Thursday, June 24, 2010

A Growing Concern


I am moved to shift my focus away from my small island to the larger Quaker body. I recently posted a tidbit on Facebook... a mere link to an article on what the neo con agenda had done to the finances of the American people, with the observation that Obama's financial team is exactly the same as Bush's economic team.

'Now he may lend an ear to some economists from the left, such as Nobel Laureates Krugman and Steigliz, but his actual team in power comes from Wall Street, and thinks like Wall Street. The program of this team, this agenda, is to preserve the free wheeling markets at all cost.. uncontrolled capitalism... with the new twist that they have learned how to socialize the debt, passing it on to our grandchildren.

From my posting on Facebook, a member of my home Meeting, who is himself a reporter for the local left leaning free press... cross posted with a comment along the lines of "good point, is anyone watching?"
The US debt has grown from 20% of GDP to over 60% of GDP... and the bulk of that money has gone to Wall Street.

I have a grave concern because I fear that the very people who should be watching and crying out over this have long ago ceased to understand it.

Years ago, I served on our small Quaker Meeting's financial committee and had occassion to speak with some of the folks in Philadelphia who manage the Friends Fiduciary Fund, which manages the bulk of institutional "Liberal" Quaker money. It holds the endowment of Pendle Hill, of AFSC, of the Philadelphia Yearly Meeting, Friends Journal and many Quaker schools and smaller meetings.

The woman that I spoke with, who assured me that all of the people on the Committee were dedicated Friends and served at no expense, seemed a bit entranced with the language of the Street,,, rolling off terms such as Mid Cap, high cap and the omnious sounding "rolling 6% return.

When I went to question her specifically on some holdings.. such as Dow Chemical and Walmarts and Coca Cola...with snippets from our Earth Testimony... she countered that Quakers did not have an Earth Testimony. They had testimony against war, gambling, alcohol, and tobacco.. and they were running a fund completely clear of that.

Yes, well, there were holdings in oil companies.

And no, they did not perceive that CocaCola was a drug,

Well, to actually change this, they would have to hear a rumble at Yearly Meeting....

Then I was entranced by all the large ads in the Friends Journal for the :"Quaker" homes... and why so few of them had any information on their web pages. Further pursuit let me to inquiries to Kendall in Lexington,
KY where I learned that if I bought in at $180,000 (so that my estate would get half) they could offer me a 550 sq ft apartment and care for life for $2500 a month.

That was when I realized that none of the Quakers that I knew and loved would ever be there since they simply do not have that kind of money....

The Quakers I know are dutifuly poor as church mice. They give any excess away to those who are more in need. They do not hoard or accumulate. While it is true that some ... who worked for the State or Universities and may have a retirement fund and invested well in real estate,.. might find their way to a "deluxe" retirement home such as this, my dearest friends would not.

So I would ask Friends now to turn your collective attention to the financials.

Look and read and listen carefully to what is being said now about the financial collapse on Wall Street and what deals for further and continuous deregulation of the banking sector were made in this Congress.

Inform yourselves of where any institutional money is being held and move it into your smallest and closest community bank.

Consider starting your own micro finance lending banks.

I have no doubt that Friends Fiduciary will once again get the 6% rolling return that it is seeking.

But we are enjoined to uproot the causes of war.

And I, for one, do not see how we can do that if our institutions are invested in oil stocks.

Now I have been very good with this one... I have sat with this concern for over a decade,

But now, really, do not Friends think it is time to Rumble?



Micah Bales said...

I appreciate the questions you are raising. I hope we can keep raising these questions and listen to the answers that our Inward Guide has for us.


kibbles said...

How can Quakers be so poor and have such expensive schools? What message are we sending when Friends Schools penalize single income families with a stay at home parent? When they cost more than many colleges? Who is getting all this money?

Angela Manno said...

Yes, Quakers do have an Earth Witness, but rather than a new Earth Testimony, many Friends have come to realize it is time to open our existing Testimonies to embrace the Earth itself. “Our love has been too narrow” claimed the late eco-theologian, Thomas Berry in his Schumacher lecture “Every Being Has Rights.” For a Quaker perspective, read the important and timely “Eco-spirituality & Action” minute approved by NYYM in July of 2007:

Here is an excerpt: “Now we are led to widen our witness again to work for peace between humans and our sacred Earth community. Our culture has considered the Earth our property to be exploited, and we have all, knowingly and unknowingly, been complicit in this violent appropriation of world resources. We must now search for the seeds of this war in our possessions and in our lives, and work to nurture a new, mutual relationship with the Earth in all of our actions. The spirit is calling us to hold in reverence this miracle that God has given us.”

In a time when we see the Earth's life systems unraveling, we may at last begin to understand that the Earth is not a collection of objects to be used, but a communion of subjects to be reverenced and nurtured. It is time we recall the first commandment God gave Adam: to Take Care of the Garden, and commit fervently to uphold it.

Diane said...

As I understand it, at the root of war and all abuse of others is self-preservation and self-definition which leads to the need to lord-it-over others. How are we to turn people from that darkness to the Light of the Everlasting Gospel which leads people to self-giving service?

TheYellowDart said...

What's wrong with oil? We use it or the equipment that uses it everyday. If you drive a car or take a bus or cut grass with a lawn mower, you use it directly. However, very many of the other electric utilities we use take coal as fuel. Are coal company investments okay? Of course most of the other power plants not using coal use natural gas and nuclear. Are they alright? Less than 10% of electricity generation are hydroelectric, natural gas, solar and wind. So if you use items that require electricity there is a 90% chance that you are using fossil fuels or nuclear. Should Quakers not invest in any of them? These are such basic essentials for everyone. They keep people warm, provide transportation, provide fuel for cooking, etc. I would think that we would want to invest in companies that bring these valuable resources to market. Until someone figures out a more efficient way to power our machines, we will be using oil until it runs out. I can not really see why energy companies would be singled out as non-investable. These will undoubtedly be the very same companies that will be providing those alternatives once they become efficient and mature enough to replace the fossil fuels.

Tom Smith said...

One of the responses from a Friends School Head was that the school was a "business" and unless that was taken care of first then the other aspects were secondary. I disagreed. I understand VERY WELL that Friends Schools, as well as most other "non-profit" activities must be run with attention to business/finances, but my understanding of Friends calls us to a higher set of priorities and leadership.

By the way, my wife and I have moved to a "Presbyterian" retirement home largely due to the cost of "Friends" retirement homes.

forrest said...

I think Friends have always had a hard time seeing the connection between gambling and "investing" as now practiced. And so they've got this blind spot regarding how their innocent efforts to financially support & sustain Good Works are affecting the real economy and increasing the power of highly unenlightened political forces... An article I wish more friends would read, by a very illuminating man (I'd also recommend his older article on the havoc that's been wrought by 'the magic of compound interest' over the centuries, at his home site ):

EU Today, US Tomorrow
Europe's Fiscal Dystopia: the "New Austerity" Road


Jeremy Mott said...

Friends, this is an excellent blog.
I'd like to make a couple of points. (1) Some of the Quaker
retirement communities have "scholarship" funds for Friends and friends of Friends who
have worked much of their lives
for Friends and Friends causes and are indeed as poor as churchmice.
I believe that Nelson & Marian Fuson, mainstays of the civil rights movement in Nashville, and
founders of Nashville meeting, and
(in Nelson's case) professor of
physics at Fisk, who lived in college housing and thus had no
house to sell, made it into the
original Kendal in Penna. in this
way. And I believe that Dan Seeger, who had worked for AFSC and Pendle Hill all his adult life, got himself and his parents into Medford Leas in this way also. This is sort of like what the very expensive Quaker schools sometimes do: they have a lot of
scholarship money available for Quakers who need it. Also, as far
as schools go, there are two boarding schools that are much less expensive and have much more of a Quaker feel about them: Olney
and Scattergood. Yet they are still very expensive. They must
pay their teachers and feed their
people, after all; this costs a lot
of money. And Quakers, in general,
are not poor; we just like to think we are. Furthermore, the
Quaker communities of the Phila-
delphia and Baltimore areas are
very wealthy indeed. I'll continue.
Jeremy Mott

Jeremy Mott said...

(2) If you are genuinely poor, or
your Friends are, ask yourself why.
Is this necessary to do work of
Quaker importance? Or do you do
this simply out of a feeling that
being poor is a good thing? It used
to be that Friends tried to create
wealth, and often did so, and then
tried to put it to good use. In
Baltimore Y.M. (Orthodox), for example, Johns Hopkins started out
very poor indeed. His parents had
a big tobacco plantation, and freed all their slaves, which ended his education when he was a
a teenager. He fell in love with
his cousin so never married. He
made an enormous fortune in business, which he he used to found
Johns Hopkins Univ. and Hospital. Also, the
King and Thomas families built the
B&O Railroad, and I'm sure found
good uses for their money as well.
In the other Baltimore Y.M. (FGC),
Legg Mason & Co. was (and is) an
enormously successful investment house in Baltimore; its money has financed many worthy Quaker projects. Herbert Hoover made a
great fortune as a mining engineer around the world; he may have been the wealthiest President of all.
He made huge charitable donations;
he always tried to hide them, often successfully; but it is said
that he and Lou Henry (his wife,
also a Friend) financed the Florida Ave. meetinghouse in Washington. He was already rich
when he was in charge of American
relief work in Europe post-World-
War-I, so he took no salary; he
also refused his salary when he was President, but gave it away.
The only other President to do this was Kennedy. A Friend, John
Bogert, is (or was, I think he's
retired now) head of the Vanguard family of mutual funds, which is the one big mutual-fund-family with the lowest expenses of all, because of its co-operative structure; he invented the index
fund, as it's called, now in wide-
spread use, (3) Quaker books of
discipline should have some hard-
headed advice for Friends: they
often recommend having a will---
an excellent idea; there is also
good advice that they should have,
but don't, about how to obtain
medical insurance cheaply, and how
to prepare for retirement. We don't
simply have to mooch off the state.
I'll continue. Jeremy Mott

Jeremy Mott said...

(4) Some young Friends are proposing a big expensive program of Quaker volunteer service,to be financed by grants from Quaker foundations (i.e., dead wealthy Quakers). Yet there are literally
dozens of Quaker service opportunites available now, among
liberal Friends, among FUM Friends, among EFI Friends, in the
U.S.A. and around the world. Yet
young Friends, to take part in these service projects, must save
up their own money, or get a little grant from their own monthly meeting or yearly meeting, to pay for their participation.
What's wrong with that? What we
need, I think, is simply an information service, to spread the
word among Friends and Friends
schools and colleges and meetings,
about these service opportunities.
The info service, of course, couldn't impose any rules on the
varied Quaker projects, not "liberal" rules or Orthodox
rules of sexual conduct, for example; each would keep its own
rules, just as each would keep its
own expectations on language fluency (e.g., in Latin America volunteers should generally know
Spanish already) and transportation. The world is a
big and varied place; so is the
Quaker world. Peace, Jeremy Mott

Babette said...

Thank you all so much for your comments!

I agree that Friends historically "did well by doing good" but from what I have seen, that is perhaps now more historical.

My concerns over oil was not as a resource but over the fact that as a nation we have been so willing to go to war over it. And so my questions over investments were only on that issue from that light.

I think that most Friends Schools are perhaps now more of "outreach" ministries .. which get to the children of other backgrounds.. and as such do serve a very good purpose even though they are expensive.

When I first saw the "portfolio", I was quite shocked. Perhaps others would be as well.

Ben Schultz said...

I must say, this is one of a very few posts I have read that leaves me with the feeling that there are practical quakers. BTW, practical is my highest quaker nod.
You are indeed a Q.W.A.B ( quaker with a brain), sadly in short supply.
I am in business( a successful one I might add, I made more than Chrysler and General Motors did last year, sadly that's about 2 bucks an hour), and I have always wondered what happened to the idea of quakers as ethical business people, not just teachers at expensive schools or biologists( sorry- stereotyping). Is there something wrong with that picture?
Love Ben Schultz

Babette said...

All Right, Friends.. then I challenge you to join me in building an alternate vision here on the Island of Quiskeya.

Jeremy Mott said...

Babette, using small community banks is an excellent idea, so long as they have FDIC insurance.
How about credit unions? They had
a perfect record during the banking crisis of the last few years. They are controlled by their depositors. They have their
own federally backed deposit insurance system. They now exist
almsot everywhere. Be sure to use one with federal deposit insurance.
This idea should also be in our
books of discipline, I think.
I'm glad you think, along with others, that the big problem with
investments in oil is the potential for war, as well as the
potential for environmental disaster and deaths of employees.
Before you "rumble" at yearly
meeting in re Friends Fiduciary,
I'd ask you to get familiar with
the world of social investing.
There is Pax World Funds, in
Portsmouth, N.H., which was founded
long ago by Methodist and Quaker
pacifists. I believe it never
invests in international commodities like oil. They also
try to invest in companies that
emphasize employee safety (which
means no deep coal mines) and com-
panies that protect the environment (which means no strip mines). I think they do have a
few investments in utilities that
use wind power. You could also
contact Calvert Funds, of Washington, D.C., which has similar
principles---but they used to have
a "load" or sales charge. If you
put some money into one or both of these funds---you should have an
IRA anyway---you might end up with the knowledege you'd need to go to
yearly meeting, and ask Fiduciary
to change its ways, or ask yearly meeting to change its investments.
And you can never be sure that any investment is safe, or will produce any particular return.
That's the risk of life. J.Mott

Babette said...

Friend Jeremy- Our Asheville, NC Meeting WAS invested in Pax World Fund when I started the "rumble" there with the question of that fund's holding 11% in pharmaceuticals at a time when the price of medicine was making medical care more and more expensive. That is what led us to consider Friends Fidiciary. Asheville Friends Meeting did move thier small endowment to the local Credit Union which invests localls and is federally insured.

As I have moved offshore.. and have been here for the last 6 years on a witness for Haiti,,, and really do not forsee that I will be coming back to the States to live, I will not be "leading" any sort of wider "rumble" but did want to pass my concern on to other Friends and Meetings in light of the current financial situation.

Jeremy Mott said...

Babette, I don't know if Friends
Fiduciary will change. After all,
it is a stuffy Philadelphia Quaker
institution. But I know that Pax
changed once, in response to its
shareholders, about 10 or 12 years
ago. It's a balanced fund. And it
used to put the bond investments
mostly in Treasury bonds, meaning
war. Apparently I was not the
only shareholder to complain. So
they no longer invest in Treasuries, but in GNMA bonds (housing, but backed by the Treasury) instead. One might want
to see what their policies on pharmaceutical investments are now.
Or re-think one's opposition, now
that the monopoly preniums received by the drug companies on their patented products are about
to be socialized, not aimed at the
individual drug purchsers. I think
that drug prices will be regulated
within a few years---if Obamacare
survives at all.
No mix of social investing is perfect. Yet I think that Friends
Fiduciary has been one of the
worst in the field. Pax World has some new funds now (of course, they don't have a record): two of
them concentrate on environment, and one on women's rights and

Jeremy Mott said...

Friends, remember T.Boone Pickens
from 2008? A right-wing patriotic
oil magnate, but a public-sprited
and thoughtful man. He opposed
further reliance on imported oil, and I believe on offshore driling as well, for the obvious reasons:
potential for war and environmental
disaster. He wants to see widespread use of wind power. This
will require construction of a large network of new transmission lines. So, in the meanwhile, he
proposes greatly increased drilling for and use of domestic
natural gas, which is in abundant
supply, and for which we have new
methods of extraction. Burning
natural gas is bad for the environment, but much less bad than burning oil. Yet Obama, like
his predecessor, seems to have
rejected this advice; I think he's
in the pocket of the oil and
coal companies. I wonder if any
of the social-investing funds are
putting any money into natural gas.
Jeremy Mott

Jeremy Mott said...

So much for what I thought,
I see on the web that T.Boone Pickens has large investments in
Andarko and Halliburton, partners
of BP in the Gulf. Jeremy Mott

Jeremy Mott said...
This comment has been removed by a blog administrator.
Babette said...

I am sure that Friends Fiduciary has a difficult job.. steering clear of all investments in arms, gambling, alcohol and tobacco since there are so many mergers that one day you can hold a company that makes catsup and the next day they own a still.

Certainly the fraud on deritives has hurt everyone. Yet they are allowed to continue, and the banks are to remain "too big to fail".

Ken Schroeder said...

You can't worship God AND Mammon, folks.

Anonymous said...
This comment has been removed by a blog administrator.
Babette said...

I have never thought there was any danger of Mammon worship among Friends I have met.

Rather there is a general discomfort around the very subject of money.

I have sat in Meetings discussing the allotment of $25 for a half hour.

But yes, I could see that from your perspective. We are perhaps too attached.. not trusting that we will be cared for like the lillies of the field.

But I do think that Meetings should consider putting a portion of their endowments.. for those Meetings that have endowments.. into micro finance loans for their own members who may have to retool for another enterprise. Sometimes a very modest loan.. of a few thousand dollars... can make the difference between someone being able to survive or going on welfare or worse.

Friends used to have a reputation for taking care of our poor and elderly but I sense that we may not be prepared for the sort of long haul that this current downturn may become.