" was attempt to privatize and speed up the process of recording property rights and titles, bypassing local governments and their fees. Meanwhile, as Peterson says, the same giant banks that set up this shell company received massive bailouts while local governments were 
laying off teachers, firefighters, police officers, infectious disease clinic workers, closing criminal detention centers for violent juveniles, and shuttering courthouses.
Maybe this is why people are so mad at incumbent politicians. They know that something is deeply wrong with our institutions. They see that massive global banks continue to profit while ordinary people struggle to get by in local communities. 

Now, thanks to Professor Peterson and others like him, we can see that monied interests captured our institutions and no one really noticed. Globalized finance ran amok while we slept.

Can we wake up and figure out who owns our houses?

Friday, October 8, 2010

The Most Important Movie of 2010

In today's New York Times A.O. Scott positively reviews Inside Job, a new documentary about the global financial collapse. Produced by Charles Ferguson, who was responsible for No End in Sight, which was a brilliant analysis of the fiasco of the post-Iraq War occupation, this looks to be the most important film of the year. 
Call me a crazy globalization geek, but I cannot wait to see this as soon as possible. (If anybody knows if or when it's showing on the big screen in Northeast Ohio, please let me know. I don't want to wait until it's out on DVD.) I really do think every American citizen who cares about their country ought to watch this.

I say this because I think everyone needs to understand how our economy got into its current mess. And the way our economy got into its current mess is mainly due to the financial shock caused by aggressive, irresponsible lending by global banks.

Unlike Michael Moore, whose Capitalism: A Love Story was silly, Ferguson is not a cranky partisan. He has a PhD in political science from MIT, and he got into filmmaking by accident. He's an academic policy analyst at heart, and he applies his skills in his films. While No End in Sight was tightly focused on what happened after the Iraq invasion (in part because Ferguson actually supported Bush's policies beforehand), Inside Job delves into the deeper causes of the financial breakdown. (Here's the trailer.)

If you care about the world, you need to engage the story told in this film.

Friday, October 1, 2010

A Clear Analysis of New Global Financial Regulations

As the global sub-prime meltdown of 2007-08 showed, the financial systems of the world's major countries have been tightly integrated over the last 30 years. When U.S. banks wanted investors to buy bonds linked to subprime mortgages, they found them overseas. When overseas investors wanted to get higher returns on bonds, they bought supposedly safe subprime mortgage CDOs. Capital is global and mobile.

Meanwhile, banks and investment firms were able to leverage their assets, borrowing far more than they should have been able to, against the supposed value of their supposedly safe portfolios. It's clear to everyone that stricter capital requirements on banks would help. And that's exactly what the major players in global finance have agreed to in the so-called Basel III agreement. It's "so-called" because it's the third major agreement on global banking negotiated through the Bank of International Settlements in Basel, Switzerland. 

For a wonderfully clear and insightful analysis of this new deal, see a new article written by my former student, Dan McDowell. Dan makes the point that the enforcement of these new standards, which require banks to "keep more cash on hand" (as Dan puts it so clearly) will be voluntary. No international body will monitor compliance with the new Basel III standards, so the various participants might be tempted to cheat.

Basel III is a classic case study of global "governance without government" (which I discuss in chapter 9 of my book). There are standards, but there is no global authority to punish those who violate them (despite the misplaced fears of those who imagine that "a one world government" is just around the corner). Thanks to Dan, this is now clear. Nice work, Mr. McDowell!

Tuesday, September 14, 2010

Do Social Media Promote Narcissism?

In a previous post reviewing Judith Shulevitz's book The Sabbath World, I touched on her contention that cellphones promote more flexible ways of being in time. Instead of fixing our social engagements on the calendar grid, we may "play it by ear" more. I've noticed that my kids tend to do this with their friends. We get calls or texts from them as their "hanging out" shifts from place to place. But maybe this is just what teens do. Are new communications technologies shaping adult society?

Yesterday's New York Times helps answer the question affirmatively, with an excerpt from a new book Nick Bilton, one of their technology writers/bloggers. While Bilton may overstate the case, I think he's touching on a pretty profound shift that technology allows--a shift that may change how we experience time. The opening paragraphs of the story grabbed me right away (the bolded passages especially):
If you pull out your smartphone and click the button that says “locate me” on your mapping application, you will see a small dot appear in the middle of your screen.
That’s you.
If you start walking down the street in any direction, the whole screen will move right along with you, no matter where you go.
This is a dramatic change from the print-on-paper world, where maps and locations are based around places and landmarks, not on you or your location. In the print world people don’t go to the store and say, “Oh, excuse me, can I buy a map of me?” Instead, they ask for a map of New York, or Amsterdam, or the subway system. You and I aren’t anywhere to be seen on these maps. The maps are locations that we fit into.
But today’s digital world has changed that. Now, we are always in the center of the map, and it’s a very powerful place to be.
When people want to know how the media business will deal with the Internet, the best way to begin to understand the sweeping changes is to recognize that the consumer of entertainment and information is now in the center. That center changes everything. It changes your concept of space, time and location. It changes your sense of community. It changes the way you view the information, news and data coming directly to you.
Now you are the starting point. Now the digital world follows you, not the other way around.
Wow, if Bilton is right, then all that talk about postmodern society might really be onto something. If our experience of space is that "we are always in the center of the map," then how can we understand the idea that we are to "fit into" God's glorious Creation? We risk losing sight of the grandeur of this big world.

If "you are the starting point," then how do you experience time? Isn't it yours to control? Traditional Christian teaching holds that time is a gift from God that we must receive and give back (see Dorothy Bass' wonderful book, Receiving the Day). This teaching has been the most important, most transformative lesson I've learned in my adult life.

While I don't want to insist that the old school print world/map world is absolutely God's technology, I appreciate Neil Postman's argument about how print technology disciplines our thinking (as opposed to the superficial, image-based communication fostered by television--see Postman's book Amusing Ourselves to Death).

As a Christian, I think we need to learn how we "fit into" the world. If technology makes it harder for us to do this, then I think we need to be careful in how we let it shape us. We may need to learn from the Amish, who practice discernment with technologies and avoid those that threaten community.

The German philosopher Heidegger was fond of saying that "man is not the lord of beings; he is the shepherd of Being." He hated technology, because he thought it made humans think that they were in control. This humble dependence on something outside ourselves seems like the proper posture for humanity in a world that is much bigger than us. We may feel that we are in the center, but in reality we are just a speck of dust in the universe.

If Bilton is right, then we'll be facing whole generations of narcissists who really believe that they are the center of it all. I hope he's wrong. But, if he's right, I hope the Church can still inculcate humility in its members. I'm just not sure how one teach teach a person about the God who is really at the center when that person thinks that he or she is God. 

Friday, September 10, 2010

How an Obscure American TV Show Persuaded Turks to Play Basketball

Today's New York Times sports section has a fascinating story on how The White Shadow television series helped inspire young people in Turkey to play basketball, in a place where soccer had been king.

For those who weren't watching obscure TV shows in the early 1980s, the show starred Ken Reeves, who played a white ex-NBA star who was coaching basketball at the imaginary Carver High School, a predominately African-American and urban school dealing with issues of poverty, broken families, and racial tension. I remember watching a few re-runs after it first aired--after the days when I'd played YMCA basketball at the old downtown Y and dreamed of floating like "Dr. J." above the rim--and thinking that it captured the era pretty well. As an aspiring basketball player back then, the show spoke to me.

But I had no idea that the show was being exported to Turkey, where it became a smash hit on Friday nights beginning in 1980. Syndicated re-runs came in 1993 and 2001, further spreading the show's influence. According to a number of Turkish voices quoted in the story, people rushed home to watch the show after basketball practice or games.

The quote in the story that really caught my eye was from Robert Thompson, who teaches communication and media studies at Syracuse University. I think he describes the influence of media quite well:
“The exportation of American television was a form of empire building — empires of consciousness, not of geography — that shaped the desires, perceptions and goals of global populations in ways it is impossible to appreciate,” 
As a fan of the James K.A. Smith's book Desiring the Kingdom, I think this nails the way that media can capture our imagination. It doesn't seem rational or sensible, but compelling story-telling can capture the imagination in such a way that we desire to be like characters in television programs.

It reminds me of a student years ago who came to me to say that she was interested in going to law school. After we chatted, it became clear that a major reason why she wanted to go was that she loved watching Law and Order on TV. Although that was a pretty slender basis on which to base a career choice, I now understand why a TV program could be that basis. It's all about capturing the imagination and the desires.

Young people in Turkey were moved to play basketball because of The White Shadow--a slender basis on which to base a choice.  But that's how we affective, liturgical animals (to borrow Smith's terms) tend to operate. Something captures our desires and moves us.

Instead of cheesy 1970s television shows, however, I hope that Christians will be moved by worship.

Tuesday, August 31, 2010

Canada's Push to Claim the Arctic? The WSJ Says "Yes."

Today's Wall Street Journal carries a story about Canada's attempts to "burnish its position as position as [an] Arctic Power", which returns us to themes discussed in chapter 9 of the book and discussed last week here. Unlike the Foreign Policy story that I covered last week, the Journal story takes seriously Canada's military muscle-flexing. I'm just glad to see that my brother-in-law's favorite publication supports my position in the book!

Monday, August 30, 2010

Global Ecology and Food

In Chapter 4 of the book, I focus on how our current eating habits are putting serious pressure on global ecological constraints. It's always nice to know that other people share similar concerns.

Last week's New York Times carried a review of a book by Julian Cribb, The Coming Famine: The Global Food Crisis and What We Can Do to Avoid It, which makes a similar case.

One of the most striking passages in the review came toward the end:
“Even if North Americans and Europeans halved their meat and dairy consumption,” Mr. Cribb writes, “the saving could be completely swamped by the demand from six hundred million newly affluent Indian and Chinese consumers.”
The rise of India and China complicates the idea that the switch to more sustainable eating (eating less, eating locally, eating organic) will avoid a global crisis. Of course, population pessimists since Thomas Malthus have been worrying about the outstripping of food resources by population growth. Thus far, the globalized food system has been able to produce a seeming abundance of food through industrial methods. But at some point we really could run out of earth to sustain the kind of high calorie, high animal protein eating that millions of people now expect.

Eating locally and growing your own garden is a good start, but maybe we can all learn from the Amish (for more on this, see chapter 4). Simple practices of stewardship bear witness to the belief that God's Creation participates in his goodness. Living out stewardship is a practice that demonstrates hope to the world.

Wednesday, August 25, 2010

Sad day! Fun day!

The sadness of dropping off my son at college today was mixed with some excitement about recording an interview about the book with the Australian Broadcasting Corporation's Encounter Program -- a weekly program that focuses on theology and public life. It's sort of like the Australian version of Krista Tippet's Speaking of Faith program, which, if you haven't listened, promotes intelligent conversations on matters of faith. The list of programs on the Encounter site humbles me. I'm thankful to have been included.

I was impressed with the questions that the interviewer, Margaret Coffey, asked. She'd read the book carefully asked about the deeper theological questions it raises. She says that the soonest that parts of this would air would be in early October. Once I hear anything, I'll put up links here.

Apart from getting to talk about the book, the other thing that was exciting was the chance to get inside the studios of WKSU, my favorite NPR station--actually, my favorite radio station, period. After hearing their voices on the radio all these years, it was cool to meet some of the programming and news staff.

Like I said, it was a day of mixed emotions. At midday, we left one-fifth of our family, our first-born, at the University of Pittsburgh. Three hours later, I was in Kent talking about the book with Margaret in Australia--actually practicing the kind of "healthy globalization" that the church has been modeling for over 2,000 years.

The Arctic Gold Rush

In chapter 9 of the book, I use the thawing of the Arctic region as a thought-experiment to think about the globalization of politics. This was the most difficult chapter to write, because the politics of globalization field is the one closest to my training. But the future of the Arctic region, I thought, helped to clarify three important issues: 1) the "tragedy of the commons," or the failure to protect collective resources (the polar environment); 2) the importance of territoriality, or states claiming earthly land or seabeds (Canada vs. Russia); and 3) challenges to state power and identity (global problems like climate change and the rise of global identities outside loyalty to the state).

(Whew! That was supposed to be a simple summary of the chapter!)

Anyway, the most recent issue of Foreign Policy magazine has a very interesting opinion piece by a geographer from Alaska who is an expert on the region. What I found interesting is that he affirms the importance of the oil, gold, and diamonds that lie buried under the region's melting ice. While he is sanguine about the possibility of territorial conflicts emerging there, and he says the climate change is only partly to blame for the warming, his description of the environmental situation is hardly encouraging. Because we are desperate for more natural resources and fish, corporations and governments are driven to exploring for them there (or so he contends). Overfishing and resource depletion are driving the "business opportunities" that NPR described a couple of years ago.

The Arctic gold (and oil and fish) rush is on. Is that a good thing?

Friday, August 20, 2010

Durkheim on Sacred Time

In a previous post, I reviewed Judith Shulevitz's The Sabbath World, a lovely book on the personal and corporate meaning of Sabbath practice. While reading it, I noticed that Shulevitz draws on the work of the late 19th/early 20th century French sociologist Emile Durkheim, specifically, his classic text The Elementary Forms of Religious Life.

My office neighbor, the wonderful sociologist of religion Mal Gold, lent me his copy so I could track down Shulevitz's references. Now, if I were a real scholar, I would have read the whole thing cover to cover, but instead I looked up Durkheim's reflections on time. (Mal assures me that even sociologists of religion don't enjoy plowing through the entire 450 page, densely packed tome.)

The book summarizes research on traditional, aboriginal religions of Australia, which Durkheim considers a good baseline for comparison with other forms of religion elsewhere. Leaving aside the validity of his methods and his larger thesis about religion, I found several of his points about time to be interesting (as did Judith Shulevitz). Durkheim helps us discover what the fullness of time might mean.

1. Time is a social and collective reality first and foremost 
This contention is central to Durkheim's whole thesis about the collectivity of societies defining what religion is. He argues that individuals alone would not have consciousness of time. Instead, the regular intervals of time marked out by society give rise to time consciousness. All the divisions of time come from social life (p. 9-10).  "Every call to a feast, hunt, or military expedition implies that a common time is established that everyone conceives in the same way" (444). Society comes first, constructing how individuals think.

2. Divisions of time into sacred and profane are basic in aboriginal religion and therefore in all religious practices
Durkheim says that Australian aborigines divided all of life into material pursuits (hunting/fishing/war) or religion (p. 311). Separate holy days for religious life allowed the time to be marked as different. "Ritual cessation of work is thus no more than a special case of the general incompatibility of that divides the sacred and the profane . . . (p. 312). As he puts it,
Religious and profane life cannot coexist at the same time. In consequence, religious life must have specified days or periods assigned to it from which all profane occupations are withdrawn. Thus were holy days born. There is no religion, and hence no society, that has not known and practiced this division of time into two distinct parts that alternate one with another according to a principle that varies with peoples and civilizations. In fact, probably the necessity of that alteration led men to insert distinctions and differentiations into the homogeneity and continuity of duration that it does not naturally have (p. 313).
3.  Religious festivals and holy days instill a collective "effervescence" (p. 385-86)
As Durkheim puts it, religious ceremonies "set collectivity in motion; groups come together to celebrate them" (p. 352). During ordinary times, we focus on "utilitarian and individualistic affairs. Everyone goes about his own personal business; for most people, what is most important is to meet the demands of material life" (352). By contrast, on feast days the people focus on "the beliefs held in common: the memories of great ancestors, the collective ideal the ancestors embody--in short, social things" (352). People feel "reborn . . . reanimated . . . reawaken[ed] . . . regenerated" (353). But this energy cannot be sustained forever, so society must return to ordinary times.

Seasons of feasting and fasting go way back to aboriginal practice. However, we've moved away from that practice. The philosopher Charles Taylor believes that the rejection of such "higher times" eventually led to a flatter kind of secular time (see chapter 1 of my book). I argue that we have flattened our experience of time to one dimension, cutting off our collective connection to higher, sacred times.

4. "The more societies develop, the less is their tolerance for interruptions that are too pronounced" (354)
In other words, the higher times of feasting and the lower times of work are less extreme in their highs and lows, "the contrast between them is less marked" (354). In the modern world we preferred less of a roller coaster and more of a flatness in our experience of time, with fewer highs and lows. Homogeneity, rather than differentiation between sacred time and secular time, became the norm.

But, as I noted in my post on Shulevitz, postmodern time, organized by cellphones and mobile electronic devices, may become more fluid than modern time. So are we headed back toward a more individualized experience of time, or are we opening up spaces for collective interruptions again? How are we experiencing time these days?

Wednesday, August 18, 2010

Pope Benedict XVI on Globalization

Another small summer project of mine was to read through Caritas in Veritate (Charity in Truth), an encyclical letter released last summer by the Vatican. Despite the abstract title, it is really all about globalization and human development, returning to themes first laid out by Pope Paul VI in his 1967 encyclical Populorum Progressio and by Pope John Paul II in a variety of settings. Ignatius Press has a nice hardbound volume of Caritas in Veritate, which I enjoyed reading a few weeks ago (much more fun than reading the Vatican website version).

I found a few key themes informing what the former Joseph Ratzinger (now Benedict XVI) and the Vatican think about globalization. Many of these are worth pondering (even if one might disagree with them). Here are some of my favorite passages and themes from the letter.

1. Globalization is unifying humanity and "to some degree" helping to advance the Kingdom.
Man's earthly activity, when inspired and sustained by charity, contributes to the building of the universal city of God, which is the goal of the history of the human family. In an increasingly globalized society, the common good and the effort to obtain it cannot fail to assume the dimensions of the whole human family, that is to say, the community of peoples and nations, in such a way as to shape the earthly city in unity and peace, rendering it to some degree an anticipation and a prefiguration of the undivided city of God (Paragraph 8, p. 16, emphasis in original).
"To some degree" is a key qualifier here; otherwise, I think we are in danger of rendering globalization as a kind of natural force, like gravity, that advances the Kingdom. I am suspicious of such claims, since they can baptize social or economic systems that might be quite harmful to the advancement of God's reign on earth (see my book).

This concern is addressed in paragraph 42, where "the breaking-down of borders is [seen as] not simply a material fact: it is also a cultural event both in its causes and its effects. If globalization is viewed from a deterministic standpoint, the criteria with which to evaluate and direct it are lost" (p. 85).

The solution, argues Benedict, is "to promote a person-based and community-oriented cultural process of worldwide integration that is open to transcendence" (p. 85), and "to steer the globalization of humanity in relational terms, in terms of communion and the sharing of goods" (p. 87). This latter process, he contends, will come through grasping the theological dimensions of globalization (a challenge that a number of Christian thinkers are undertaking).

2. The cultural dimension of globalization is important (paragraph 26).
Today the possibilities of interaction between cultures have increased significantly, giving rise to new openings for intercultural dialogue: a dialogue that, if it is to be effective, has to set out from a deep-seated knowledge of the specific identity of the various dialogue partners (p. 49).
3. The commercialization of cultural interaction threatens cultural flourishing (paragraph 26)

Benedict describes two dangers here: cultural eclecticism, which views cultures as "substantially equivalent" but separate blocs (shades of Samuel Huntington); and cultural leveling and "indiscriminate acceptance of types of conduct and lifestyles" (para. 26, p. 49). Similarly, chapter 10 of my book spends a few pages worrying about the shallowness of electronically mediated cultural communication, and about the clash of civilizations or global cultural hybridity.

4. Alternative business structures should be considered (paragraphs 38 to 41, also paragraph 46)

The Pope has put his teaching authority behind the efforts to build social responsibility into corporate structures, promoting what he calls "civilizing the economy" (para. 38, p. 76). Managers, he says, must not just focus on the interests of shareholders but on "all the other stakeholders who contribute to the life of the business: the workers, the clients, the suppliers of various elements of production, the community of reference" (Para. 40, p. 79). This puts the Church squarely behind the Corporate Social Responsibility movement.

5. "Development" must focus on true human flourishing, which includes the environment and not just technological growth (paragraphs 43-77)

This was a particularly lucid passage on this, the central theme of the whole encyclical:
True development does not consist primarily in "doing". The key to development is a mind capable of thinking in technological terms and grasping the fully human meaning of human activities within the context of the holistic meaning of the individual's being. Even when we work through satellites or through remote electronic impulses, our actions always remain human, an expression of our responsible freedom (para.70, pp. 141-42).
And "development," of course, goes far beyond mere physical or material improvement. "There cannot be holistic development and universal common good unless people's spiritual and moral welfare is taken into account, considered in their totality as body and soul" (para. 76, p. 151).

Above all, says the Pope, development requires "Christians with their arms raised towards God in prayer, Christians moved by the knowledge that truth-filled love, caritas in veritate, from which authentic development proceeds, is not produced by us, but given to us" (para. 79, p. 155). That is, we can only receive "truth-filled love" as a gift--a gift which can give us the courage to keep working to help all peoples move toward the love of God (para. 78, p. 154).

All in all, this was an interesting restatement of John Paul II's views on globalization, with some updating to take account of the recent global financial meltdown, making this analysis quite timely. For those who care about thinking Christianly about globalization, this is worthy summer reading.

Tuesday, August 10, 2010

Martyrdom in Afghanistan

Today's New York Times has a sympathetic portrait of the ten civilian aid workers who were recently killed by the Taliban in Afghanistan. Here's the Associated Press photo and caption from the Times:

The 10 civilian aid workers killed Thursday in Afghanistan, from top left: Glen D. Lapp, Tom Little, Dan Terry, Dr. Thomas L. Grams, Cheryl Beckett, Brian Carderelli, Dr. Karen Woo, Daniela Beyer, Mahram Ali and Ahmed Jawed. (New York Times)

I had heard that these folks were with a Christian organization, but today's story mentioned the NGO they were working for--the International Assistance Mission--and it makes clear that these were not crazy or naive Christians trying to convert Muslims by preaching. Instead, the father of one of the victims made clear that they were savvy.
Even Charles Beckett, the father of one of the victims, defended his daughter’s colleagues. “These are brilliant people,” he said. “It’s not like they’re naïve and uneducated and have some fantasy about going on trips to help some people in dangerous areas.”
This was a terrible tragedy: brilliant people with medical knowledge and good hearts trying to demonstrate God's love by binding up wounds and healing diseases.

Two thoughts come to mind at this sad time. First, I don't think it's a stretch to name these ten as martyrs who died for the faith, like Tom Fox, who died in Iraq in 2004 (his story is described in chapter 7 of my book). Unlike so-called martyrs (shaheed) in radical, sectarian Islamic groups, who kill others in suicide attacks, these folks were trying to heal. Second, this demonstrates the increasingly multinational, global nature of the Christian church (a theme of chapters 9 and 10 of the book).

Friday, August 6, 2010

"Glimpses of a Different Order of Time"

A review of The Sabbath World: Glimpses of a Different Order of Time, by Judith Shulevitz

My wonderful colleague Jane Hoyt-Oliver lent me her copy of this new book by freelance writer Judith Shulevitz. It's a deeply thoughtful compilation of semi-autobiographical reflections on her practice of the Jewish sabbath, mixed with some thoughtful research on the history of sabbath-keeping and brilliant speculation on its wider significance. I'd like to share some of my favorite quotes as a way of glimpsing what Shulevitz does so well, with beautiful prose (I wish I had read this book before completing my own!).

The difference between modern standardized time and holy time: 
Holiness scandalizes, as well it should. It's the very incarnation of unreason. Once Isaac Newton convinced us that time was a mathematical quantity, wholly measurable, infinitely divisible, and expressible in numbers, and economists showed us that time could be a commodity, exchangeable for money, we were bound to find implausible the notion that certain times were holy while others weren't. How could some points on a graph be charged with supernatural power while others rest inert? Where, precisely, would the holiness lurk? If it can't be measured, how do we know it exists (p. 61)?
The importance of apocalyptic time in creating narrative
Shulevitz describes the importance of sabbath keeping to the Maccabean rebels against Rome (c. 167 B.C.), and points out that some of them may have felt that if they were martyred for keeping the Sabbath, "the end of time would come and they would rise again . . . . [T]hey felt that to keep the Sabbath, was to assert that time had a beginning, a middle, and an end." This kind of apocalyptic imagination echoes New Testament scholar/theologian N.T. Wright's view of Judaism at the time, which he argues was crucial for understanding the New Testament imagination. The gospels and epistles were written with this kind of urgency, with the authors inspired to believe that the events of Jesus' life were indeed the inauguration of God's rule in history, the fulfillment of Israel's longings.

The contrast between modern time and the Fullness of Time
Marx was the first to point out that divorcing time from context and commodifying it as money leads directly to temporal compression. When time is money, speed equals more of it (p. 97). [I say something very similar in the book in chapter 1.]  . . . [But] the fullness of time is the moment when God (through Christ and the Holy Spirit) invades the present and fills it with his presence (p. 98, after describing kairos time and citing both Paul and Kierkegaard).
I would argue that Christians need to rediscover this notion of the Fullness of Time from both Paul (Gal 4:4) and Kierkegaard (The Concept of Anxiety [Princeton, 1980], p. 90). I really wish I had come across her Kierkegaard reference earlier! I knew he had used the phrase but couldn't find it in his writings.

The shift from modern, railroad time to postmodern, cellphone time
One of her most striking observations, based on a book by Richard Ling entitled The Mobile Connection: The Cell Phone's Impact on Society (2004), is that our practice of time is becoming more fluid, so a static concept of a one-day Sabbath may be harder to embody and live (pp. 194-96).  "In the embryonic progressive [flexible cellphone or Facebook time], nothing ends. The Sabbath, by contrast, demands of us a hard and tragic sense of beginnings and endings" (p. 197). She's onto something here. It will be harder to maintain practices like Sabbath-keeping with their temporal rigidity. Yet we need this kind of rest so badly (see chapter 6 of my book on Lent).

Her final words on why we need the Sabbath
We could let the world wind us up and set us to working, like dolls that go until they fall over because they have no way of stopping. But that would make us less than human. We have to remember to stop because we have to stop to remember (p. 217).
Take a 24-hour break this weekend. It's a way of living in the story that we are called to enter.

Thursday, August 5, 2010

Even More Summer Reading on the Global Financial Crisis

First off, thanks to Google for making a new template available that works well for a blog about "the flat world." For those who've seen the blog before, this should be a less cluttered look and a better pairing of medium with content. (Let me know if you disagree!)

And now on to my post-World Cup summer obsession: reading interesting books about the global financial crisis. (Yes, such things exist!) I just finished two more books that help explain the mess the world economy got into by 2007 or 2008. The first, although prophetic, is now slightly dated and probably too technical for the average reader; the second is a current and compelling story that most people would grasp.

Dated and a bit technical, but prophetic
Charles Morris' 2008 book The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash was one of the first books published on the mess, coming out even before the full scope of the disaster was apparent. Morris was a former banker, with some high-level Wall Street connections (he thanks Nouriel Roubini, an early prophet of doom; George Soros, a world-famous currency speculator and intellectual; and Satyajit Das, an expert on the crazy financial products called derivatives, for helping him). Interestingly, Morris blames the free market ideology of the so-called Chicago School and of former Fed Board of Governors Chairman Alan Greenspan for a hands-off approach to regulating finance. In Morris' view, the roots of the crisis go back to the rise of "monetarism"--the belief that money supply drives inflation--in the 1980s. Deregulation was in, so financiers were left alone to police themselves.

But he goes beyond ideological polemics to explain the history that preceded the current mess. Three precedents are the 1987 "Black Monday" stock market crash, the 1998 Long Term Capital Management collapse, and the 2000 popping of the dot-com stock market bubble--all of which illustrated the flaws of applying mathematical models to manage the risk of market downturns. History doesn't obey the law of averages but has a way of coming up with never-before-anticipated events--events that don't fit on a "normal" bell-shaped curve. Globalized finance is not like physics and its mathematical expression:
The mathematics of big portfolios analogizes price movements to models of heat diffusion and the motions of gas molecules, in which uncountable randomized micro-interactions lead to highly predictable macro-results. Although it's theoretically possible that all the air molecules in my room will shift to one corner . . . the laws of large numbers ensure that the actual frequency of such events is way beyond never. Large securities portfolios usually do behave more or less as the mathematics suggest. But the analogies break down in a time of stress. For shares to truly mirror gas molecules, trading would have to be costless, instantaneous, and continuous. In fact, it is lumpy, expensive, and intermittent. Trading is also driven by human choices that often make no sense in terms that models understand. Humans hate losing money more than they like making it. Humans are subject to fads. . . . [I]n real financial markets, air molecules [real human beings] have a disturbing knack for clumping on one side of the room (pp. 56-57).
Even though the crisis was just beginning to unfold, Morris identifies several new financial products that contributed to making the crisis so massive: collateralized mortgage obligations, collateralized debt obligations, and credit default swaps. If all these terms confuse the heck out of you, then try watching the "Crisis of Credit Visualized" video, which is very helpful. Credit default swaps are what led to the Fall 2008 near-collapse and $85 billion bailout of AIG, a giant global insurance firm, which had not yet happened when Morris was writing, but he could claim to have seen it coming (at least in general). Which just goes to show you that this thing was entirely possible to anticipate. While it took a while for President George W. Bush to realize that "this sucker could go down," people like Morris saw it coming well ahead of time.

A compelling story for most readers
David Faber, a reporter for CNBC, has the courage to say that he honestly missed this story as it was unfolding. But thanks to a hedge fund manager in Texas named Kyle Bass, who called him to clue him in, he eventually started piecing together what was really happening at multiple levels. In other words, Faber figured out the story that only a few experts on the edges of Wall Street like Bass (the same people that are heroes in Michael Lewis' The Big Short) had told up to that point. Once he "got it," he needed to tell the story.

As a result, Faber's book And Then the Roof Caved In (2009) does a nice job framing the crisis as a compelling narrative, with real characters taking actions that drove the story from its beginning to its end. It looks like Faber basically converted his reporting for the CNBC documentary House of Cards into book form. Unlike Morris, he limits to the story to the critical period between 2001 and 2008, focusing on the links between 1) ordinary homebuyers who were trying to use increasing house prices to get ahead financially, 2) unregulated subprime mortgage lenders who were eager to lend at high rates of interest, 3) Wall Street banks desperate to buy up "physical" mortgages to pool into mortgage-backed bonds, 4) global investors desperate for high returns above the low interest rates set by the Federal Reserve (Fed), 5) credit rating agencies (Moody's, Standard & Poor's, and Fitch) that were complicit with the Wall Street firms that paid them to rate bonds issued by the same firms, 6) a Fed that failed to regulate the subprime mortgage market or take action to ease the housing bubble (the steady increase in housing prices and the flow of overseas capital into the mortgage bond market), and 7) Wall Street bankers (like Stan O'Neal, the head of Merrill Lynch) who were more interested in playing golf and paying themselves huge bonuses than in what was going on.

These seven are the main characters in any accurate rendering of the drama (is it a tragedy or comedy?). I want to comment briefly on ordinary people, Wall Street banks, and global investors.

I was especially glad to see the attention paid to the impact of all this financial maneuvering on ordinary people (#1 above). Faber focuses on the story of Arturo Trevilla, an upwardly mobile Mexican immigrant to California, and his family. They bought a house for $584,000, signing papers that said he took home $16,000 a month when he really earned $3,600 a month. (Arturo's English wasn't great, and even if it was, loan papers are hard to understand.) He also borrowed money for the down payment (a so-called "piggyback" loan). He was hoping to get out of his subprime loan in the future by borrowing against the expected future value of his home, which he, like everyone, assumed would keep increasing. Then he could borrow $70,000 of his home equity and start the embroidery business he was dreaming of. Unfortunately, by the time his adjustable rate mortgage payments zoomed up to $5,000 a month, he was in trouble. Then he lost his job, and he, his wife, his three kids) moved into an apartment with another family. Predatory lending or irresponsibility? A little of the latter, but mostly the first, I think.

The issue of ordinary people "flipping" homes for profit was also a major contributor to the crisis. Kyle Bass, the hedge fund guy, knew there was a problem when he chatted with a bartender in Las Vegas in 2007 who told him that he wasn't doing so well because his "three houses are killing me" (151). He'd been borrowing to buy and flip houses but couldn't sell them. Yes, a regular old bartender was doing that. And, yes, the inability to sell suggested that the real estate price bubble had popped--especially in places like Las Vegas (or California, Arizona, or Florida).

Why was Wall Street so stupid? In passing, Faber mentions a study of 24 housing busts that had happened since the 1970s (p. 175). In the last post, I reviewed John Lanchester's I.O.U., who had lived through a real estate bubble in England And yet really smart people all over the world were convinced that housing prices in the US would keep rising? Everyone knew that things were getting risky, so why did they keep investing in mortgage-backed bonds? According to the former CEO of Citigroup, they were afraid of losing market share (p. 168).

The global dimensions of this crisis are significant. Without the "giant pool of money" held by investors outside the U.S.--something like $70 trillion in 2008--this crisis wouldn't have started or become so widespread. According to Faber, "In 2005, 80 percent of subprime mortgages were being securitized and sold to voracious investors around the world. The subprime mortgage had become the chief export of our country" (p. 78). Message to the world from the USA: "Sorry about that."

On two controversial, politically charged points in the narrative, Faber weighs in with his own reading of the evidence.

First, he doesn't blame Fannie Mae and Freddie Mac, the two federally supported mortgage guarantors, for driving the crisis. After delving into the story, he attacks the "myth" that "the lax lending standards of Fannie and Freddie promulgated the current crisis. It is not true. Wall Street rushed into the vacuum created by the absence of Fannie and Freddie in 2003-2005 [because they were under pressure to be more cautious and accurate in their financial statements]" (p. 66). 70 percent of U.S. mortgages originated in 2003 were sold to Fannie and Freddie. By 2006, only 30 percent of mortgages were (p. 65). However, he does note that Congressman Barney Frank, the Chair of the House Financial Services Committee, later encouraged Fannie and Freddie to increase lending, on the theory that extending credit to less creditworthy borrowers would help expand the American Dream of homeownership. Still, in Faber's view, Wall Street is the one that drove the game.

Second, probably because he scored an interview with Alan Greenspan in 2008, Faber gives a wide berth to accusations that Greenspan and the Fed failed to take appropriate regulatory actions (in contrast to Morris, as noted above). However, he does point out (on pp. 50-54) that Edward Gramlich, one of the Fed's Governors, and Sheila Bair, the head of the Federal Deposit Insurance Corporation (the main regulator of banks), tried to persuade Greenspan to tighten lending requirements for mortgages. No dice.

Because of this reverence for Greenspan, Faber ends the book on a rather futile note, with no lessons for possible future corrective actions. As he puts it, in the final paragraph of the book,
Greed is the fuel that makes our capitalist system run. It is a powerful emotion. When I asked Alan Greenspan about it, he agreed, and then he gave me a sideways look from that famous 82-year-old face and said: "And you're going to outlaw that? Go ahead and try it."
Well, there's nothing we can do. There is No Alternative to letting the market run. You might as well try to pass a law against gravity.

Do you buy that?