Sunday, November 08, 2009

PC Bias on Fort Hood Shooter Extends to Mortgages

The Fort Hood shootings are an example of how an event can be considered a anomaly, or a broad pattern, depending on the preconception. The major media and the White House have a strong belief that Muslim extremism is idiosyncratic and mainly irrelevant. As Chris Matthews stated, 'we may never know if religion was a factor at Fort Hood' (who's this 'we' kemosabe?). Obama cautioned against 'jumping to conclusions. The New York Times has the headline articles "Army Chief Concerned for Muslim Troops, and also Little Evidence of Terror Plot in Base Killings, and finally, Painful Stories Take a Toll on Military Therapists. The narrative they want to tell is that a poor psychologist was overwhelmed by the stress of listening to troops discuss their stress by going over to Iraq, and that the biggest problem created by this event is anti-Muslim bigotry.

Consider that when 4 college kids were killed at Kent State in 1970 it was quickly decided this was the signature event of how the government war machine was killing unarmed American kids, as opposed to an unintended accident caused by students bent on increasing anarchy until something happened. James Byrd was a black man murdered by some white supremacists in 1998. There are prime time documentaries, foundations, and major references by politicians and pundits on this event, as if it signified a broad issue. Actually it was highly unusual, most interracial violence involves black perpetrators and white victims, the disparity in crime propensity is on the order of the male/female difference.

Events are either anomalies or examples of a pattern based on a simple politically correct view of how the world works, still based on Marx's class lens: the dominant class is responsible for everything bad done by everyone, either directly or indirectly. The Statistical Abstract of the United States has lots of tables on crime victimization by race, but not the perpetrator by race, because we don't want to blame the victim.

How does this relate to finance? The Fed keeps easy to read data on mortgage rejection rates by race, but hides default rates by race, which has led to innumerable simplistic newspaper stories that have 'proved' rampant discrimination by banks. As banks and regulators addressed the mortgage disparity, it was seen as simple justice. Fed Governor Edward Gramlich noted in 2004:
Given the generally low level of serious delinquencies, a purely numerical analysis seems to suggest that significant net social benefits have resulted from the rise in credit extensions and homeownership
At the end of the article he notes
Rising to these challenges will ensure that continued subprime mortgage lending growth will generate even more social benefits than it seems to have already generated.
The endgame to this was inevitable because no one was going to stop the trend towards easier lending criteria, let alone reverse it. If the statistical disparity was simply due to bigoted discrimination, closing the gap would be costless. As they say, things always end badly, otherwise, they wouldn't end. Once subprime blew up, sticking with the Marxist narrative right-thinking people were quick to blame banks for forcing ill-advised mortgages on minorities.

The same principle is involved in education, crime, and borrowing, that of seeing any behavior by socially disadvantaged groups as more evidence of their victimization by the dominant majority. Policies predicated on mistaken assumptions make things worse. By promoting the belief that bigotry accounts for most of every disadvantaged group disparity, the PC elites are doing more harm than good to everyone. Their bad solutions are then applied to everyone, creating a race to the bottom based on great intentions.

7 comments:

Anonymous said...

When economists weigh in against rent control, they rarely argue that rent control will lead to a mad rush of landlords lowering rents, thereby causing an unsustainable bubble in the rental market as landlords try to rent as many properties as possible and stop doing credit checks on prospective tenants.

That's probably because this explanation doesn't make any sense. It's therefore interesting that the "political correctness (partly) caused the housing bubble" theory continues to have seemingly intelligent proponents.

As far as the Ft. Hood shotting goes, of course it's likely that religion played some role in his mental states and actions. What people are really discussing is whether or not "we" (kemosabe) need to crack down on Muslims as a group. It's not like there is no downside to letting people's tribal instincts run wild.

Anonymous said...

I don't think it's nearly so much preconceptions in the media/administration reaction as it is a finely tuned sense of optics. This is an absolutely tragedy and an incredibly loaded situation. It's not an issue of being PC. It's just good handling by the administration and it's also very soon after it happened so the MSM is playing carefully as well. It doesn't make sense to derive anything more than that from what's being said so soon after what has happened.

Anonymous said...

'...of course it's likely that religion played some role...'

Your first clue being his chanting 'Allahu Akbar' as he committed the murders?

Dangerhorse said...

"The narrative they want to tell is that a poor psychologist was overwhelmed by the stress of listening to troops discuss their stress by going over to Iraq, and that the biggest problem created by this event is anti-Muslim bigotry."

That's a gross caricature of these articles.

There is, of course, an effort to portray the actions of Hasan as idiosyncratic and not representative of Muslims in general. But do you really disagree with that? What's your "narrative"?

bjk said...

You're mischaracterizing Gramlich's views, and he was one of the few to warn about the dangers of the housing market bubble and subprime lending.

"Given the generally low level of serious delinquencies, a **purely numerical analysis** seems to suggest that significant net social benefits have resulted from the rise in credit extensions and homeownership. . . .
But delinquencies could be more of a problem than such calculations suggest. . . . There could be problems that are revealed only with a more-refined analysis of the data: For example, **may represent significant problems for certain racial or ethnic groups** or for certain neighborhoods."

What he's saying is, certain races may be more prone to delinquencies, although he has to delicately put it the other way around.

Anonymous said...

It's funny how ideology plays a role in assigning blame. It's really silly to make fun of the left blaming the the evil bankers and then immediately blame government and political correctness for the subprime mess.

Does it matter that CRA did not cover >70% of subprime lending done by bank affliates and other mortgage brokers? non-CRA subprime loans have higher default rates? or that post 2004 vintages several times the default rates? Were the brokers who'd sell their mothers for an extra commission motivated by PC and wanted to help poor black neighborhoods? What about commerical real estate? The situation is much worse compared to residential. Was it PC that cause the commercial bubble?

Anonymous said...

> "The narrative they want to tell[...] the biggest problem created by this event is anti-Muslim bigotry."

That's not the narrative I read in the NYT but let's first assume it is : is it possible that bigotry isn't much as feared for the muslim per se as its repercussions might have, such as another shooting on another army base? Let's now assume it may not : what evidence regarding this particular shooting do you have to back up your claim, apart from prejudice towards the media/elite?

> James Byrd was a black man murdered by some white supremacists in 1998. […] Actually it was highly unusual, most interracial violence involves black perpetrators and white victims.

Interracial violence does not necessarily imply racially motivated violence so unless that is established, the comparison is probably not valid.

> "still based on Marx's class lens: the dominant class is responsible for everything bad done by everyone, either directly or indirectly."

Does one have to be a Marxist to hold the more privileged (or "dominant" as you call it) to a higher standard?

> "As banks and regulators addressed the mortgage disparity, it was seen as simple justice. [...] The endgame to this was inevitable because no one was going to stop the trend towards easier lending criteria"

If I borrow this logic, then

"In the summer of 2003, leaders of the four federal agencies that oversee the banking industry gathered to highlight the Bush administration's commitment to reducing regulation. […] Gilleran was an impassioned advocate of deregulation […] the ranking Democrat on the House Financial Services Committee, wrote in a letter to Gilleran [OTS director] that this was "a complete abrogation of the mandate your agency has been given by Congress."

was probably motivated by the Bush administration having a Marxist bent. If not, then the facts reported above are probably distorted : surely a shady maneuver by the secular-progressists (admittedly a quote from the Washington post, November 23, 2008)

> "By promoting the belief that bigotry accounts for most of every disadvantaged group disparity, the PC elites are doing more harm than good to everyone."

Social status is almost as surely inherited as one's eye color. Aren't that and the desire to get beyond the status quo the motives behind the above incriminated policies, rather than the alleged bigotry?