Christianity by State: The Religious Dimension of Federalism

According to the  2010 U.S. Religious Census of Religious Congregations & Memberships Study by the Association of Statisticians of American Religious Bodies, less than 50 percent of the people living in the United States identified themselves as Christian adherents in 2010. There were more than 150.6 million out of 310 million. Even so, candidates for the U.S. presidency still felt the need to vocalize the fact that they are Christian (while the opponent doesn't quite measure up in that respect). President Obama made a point during his first two years in office to stress his Christianity as if it were the membership card to the Oval Office. It would seem that the litmus test was already antiquated and thus needlessly constrictive on potential candidates.

The study also discerned differences between the states, once again giving evidence of the heterogeneous nature of the empire of fifty republics. States where more than 55% of the residents identified themselves as Christian were either in the South or in the Midwest. Mississippi (59%), Utah (57%), Alabama (56%), and Lousiana (54%) top the list. Interestingly, the two clusters of dark red on the map point to two distinct Christian cores in the United States. It would be interesting to study whether or how the two cores differ. One indication is that there were differences is that all of the states in the southern core had the death penalty at the time, whereas two of the three states in the northern core did not. I suspect that the southern core was more ideologically conservative in nature (i.e., social issues)--the Northern core's conservatism being moderated perhaps by the tradition of Hubert Humphrey.

States where less than 36% of the residents identified as Christian were in the West and New England. Vermont (23%), New Hampshire (23%), Maine (25%), and Massachusetts (28%) have the fewest Christians on a percentage basis (the map incorrectly shows MA as bright red). In these states, it would be particularly untenable were public services and offices to close on Good Friday and the following day. Unlike Christmas, Easter does not have the secular holiday component (which is recognized as a national holiday in the U.S.).  In fact, the sheer extent of difference between states like Mississippi (high 50s) and those like Vermont (low 20's) suggests that holidays should be declared on the state rather than the federal level. The question of whether the U.S. Constitution's establishment of religion clause applies at the state level is also relevant.

In short, the multi-colored map of the U.S. in terms of Christianity suggests that a "one size fits all" approach through Congress has the significant downside of ignoring significant cultural and religious differences. In other words, to take Vermont and Mississippi and "split the difference" is not likely to fit with the condition in many states. The fact that those two states are in the same union testifies to the fact that the union itself is on the empire-level, meaning that its member states are themselves commensurate with countries around the world that are not themselves on the empire-level. It should be no surprise, then, that federalism, which originated at the empire level in alliances, is a system of governance particularly well-suited to accommodate the sort of diversity that exists in the U.S. (and E.U.). The key to enabling federalism to accommodate the different religious makeups of the states is to keep the imperial-level government from stifling the state governments. In other words, they need to have enough space to produce legislative action that is tailored to their respective religious cultures. In states that are dark red, it makes sense that Good Friday would be a recognized holiday, whereas such a practice in Vermont or Oregon would impose too much on too many people. 

On Federalism in America and Europe, see Essays on Two Federal Empires: Comparing the E.U. and U.S., Essays on the E.U. Political Economy: Federalism and the Debt Crisis, and British Colonies Forge an American Empire, all available at Amazon.

Source:

The Huffington Post, "Most and Least Christian States in America," May 29, 2012. 

God's Gold through the Centuries

In the wake of the financial crisis that came to a head in September of 2008, people might have been wondering if sufficient moral constraints on the greed on Wall Street are available, even possible. The ability of traders to create complex derivative securities that are difficult for regulators to regulate, much less understand, may have people looking for ethical or even religious constraints. It would be only natural to ask if such “soft” restraint mechanisms really do have the puissance to do the trick. Here’s the rub: the tricksters are typically the last to avail themselves of ethical or religious systems, and they the wrongdoers are the ones in need of the restraint. Blankfein said of his bank, Goldman Sachs, that it had been doing God’s work. About a week after saying that, he had to walk his statement back and admit that the bankers had does some things that were morally wrong. Although divine omnipotence is by definition not limited by human ethical systems, it is hard to imagine a divine decree telling bankers to tell their clients one thing (buy subprime mortgage derivatives) while taking the opposite position on the bank’s proprietary position (shorting the derivatives, beyond being a counterparty to clients). Divine duplicity seems to represent an oxymoron on a megascale rather than a justification for greed. As the crisis erupted and was subsequently managed by public officials in government and new managers brought in to salvage AIG, I was researching the history of Christian thought on profit-seeking and wealth. I have since published an academic text and a nonfiction book, which develops further on the treatise on the topic. As the book is too recondite for sane people (i.e., outside of academia), I am writing a non-fiction book on the topic for a broader readership. To whet the appetites of those of you who are waiting for something more readable that a recondite thesis, I present a brief account of my original research on the topic here. 

For the full essay, see "God's Gold through the Centuries."

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See related essay: "Religious Sources of Business Ethics"

The academic treatise: Godliness and Greed: Shifting Christian Thought on Profit and Wealth 

The non-fiction book: God's Gold: Beneath the Shifting Sands of Christian Thought on Profit-Seeking and Wealth.

Larry Summers Bowed Out of the Race for Fed Chair: “Advise and Consent” Triumphant

On September 15, 2013, the White House announced that Larry Summers, Barak Obama’s prior chief economic advisor and a Secretary of the U.S. Treasury during the Clinton administration, no longer wanted to be considered to fill the upcoming vacancy as chairman of the Federal Reserve. In the announcement, Obama (or an advisor) wrote, “Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today.”[1] Unfortunately, this statement suffers from a sin of omission, which admittedly had been minimized by the media as well. Accordingly, the Democrats in the U.S. Senate who had just come out against a Summers nomination can be regarded as done the nation a vital service. Moreover, the “check” of the “check-and-balance” feature of the U.S. Senate’s confirmation power worked.
With all its open points of access, democracy can have a splintering effect on a point worthy of public debate. The media dutifully plays its “scattering” role before any reasoned train of thought can gain traction in the public domain. For example, at the time of Summers’ retraction, the New York Times reported that a “reputation for being brusque, his past comments about women’s natural aptitude in mathematics and science, and his decisions on financial regulatory matters in the Clinton and Obama administrations had made [Summers] a controversial choice.”[2] A reader could be forgiven for concluding that personal vendettas, public gossip, and single-issue (not even monetary policy!) political activists have points just as important as the matter of Summers’ past decisions on financial regulation.
Any political interest having succeeded in getting its point to a microphone is deemed just as relevant or decisive as any other. Democracy is the great relativiser. The great equalizer. Is rule by "members of the club" the only practical alterative, or is it American democracy merely its front, only superficially relativising and equalizing the relevant and the less-than-relevant?

       Alan Greenspan, Larry Summers, and Robert Rubin. In the late 1990s, they pressed Congress to keep financial derivatives unregulated. A case of government doing Wall Street's bidding?   Image Source: pbs.org


Obviating the scattering effect, we can zero in on Obama’s attribution of “expertise, wisdom and leadership” and ask whether they apply to Summers when he joined Alan Greenspan and Robert Rubin in the late 1990s to lobby Congress to remove the CFTC’s authority to regulate financial derivatives. At the time, Brooksley Born, chairwoman of the CFTC, was recommending to Congress that mortgage-backed derivatives be regulated. That the unholy triumvirate, blessed by Clinton and supported by Wall Street, succeeded with the help of Sen. Phil Gramm in discrediting Born kept the financial system vulnerable to being blind-sided by a collapse in any of the securitized derivatives markets.
It is difficult to fathom how financial regulatory expertise, wisdom, or leadership could possibly pertain to Summers in his lobbying capacity during the Clinton administration, even if he did go on to help Obama mop up the fiscal thaw after Lehman's bankruptcy. Yet, sadly, Summers’ down-right discraceful bullying of Born, and being wrong on top of that on whether financial derivatives should be regulated were barely mentioned in the public discourse leading up to Summers’ decision to withdraw his name from the president's consideration.
Fortunately, the public can rely on the informed advise and consent power of the U.S. Senate. Is it just a coincidence, however, that bullish financial markets answered Summers' decision? Or was it the other way around: Summers' decision being the answer to a message he had received from Wall Street?
To be sure, Summers was "generally considered to be in the pocket of Wall Street."[3] Citibank had been paying him for what the Federal Reserve refers to as "participation" in "Citi events."[4] Additionally, his efforts to keep financial derivatives, including CDOs, unregulated enabled Wall Street banks to make "kazillions of dollars."[5] However, bankers have short memories, given the inertia of the financial interest of the moment. Traders and bankers tended to favor Yellen, according to a poll conducted by CNBC; whereas Yellen got 50 percent, Summers came in at a mere 2.5 percent.[6] Besides sporting an abrasive (Harvard?) manner, Summers had given vocal hints that he might tighten monetary policy, even reduce the Fed's bond-purchase program sooner than Yellen would.
Particularly given Summers' nature, I have trouble believing that he woke up one nice fall morning and decided to cave in to anticipated "political obstacles" to his getting confirmed by the U.S. Senate. Put another way, more was likely behind his loss of support among Democrats on the Senate committee than even concerns the senators might have had about Summers' prior participation in turning Congress against Born's plea to regulate derivatives. Could it be that Wall Street CEOs were pulling the strings, reaching from Boston to Capitol Hill without even leaving finger-prints?    

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1. Annie Lowrey and Michael D. Shear, “Summers Pulls Name from Consideration for Fed Chief,” The New York Times, September 15, 2013.
2. Ibid.
3. Mark Gongloff, "Larry Summers' Withdrawal from Fed Race Is Good News for Wall Street and the Economy," The Huffington Post, September 16, 2013.
4. Reuters, "Fed Contender Larry Summers Cancels Citigroup Events," CNBC, September 14, 2013.
5. Gongloff, "Larry Summers."
6. Mark Gongloff, "Wall Street Overwhelmingly Favors Yellen Over Summers for Fed Chair: CNBC Poll," The Huffington Post, July 26, 2013.

The Banks’ Consultants: Guarding the Hen House

Leaving it to consultants hired by mortgage servicers to right the wrongs that the services inflicted on foreclosed homeowners was the unhappy consequence of bank regulators giving ambiguous guidance and failing to install viable oversight mechanisms. According to the Government Accounting Office, “regulators risked not achieving the intended goals of identifying as many harmed borrowers as possible.” Even if the reviews had been completed, there was on guarantee that wronged mortgage borrowers would have received any compensation. On the other side of the ledger, the banks had received billions from the U.S. Treasury with no strings attached. Whether intentional or not, the banking regulators put too much stock in the consultants, who, after all, had been hired by the mortgage servicers."
The report confirms that the Independent Foreclosure Review process was poorly designed and executed," Rep. Maxine Waters (D-Calif.) said. The "report confirms what I had long suspected -– that the OCC’s oversight of the supposedly independent consultants hired by the servicers was severely deficient. The report should serve as a wake-up call.” By referring to the consultants as supposedly independent, Rep. Waters implies in her statement that the flawed review process put the consultants in the position of being able to exploit a conflict of interest.
On the one hand, the flawed oversight means that the consultants were the ones to protect the public interest. The public had to rely on them to correct the wrongs in the interest of the foreclosed. We can label this the consultants’ “public interest” role. The consultants’ other role  was in working for the servicers. As Benjamin Lawsky, the superintendent of New York's Financial Services Department, pointed out, "The monitors are hired by the banks, they're embedded physically at the banks, they are paid by the banks and they depend on the banks for future business." This is the consultants' other role, which can compromise the first role. 
In a conflict of interest, one role can circumvent another, more legitimate role. Even if the conflict is not exploited with the more legitimate role taking the hit, a person or institution in such a position can be reckoned as unethical, according to some scholars. Other scholars argue that only the actual exploitation of the more legitimate role by the other is unethical.
In my view, if exploitation can be seen as a possibility in the relation between two roles, the relation itself is unethical. Put another way, it is unethical to put a person or organization in such a position, even if actual exploitation does not occur. In my view, to create or perpetuate the condition wherein a person or organization can exploit a conflict of interest is unethical.
It follows that the government has a moral responsibility to eliminate the conflicting roles even if they are not being exploited. Furthermore, the person or organization having two such conflicting roles  as can be counted as a conflict of interest is also ethically obliged to pick one role or the other. Often this is not convenient from a short-term financial standpoint, so business practitioners tend to look the other way, rationalized that since no actual exploitation of the conflict of interest has occurred, there are no ethical issues. They are wrong. The mortgage servicers should never have hired consultants to monitor the servicers. This circle itself is problematic, ethically speaking.
The regulators rather than the consultants should have been the key enforcers, and thus protectors of the public interest. The regulators can be faulted not only for their lack of competence, but also ethically in having allowed the conflict of interest to exist.  A business should not be allowed by the regulators to guard the hen house. To permit this to happen is unethical even if no hens are eaten.  


For more on institutional conflicts of interest, see my book, Institutional Conflicts of Interest: Business & Public Policy, available at Amazon.

Sources:

Ben Hallman and Eleazar Melendez, “GAO Foreclosure Report Finds Bank Regulators Failed to Provide ‘Key Oversight’,” The Huffington Post, April 3, 2013.

 Dan Fitzpatrick, "'A Dose of Healthy Competition' For Banking Regulators," The Wall Street Journal, April 18, 2013.