tag:blogger.com,1999:blog-7905515.post8657469373035777361..comments2024-03-14T11:09:32.759-05:00Comments on Falkenblog: When Quality Doesn't MatterEric Falkensteinhttp://www.blogger.com/profile/07243687157322033496noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-7905515.post-7420323024226770172010-09-03T09:10:23.611-05:002010-09-03T09:10:23.611-05:00"Banks don't use race in their underwriti..."Banks don't use race in their underwriting, if they did, they would be sued." - OK - this is an effect of a law, this law forces banks to use some non optimal methods and thus decrease their efficiency in the name of basic justice. I hope you agree that this is a good policy.zbyhttps://www.blogger.com/profile/04636763782334128869noreply@blogger.comtag:blogger.com,1999:blog-7905515.post-9897839666103755142010-09-02T14:03:23.084-05:002010-09-02T14:03:23.084-05:00Am I drunk or are you blaming the housing crisis o...Am I drunk or are you blaming the housing crisis on diversity programs? Do I read you correctly? <br /><br />I've come to expect crazy right-wing rants on this blog, but this one is weirder than any before.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7905515.post-67316821413459606612010-09-01T12:20:00.959-05:002010-09-01T12:20:00.959-05:00Banks don't use race in their underwriting, if...Banks don't use race in their underwriting, if they did, they would be sued. This has been true for decades (I don't know pre-1980s). They use things like income statements and balance sheets. These have disparate impact, to be sure. Thus, even though a dummy variable on race often does have explanatory power , banks do not decision on this variable, they try to keep it out of databases so others can't mine it for evidence of discrimination. If you do have it, and off-the-record analysis on this variable you would severely hurt your career. If anything, there is a lot of deterioration of objective criteria to generate sufficient volume for various target groups.<br /><br />I'm color blind, which makes me a racist to many. I think they are the bigots, and as India has shown, heightened sensitivity to group distributions does not lead to greater wealth or harmony.Eric Falkensteinhttps://www.blogger.com/profile/07243687157322033496noreply@blogger.comtag:blogger.com,1999:blog-7905515.post-80806256069758868882010-09-01T11:12:30.841-05:002010-09-01T11:12:30.841-05:00"As true discrimination is about as rare as a..."As true discrimination is about as rare as a Klan rally, this is all just a sop to the Indian-like ethnic group spoils system the US is becoming (are there really any bankers who hate minorities enough to forgo extra profits?)."<br /><br /><br />It's funny that the people who make this argument are the same people who think that racial profiling works. <br /><br />Racial/religious/etc. profiling works by assuming (usually correctly)that you can sort a group based on a single variable that is highly correlated with the variable that you are interested in, instead of going through a costly process of sorting by a large number of variables to get a perfect correlation. <br /><br />If you can capture 80% of the variation in loan loses by race then why would you go through the costly process of collecting information on income, wealth, etc. and not reject loans a based on race alone. <br /><br />Your argument overlooks the fact that profit optimization can lead to systematic discrimination without requiring bankers to hate minorities.Anonymousnoreply@blogger.com