[ExI] How do we construct workable institutions and ethical behaviors?

[Kelly Anderson]

On Sun, Dec 11, 2011 at 4:38 PM, Jeff Davis <jrd1415 at gmail.com> wrote:
> Not buying it, Spike.  Risk control based on racism is offensive and
> not to be tolerated.  There exist standards -- there used to anyway --
> regarding qualifying for a loan.  Standards that are independent of
> where you live.  When the banking industry red-lined a district, they
> broad-brushed everyone living there and denied them access to services
> on a racial basis.

While it is certainly the case that neighborhoods have racial
profiles, the idea that you would not give a loan out for a house in a
particular area makes some sense. For example, I might not want to
loan people money if their homes were built in an area prone to land
slides, or earthquake liquefaction, or hurricane damage or flooding.
Likewise, I might not want to put out loans in areas where there
previously have been riots, fire storms (either man made or natural),
or that are likely to be bulldozed en masse (such as parts of Detroit
recently)...

While there is a correlation to race, redlining areas because of
specific risks does not seem to be overly racist to me.

> Case by case would have been fair, the broad-brush
> is discriminatory.

So all you who live in a flood plane are being discriminated against? Really?

> Their risk-avoidance motive is understandable, but
> the standard mortgage qualification criteria would have take care of
> that.  The intent may not have originated from racial bias, but the
> result was racist and was at least partially enabled by an apologist's
> easy indifference to racially discriminatory practices.

People and institutions that are racist always look for some way to
discriminate that doesn't seem to be racially oriented. But more
people just want to make more money.

>> That generated tax
>> revenue, which allowed them to hire cops, which made it safer, which
>> encouraged other businesses and banks to loan on homes.  Those who remember
>> East Palo Alto from the late 80 to early 90s should go look at it now

That would be fun. I worked in East Palo Alto for a brief period in 1984...

> Spike, you know I love you like a brother, but this feels all too much
> like white boy apologism.
>
> None of which persuasively addresses the "they were forced" question.
>
> Full disclosure:  I'm a racist.  No apologies.  I have zero use for
> the American black ghetto culture.  Sure, they came from slaves and
> have had a rough time.  They have all manner of thoroughly valid
> explanations about how they got where they are.  But that's no excuse.
>  Time for them to get over it, and get on with making something of
> themselves.  Everyone's got their problems.

I'm not a racist, though I have over the years had 6 black, 8
Hispanic, 1 half Asian, 4 Caucasian and one full African children in
my care, though thankfully not all at once (LOL). So I have something
of an interest in race and racism. (Currently, I have 2 black and 2
Hispanic children home full time as a single dad.)

>From my point of view, having read a few books on the subject from all
sides of the political spectrum, it's complicated. But one of the
things that stands out to me was LBJ's Great Society program of the
late 60s. At the beginning of this program, something around 5% of
inner city black families that qualified for welfare payments of some
kind actually received those payments. The program went into the inner
city and advertised the availability of these programs. The program
was a huge success, in that by the end of the program 95% of the
families that were entitled to the entitlements actually got them. Now
for the law of unintended consequences... This led directly to the
disintegration of the black family structure in these neighborhoods.
It led to a particular kind of "pimp" that would knock up single black
women with multiple children, who would then collect welfare checks,
that the "pimp" would then force her to share with him. I call him a
pimp rather than a father, because he didn't help raise his children,
just took their money. Granted, that is an extreme case, and probably
didn't happen all that often.... However, the number of inner city
children with intact nuclear family units plummeted rapidly after
everyone who was entitled got their entitlements. This has led to the
high rates of incarceration of blacks, and any number of other bad
outcomes. I lay a considerable portion of the blame at the feet of
LBJ.

Libertarian economist Thomas Sowell argues that the Great Society
programs only contributed to the destruction of African American
families, saying "the black family, which had survived centuries of
slavery and discrimination, began rapidly disintegrating in the
liberal welfare state that subsidized unwed pregnancy and changed
welfare from an emergency rescue to a way of life."* I agree with Mr.
Sowell. Great article, by the way... at
http://www.capitalismmagazine.com/index.php?news=3864

-Kelly
* Wikipedia - http://en.wikipedia.org/wiki/Great_Society