Did Christianity Cause the Crash?

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America’s churches always reflect shifts in the broader culture, and Casa del Padre is no exception. The message that Jesus blesses believers with riches first showed up in the postwar years, at a time when Americans began to believe that greater comfort could be accessible to everyone, not just the landed class. But it really took off during the boom years of the 1990s, and has continued to spread ever since. This stitched-together, homegrown theology, known as the prosperity gospel, is not a clearly defined denomination, but a strain of belief that runs through the Pentecostal Church and a surprising number of mainstream evangelical churches, with varying degrees of intensity. In [Fernando] Garay’s church [Casa del Padre], God is the “Owner of All the Silver and Gold,” and with enough faith, any believer can access the inheritance. Money is not the dull stuff of hourly wages and bank-account statements, but a magical substance that comes as a gift from above. Even in these hard times, it is discouraged, in such churches, to fall into despair about the things you cannot afford. “Instead of saying ‘I’m poor,’ say ‘I’m rich,'” Garay’s wife, Hazael, told me one day. “The word of God will manifest itself in reality.”

Many explanations have been offered for the housing bubble and subsequent crash: interest rates were too low; regulation failed; rising real-estate prices induced a sort of temporary insanity in America’s middle class. But there is one explanation that speaks to a lasting and fundamental shift in American culture–a shift in the American conception of divine Providence and its relationship to wealth.

In his book Something for Nothing, Jackson Lears describes two starkly different manifestations of the American dream, each intertwined with religious faith. The traditional Protestant hero is a self-made man. He is disciplined and hardworking, and believes that his “success comes through careful cultivation of (implicitly Protestant) virtues in cooperation with a Providential plan.” The hero of the second American narrative is a kind of gambling man–a “speculative confidence man,” Lears calls him, who prefers “risky ventures in real estate,” and a more “fluid, mobile democracy.” The self-made man imagines a coherent universe where earthly rewards match merits. The confidence man lives in a culture of chance, with “grace as a kind of spiritual luck, a free gift from God.” The Gilded Age launched the myth of the self-made man, as the Rockefellers and other powerful men in the pews connected their wealth to their own virtue. In these boom-and-crash years, the more reckless alter ego dominates. {snip}

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Among Latinos the prosperity gospel has been spreading rapidly. In a recent Pew survey, 73 percent of all religious Latinos in the United States agreed with the statement: “God will grant financial success to all believers who have enough faith.” For a generation of poor and striving Latino immigrants, the gospel seems to offer a road map to affluence and modern living. Garay’s church is comprised mostly of first-generation immigrants. More than others I’ve visited, it echoes back a highly distilled, unself-conscious version of the current thinking on what it means to live the American dream.

One other thing makes Garay’s church a compelling case study. From 2001 to 2007, while he was building his church, Garay was also a loan officer at two different mortgage companies. He was hired explicitly to reach out to the city’s growing Latino community, and Latinos, as it happened, were disproportionately likely to take out the sort of risky loans that later led to so many foreclosures. To many of his parishioners, Garay was not just a spiritual adviser, but a financial one as well.

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But since that time, the movement has made itself over, moving out of the fringe and into the upwardly mobile megachurch class. In the past decade, it has produced about a dozen celebrity pastors, who show up at White House events, on secular radio, and as guests on major TV talk shows. Kirbyjon Caldwell, a Methodist megapastor in Houston and a purveyor of the prosperity gospel, gave the benediction at both of George W. Bush’s inaugurals. Instead of shiny robes or gaudy jewelry, these preachers wear Italian suits and modest wedding bands. Instead of screaming and sweating, they smile broadly and speak in soothing, therapeutic terms. But their message is essentially the same. “Every day, you’re going to live that abundant life!” preaches Joel Osteen, a best-selling author, the nation’s most popular TV preacher, and the pastor of Lakewood Church, in Houston, the country’s largest church by far.

Among mainstream, nondenominational megachurches, where much of American religious life takes place, “prosperity is proliferating” rapidly, says Kate Bowler, a doctoral candidate at Duke University and an expert in the gospel. Few, if any, of these churches have prosperity in their title or mission statement, but Bowler has analyzed their sermons and teachings. Of the nation’s 12 largest churches, she says, three are prosperity–Osteen’s, which dwarfs all the other megachurches; Tommy Barnett’s, in Phoenix; and T. D. Jakes’s, in Dallas. In second-tier churches–those with about 5,000 members–the prosperity gospel dominates. Overall, Bowler classifies 50 of the largest 260 churches in the U.S. as prosperity. The doctrine has become popular with Americans of every background and ethnicity; overall, Pew found that 66 percent of all Pentecostals and 43 percent of “other Christians”–a category comprising roughly half of all respondents–believe that wealth will be granted to the faithful. {snip}

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Theologically, the prosperity gospel has always infuriated many mainstream evangelical pastors. Rick Warren, whose book The Purpose Driven Life outsold Osteen’s [Your Best Life Now, by Joel Osteen], told Time, “This idea that God wants everybody to be wealthy? There is a word for that: baloney. It’s creating a false idol. You don’t measure your self-worth by your net worth. I can show you millions of faithful followers of Christ who live in poverty. Why isn’t everyone in the church a millionaire?” In 2005, a group of African American pastors met to denounce prosperity megapreachers for promoting a Jesus who is more like a “cosmic bellhop,” as one pastor put it, than the engaged Jesus of the civil-rights era who looked after the poor.

More recently, critics have begun to argue that the prosperity gospel, echoed in churches across the country, might have played a part in the economic collapse. In 2008, in the online magazine Religion Dispatches, Jonathan Walton, a professor of religious studies at the University of California at Riverside, warned:

Narratives of how “God blessed me with my first house despite my credit” were common. . . . Sermons declaring “It’s your season of overflow” supplanted messages of economic sobriety and disinterested sacrifice. Yet as folks were testifying about “what God can do,” little attention was paid to a predatory subprime-mortgage industry, relaxed credit standards, or the dangers of using one’s home equity as an ATM.

In 2004, Walton was researching a book about black televangelists. “I would hear consistent testimonies about how ‘once I was renting and now God let me own my own home,’ or ‘I was afraid of the loan officer, but God directed him to ignore my bad credit and blessed me with my first home,'” he says. “This trope was so common in these churches that I just became immune to it. Only later did I connect it to this disaster.”

Demographically, the growth of the prosperity gospel tracks fairly closely to the pattern of foreclosure hot spots. Both spread in two particular kinds of communities–the exurban middle class and the urban poor. Many newer prosperity churches popped up around fringe suburban developments built in the 1990s and 2000s, says Walton. These are precisely the kinds of neighborhoods that have been decimated by foreclosures, according to Eric Halperin, of the Center for Responsible Lending.

Zooming out a bit, Kate Bowler found that most new prosperity-gospel churches were built along the Sun Belt, particularly in California, Florida, and Arizona–all areas that were hard-hit by the mortgage crisis. Bowler, who, like Walton, was researching a book, spent a lot of time attending the “financial empowerment” seminars that are common at prosperity churches. Advisers would pay lip service to “sound financial practices,” she recalls, but overall they would send the opposite message: posters advertising the seminars featured big houses in the background, and the parking spots closest to the church were reserved for luxury cars.

Nationally, the prosperity gospel has spread exponentially among African American and Latino congregations. This is also the other distinct pattern of foreclosures. “Hyper-segregated” urban communities were the worst off, says Halperin. Reliable data on foreclosures by race are not publicly available, but mortgages are tracked by both race and loan type, and subprime loans have tended to correspond to foreclosures. During the boom, roughly 40 percent of all loans going to Latinos nationwide were subprime loans; Latinos and African Americans were 28 percent and 37 percent more likely, respectively, to receive a higher-rate subprime loan than whites.

In June, the Supreme Court ruled that state attorneys general had the authority to sue national banks for predatory lending. Even before that ruling, at least 17 lawsuits accusing various banks of treating racial minorities unfairly were already under way. (Bank of America’s Countrywide division–one of the companies Garay worked for–had earlier agreed to pay $8.4 billion in a multistate settlement.) One theme emerging in these suits is how banks teamed up with pastors to win over new customers for subprime loans.

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The idea of reaching out to churches took off quickly, Jacobson [Beth Jacobson,a star witness for the City of Baltimore’s recent suit against Wells Fargo] recalls. The branch managers figured pastors had a lot of influence with their parishioners and could give the loan officers credibility and new customers. Jacobson remembers a conference call where sales managers discussed the new strategy. The plan was to send officers to guest-speak at church-sponsored “wealth-building seminars” like the ones Bowler attended, and dazzle the participants with the possibility of a new house. They would tell pastors that for every person who took out a mortgage, $350 would be donated to the church, or to a charity of the parishioner’s choice. “They wouldn’t say, ‘Hey, Mr. Minister. We want to give your people a bunch of subprime loans,” Jacobson told me. “They would say, ‘Your congregants will be homeowners! They will be able to live the American dream!'”

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I asked Garay why his parishioner Billy Gonzales, who earns barely $25,000 and has no money to fix his car, should donate 10 percent of his income. “Because it gives him a new mentality. It teaches him that money can breed more money, that you can have money in your pocket on Saturday morning even though you got paid Friday night. People who support the church week after week have a dedication. Those who just give $5 or $10 here and there, you’ll hear them have the same problems week after week.” Jackson Lears would add another explanation: tithing is like the moment the gambler lays his money down on the table–it “promises at least a fleeting opportunity to contact a realm where hope is alive,” he writes. Without it, there’s only the dull regularity of $2,000 a month and a dead car.

During the boom years, Apostle Garay, as he is known in church, was brasher than he is now. He spoke in very specific terms during church services, promising that a $100 offering would yield a $10,000 return: “This is not my promise. It is God’s promise, and he will make it happen!” he would say.

While it sounds absurd, this kind of message can have a positive influence, according to Tony Tian-Ren Lin, a researcher at the University of Virginia who has made a close study of Latino prosperity gospel congregations over the years. These churches typically take in people who had “been basically dropped into the world from pretty primitive settings”–small towns in Latin America with no electricity or running water and very little educational opportunity. In their new congregation, their pastor slowly walks them through life in the U.S., both inside and outside of church, until they become more confident. “In Mexico, nobody ever told them they could do anything,” says Lin, who was himself raised in Argentina. He finds the message at prosperity churches to be quintessentially American. “They are taught they can do absolutely anything, and it’s God’s will. They become part of the elect, the chosen. They get swept up in the manifest destiny, this idea that God has lifted Americans above everyone else.”

At Casa del Padre, the celebration of consumer culture is quite visible, along with a sense of boundless opportunity. The people in the church, for instance, tend to have very expensive cell phones–never the free ones that come with a calling plan, nor the sort that can be bought cheaply at a convenience store. “They start wanting what’s considered the best and the most technologically advanced in this country,” Lin says. Garay’s church, it seems to me, teaches them that they deserve these things, so they go about getting them, with few resources and infinite adaptability. Before the crash, one group of young men got a $12,000 loan to start a landscaping company; another man bought a $270,000 house. One of the church’s Bible-study leaders, who’d grown up in a remote village in Mexico with an abusive, alcoholic father, had become a very successful contractor by the height of the boom, managing 30 men on multiple jobs and winning contracts to paint luxury subdivisions in the exurbs.

The tenets of the prosperity gospel, and the practical advice that pastors often give their parishioners, help immigrants learn “not just how to survive but how to thrive; not just live paycheck to paycheck but handle money–manage complicated payrolls, invest in equipment,” Lin told me. Along the way, they become assimilated. “While they’re trying to be closer to God, instead they become American,” he says, from their optimism and entrepreneurialism to the very nature of their dreams.

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Like much of Garay’s advice, this recommendation is partly grounded in economic reality, and partly drawn from mystical notions about a biblical calendar. “I’m very real,” he once told me. “If you want to eat at Red Lobster, you better have a Red Lobster paycheck, and enough left over to pay your electric bill. But I’ve also seen miracles of God.” Later, during one of our talks over coffee, his wife echoed the sentiment. “If you can’t afford a house, you shouldn’t buy it,” Hazael said, when I asked whether the prosperity gospel might push people to take irresponsible risks. “But if the Lord is telling you to ‘take that first step and I will provide,’ then you have to believe.”

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It is not all that surprising that the prosperity gospel persists despite its obvious failure to pay off. {snip}

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