May 31, 2010

Why were these consequences unexpected?

 From the New York Times:
By MICHAEL POWEL

MEMPHIS — ... Not so long ago, Memphis, a city where a majority of the residents are black, was a symbol of a South where racial history no longer tightly constrained the choices of a rising black working and middle class. Now this city epitomizes something more grim: How rising unemployment and growing foreclosures in the recession have combined to destroy black wealth and income and erase two decades of slow progress.

The median income of black homeowners in Memphis rose steadily until five or six years ago. Now it has receded to a level below that of 1990 — and roughly half that of white Memphis homeowners, according to an analysis conducted by Queens College Sociology Department for The New York Times.

Black middle-class neighborhoods are hollowed out, with prices plummeting and homes standing vacant in places like Orange Mound, White Haven and Cordova. As job losses mount — black unemployment here, mirroring national trends, has risen to 16.9 percent from 9 percent two years ago; it stands at 5.3 percent for whites — many blacks speak of draining savings and retirement accounts in an effort to hold onto their homes. The overall local foreclosure rate is roughly twice the national average.

The repercussions will be long-lasting, in Memphis and nationwide. The most acute economic divide in America remains the steadily widening gap between the wealth of black and white families, according to a recent study by the Institute on Assets and Social Policy at Brandeis University. For every dollar of wealth owned by a white family, a black or Latino family owns just 16 cents, according to a recent Federal Reserve study.

The Economic Policy Institute’s forthcoming “The State of Working America” analyzed the recession-driven drop in wealth. As of December 2009, median white wealth dipped 34 percent, to $94,600; median black wealth dropped 77 percent, to $2,100. 

So, at the height of the Housing Bubble, during George W. Bush's campaign to add 5.5 million minority homeowners, median white wealth was $143k while median black wealth was 9k. Now, that median number is high relevant because the black homeownership rate had started out the last decade a little under 50% and the goal of the Clinton and Bush administrations had been to push it to well over 50%. But black households right at the 50th percentile -- the people whom both administrations had wanted to get mortgages -- had less than $10,000 in net worth (during the Bubble). In other words, these marginal homeowners had a negligible cushion to ride out a downturn in home prices.

The net worth figures for Hispanic are similar. Not surprisingly, the San Francisco Fed study of hundreds of thousands of mortgages handed out in California during the Bush years shows a foreclosure rate 3.3 times higher for blacks and 2.5 times higher for Latinos.

Now, the higher foreclosure rates for blacks probably weren't that economically disastrous, since they tend to live in low home price neighborhoods in low price cities, such as Memphis and Detroit. But Hispanics averaged bigger new mortgages than whites on average during some of the boom years since they tend to be concentrated in high-priced California and its spillover states.

The mayor and former bank loan officers point a finger of blame at large national banks — in particular, Wells Fargo. During the last decade, they say, these banks singled out blacks in Memphis to sell them risky high-cost mortgages and consumer loans. 

Yeah, that was what the Clinton and Bush administrations encouraged them to do. It's called community reinvestment, diversity, and a lot of other socially acceptable names.
The City of Memphis and Shelby County sued Wells Fargo late last year, asserting that the bank’s foreclosure rate in predominantly black neighborhoods was nearly seven times that of the foreclosure rate in predominantly white neighborhoods. Other banks, including Citibank and Countrywide, foreclosed in more equal measure....

“The mistake Memphis officials made is that they picked the lender who was doing the most lending as opposed to the lender who was doing the worst lending,” said Brad Blackwell, executive vice president for Wells Fargo Home Mortgage. 

Yes, but more lending to minorities, which is what the government, the media, and all right-thinking people were demanding, equals worse lending. It's called diminishing marginal returns. The way you got to do more lending was to lend to more marginal characters, which is what both political parties were insisting upon.
Not every recessionary ill can be heaped upon banks. Some black homeowners contracted the buy-a-big-home fever that infected many Americans and took out ill-advised loans. And unemployment has pitched even homeowners who hold conventional mortgages into foreclosure.

Federal and state officials say that high-cost mortgages leave hard-pressed homeowners especially vulnerable and that statistical patterns are inescapable.

“The more segregated a community of color is, the more likely it is that homeowners will face foreclosure because the lenders who peddled the most toxic loans targeted those communities,” Thomas E. Perez, the assistant attorney general in charge of the Justice Department’s civil rights division, told a Congressional committee.

Glad to see the Obama Administration is taking such a sophisticated view.
... For the greater part of the last century, racial discrimination crippled black efforts to buy homes and accumulate wealth. During the post-World War II boom years, banks and real estate agents steered blacks to segregated neighborhoods, where home appreciation lagged far behind that of white neighborhoods.

Blacks only recently began to close the home ownership gap with whites, and thus accumulate wealth — progress that now is being erased. In practical terms, this means black families have less money to pay for college tuition, invest in businesses or sustain them through hard times.

There's a huge history of racial discrimination in housing, much of it outside the South, that has been largely forgotten. For example, it was common in LA in the postwar era for sales contracts to have clauses saying the buyer couldn't resell to blacks. From the standpoint of economic theory, this was an interesting phenomenon. The restriction in the contract wasn't in the self-interest of the sellers, who, after all, were moving out. All else being equal, the restriction on the right to resell their new property to the highest bidder hurt the buyers on an individual basis, but, evidently, was in their collective self interest.

Similarly, all else being equal, from a theory point of view, unrestricted neighborhoods should have had the highest appreciation since the sellers could sell to the highest bidders. But, all else wasn't equal and the opposite happened: restricted neighborhoods appreciated faster, on average, than unrestricted neighborhoods.
Wells Fargo says it has modified three mortgages for every foreclosure nationwide — although bank officials declined to provide the data for Memphis. A study by the Neighborhood Economic Development Advocacy Project and six nonprofit groups found that the nation’s four largest banks, Wells Fargo, Bank of America, Citigroup and JPMorgan Chase, had cut their prime mortgage refinancing 33 percent in predominantly minority communities, even as prime refinancing in white neighborhoods rose 32 percent from 2006 to 2008.

In summary, after decades of complaining that minorities were being discriminated against by not getting enough mortgage money, public discourse has been so lobotomized that the discrimination framework remains the only acceptable way of thinking about the mortgage meltdown, even when it's clear that a part of the problem was that minorities got too much mortgage money.

52 comments:

travis said...

"The mayor and former bank loan officers point a finger of blame at large national banks — in particular, Wells Fargo. During the last decade, they say, these banks singled out blacks in Memphis to sell them risky high-cost mortgages and consumer loans."

That lament sounds familiar. Back in 1898 Mark Twain noted:

"In the cotton States, after the war, the simple and ignorant negroes made the crops for the white planter on shares. The Jew came down in force, set up shop on the plantation, supplied all the negro's wants on credit, and at the end of the season was proprietor of the negro's share of the present crop and of part of his share of the next one. Before long, the whites detested the Jew, and it is doubtful if the negro loved him."

According to the New York Times, over a hundred and forty years after emancipation, blacks are still simple and ignorant and bear none of the responsibility that comes with freedom.

Henry Canaday said...

Just got back from a risky foray into the wilds of Canada. Well, Montreal. The airport limo driver was an Algerian who immigrated to Canada 20 years ago. His only complaint was that Canadian banks, which have long required 10 percent down on new home purchases from even the most trusty borrowers, now require 25 percent down from self-employed people, even if their recent income was solid. We both agreed, however, that having to save for a down payment is better than going through a U.S.-style financial collapse and deep recession.

Montreal is booming and astoundingly pleasant for a major city. With two million people, it has nearly four times the population of Washington DC. Yet you can walk into a downtown office skyscraper without signing in at a security desk. Hell, they will even guide you to the lobby rest room. I haven’t seen lobby rest rooms in a downtown DC office building since the 1960s.

Montreal is so innocent they still have those guys with shaved heads and orange robes working the downtown sidewalks. The only Hare Krishna you might see in Washington is in the morgue, after he has been filleted by a less spiritual street person.

Apparently if you can persuade French- and English-speakers to get along, you may know something about running a country and a city.

OneSTDV said...

This mirrors the global trend I discussed here:

Black-White Wealth Disparity Grows

Anonymous said...

"black unemployment here, mirroring national trends, has risen to 16.9 percent from 9 percent two years ago; it stands at 5.3 percent for whites"

The media isn't helping blacks by pushing this discrimination talk and the hints of discrimination talk above. Instead of blacks deciding to become credit worthy and good employees they'll continue their pattern of screeching discrimination at everything they don't like. I work at a professional job, and the one black in my job category has been so obnoxious, incompetent, and chip-on-his-shoulderish that my liberal colleagues are openly sick of him and his racial BS. When they're getting sick of it, it's quite clear blacks are alienating themselves from everyone, and that unemployment rate disparity will just keep rising.

l said...

Conventional wisdom: The way out of this housing bust is to reinflate the bubble. (i.e.: Let's do it all over again.)

Anonymous said...

median white wealth was $143k while median black wealth was 9k

Ugh.

That's a factor of almost 16.

Anonymous said...

So, let me get this straight. You're in favor of a competitive meritocratic system when that system benefits YOUR people (=White People) but NOT in favor of such system when it tends to hurt YOUR people (again, White People) such as when there is a free competitive globalist labor system driving White wages down and White jobs out of this country.

So, in the area of house lending, you're in favor of a free market system which naturally excludes many blacks.

But in the area of White blue-collar labor, you want protectionism.

Just a lil' hypocrisy there.

Shawn said...

The main reason California has so many foreclosures is because banks cannot go after deficiency judgments, unlike other states, so people just walked away.

eh said...

...public discourse has been so lobotomized that the discrimination framework remains the only acceptable way of thinking about the mortgage meltdown,...

To paraphrase your question: Why is this unexpected?

Marc B said...

Memphis was among the rising cities of the New South in the 1980's, but one thing changed everything and set the wheels of urban blight in motion: the election of Willie Herenton for Mayor in 1991. He won by the slimmest of margins and only because he was black.

He was generally respected by whites during most of his tenure as MCS superintendent, but his participation in a sex scandal requiring a large payout after he fooled around with a teacher, along with only marginal improvements over a long period of time added to this loss of white support. Immediately after the election, Whites bailed on the city, choosing to move to outlying counties, Northern Mississippi, and the suburbs.

To increase the city tax base, he annexed the outlying suburb of Cordova, bringing their schools into the Memphis City School fold and citizens under city governance. The parents who moved there thinking they could send their kids to nearby public county schools soon scrambled to send their kids to private schools. Home values there have been stagnant since about 1998.

Blight has spread over Memphis drastically over two decades, and the tax base has been rapidly evaporating. Being a career bureaucrat, Herenton lacked a basic understanding of what attracts businesses to an area yet was a master at stoking the flames of racial division. His formula has done everything to make Memphis one of the least attractive places for the well-educated, stable citizens, and corporate expansion. He lost the SWPL vote by his third term. The new mayor, AC Wharton is far more pleasant and inclusive, but has changed few of of the bad policies (massive crony hiring of the under-qualified and expansion of government) Herenton imposed as mayor. The city is sinking fast.

jody said...

obama can help black americans a lot by going after illegal aliens.

think he will?

nah.

Göran Sampl said...

Some black homeowners contracted the buy-a-big-home fever that infected many Americans

As opposed to the buy-a-big-car chronic ailment they've suffered for decades?

Reg Cæsar said...

So, in the area of house lending, you're in favor of a free market system which naturally excludes many blacks.

But in the area of White blue-collar labor, you want protectionism.

Just a lil' hypocrisy there.


--Anonymous the Lionhearted

As good as immigration restriction may be for whites, it's even more advantageous for blacks.

Also, most immigration is subsidized; what we have is a long way from "a free competitive globalist labor system". At any rate, citizenship, or even just residency, is worth something, and we should not be giving it away for nothing.

Finally, it is quite odd how this poster capitalizes "white", but not "black". Other than some of the hardcore white nationalists, I'm not aware of anyone else who follows this practise.

Lugash said...

I am Lugash.

I'm sure Steve has talked about this before, but the Pew Hispanic Center has good data that breaks down the black/white/hispanic wealth gaps. IIRC the bottom half of black America has slightly negative net worth.

The main reason California has so many foreclosures is because banks cannot go after deficiency judgments, unlike other states, so people just walked away

I believe both NV and FL allow deficiency judgments. In practice lenders never pursue borrowers because you can't get blood from a stone.

elvisd said...

check out the "South Memphis Ghetto" vids on youtube, narrated by an african american women who is disgusted with the situation and narrates a lack of work ethic, corrupt officials, the thug mentality, and my favorite, the "preacher" class that virtually paralyzes things in many black communities.

It's a different flavor completely from the Detroit Ghetto Tour videos.

Lawful Neutral said...

Just a lil' hypocrisy there.

Granting for the sake of argument your characterization of Steve's position, there's nothing hypocritical about it. Seeking the best for your own people is a principle and it's applied consistently here.

Anonymous said...

median white wealth was $143k while median black wealth was 9k

Ugh.

That's a factor of almost 16.


You know, I wonder if there is a constant factor which is a function of IQ?

Could a standard deviation [or thereabouts] in intelligence account for a factor of 16 in wealth?

In general, 16 sounds a little high, but I wonder what the correct number is?

If the factor were instead 3, then you would be looking at medians which were something like this:

IQ 100 <-> $150K net wealth
IQ 115 <-> $450K net wealth
IQ 130 <-> $1,350K net wealth
IQ 145 <-> $4,050K net wealth

I wonder if Charles Murray knows the true numbers?

Probably the relationship isn't strictly geometric [or "logarithmic" - always growing by a fixed factor with each increase in standard deviation], but it would be interesting to know what the curve looked like.

keypusher said...

anonymous

I'm not sure what Steve Sailer supports. He doesn't strike me as a reflexive believer in free markets, but maybe I'm projecting. He's never supported unrestricted immigration because he doesn't want Americans (of any color) to have to compete with the billions of people in the world who will work for less than the wages Americans want. As another poster pointed out, restricted immigration helps blacks more than anyone else.

Anyway, if you get rid of bubble-era practices and require 10% or even 20% down payments, that isn't a free market. A free market in housing has not existed in our lifetime, and it won't exist in our children's lifetime either. If we're going to have regulation, let's have regulation that makes sense, rather than regulation that came damn near to wrecking the economy.

keypusher said...

anonymous

I'm not sure what Steve Sailer supports. He doesn't strike me as a reflexive believer in free markets, but maybe I'm projecting. He's never supported unrestricted immigration because he doesn't want Americans (of any color) to have to compete with the billions of people in the world who will work for less than the wages Americans want. As another poster pointed out, restricted immigration helps blacks more than anyone else.

Anyway, turning to housing, if you get rid of bubble-era practices and require 10% or even 20% down payments, that isn't a free market. A free market in housing has not existed in our lifetime, and it won't exist in our children's lifetime either. If we're going to have regulation, let's have regulation that makes sense, rather than regulation that came damn near to wrecking the economy.

OhioStater said...

You should blog the ShoreBank bailout.

http://michellemalkin.com/2010/05/21/the-shady-shorebank-bailout/

David said...

A lender must loan responsibly - i.e., according to the principles of creditworthiness. When these principles are discarded and loans are made to people who don't meet regular creditworthiness standards, the loans are worthless ("toxic"). In short, the toxicity of "toxic loans" originates in the lendee, not in the lender. (What the foolish lender does is merely enable it.)

That "black Memphis wealth" wasn't really there. It was an illusion - part of the bubble of illusory wealth of the Housing Bubble. Essentially, the blacks referenced in this story can't pay the loans back, meaning they consumed the loans. They ate that wealth like any welfare moocher does.

Cloaking welfare in the mantle of "home ownership" does not change the grim reality into "economic development" and "a bright future."

Roger Chaillet said...

So, Steve, Memphis is well on the way to becoming another Detroit?

Sounds like my dystopian hometown of Washington, D.C. The remnants of the '68 riots have only recently been torn down.

But the real difference between D.C. and Detroit/Memphis?

Your tax dollars.

These dollars are being used to gentrify D.C., thereby driving out registered Democrats.

It's been so wildly successful that the D.C. mayor wants to build more subsidized housing, so that the last of his political base doesn't exit to the depressed, inner suburban ring.

Tom V said...

Anonymous:

So, in the area of house lending, you're in favor of a free market system which naturally excludes many blacks.

The favoritism market system naturally bankrupts many blacks. That, too, counts as "discrimination" according to the article. Damn if you do...

But in the area of White blue-collar labor, you want protectionism.

Why can't Steve see that there are more blacks and browns in blue collar jobs than whites? The most sensible thing to do, as the WSJ would tell you, is to import Mexican competition to finish them off!

Anonymous said...

The basic facts are now known but poorly understood. Prosperity correlates on an international scale with IQ. The figure is about .70. Since IQ also correlates with race this means that black nations are poor and white (Western European) and East Asian nations are rich.

The same is true for nation's with large American Indian populations.

This very high correlation rate is remarkable when you consider all the confounding factors not the least of which is that we call American Indians Hispanics which term can include blacks and/or whites.

But the general trend is clear. Countries like Haiti are poor not because of their lack of resources, South Korea (the nation with the highest IQ) also has no significant resources. IQ counts - which is just a way of saying race counts.

So what about America. We have blacks yet we are rich. The answer seems to be that we were rich in spite of our blacks and browns, certainly not because of them.

The current economic downturn I call The Diversity Depression. It is fundamentally more serious than what we used to call The Great Depression. It is more serious because the underlying cause is not just unrecognized or ignored but not allowed into our minds. We resist the obvious explanation. The economic collapse was caused by minorities - or rather by largely white institutions trying to "cure" the flaws of minorities.

If we had had no blacks or Hispanics would we have ever conceived of the financial practices of lending to the indigent? America (and everyone else) has failed at making blacks and browns full fledged rich and peaceful citizens. We couldn't manage that feat after at least a trillion dollars of social programs. We failed to create responsible black homeowners.

So we just declared them homeowners by fiat apparently thinking that that would then make them responsible. We are paying now for that particularly bad logic. The real problem is that our current economic problems have not been enough to shake us out of our foolishness. That means more is to come.

At the time of the Founding Fathers it was widely recognized that the blacks in our society were not fit for full participation in our proposed democratic republic. The founders left the question unanswered.

The Civil War was one consequence of the existence of Negroes in America. No one had an acceptable alternative so the black slaves were freed. At that time still no one thought blacks were the equal of whites but again there didn't seem to be an alternative but to act as if they were.

The problem was never addressed just postponed. A democratic republic can only work when "all men are created equal". All political leaders have understood that. For the last couple decades we have tried through social programs to make blacks equal - but it hasn't worked.

The US left the Second World War on top of the world. All our economic competitors had been bombed. We were rich and could afford to carry our unproductive black population. But steadily we have fallen back as new competitors arose. Concentrated urban centers of blacks have become ulcers on on the body politic. The Japanese a generation ago thought they would surpass us economically because they didn't have to carry a burden of low IQ blacks. The Japanese had other problems but on that question it seems they were on to something.

I am very optimistic about the future of humanity but not so much about the future of the USA or even Western Democracy. When civilization is beset on all sides by Islam and America suffers a severe economic crisis because of the presence of the unproductive blacks among us, we decide to elect a black man from a Muslim family.

Albertosaurus

Piper said...

Location, location, location. Nice amenities boost the value of homes in the neighborhood. Good schools? Friendly parks? Nice community swimming pool?

Since neighborhood racially-restrictive deed restrictions improve the quality of the schools,* the friendliness of the parks, etc., they amount to a valuable amenity. Really, such restrictions are theoretically akin to landscaping easements and other value-boosting "CC&R's" of master-planned housing developments.

The opportunity cost of the covenant to the individual owner generally is small compared to the added amenity value (how often will the high bidder be black, when the average black has only 10% of the average white's net worth?).

When the U.S. voided racially-restrictive deed restrictions in 1948, that widened income-based neighborhood disparities in America. Unable to keep their neighborhoods friendly using restrictive covenants, whites were forced to sort themselves much more by wealth, and leave the poorer whites to the tender mercies of their new black neighbors.

For various reasons I agree that it was a good idea to abolish racially-restrictive deed restrictions (though I think the logic of Shelley v. Kraemer was flawed-- the result should have been justified on other grounds). However, I am not unmindful of the stiff price whites paid for the change.

-------------------------

*In the US we measure "school quality" by the test scores of the students rather than by quality of teachers. Since students' test scores reflect chiefly students' IQ's, and IQ scores are a good proxy for race, "school quality" is pretty much inverse to the poportion of students who are NAM's.

keypusher said...

When the U.S. voided racially-restrictive deed restrictions in 1948, that widened income-based neighborhood disparities in America. Unable to keep their neighborhoods friendly using restrictive covenants, whites were forced to sort themselves much more by wealth, and leave the poorer whites to the tender mercies of their new black neighbors.

Sounds plausible, but has it ever been really researched?

I remember when "The Tipping Point" came out I assumed it was about residential integration. Not very intelligent of me.

Anonymous said...

I am very optimistic about the future of humanity

Then you need to learn more about demographics.

And spend some time contemplating the catastrophe of China's 1-Child policy.

And thinking about 100 million or more [250 million?] missing girls throughout Asia [due to sex-selective abortions].

Etc etc etc...

Eric said...

In general, 16 sounds a little high, but I wonder what the correct number is?

It doesn't sound high to me. Once you're living hand-to-mouth everything costs more, which makes it much harder to get out of that situation.

I once had a girlfriend who bought a brand new car because she could trade in her old car and drive the new one off without putting in any money.

She couldn't afford a new car. The reasonable thing to do would have been to buy a good used car, but she didn't have any money. So she signed up for $400/month payments for six years.

Somewhere out there she's still broke and driving a new car.

Anonymous said...

The failure of the promotion of black home-ownership to result in lasting wealth gains in the black community has everything to do with the means by which that promotion was facilitated - lending close to 100% of the appraised value of a house.

Fannie's & Freddie's standards for a "qualified" mortgage, i.e., one they would buy, were that it be for $417,000 or less, and up to 97% of appraised value. Furthermore, appraisers soon learned to overvalue houses because they would not get appraisal work from outfits that originated mortgages (e.g., Countrywide) unless they did.

With a 3% down payment and a mortgage on a 30-year amortization schedule, almost no equity is built up during the first five years of the mortgage. The mortgage payments are almost all interest, and the small contribution to principal made by them, together with the minuscule down payment, was not enough to cushion against a downturn in housing prices. There was not much there to begin with, and now there's nothing.

The hard lesson is that net worth must be built on a cash foundation. Too much leverage is a recipe for catastrophic loss. The attempt of Fannie, Freddie, the FHA, etc., to use politically allocated credit as a tool for social engineering has had its predictable consequences. It suggests that the people behind these operations had at best a tenuous grasp of arithmetic.

Svigor said...

Just a lil' hypocrisy there.

Maybe. Or maybe it's apples and oranges? Are you an across-the-board meritocrat? That is, you want the best man to have your old lady? How about the job of being your kid? Do you take applications, or is it all just about the nepotism? Are your parents really the best people for the job?

I'm just curious.

I don't feel like looking it up for the finer points, but doesn't "hypocrisy" mean one way for me, and another for everyone else? I don't think it's the catch-all term for "intellectual inconsistency" that people seem to think it is. If it's the former, then being in favor of closed borders and meritocracy doesn't qualify. Not that it qualifies if it's the latter, either.

Cal J said...

The single biggest financial advantage you can give your kids, apart from being able to make them doctors or lawyers or CPAs, is making sure they can do house and car repairs and especially for girls, learn to sew and cook.

With those skills your expenses can be cut radically, allowing the building of a savings cushion. And you don't have to have a very high IQ for those.

I learned to do plumbing, wiring, and carpentry from my grandfather and car repair-even rebuilding engines and automatic transmissions-from my father. I've always bought a not running car every couple of years and fixed it up. I have never made a car payment in my life.

My first wife could not cook and we ate out constantly. The second time around, I put cooking and sewing (both ability and willingness) above bedroom matters in choosing a wife. I have a $30,000 job-low status but low stress and strict 40 hour schedule-and my wife stays home with our two kids (and a third is on the way-we decided to have #3 out of white demographic decline, plus she likes having babies-I attribute this partly to our decision to have home birth, which has worked out really well). Yet we have a nice suburban house all paid for and four cars.

We eat pretty well too.

We don't eat out, we drive fully depreciated old cars and have only liability insurance, we tend to shop at Goodwill. We don't watch TV. This computer is seven years old, well, most of it. The keyboard is 20. My wife has a little home business selling on eBay. Our kitchen and laundry room is all vintage stuff I repaired. Chambers stove, two Maytag dryers, commercial Norge front loader older than I am.

So, it can be done, but it isn't easy. I've pulled more than one late night house or car repair stint and wound up going to work with no sleep. But the guy next door with a BMW doesn't eat or sleep any better than I do. He just pays a lot more taxes.

The Anti-Gnostic said...

The hard lesson is that net worth must be built on a cash foundation.

Charley Reese used to harp on this, and in all fairness, blacks aren't the only ones who've flunked. Most middle class Americans are not nearly as wealthy as they appear. Take away their cash flow--their ability to make interest payments on debt--and they are instantly underwater.

Leverage is not wealth, not for Jerry Lundegaard, not for Lehman Brothers, not for the US government.

Truth said...

hy·poc·ri·sy (h-pkr-s)
n. pl. hy·poc·ri·sies
1. The practice of professing beliefs, feelings, or virtues that one does not hold or possess; falseness.
2. An act or instance of such falseness

"Maybe. Or maybe it's apples and oranges? Are you an across-the-board meritocrat? That is, you want the best man to have your old lady? How about the job of being your kid? Do you take applications, or is it all just about the nepotism? Are your parents really the best people for the job?"

Sviggey old bean, it seems like this gentleman's call for common consistency has struck a nerve.

OhioStater said...

Well blacks need to spend more on cars than white people do since being compared to a typical black person has more downside than a white person being compared to a typical white person. Of course cars and clothing don't appreciate which is a drag on wealth.

http://www.theatlantic.com/magazine/archive/2008/07/inconspicuous-consumption/6845/

Reg Cæsar said...

But the real difference between D.C. and Detroit/Memphis?

Your tax dollars.

These dollars are being used to gentrify D.C., thereby driving out registered Democrats.


The license plate bitches about "taxation without representation". But only a fraction of the residents pay, so what they're really after is representation without taxation.

I say exempt DC residents from federal income taxation-- and allow the folks in public housing to sell their places to anybody. In a few short seasons, the place will be filled with Republican and Libertarian investors, entrepreneurs, and the like. And no one, absolutely no one, will be talking about a seat in Congress.

Especially Marion Barry.

Anonymous said...

Same old, same old.
In a nutshell, the essence of 'race relations' in the USA is this:
"Whitey - damned if he does, damned if doesn't".

Anonymous said...

One of the anonymices here thinks he's so damned clever by trying to berate Steve with a completely bogus dichotomy of somehow equating 'free trade' (which actually harms balcks the most)with the insane Bush policy of subsidising dead-beats in buing houses they could not afford and did not deserve.
The point is Steve is against bad policy - he's not in to dogma - he just attacks bad policy, no matter what the policy is, when he finds it.
If the present trade st up is bad policy, and the mortgage disaster is bad policy, so be it. Only a damned fool sees dogmatic linkage in these two very different, disparate areas of policy.

Anonymous said...

The problem with thinking that the factor is 16 is that it can't possibly hold out for very long:

IQ 100 <-> $150K net wealth
IQ 115 <-> $2,400K net wealth
IQ 130 <-> $38,400K net wealth
IQ 145 <-> $614,400K net wealth

That doesn't look right.

Granted, the factor probably isn't constant.

Maybe it tapers off rapidly - something like this:

IQ 085 <-> baseline
IQ 100 <-> factor of 16
IQ 115 <-> factor of 4
IQ 130 <-> factor of 3
IQ 145 <-> factor of 2

That sort of easing would still allow for IQ-145 types to have about 4 * 3 * 2 = 24 times the wealth of IQ-100 types.

PS: I bet that Charles Murray knows what the real numbers are.

Simon in UK said...

AIR from The Bell Curve, us IQ 145 types have lower incomes than IQ 130 types, because we do PhDs, go into academia, and thus greatly harm our lifetime income.

On the bright side, we get to work roughly half the hours we'd need to doing Law or such, and it's fun.

AngryWhiteGuy said...

Seeking the best for your own people is a principle and it's applied consistently here.

Seeking the best for your own to the exclusion of elementary ethics isn't principle. It's mindless tribalism. Not that that's bad necessarily (although it is). I just want you to be clear on that.

Are you an across-the-board meritocrat? That is, you want the best man to have your old lady? How about the job of being your kid? Do you take applications, or is it all just about the nepotism? Are your parents really the best people for the job?
I thought even an iSteve commenter could tell the difference between private decisions toward loved ones and public policy. I guess I'm naive.

The point is Steve is against bad policy - he's not in to dogma - he just attacks bad policy, no matter what the policy is, when he finds it.

The problem is, it's impossible to decide, in any coherent or intelligible fashion, which policies are "bad" without at least some sense of what you call "dogma." That is, some elementary notions of justice and basic morality (not to mention intellectual consistency) that apply to persons regardless of their race, color, or place of birth.

AngryWhiteGuy said...

Also, that immigration restrictions (allegedly) help blacks doesn't mean a damn thing. All it proves is that Steve and the rest of his creepy fanboys support policies that benefit blacks when they also happen to benefit whites too. Some principle.

Simon in UK said...

AngryWhiteGuy, you are very silly.

ATBOTL said...

"That is, some elementary notions of justice and basic morality (not to mention intellectual consistency) that apply to persons regardless of their race, color, or place of birth."

White people are the only people who care about such universal morality, everyone else is unashamedly "tribal" in their morality. I'm going to go with the idea that everyone else is more likely than white people to be right on this one.

David said...

Tribalism is not unprincipled. What about "ethical principles" requires that they ignore facts, such as "race, color, or place of birth"?

The old argument used to be that these facts are scientifically irrelevant to any normative consideration. But that argument is now under reexamination (or perhaps first examination).

The creed of universalism - which never seems to apply to its inventors, the Jews, since they are a unique, aka "chosen," people - some universalism! - simply acts as a dygenic acid on all other tribes. We're dying of it and we're tired of it.

In place of "universalism" I propose a more fact-based principle: namely, self-determination of peoples. Prudential considerations (very akin to morality) can govern relations between peoples about as well as any considerations can in this world.

AngryWhiteGuy said...

I didn't mention the Jews at all. But its not surprising that you brought them up.
"...[A]ntisemitism is an irrational thing. The Jews are accused of specific offences... which the
person speaking feels strongly about, but it is obvious that these accusations merely rationalise some deep-rooted prejudice. To attempt to counter them with facts and statistics is useless, and may sometimes be worse than useless....
[P]eople can remain antisemitic, or at least anti-Jewish, while being fully aware that their outlook is indefensible. If you dislike somebody, you dislike him and there is an end of it: your feelings are not made any better by a recital of his virtues."
- George Orwell, "Antisemitism in Britain" 1945

AngryWhiteGuy said...

What about "ethical principles" requires that they ignore facts, such as "race, color, or place of birth"?
Its obvious that we are entitled to ignore all sorts of facts when making normative judgments. We ignore facts about eye color and the length of the big toe.
The old argument used to be that these facts are scientifically irrelevant to any normative consideration. But that argument is now under reexamination (or perhaps first examination).

Please indicate the new scientific discoveries that make it OK to blatantly contradict oneself by advocating one set of principles for one group and an entirely different set for another.

Marc B said...

"Please indicate the new scientific discoveries that make it OK to blatantly contradict oneself by advocating one set of principles for one group and an entirely different set for another."

The articles and postings on this website call for an end to social engineering and entitlements and a return to a system that allows people to end up wherever their temperament, physical attributes, IQ, networking skills, connections, charm, and industry get them. We are against are policies, memes, PC indoctrination, and legislation that are against the self-interest of White Europeans and males. You have yet to make a valid point showing how us "fanboys" or Steve are anything less than congruent on these two basic positions.

AngryWhiteGuy said...

The articles and postings on this website call for an end to social engineering and entitlements and a return to a system that allows people to end up wherever their temperament, physical attributes, IQ, networking skills, connections, charm, and industry get them.

Then why don't you want Mexicans to use their "temperament, physical attributes, IQ, networking skills, connections, charm, and industry" to land jobs as gardeners and cleaning ladies?

We are against are policies, memes, PC indoctrination, and legislation that are against the self-interest of White Europeans and males.

The former position clearly contradicts the latter, inasmuch as allowing people to use their natural talents to achieve whatever they can get can sometimes be against the interests of white Europeans and males.

You have yet to make a valid point showing how us "fanboys" or Steve are anything less than congruent on these two basic positions.

I just did.

David said...

>Please indicate the new scientific discoveries that make it OK to blatantly contradict oneself by advocating one set of principles for one group and an entirely different set for another.<

Sure thing.

The fact that different existents are different. Blacks are different from Jews are different from Chinese are different from Vietnamese are different from East Indians, et al. It's not a "blatant contradiction" to recognize real differences. For example, it is not a contradiction of true principles to accept racial disparity in some area of life, such as ownership of laundries or staffing of fire departments.

Egalitarianist absolutism, which you call principled, is not more than a bare deduction from the false premise that every person and every "group" is (or potentially is) the same. The truth is, all racial groups are different from each other (i.e, they exist) and therefore treating them the same is what's a blatant contradiction - of fact.

The mores of different groups differ. This used to be acknowledged and celebrated (and this acknowledgment was celebrated as realism and as respect for facts and peoples). The ways of the Hobbit-people might not be good for the English, and vice-versa. Then the juggernaut of Universalism mowed down and ironed out differences - well, it hurts and kills a lot of people while allegedly attempting to iron out differences, anyway. Paraded as High Morality, the commandments of the Universal Moralists are patent rationalizations for and indispensable adjuncts to imperialism, of a given aggressor's trying to drive a different group(s) out of its own area or, through internal deracination, out of existence - or, at least, out of any position of sovereignty from which it might pose a threat to the aggressor's ambitions.

Universalism is at odds with fact, thus it is fanaticism, and is ineluctably totalitarian. Look at the mess it makes. Of course, some people LIKE that mess - "creative destruction," in the neo-con sense.

Marc B said...

"Then why don't you want Mexicans to use their "temperament, physical attributes, IQ, networking skills, connections, charm, and industry" to land jobs as gardeners and cleaning ladies?"

Now, if the question is whether I'd be opposed to a native born Hispanic US citizen whose parents legally immigrated to the US from Mexico, who is educated and worked hard to become successful, the answer is no. I would rather see this person attain more success than a white US citizen that isn't willing to educate themselves or work hard. I just don't want the Hispanic to have any entitlements or special treatment unavailable to the white citizen along the way.

Throwing illegal immigration into the debate is a red herring, because it has nothing to do with meritocracy. Almost every country in the world has strict guidelines for immigration and border protection. You are holding the US to a different standard (especially compared to Mexico's strict laws and enforcement) in this thread to be insolent.

Anonymous said...

"AngryWhiteGuy",
You think you're so damned clever by quibbling away with such bogus straw-man arguments as 'intellectual consistency' in arguments, blah, blah, blah, "I'm being clever and deconstructive", "Look, how smart I am!", "I'm undermining Steve and his followers by my brainpower!".
But you fail to see the most blatantly obvious point in your silly game playing.
Freedom to form an opinion means exactly that.An individual is free to form an opinion on any subject whatsoever on the basis of any set of evidence whatsoever that he encounters.Only a damned fool believes that individuals should be hidebound by a set of 'principles'.
What works, works.
What doesn't work, doesn't work.
On the two cases that you mention (ie trade policy and the minority mortgage disaster), the prevailing intellectual opinion on trade policy is that a policy of free trade benefits ALL the parciptants - this is down to the theory of Ricardo and Smith.
However, empirical evidence (actual fact rather than paper theory), leads many of us to doubt this, particularly with regards to the fiscal position of the USA.
Are you really stupid enough to say that people are 'not allowed' to challenge dogma because somehow it's 'not intellectually consistent' - you bandy these big words about, because you feel they make you 'seem clever' on this board, but obviously you haven't got a clue what 'intellectualism' really means.The essence of 'intellectualism' is the unbridled freedom of the individual to adopt absolutely any position he wants on any subject he wants, with his argument based purely on evidence, and not beholden to any rigidity whatsoever.

AngryWhiteGuy said...

The fact that different existents are different. Blacks are different from Jews are different from Chinese are different from Vietnamese are different from East Indians, et al. It's not a "blatant contradiction" to recognize real differences. For example, it is not a contradiction of true principles to accept racial disparity in some area of life, such as ownership of laundries or staffing of fire departments.

Thank you for informing me that Blacks are different from Jews. I wasn't aware of that. Also, point to where I said that we ought to have total ethnic parity in all walks of life. Good luck, because I said no such thing.

Throwing illegal immigration into the debate is a red herring, because it has nothing to do with meritocracy.

Sure it does. The best man for the job is the best man for the job, whether he was born in Kansas or San Salvador. If you don't think that the guy from San Salvador should have the job, that's fine. But then you're not a meritocrat.

You are holding the US to a different standard (especially compared to Mexico's strict laws and enforcement) in this thread to be insolent.

I'm not employing any double standard. If some Mexican national was spouting off about meritocracy and market discipline, but then turned around and justified border controls on Guatemala, I'd call him out on it too. And even if I am employing a double standard, what makes my (alleged) double standard worse than yours?

Freedom to form an opinion means exactly that.An individual is free to form an opinion on any subject whatsoever on the basis of any set of evidence whatsoever that he encounters.

As a First Amendment absolutist, I agree. I don't see the point, though. Freedom of speech does not entail immunity from criticism.

Only a damned fool believes that individuals should be hidebound by a set of 'principles'.

I'm not asking anyone to hold themselves to any set of principles. I'm asking people to be consistent in the application of the principles they already use in their judgments.

Are you really stupid enough to say that people are 'not allowed' to challenge dogma because somehow it's 'not intellectually consistent'

Everybody's allowed to say or challenge whatever the hell they want. But I don't think asking people to try to avoid double standards amounts to a violation of anyone's First Amendment rights.

And thank you for complimenting my intelligence.