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Ways of the World

Carol Stone, business economist & active Episcopalian, brings you "Ways of the World". Exploring business & consumers & stewardship, we'll discuss everyday issues: kids & finances, gas prices, & some larger issues: what if foreigners start dumping our debt? And so on. We can provide answers & seek out sources for others. We'll talk about current events & perhaps get different perspectives from what the media says. Write to Carol. Let her know what's important to you:

Sunday, October 29, 2006

On the Road . . . .

Since you last heard from Ways of the World, we spent five days on the West Coast, three in Portland at a conference and two visiting family in California. The conference was the Annual Meetings of a group of social scientists who specialize in religious studies, formally known as the Society for the Scientific Study of Religion (SSSR), in joint sessions with two other academic associations. Most of these folks are sociologists, but there are psychologists, political scientists and – yes – economists. They are mainly college professors, but some are independent researchers, like me, and also research directors for various denominations and religious organizations.

The denominational research is heavily demographic: who are the people who sit in the pews? What race, family size, income bracket, profession? What kinds of worship speak to them? How often do they read the Bible? How do they relate to their clergy? What kinds of programs make for a successful church?

Jewish Scholars and "Change"
One of the most interesting sessions for me consisted of presentations by several Jewish researchers who have been implementing a pilot project to engage congregants more in their worship and in synagogue activities. They have introduced new programming and new liturgical practices in selected synagogues. The speakers talked especially about resistance to change they encountered among members and skepticism among some rabbis. Another Episcopalian and I in the audience saw right away that our own experiences with "change", including new roles for laity and the stiffening among some of our members at new liturgical forms were duplicated in this current Jewish work and that our comments could be helpful to each other.

Religion and the Economy
There were sessions on "religion and capitalism" and on "spiritual capital". One presentation examined articles in well-known church-related periodicals. Over several decades the magazines' respective themes indicated that one indeed leans toward capitalism while the other is more attuned to social justice. Another presentation studied historical approaches to church-state relations in colonies; that researcher found that stronger economic institutions emerged in colonies where there was more religious freedom, that is, where individuals could build more "spiritual capital". Obviously these brief descriptions don't do justice to these projects, but they illustrate the kinds of linkages scholars are finding between religion and economic issues.

The Baylor Survey
I became acquainted with a group of professors at Baylor University in Texas. They have begun the Baylor Religion Survey, a new national sampling of ordinary people about their religious connections and beliefs. There are numerous Gallup Poll-type surveys that include questions about religion, but this one is by far the most detailed and will be repeated every two years, so a consistent set of information can be compiled and monitored over time. The Gallup organization actually conducts the survey polling and the Templeton Foundation is funding it. The first round, collected at this time last year, included general sections on basic characteristics: gender, age, region of residence, church membership, church attendance, frequency of prayer and so on. It also had specific "modules" on images of God, civic involvement and purchases of religious goods, among others. We hope to become involved ourselves in a succeeding survey round with some questions about attitudes toward business and the economy.

"Images of God" – that's intriguing. What did the Baylor survey find about "images of God"? Just one aspect will give you some flavor: from a list of 16 adjectives that could describe God, the Baylor analysts find that people differ in whether they perceive God as "engaged" in the world and in personal affairs or "distant" from them. Those who see God as "engaged" tend to more frequent church attendance, more literal interpretations of Scripture, stronger belief in the divinity of Jesus. It also turns out that the believers in an "engaged" God are more concentrated in the South and Midwest, with disproportionately small numbers in the East and West. Thus, for us on the two coasts there is a different religious atmosphere in which fewer people believe that God cares about what's going on the world and about us.

I keep concluding my articles here with "stay tuned for more" and this one is no exception. Two more thoughts for now: One, does the Episcopal Church have a Research Director? Indeed we do. His name is Kirk Hadaway and he works in the Congregational Development office at 815. He spoke on "Religious Growth and Decline", unfortunately at the same time as the Baylor session, so I didn't hear him. He is senior in this profession and is the incoming President of the Religious Research Association.

A Ride up the Columbia River, Too
Secondly, about Portland, Oregon. If you've never been – and I hadn't – it's beautiful country and even on a rainy day, a ride on one of the country's oldest highways right alongside the Columbia River was a real treat, along with seeing the salmon work at swimming upstream through the "fish ladders". They wind up less than 6 feet from where they were born! Nature is incredible sometimes. You just can't experience these miracles and then somehow believe that God is "distant" from the world and us.

Friday, October 13, 2006

"Lasting Peace" Requires People "To Break Out of Poverty"

Mother Crafton's eMo today about the Nobel Peace Prize tells how excited I am that Muhammad Yunus and the Grameen Bank have been honored and rewarded in their work to alleviate poverty of the deepest kind in one of the poorest places on Earth. Although Yunus is an economist, they did not receive the Nobel Prize in Economics; they received the Nobel Peace Prize.

First, it is important to notice that the award is dual: it will be split between Dr. Yunus, the founder of the Bank, and the Bank itself. It is hardly surprising that a leader of Dr. Yunus's stature has been recognized. He has great insight and great ability, including the ability to develop talent in others so they can manage the Bank's operations with him. He also has the kind of ego to let go so those people can do just that.

The honor to the Bank itself is a singular statement about the people of Bangladesh. The Grameen Bank is owned 6% by the government of Bangladesh and 94% by the "members" of the Bank, the very poor people who borrow from it. These people, through the business they conduct in the unique institution they have made, share in the Nobel Peace Prize.

We have talked twice here about the book on the Grameen Bank, The Price of a Dream by David Bornstein. The first time, on June 27, we recommended the book because of the stories it tells, or rather, the way Bornstein composes it to let the people tell the stories of their hard work. They would try to manage some small business in their village to earn money, but three-quarters of the profit had to go to the loan shark who would only give them credit at some astronomical interest rate. No financial institution of any status would deal with them because, well, they were poor. But the financing they could get was so expensive that they still couldn't break out of their poverty.

But the people of Bangladesh are people just like other people. It may be a tough climate, with flooding and terrible heat. There may be a war in that volatile territory every other decade or so, so that no one can settle down long enough to get a good life established. They may have lived under great oppression, especially the women. But they are still people who respond to incentives just like any of us. And they still want their children to have it better than they do. They will stretch and grow to reach their goals, just like we will if we are challenged.

The second time we called your attention to The Price of a Dream was near September 11, when we described how the Grameen Bank's micro-credit operation was helping people help themselves, so their lives might move forward instead of drifting toward the lures of terrorism. The Grameen Bank does not have a top-down structure. The vast majority of lending decisions are made in the village by organized groups of villagers who administer the loans the Bank makes to them and their neighbors. There is both social pressure and support from your dearest friends for you to succeed. You have to pay the loan back, so you must do something productive with the money. You will. For the first few years, meetings of the village groups concluded with a "salute". This has been dropped because it seemed too militaristic, but one of the purposes it served was to make the women raise their eyes and look the group leader straight in the face, a posture they would never take with their husband or other "over-lord". And the men who borrow must take direction from any woman who is conducting the Bank's business.

The Nobel Committee saw all this and praised it. Their citation says, "Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development."

Mother Crafton made a typo in her eMo today. She wrote, "Congratulations to Bangladesh's Dr. Muhammad Yunus, our newest Noble laureate, and a most worthy one." Noble, indeed.

Wednesday, October 11, 2006

Saving Today So We Can Live Better Tomorrow

About a month ago, we offered some comment here titled, "Better Living Through Shopping"; we explored people's motives for buying things and we also described the pleasure they derive from the process of shopping itself. People told market researchers that their main reason for making purchases is to improve their "quality of life".

Ah, "quality of life". Such an amorphous concept, it can explain many things we do. We eat nutritious foods, we get annual medical check-ups, we attend church. We also backpack in the woods (with only the latest camping gear), we take a course at the quilt shop in the charming little town 20 miles east, we attend a rock concert – these recreational activities provide important balance in our "quality of life".

We might also want to do these things "tomorrow". But, as we've documented well here, we've burdened ourselves with debt and we're cutting into our net worth in order to keep improving our lives "today". So what about "tomorrow"? That must have something to do with saving.

Only Half of Families Save
About half of the families in the country "save". That is, in the Federal Reserve's Survey of Consumer Finances for 2004, which we've explored before, 56% of families replied that they manage to keep their spending less than their income, so they have something left over to save. This ratio of savers in the population is lower than the 59% in the previous 2001 survey, but it is about even with the two previous polls.

This number seems low to us, but at the same time, virtually everyone has some kind of financial assets, according to this survey. And these assets are actually growing. Our problem in recent years has been that our liabilities have increased by even more, so that the population as a whole is more vulnerable to whatever "tomorrow" might bring.

Spending Is More Fun than Saving
Correcting this doesn't come easily. Shopping is fun, as we've noted, but saving isn't. It can be satisfying and comforting to have money in the bank, but there's not much pleasure in it. Back in the 1990s, many people also thought the stock market was exciting, but that good feeling vanished fairly abruptly when prices plunged with the "" bust.

Low Interest Rates Meant "Tomorrow" Wasn't Worth Much
Further, saving didn't really pay. Short-term interest rates dropped steeply during the 2001 recession and then again after 9/11. From late in 2002 until early last year, the rates we could get on bank deposits and money market funds were down around 1% and less than the rate of inflation. So what it did pay to do was spend money. If you saved your money for a year, you would earn so little interest on it that you wouldn't cover the inflation in the goods and services you might want to buy, and you'd be worse off than if you'd gone ahead and made those purchases.

Rates Higher Now, So Are Stocks
Interest rate conditions have changed over the last several months. Rates have increased in general and in particular on bank CDs and money market accounts. Several savings instruments now earn more than the rate of inflation. The stock market is gradually regaining favor as well. The Dow Jones Industrial Average finally got back up to its levels of early 2000 just a couple of weeks ago and has pushed through to new record highs. Several other widely watched stock market indexes are also nearing their earlier peaks. This move is actually a stronger one, based on greater consideration of fundamental company operations and finances than prevailed in the euphoric atmosphere of the late 1990s.

So we have conditions at banks and in financial markets that are more conducive to saving. Next time, as we did with spending, we'll talk about people's motives for doing that. In this case, our reasoning is still centered on "quality of life", but it's our life tomorrow that's at stake.

A Data Source
Meantime, if you are in the midst of financial decisions, we can suggest a handy website for calculating interest payments, deciding on a car rebate vs. lower loan interest, picking out a CD investment and so on. It's and it's full of free advice and all kinds of current consumer interest rate information not easily available elsewhere. There is advertising, but the service itself is long known as a provider of unbiased information and data on consumer saving.

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