Archive for the ‘liberty’ Category

How many CRA loans, how much affirmative action payout?

Wednesday, November 5th, 2008

From 2000 to 2007, blacks and hispanics received six hundred and thirteen billion dollars more in home purchase mortgages than they would have received had they received the same proportion of the money that they received in 1999 – a figure that strikingly resembles the total cost of the bailout.

In 1999, people warned that CRA loans, affirmative action loans, racial quota loans, began to endanger the financial system

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people …

…These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, …

… “If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

1977 was the start of turning the finance industry into a political slush fund, and with each regulatory  intervention, the amount of money at risk increased  exponentially

How many CRA loans, affirmative actions loans, racial quota loans, were there?

Fortunately the data for new house loans by race is available, and from this data we can calculate that CRA loans, affirmative action loans, racial quota loans, for new house purchases, in the period 2000 to 2007 were at least  six hundred and thirteen billion dollars, which is pretty close to the total US bailout cost.

613 billion dollars.

So this was an affirmative action financial crisis, and we are for the most part bailing out financial institutions that were forced to lend to unqualified borrowers by race, and perhaps also bailing out the culture of corruption that results from rating mortgage securities AAA that were generated in the course of signing up people to vote democrat with a bottle of cheap whiskey and a million dollar mortgage – because rating them differently would be racist, much as Princeton was corrupted because when it graduated Obama’s wife, fearing that it would have been racist had it failed to pass her thesis merely because it was a barely literate rant against racism.  We are required to pretend Obama’s wife is educated, and we are required to pretend that these borrowers are credit worthy.  It corrupts the universities, and it corrupts the financiers.

There was a massive increase in the value of loans to black and hispanic borrowers.  To the extent that these loans grew much faster than loans to white people, this most likely represents affirmative action.  This is a conservative estimate, since affirmative action lending has been enforced by the Community Reinvestment Act (CRA) since 1977.  What was new in 1999 was not affirmative action lending, it was affirmative aciton lending on a scale that threatened the financial system.

In 1999, mortgages to black and hispanic new house borrowers were 10.4% of mortgages to white new house borrowers.

In 2006, mortgages to black and hispanic new house borrowers were 36.5% of mortgages to white new house borrowers.

I calculate what new home mortgages would have been had new home mortgages to black and hispanics remained 10.4% of new home mortgages to whites.

The excess, the difference between hypothetical mortgages and actual mortgages, is a conservative estimate of CRA loans, affirmative action loans, racial quota loans.

In this table, the first column is new housing loans to whites, the second column is new housing loans to blacks and hispanics. Estimated CRA loans are the difference between the actual and hypothetical loans, and at the bottom I total numbers.

The numbers for new house mortgages in billions of dollars come the government racial quota monitoring website.  The number for affirmative action loans is my estimate, calculated as new house mortgages to blacks and hispanics minus 10.4% of white new house mortgages

The numbers for new house mortgages in billions of dollars come the government racial quota monitoring website.  The value for affirmative action loans is my estimate, calculated as new house mortgages to
blacks and hispanics minus 10.4% of white new house mortgages

Home Purchase Mortgages in Billions of dollars

Year Black and
White estimated
1999 37.60 359.90 0.00
2000 43.72 364.54 5.63
2001 51.18 381.41 11.33
2002 89.44 469.03 40.44
2003 128.40 537.96 72.20
2004 135.26 547.41 78.07
2005 236.06 757.33 156.94
2006 247.55 678.20 176.70
2007 129.53 547.41 72.34
Total 1098.75 4643.20 613.65

Unfortunately, no racial breakdown on default rate is available, but the Hispanics I saw buying houses in Sunnyvale in 2005 and 2006, looking at them from twenty paces, you could tell in two heartbeats that the chances of them making payments was very poor indeed.

Implicit government guarantees produce a vast river of easy credit to the too-big-to-fail beneficiary of that guarantee, and inevitably politicians are tempted to direct that river to political voting blocks – sometimes political voting blocks that are unlikely to repay the money.

It is a fundamental moral hazard problem in government regulation and intervention, which cannot be regulated away.  Instead of regulating, the beneficiaries of these guarantees must be shrunk – regulated to become small enough to fail, instead of regulated to benevolently hand out money to the politically favored.  Instead of sending that mighty river of money in the direction of desirable voting blocks, politicians must shrink it – which, like dieting, is hard for them to do.

The financial crisis in America was one of affirmative action and the community reinvestment act, of Black and Hispanic deadbeats robbing honest hardworking whites, but thinking of it in those terms of the particular voting blocks is not useful, will not get us to a financial system that moves savings from honest thrifty savers to honest hard working investors who can put the money to profitable use.  Such thinking, thinking in terms of voting blocks, will at best merely change the skin color of the deadbeats robbing the honest folk.  The financial crisis in the rest of the world had different beneficiaries with diverse skin colors, but the common factor was political favor sending funds to political voting blocks, rather than to people able to put the money to profitable use.  It is more useful to think in terms of moral hazard – that politicians cannot regulate, for they have perverse and dangerous incentives, and therefore corrupt financiers.

That politicians dispatched our money to cat eating wetbacks should enrage us, but we should be enraged at the politicians, rather than at migrants looking for work who have difficulty affording meat from a butcher, migrants who are prohibited from honest work by those politicians, and then offered welfare and a million dollar mortgage no money down by the same politicians.  The politicians corrupted Hispanics and financiers alike.

Court appointed lawyers

Thursday, June 26th, 2008

Texas Child Protective Services wishes to “protect” Teresa Jeffs from being sexually abused – which “protection” has a curious resemblance to charging her with practicing polygamy while white.

The courts have appointed Natalie Malonis to supposedly represent her and two other polygamist “children”, which lawyer has been conducting trial by media against her supposed client:

“I believe that [Teresa Jeffs] was avoiding service because of coercion and improper influence from Willie Jessop.”

“There is no question I am absolutely looking out for her, … What’s happening is really a shame because people who purport to care about her are really doing her a disservice.”

“I’m trying to help her. It’s really not in any child’s interest to waive their attorney-client privilege. I’m not going to fight with her in the media.”

“And one of the big problems in this case is that the victims really don`t consider themselves victims so they`re not — it`s difficult to help them.”

This kind of public @#$% would be improper even if Malonis was a prosecutor instead of supposedly a defender. If a lawyer’s client starts fighting her in the media, she is not allowed to fight back in the media.

Hatred of softly influential groups

Tuesday, June 24th, 2008

Wherever a group has disproportionate economic or cultural success that does not rest upon political power, does not involve the ability to kill people and break things, does not depend upon hard power, for example Jews, Americans, Indonesian Chinese, Indian Fijians, Indians in Africa, the Ibo in Africa, the same hatred occurs, the same accusations, the same fantasies, the same excessive and disproportionate attention, the same concoction of utterly trivial grievances into supposedly enormous crimes – even if the disproportionately successful group and the less successful group have no previous history, but only encountered each other fairly recently. I observe that we also get such interesting phenomena as self hating members of the successful group – the psychopathologies so characteristic of Jews are also characteristic of other disproportionately successful and correspondingly hated groups.

This phenomenon is the inverse of Stockholm Syndrome. Stockholm Syndrome is that we are apt to love those who control us by fear and murder. Hatred of softly influential minorities, such as anti Americanism and hatred of overseas Chinese in various third world countries, is that we are apt to hate those whose intellectual creativity entertains or inspires us.

Amy Chua, author of the book “World on Fire”, which examines the problem of softly influential groups, under the demonizing and politically correct name “Dominant Minorities”, is a pretty good example of a self hating Filipino Chinese. It would seem that the Chinese sinned by being industrious and successful, and therefore the system that allowed them to succeed is supposedly to blame for bringing repression upon them in the Philippines, and massacre upon them in Indonesia.

There are a great many diverse newly affluent ethnic groups, among them the overseas Chinese of various Asian countries. An ethnic group succeeds, perhaps because of genetic superiority, perhaps because of a culture that encourages education, thrift and hard work, and so people hate that ethnic group – hate Amy’s ethnic group among others. Her analysis of the problem is absolutely accurate and spot on, though of course her implied solution – a political elite that imposes equality on all the non elite – has failed disastrously. She sees, and explains in detail, that her ethnic group is in the same hole as the Jews, and as a great many other similar groups, correctly analyzing the problem that afflicts overseas Chinese and Jews and many other groups as a single problem with many groups and many examples. The flaw in her analysis is the self hating and politically correct phrase “dominant minority”.

The groups she is talking about are not dominant, rather they possess soft power. If Americans wandered around shooting people to force obedience, everyone would love them, but Americans are hated because they persuade people to drink coca cola and watch terminator movies.

Similarly Hitler, a failed artist, was primarily enraged by the influence of Jewish plays and art. When people complain that America rules the world, they really complaining that they watch American movies, and thus people are playing attention to Americans instead of themselves.

The correct description of the problem is “non coercive influence”, and “softly influential group” Non coercive influence, soft power, is what a softly influential group possesses, and it makes that group hated. Dominant minorities are often loved, and are never hated. The problem, rather is hatred of softly influential groups.

I observe that since the surge, since Americans flattened half of Fallujah, we have at last seen large numbers of Arabs clerics, all of them Iraqis, most of them not very far from Fallujah, preaching genuinely moderate Islam, and large numbers of Arab intellectuals, a great many of them Iraqis, arguing for moderate and realistic behavior by Arabs and Arab countries, accurately perceiving the faults of Islam and the Arabs. The American attempts to directly build a state were all miserable failures, and continue to be so, but when the Americans showed persistence in slaying their enemies, there was considerably greater willingness to examine American ideas and beliefs honestly and thoughtfully. Arab intellectuals and clerics changed their position, and we now increasingly hear from Arabs that Arabs have problems because their society has something wrong with it, not because the outsiders are holding them down. Seeing that Americans would fight and not yield made in much easier for Arabs to understand and agree with the Americans, though I think Americans could have made the same point at considerably less cost to themselves.

The critical variable is hard power, and hard power is the costs you can inflict on others. If a softly influential minority exercises sufficient hard power – that is to say, hurts enough people and destroys enough wealth, or demonstrates willingness and ability to do so – irrational hostility diminishes among those people who are potentially vulnerable to being hurt, and the softly influential group becomes able to make its case intellectually, able to win hearts and minds through persuasion and good deeds. The good deeds are only appreciated from people who can and do also do bad deeds.

Not only is the group less hated, but it less apt to hate themselves. Not so very long ago Americans were having orgasms of guilt because a guard at Gitmo tortured a poor helpless terrorist by pissing a short distance upwind of a Koran. Today Americans have flattened half of Fallujah and no one gets indignant.

When Americans knocked down a few dozen houses in Fallujah and killed a few people, there was a big outcry about the Fallujah massacre, just as there was about the Jenin massacre when Jews knocked down a few houses and killed a few people.

But when Americans came back a couple of years later and proceed the flatten half of Fallujah and kill a great big pile of people, not only are Fallujans fine with that, but more importantly, Americans are fine with that. If you google, you will still get five times more hits on Jenin massacre than on Fallujah massacre, and most, probably all of the hits for Fallujah massacre are for much smaller events from long ago where Americans were doing very little damage to people or property. When Americans rolled their sleeves up and really started killing people and breaking things in vast numbers, then there was no more talk of “Fallujah massacre” – not from Arabs, not from Europeans, and not from Americans.

The solution to the problem that Amy so accurately describes is the Fallujah solution, the opposite of the solution she inaccurately prescribes. The answer to irrational hatred is to hurt people and break things. Since the hatred is irrational, crazy, and self destructive, a sufficiently hurtful and destructive response to hatred snaps people out of their madness, and creates an environment where communication and good deeds can work, as is happening in Fallujah and Anbar province.

Of course, that strategy can also lead to holy war, if people incorrectly evaluate other people’s legitimate grievances as irrational, crazy, and self destructive, but what we are seeing in Iraq is the quenching of holy war, with, to my great surprise, a massive outbreak of moderate Islam, We are not seeing any signs of a functional democracy or national unity, which was supposed to be the mechanism that would supposedly produce moderate Islam, but we are seeing moderate Islam despite, or perhaps because of, the severe disfunction of the institutions that were supposed to encourage it.

How much hard power is required? Small doses are counter productive, merely giving people superficially rational excuses for their irrational hatred. Gitmo produced the insane hysteria about torturing a prisoner by pissing upwind of a Koran, making the problem worse, not better. The Fallujah sized dose, however, has had dramatic good effects in Fallujah and noticeable good effect in America, winning the hearts and minds not only of Fallujans, but of Americans.

A better ID card

Friday, June 20th, 2008

Digital Identity Forum has a better solution for ID.

Instead of an ID card that tells any purported authority everything about you, an ID smart card that verifies what authority the authority actually possesses, and reveals the minimum information that that authority is authorized to know, for example that you are over 18, to be read by cell phone with nfc cardreader.

Europe can’t stop anything

Thursday, June 5th, 2008

Michael Totten quotes a Serb:

“If Americans said they were no longer interested in Europe, it would be a catastrophe here.”

“You think?” Sean said.

“Yes,” David said, “because Europe can’t stop anything.”

The military weakness and incapacity of Europe in Serbia startled the Serbs, even more than America’s capacity stunned them. Since then, Europe’s martial weakness has been on display in one humiliating debacle after another. Recall Britain’s startling display of fear, weakness, cowardice, and dhimmitude in the Persian gulf.

All that wealth, and no capacity to defend it. The vultures are circling.

For a state to exist, it has to be able to destroy those that oppose it, or might oppose it, to inflict famine and ruin on hostile populations, has to be able burn the crops and flatten the cities, after the manner of General Sherman, and has to have confident belief, a belief shared by officers and men, that it is right to do so.

To do this, it needs some source of cohesion. It cannot provide its own cohesion. Pay and threats will not work to motivate soldiers, for when things go bad, when your soldiers most need motivation, these motivations cannot function, for nothing will motivate people impose the discipline.

The usual source or cohesion is ethnic identity: the nation state. Other sources of cohesion are religion, as for example the various theocratic states, such as the caliphate, and ideology, as for example the American revolution and the various communist coups.

So if a state’s cohesion came from ethnicity, then when it goes multicultural, then its soldiers and police are fighting for pay and pension and nothing more, and then it is are doomed. Similarly, when the last shreds of liberty are crushed out in the US, when the second amendment is utterly gone, and little left of the first amendment, US troops will be fighting for pay and pension and nothing more and then the US will be doomed.

Global Guerrilas reports that Mexico and Nigeria are falling, as bandits, revolutionaries, and suchlike take possession of the Mexican drug trade, and bandits, revolutionaries, Islamists, and suchlike take possession of Nigeria’s oil. But there is a lot more available for the stealing in Europe.

If the Nigerian or Mexican government goes, the Pentagon should secure the oil, but will not be able to do so without will and belief that it is right to do so. That would require an ideology that it reasonable to protect the private property rights of American and allied businessmen – which argument will not fly when they threw them to the wolves long ago, when long ago they allowed the oil and the oil rigs to be stolen by governments that are now failing.

Happiness is a warm gun

Tuesday, April 22nd, 2008

Arthur C. Brooks reports; that according to the general social survey, gun owners are substantially happier than others.

Why is it so? Reporting from my own personal experience:

  • The major reason for owning a gun is to protect those you love. Those who have someone they love, someone they would risk death for, someone they would kill for, are likely to be happier.
  • Those who know that they can defend that which they love, are likely to be happier.
  • An important indicator was that gun owners spent about 15% less of their time than nonowners “feeling outraged at something somebody had done”. Obviously this is a big contributor to happiness. If they spent 15% less of their time feeling outraged, they presumably spent something like 15% less of their time feeling powerless, impotent, and afraid.

Texas protective services commits perjury again

Monday, April 21st, 2008

In the testimony that led to the court approving and making permanent the abduction of four hundred children from their FLDS parents, Mrs Angie Voss testified that several children had admitted to knowing the child abuse victim “Sarah”

“We learnt that a few of the girls know of the Sarah we were looking for and that she’d been seen last weekand she had a baby,” Ms Voss said.

We now know that “Sarah” is a thirty three year old democratic party political activist. What do you think the prospects are that Child Protective Services will be charged with perjury, or the decision reversed?

Liberty needs to survive

Sunday, April 20th, 2008

Gates of Vienna writes: The culture of liberty deserves to survive

“If a large enough proportion of us decided that we would not tolerate the eradication of our cultures, then our cultures would not be eradicated. It’s as simple as that.”

Oh, really?

Let us suppose that in order to get through university, you have to pretend to affirm that our society should eradicated, because it is racist, colonialist, imperialist, capitalist, exploitative, and is destroying the planet. Suppose that if your blog says something different, you are going to be prosecuted for spreading racial hatred, harming the earth, and so forth. Suppose that if you say something different, those you love are likely to be murdered, and the police will not do much about it.

What then?

It really is not that easy to preserve liberty. Liberty always costs blood, and freedom will always require forms of social organization capable of killing people in substantial numbers.