Showing posts with label real estate. Show all posts
Showing posts with label real estate. Show all posts

June 26, 2012

Dr. Vibrant's Back: Richard Florida Redux

For over a decade, I've periodically debunked the theory of Richard "Rise of the Creative Class" Florida, who has pocketed near-Gladwellian speaking fees by telling local leaders what they want to hear: the way to make your little backwood burgh rich is to bring in a lot of gays, artists,   bohemians, and immigrants. Notice how San Francisco has a lot of gays? Well, did you also notice that San Francisco is also the Tech Capital? Huh?

Now he's trying to milk his 2002 book The Rise of the Creative Class further with a tenth anniversary edition.

Modern American doesn't have much of an intellectual immune system. Institutional America has an endless appetite for hucksters of ideas for politically correct theories about how to make money, ideas that frequently make far more money for their spokesperson than for the poor saps who try to implement them.

My role has often been to play rogue white blood cell in the English-speaking world's undergunned intellectual immune system.

So, way back in 2002, I wrote in VDARE:
These research high technology centers are not actually located in the cities of San Francisco, Boston and New York at all, but in their much less diverse suburbs. The authors’ methodological blunder is obvious: they use overly expansive definitions of “metropolitan areas.” Thus, they label “San Francisco” both the Gay Capital and the Tech Capital, even though Castro Street in San Francisco and Sand Hill Road in Palo Alto might be 90 minutes apart – in normal traffic. 
All across the country over the last 45 years, the pattern has been unmistakable: the techno-innovators congregate out in the far suburbs, a long, long way from what is normally called “diversity.” … 
Obviously, colleges can play important roles in creating tech centers, as can nice weather and good scenery. Yet the Bay Area’s technopolis didn’t grow up around UC Berkeley, as the Florida & Gates’ theory would predict, but around Stanford – the school for smart rich kids way off in the orchard-filled Santa Clara Valley. … 
Bohemians don’t invent technology. Nerds do. … Nerds tend to be especially devoted family men, possibly because they find chasing women so painful. And the most important component of any serious technology company’s workforce is married men with children. 
The suburban high tech nerdistans (to use Joel Kotkin’s phrase) are diverse in the sense that they are full of not only white nerds, but also Chinese and Asian Indian nerds. But that’s not exactly what most pundits mean when they talk about Diversity. 

In 2005, I wrote in the Washington Examiner:
“And, sure, booms and bohemians tend to correlate, but who really attracts whom to a metroplex? Do the engineers and salesguys actually pursue the gay art dealers and immigrant restaurateurs, or are Dr. Florida’s footloose favorites more likely to follow the money generated by the pocket-protector boys? 
“In the 1970s, for example, Houston suddenly became one of the gayest cities in America, even though Houston was not famously tolerant. No, Houston got (briefly) hip because gays, immigrants, and artistes flocked there because OPEC had raised prices, making Houston’s unhip oil companies rich for a decade. 
“In contrast, famously tolerant New Orleans and Las Vegas (“Sin City”) rank today near the bottom of Dr. Florida’s talent tables because his kind of folks can’t make much money in either. 
“So, he appears to have gotten the arrow of causality mostly backwards.”

And in 2008, I reviewed one of Florida's self-help books in The American Conservative:
When he's not intentionally unhelpful, he's obtuse. For example, in Who's Your City, he reprints a popular map of America he put up on his blog in 2007 showing that the largest surpluses of extra single men are in Southwestern cities, near the Mexican border. Having had a year to think it over, Dr Vibrant asserts, "The best ratio for heterosexual women was in greater Los Angeles, where single men outnumber single women by 40,000." 
So if a bachelorette doesn't quite have the looks to land a husband in, say, Cincinnati, she should hightail it to L.A., where there's much less competition from attractive women. Yeah, right … 
The obvious reason there are so many more single men than single women in the Southwest is that there are so many illegal alien males there. The kind of single women who buy hardcover advice books probably aren't that interested in a Mixtec-speaking drywaller, but Dr. Vibrant ignores such potentially controversial topics. 
He has, after all, built his success on telling business and civic leaders that if they want their dreary little burgh to become the next Silicon Valley, they'll need a lot of homosexuals, like in San Francisco. He says, "Gays predict not only the concentration of high-tech industry, but also its growth …"

Slowly, a few other people have started to notice the obvious problems in Florida's theory. In "The Fall of the Creative Class," writer Frank Bures, who moved to Madison, WI a decade ago because it seemed like the Next Big Thing in Floridian breakthroughs, calls up several social scientists to ask how the evidence is working out for Creative Class theorizing: not good. 

The most fun part is a section on Penelope Trunk, a less slick version of Dr. Florida, whom, to my surprise turns out to be a real person.
One of these peo­ple was a woman named Pene­lope Trunk, a brand­ing expert, a Gen Y prog­nos­ti­ca­tor, and a ruth­less, relent­less self-promoter. Her arrival in Madi­son could not have been more dif­fer­ent than ours. She announced on her blog that she’d done exhaus­tive research and con­cluded that the best place in the coun­try for her to live was Madi­son,  Wis­con­sin. Trunk’s name was splashed across the papers, and seemed to con­firm every Florid­ian sus­pi­cion. Local cap­i­tal­ists bankrolled her new com­pany, Brazen Careerist. She blogged and blogged and blogged about how best to choose the place to work and live. She was an apos­tle of Florid­ian doc­trine and flew around giv­ing speeches about how places could attract the shock troops of the cre­ative econ­omy the way Madi­son had attracted her. 
One day I met Trunk for cof­fee. She was loud and brash and talked over the din of the other peo­ple. She seemed to be under the impres­sion that I’d come to her for career advice, which she gave and to which I politely lis­tened. And while I liked her energy, I could tell by the way peo­ple shot her dirty looks that Madi­son was going to be a tough fit. 
Four years later, Trunk left town, which seemed odd, given her much-ballyhooed arrival. By then, we had fallen out of touch, and I was never quite clear on her rea­son for leav­ing. So I called her to find out what had gone wrong. Trunk now lives on a farm in south­west Wis­con­sin, (she divorced her hus­band and mar­ried a farmer). On the phone, she was still brash and bom­bas­tic and as she told it, her hon­ey­moon with the city started to end almost as soon as she got there. One day her ex-husband was googling, “sex offend­ers,” and he dis­cov­ered there were four reg­is­tered on their block. Next, she dis­cov­ered that the pub­lic schools were ter­ri­ble. “I started talk­ing to every­one,” Trunk said. “And I said, ‘Hey, aren’t you upset the schools suck? How is every­one send­ing their kid here?’ And peo­ple said, ‘Oh, no, I really love my school. I make sure for my kid it’s all about val­ues.’ I mean the bull­shit that peo­ple were telling me was utterly incred­i­ble. Then it just became like an onslaught. Tons of lies. Madi­son is a city full of peo­ple in denial. Peo­ple don’t leave Madi­son, so they don’t real­ize what’s good and not good.” 
I asked her if she had any regrets, or if the move was a wrong one, or if she had any advice for other peo­ple look­ing to relo­cate. Or maybe, I sug­gested, life was just messier than research? 
“No,” she said. “Life is totally clear cut. It’s exactly what the research is. All the research says go live with your friends and fam­ily. Oth­er­wise, you have to look at why you’re not doing that. If you want to look at a city that’s best for your career, it’s New York, San Fran­cisco or Lon­don. If you’re not look­ing for your career, it doesn’t really mat­ter. There’s no dif­fer­ence. It’s split­ting hairs."

That's cartoonishly overstated, but the "friends and family" part makes a lot of sense. Keep in mind that you aren't going to make friends as easily the older you get, so if you've got a pretty good class of friends by the time you get out of college, try to hang onto them.

And don't overlook the huge contribution that a good grandmother can make to your family life. My aunt, for instance, has driven at least a million miles to take care of her grandchildren who live on opposite sides of Greater Los Angeles. 

I had a terrific mother-in-law, a bright, energetic woman who really liked me. But, then, a few months before our first son was born, she was killed in a car crash. The 1990s turned out significantly more difficult for us than if we had had her around to pitch in.

June 20, 2012

California v. Texas: U2 property rights

From my new column in Taki's Magazine:
The struggles of even the best-connected California celebrities to nail down every last one of the permits they need to build on their own property helps demonstrate why differences in topography drive Californians toward voting for environmentalist Democrats and Texans toward pro-business Republicans. ... 
In Southern California, U2 guitarist The Edge (born David Evans) has been battling for a half-dozen years to build five mansions on his 156 acres of ridgeline overlooking Malibu’s Surfrider Beach, an average of one home per 31 acres. His well-heeled neighbors have gone to war to prevent him from taking such liberties with their view. 
California and Texas are the two largest states in the Electoral College, so it’s worth considering the bedrock reasons they vote the way they do. Having lived in both California and Texas, my guess is that their divergent politics are shaped by the shape of their land.

Read the whole thing there.

June 17, 2012

The rules are different in NYC (Cont.)

A slide show in the New York Times about a public school in the Williamsburg section of Brooklyn: "Hopes for Diversity at a Brooklyn School." The accompanying article is entitled "Integrating a School, One Child at a Time," about federal tax dollars being used to desegregate Brooklyn public schools.
During a kindergarten ballet recital at Public School 257, in Williamsburg,  Prairie Jones [a little blonde girl] had a question for the dance instructor. Kylie Cao, to Prairie’s left, is the only Asian student in the kindergarten. 
The school was named a magnet school of the performing arts in 2010, with a mission, under the federal magnet program, of diversification. P.S. 257 is still predominantly Hispanic, despite its recruiting efforts.

This terminology may seem puzzling to readers familiar with the currently conventional uses of the words "diversity," "integration," and "desegregate" in the New York Times, as a euphemism for More Non-Asian Minorities: e.g., the Miami Heat are diverse, but UC San Diego is not diverse. Sure, this might be a little puzzling to the Man from Mars, but we're all 21st Century grown-ups here and we're familiar with how words are used these days.

In this case, however, the NYT is using terms like "diversity" and "integration" according to their old-fashioned dictionary definitions: a school becoming less Hispanic is becoming more diverse and more integrated, which is Good. 

How come? Because we're talking about Williamsburg here. There is very little that subscribers to the New York Times care about more than the possibility that certain public schools in Brooklyn will become non-NAM enough for subscribers to send their children there. After all, putting two kids through private school in New York from K-12 costs about a million bucks. But if enough white people can send smoke signals to each other to agree upon which public schools they'll all flock to, then ca-ching!

June 12, 2012

"Obama’s early Chicago rise brought African-Americans foreclosures, bankruptcies"

A few weeks ago I posted the analysis by Robert Fitch, an old white power-to-the-proles lefty, of Obama's role in Chicago's real estate wars.

Now in the Daily Caller, Neil Munro has a long article shedding light on President Obama's role in Chicago's real estate disaster, using as a focal point the one case in which Obama ever spoke up in court (according to a 2008 Chicago Sun-Times article), a disparate impact discrimination lawsuit against Citibank to get more mortgages for minorities.
President Barack Obama wants his 2012 re-election campaign to focus on Gov. Mitt Romney’s private-sector record, but his own private-sector history shows that he promoted and profited from the nation’s disastrous real-estate bubble. 
One striking example comes from the president’s 1995 housing-discrimination class action lawsuit: It provided him with legal fees, greased his political donations and boosted his role in Chicago politics. 
While he made personal gains, his lead African-American client, Selma Buycks-Roberson, declared bankruptcy in 2001 — and again in 2008 as she received a home foreclosure notice, according to unpublicized federal and city records obtained by The Daily Caller.

Read the whole thing there.

Whitifyingest Census Tracts

Michael J. Petrilli at the Fordham Institute has a list of Census tracts where the white share of the residents grew the most in percentage point terms from 2000 to 2010. Unfortunately, the population was under 1,000 in some tracts, so ignore the first (Columbia, SC), third (Chicago's Loop), fourth (Roanoke, VA), and eighth (Dallas). But the rest have decent sample sizes.


May 27, 2012

An old white lefty's view of where Obama is coming from

The late Robert Fitch, a veteran critic of New York real estate insiders, gave a speech to the Harlem Tenants Association on November 14, 2008 applying his brand of analysis to the history of Obama's rise in Chicago. 
In fact, as Obama knows very well, for most of the last two decades in Chicago there’s been in place a very specific economic development plan. The plan was to make the South Side like the North Side. Which is the same kind of project as making the land north of Central Park [i.e., Harlem] like the land south of Central Park. The North Side is the area north of the Loop—Chicago’s midtown central business district—where rich white people live; they root for the Cubs. Their neighborhood is called the Gold Coast. For almost a hundred years in Chicago, blacks have lived on the South Side ...
And in the 1980s, the argument began to be made that the public housing needed to be demolished and the people moved back into private housing. For a while, the election of the city’s first black Mayor, Harold Washington, blocked the demolition. But Washington died of a heart attack while in office, and after a brief interregnum, the Mayor’s office was filled in 1989 by Richard M. Daley—whose father had carried out the first urban renewal. Daley was his father’s son in many ways. By 1993, with subsidies from the Clinton Administration’s HOPE VI program, the public housing units began to be destroyed. And by 2000 he’d put in place something called The Plan for Transformation. It targeted tens of thousands of remaining units. 
With this proviso: That African Americans had to get 50% of the action—white developers had to have black partners; there had to be black contractors. And Daley chose African Americans—as his top administrators and planners for the clearances, demolition and re-settlement. African Americans were prominent in developing and rehabbing the new housing for the refugees from the demolished projects—who were re-settled in communities to the south like Englewood, Roseland and Harvey. Altogether the Plan for Transformation involved the largest demolition of public housing in American history, affecting about 45,000 people—in neighborhoods where eight of the 20 poorest census tracts in the U.S. were located. 
But what does this all have to do with Obama? Just this: the area demolished included the communities that Obama represented as a state senator; and the top black administrators, developers and planners were people like Valerie Jarrett—who served as a member of the Chicago Planning Commission. And Martin Nesbitt who became head of the CHA. Nesbitt serves as Obama campaign finance treasurer; Jarrett as co-chair of the Transition Team. The other co-chair is William Daley, the Mayor’s brother and the Midwest chair of JP Morgan Chase—an institution deeply involved in the transformation of inner-city neighborhoods thorough its support for—what financial institutions call “neighborhood revitalization” and neighborhood activists call gentrification. 

William Daley went on to serve as Obama's second chief of staff, following Rahm Emmanuel, who is now mayor of Chicago.
If we examine more carefully the interests that Obama represents; if we look at his core financial supporters; as well as his inmost circle of advisors, we’ll see that they represent the primary activists in the demolition movement and the primary real estate beneficiaries of this transformation of public housing projects into condos and townhouses: the profitable creep of the Central Business District and elite residential neighborhoods southward; and the shifting of the pile of human misery about three miles further into the South Side and the south suburbs. 
Obama’s political base comes primarily from Chicago FIRE—the finance, insurance and real estate industry. And the wealthiest families—the Pritzkers, the Crowns and the Levins. But it’s more than just Chicago FIRE. Also within Obama’s inner core of support are allies from the non-profit sector: the liberal foundations, the elite universities, the non-profit community developers and the real estate reverends who produce market rate housing with tax breaks from the city and who have been known to shout from the pulpit “give us this day our Daley, Richard Daley bread.” Aggregate them and what emerges is a constellation of interests around Obama that I call “Friendly FIRE.” Fire power disguised by the camouflage of community uplift; augmented by the authority of academia; greased by billions in foundation grants; and wired to conventional FIRE by the terms of the Community Reinvestment Act of 1995. …
Yes, Obama worked with Ayers, but not the Ayers who blew up buildings; but the Ayers who was able to bring down $50 million from the Walter Annenberg foundation, leveraging it to create a $120 million a non-profit organization with Obama as its head. Annenberg was a billionaire friend of Ronald Reagan and Margaret Thatcher. Why would he give mega-millions to a terrorist? Perhaps because he liked Ayers’ new politics. Ayer’s initiative grew out of the backlash against the 1985 Chicago teachers’ strike; his plan promoted “the community” as a third force in education politics between the union and the city administration. Friendly FIRE [i.e., liberal, multiracial Finance, Insurance, and Real Estate interests] wants the same kind of education reform as FIRE: the forces that brought about welfare reform have now moved onto education reform and for the same reason: crippling the power of the union will reduce teachers’ salaries, which will cut real estate taxes which will raise land values. 
Is Obama a minion of Richie Daley? It’s true that Obama has never denounced Daley. He actually endorsed him for Mayor in 2007. Even after federal convictions of Daley’s top aides. After the minority hiring scandals. And after the Hired Truck scandal which showed that the Daley machine shared its favors with The Outfit. But the Daley dynasty has expanded far beyond wiseguy industries. The Mayor’s brother, William Daley, who served on Obama’s transition team, also serves now as a top executive of J.P. Morgan Chase. He heads the Midwest region. And chairs J.P. Morgan Chase Foundation, the core of friendly FIRE. Here’s an excerpt from a recent report: "…[we] achieved significant progress toward our 10-year pledge to invest $800 billion in low- and moderate income communities in the U.S.—the largest commitment by any bank focused on mortgages, small-business lending and community development. In 2006, we committed $87 billion, with total investment to date of $241 billion in the third year of the program. Played a leadership role in the creation of The New York Acquisition Fund, along with 15 lenders and in conjunction with six foundations and the City of New York. The Fund is a $230 million initiative to finance the acquisition of land and buildings to be developed and/or preserved for affordable housing.“ 
It’s also true that key Black members of the Obama inner circle are Daley Administration alumnae—but they’ve moved up—now they’re part of Chicago FIRE. Like Martin Nesbitt. Obama is Nesbitt’s son’s godfather. He’s the African American chairman of the CHA. But his principal occupation is the vice presidency of the Pritzker Realty group. Although they’re not well known outside of Chicago, the Pritzkers rank among the richest families in the U.S. There are ten Pritzkers among the Forbes 400: Thomas is the richest at2.3 billion. Anthony and J.B. are next at $2.2 billion; Penny in fourth, at $2.1 billion—Daniel, James, Gigi, John, Karen, and Linda weigh in with $1.9 billion. Penny is finance chair of the Obama campaign. Martin is the treasurer. 

Daley saw Obama as a potential rival for the mayor's office. After Daley brushed aside Rep. Bobby Rush's challenge for his job in 1999, Daley turned around and provided some quiet aid to Rush in 2000 to help turn back Obama's challenge to Rush. Daley saw Rush, a former Black Panther, as easy to beat, but saw Obama as potentially a greater long term challenge.
Penny Pritzker herself has had a rocky career as a commercial banker. In 1991, she founded something called the Superior Bank of Chicago which pioneered in sub-prime lending to minorities. Superior was an early casualty of the sub-prime meltdown, though, crashing in 2001 when it was seized by the FDIC. Depositors filed a civil suit against Penny charging that Superior was a racketeering organization. The government charged that Superior paid out hundreds of millions of dividends to the Pritzkers and another family while the bank was essentially broke. There was a complex settlement in which the Pritzkers were forced to pay hundreds of millions in penalties; but the agreement contained provisions that may enable the Pritzkers to earn hundreds of millions. Notwithstanding the Superior bank disaster, Penny is being touted as Obama’s next Secretary of Commerce. 
Valerie Jarrett is another black real estate executive. Described as “the other side of Barack’s brain,” she also served as finance chair during his successful 2004 U.S. Senate campaign. Jarrett was Daley’s deputy chief of staff – that was her job when she hired Michelle Obama. Eventually Daley made her the head of city planning. But Jarrett doesn’t work for Daley anymore. She’s CEO of David Levin’s Habitat—one of the largest property managers in Chicago—and the court-appointed overseer of CHA projects. Habitat also managed Grove Parc, the scandal-ridden project in Englewood that left Section 8 tenants, mostly refugees from demolished public housing projects, without heat in the winter but inundated with rats. Grove Parc was developed by Tony Rezko, who’s white. And his long-time partner Allison Davis, who’s black. 
Let’s look at Rezko and then Davis. It was Rezko’s ability to exploit relationships with influential blacks—including Muhammad Ali—that enabled him to become one of Chicago’s preeminent cockroach capitalists.

Rezko was Ali's business manager in the 1980s because he was the business manager for the Muhammad family behind the Nation of Islam.
Altogether, Rezko wound up developing over 1,000 apartments with state and city money. There was more to the Obama-Rezko relationship than the empty lot in Kenwood. Rezko raised over $250,000 for Obama’s state senate campaign. While Obama was a state senator he wrote letters in support of Rezko’s applications for development funds. But Obama ignored the plight of Rezko’s tenants who complained to Obama’s office. Rezko’s Grove Parc partner, Allison Davis, was a witness in the Rezko trial, he’s pretty radioactive too. But you could see why Rezko wanted to hook up with him. 
Davis was the senior partner in Davis Miner Barnhill & Galland, a small, black law firm, where Obama worked for nearly a decade. As the editor of the Harvard Law Review, Obama could have worked anywhere. Why did he choose the Davis firm? Davis had been a noted civil rights attorney and a progressive critic of the first Daley machine. But in 1980 Davis got a call from the Ford Foundation’s poorly known, but immensely influential, affiliate LISC—the Local Initiatives Support Corporation—that had just been founded. LISC, whose present chair is Citigroup’s Robert Rubin, connects small, mainly minority community non-profits with big foundation grants and especially with bank loans and tax credit-driven equity. LISC wanted to co-opt Davis in their ghetto redevelopment program. He agreed and the Davis firm came to specialize in handling legal work for non-profit community development firms. Eventually Davis left the firm to go into partnership with Tony Rezko. Meanwhile, Obama did legal work for the Rezko-Davis partnership. And for Community Development Organizations like Woodlawn Organization. 
In 1994, the LA Times reports, Obama appeared in Cook County court on behalf of Woodlawnn Preservation & Investment Corp., defending it against a suit by the city, which alleged that the company failed to provide heat for low-income tenants on the South Side during the winter. There were several cases of this type, but as the Times observes, Obama doesn’t mention them in Dreams from My Father. In the 1960s, under the leadership of Arthur M. Brazier, Bishop of the Apostolic Church of God, Woodlawn gained a reputation as Chicago’s outstanding Saul Alinsky-stylec ommunity organization. Mainly, TWO [The Woodlawn Organization] battled the University of Chicago’s urban renewal program. But gradually, Brazier’s political direction changed. Now TWO is partnering with UC in efforts to gentrify Woodlawn. When Barack Obama left Jeremiah Wright’s church, he switched to Brazier’s Apostolic Church of God.

I don't believe that's fully true.
Brazier is typical of a much larger group—real estate reverends—who play the Community Development game and in the process have acquired huge real estate portfolios. But it’s really a national phenomenon. Here in New York we have Rev. Calvin Butts whose church has a subsidiary, the Abyssinian Development Corp. In partnership with LISC, the ADC now boasts a portfolio of $500 million in Harlem property alone. Rev. Floyd Flake of the Allen African Methodist Episcopal Church in Jamaica, Queens has a sizeable portfolio of commercial property too. Chicago’s disciples of development include Wilbur Daniel. He’s the Pastor of Antioch Missionary Baptist Church in Englewood who really did exclaim “Give us this day our Daley bread,” meaning free land and free capital for real estate development. Daniel’s prayers were answered in 2001, when with Daley’s help, Antioch was chosen to be the lead church in Fannie Mae’s $55 billion House Chicago plan for the redevelopment of the South Side. How has Obama earned the support and allegiance of friendly FIRE? Where does he stand on the Plan for Transformation? 
Generally speaking, he’s been careful not to leave too many footprints. If you google Obama and public housing, nothing comes up. But in 1995, a year before he ran successfully for state senate seat from South Side, in Dreams from My Father he wrote about his encounters with Rev. Jeremiah Wright. Obama says he was impressed by Wright’s emphasis on the unity of the black community. But he’s a little skeptical of too broad a unity; of achieving unity without conflict. He says, “Would the interest in maintaining such unity allow Reverend Wright to take a forceful stand on the latest proposals to reform public housing?” Here he’s referring to Clinton’s Hope VI—that provided matching federal money for the demolition of public housing. And the corresponding local initiatives, which culminated in the Plan for Transformation. “And if men like Reverend Wright failed to take a stand, if churches like Trinity refused to engage with real power and risk genuine conflict, then what chance would there be in holding the larger community intact?” 
I have to stop now and put Karnak’s envelope to my forehead. What we see is that the Chicago core of the Obama coalition is made up of blacks who’ve moved up by moving poor blacks out of the community. And very wealthy whites who’ve advanced their community development agenda by hiring blacks. Will this be the pattern for the future in an Obama administration? I can’t read the envelope. But I do believe that if we want to disrupt the pattern of the past we have to make some distinctions: between the change they believe in and the change we believe in; between our interests and theirs; between a notion of community that scapegoats the poor and one that respects their human rights—one of which is not to be the object of ethnic cleaning. Between Hope VI and genuine human hope.

Putting this in a larger perspective, it's reasonable to believe that Obama was drawn to Chicago in 1985 by the excitement of the Council Wars racial struggle between Mayor Harold Washington and the retrograde white leader Fast Eddie Vrodolyak in what seemed like a zero sum racial battle. But Obama found, when he finally got to know real life poor blacks in 1985-1988, that they weren't as uplifting as he had assumed from watching PBS fund-raising documentaries about the Civil Rights era. But he slowly started to realize that who he really liked were affluent, well-educated blacks. So, he bailed for Harvard Law School, intending to come back and lead blacks back to power in the mayor's office.

Over time, however, Richie Daley became mayor and he was more than happy to cut reasonable blacks in on the profits that could be made by clearing out Cabrini Green and the like, just as long as they'd play ball with Friendly FIRE. Michelle Obama had a wealth of contacts -- she'd been Jesse Jackson's babysitter, she worked for Daley's deputy Valerie Jarrett, and she liked money -- and Barack Obama was naturally drawn into this little world centered around Jarrett and Penny Pritzker.

On the other hand, let me point out a subtle distinction. I suspect that the secret end game envisioned by the more hardheaded liberal white leaders (I'm looking at you, Mayor Emmanuel) is likely not just to yuppify the Near South Side and move poor blacks to the Far South Side of Chicago where they can still vote in Chicago elections. Instead, the hard men want to use Section 8 rental vouchers to send poor blacks packing clear out of Chicago to hickvilles like Champaign-Urbana, while middle class blacks move themselves to inner ring suburbs, leaving only Obama-like upscale blacks in Chicago. This would slowly destroy black political power in Chicago, leaving behind only token affluent blacks and pockets of black poverty around the worst toxic waste sites in the industrial deep South Side.

For example, last year, Mayor Emmanuel's Chicago Police Department sent a 40-man SWAT team into just about the last two ungentrified houses in Lincoln Park, only seven blocks from Penny Pritzker's new mansion, to find pretexts for evicting the owners, an extended family of poor blacks.

Assume you are Mayor Emmanuel, and assume you want two decades or so in office like both Daleys got. Your job is going to be a lot more fun in 20 years if Chicago follows Manhattan and D.C. in whitifying rather than go down the path of Detroit and Cleveland.

But, as of 1995, Obama and his spiritual adviser, Jeremiah Wright, objected to what was looming on the horizon as a remote possibility: the more massive economic cleansing of blacks from not just the good parts of Chicago like Cabrini Green and the South Lakefront, but from the inland parts, where Wright's church was and where Obama had done his rather feckless community organizing.

Wright is quoted in Dreams, and Obama echoed Wright's argument in a 1995 Chicago Reader interview, that middle class blacks shouldn't flee to the suburbs to keep their sons from being gunned down. They should make a stand in Chicago (at least farther south than the potentially immensely valuable land around the loop and lakefront). Obama said in 1995:
"The right wing talks about this but they keep appealing to that old individualistic bootstrap myth: get a job, get rich, and get out." ... 

So, Obama here is agreeing with Wright's stance against black flight to the suburbs, which in Dreams from My Father is symbolized by Wright telling his secretary not to move to the suburbs to keep her son safe. But, as Fitch suggests, Obama's opaque statement in Dreams -- “And if men like Reverend Wright failed to take a stand, if churches like Trinity refused to engage with real power and risk genuine conflict, then what chance would there be in holding the larger community intact?” -- can be interpreted to mean that Obama wants to play a dual game that Rev. Wright is too stubborn even though it would be in his own interests: Obama wants to play palsy-walsy with people like the Pritzkers, but also to make sure that public housing project blacks are only relocated as far as the South Side, where they can still vote and still attend Rev. Wright's church, not all the way to exurban hickvilles like Round Lake Beach.

Obama told the Reader in 1995:
"I want to do this as much as I can from the grass-roots level, raising as much money for the campaign as possible at coffees, connecting directly with voters," said Obama. "But to organize this district I must get known. And this costs money. I admit that in this transitional period, before I'm known in the district, I'm going to have to rely on some contributions from wealthy people—people who like my ideas but who won't attach strings. This is not ideal, but it is a problem encountered by everyone in their first campaign.
"Once elected, once I'm known, I won't need that kind of money, just as Harold Washington, once he was elected and known, did not need to raise and spend money to get the black vote."
Obama took time off from attending campaign coffees to attend October's Million Man March in Washington, D.C. His experiences there only reinforced his reasons for jumping into politics.
"What I saw was a powerful demonstration of an impulse and need for African-American men to come together to recognize each other and affirm our rightful place in the society," he said. "There was a profound sense that African-American men were ready to make a commitment to bring about change in our communities and lives.
"But what was lacking among march organizers was a positive agenda, a coherent agenda for change. ... 
"But cursing out white folks is not going to get the job done. Anti-Semitic and anti-Asian statements are not going to lift us up. We've got some hard nuts-and-bolts organizing and planning to do. We've got communities to build."

But, of course, in 2000, Obama's plan to follow Harold Washington's career path to the mayor's office by first getting elected to the House of Representatives was derailed by the whupping he got from ex-Black Panther Bobby Rush in black districts. When he recovered from his depression, he gerrymandered his district to include the rich white Gold Coast north of the Loop that, culturally, is his natural base. When Michelle threatened to leave him unless he came up with a workable career strategy, he gave up on winning major power in the callous world of Chicago politics, where voters expect their politicians to be more than just elegant symbols of the electorate's own refinement, but instead to deliver the goods. Obama thus reworked his goals to winning statewide and even national office by taking his ethereal everything-to-everybody act on the road to the more naive parts of white America.

One big question is what precisely was Obama's role in real estate driven changes in Chicago that Fitch outlines. The answer appears to be: eh, not that much. He was there, he looked dignified, he uttered sonorous speeches, he was friends with the players, he tried to foster compromises that would advance the interests of the rich, white and black, without damaging the interests of demagogues like Rev. Wright by driving blacks all the way out of Chicago.

But, as far as I can tell, he doesn't appear to have been a major player himself. He doesn't seem to have been a driving force in the dealmaking. Was this out of scrupulousness (ethical, racial, or careerist)? Or is Obama, on the whole, just more decorative than dynamic?

Postscript:

To flesh out this subtle point about black flight to the suburbs, it's worth quoting from Dreams from My Father at length about Obama's first meeting with Rev. Jeremiah Wright:
Eventually a pretty woman with a brisk, cheerful manner came up and introduced herself as Tracy, one of Reverend Wright’s assistants. She said that the reverend was running a few minutes late and asked if I wanted some coffee. As I followed her back into a kitchen toward the rear of the church, we began to chat, about the church mostly, but also a little about her. It had been a difficult year, she said: Her husband had recently died, and in just a few weeks she’d be moving out to the suburbs. She had wrestled long and hard with the decision, for she had lived most of her life in the city. But she had decided the move would be best for her teenage son. She began to explain how there were a lot more black families in the suburbs these days; how her son would be free to walk down the street without getting harassed; how the school he’d be attending had music courses, a full band, free instruments and uniforms. 
“He’s always wanted to be in a band,” she said softly. 
As we were talking, I noticed a man in his late forties walking toward us. He had silver hair, a silver mustache and goatee; he was dressed in a gray three-piece suit. He moved slowly, methodically, as if conserving energy, sorting through his mail as he walked, humming a simple tune to himself. 
“Barack,” he said as if we were old friends, “let’s see if Tracy here will let me have a minute of your time." ...
“Some people say,” I interrupted, “that the church is too upwardly mobile." 
The reverend’s smile faded. “That’s a lot of bull,” he said sharply. “People who talk that mess reflect their own confusion. They’ve bought into the whole business of class that keeps us from working together. Half of ’em think that the former gang-banger or the former Muslim got no business in a Christian church. Other half think any black man with an education or a job, or any church that respects scholarship, is somehow suspect. 
“We don’t buy into these false divisions here. It’s not about income, Barack. Cops don’t check my bank account when they pull me over and make me spread-eagle against the car. These miseducated brothers, like that sociologist at the University of Chicago [William Julius Wilson], talking about ‘the declining significance of race.’ Now, what country is he living in?” 
But wasn’t there a reality to the class divisions, I wondered? I mentioned the conversation I’d had with his assistant, the tendency of those with means to move out of the line of fire. He took off his glasses and rubbed what I now saw to be a pair of tired eyes. 
“I’ve given Tracy my opinion about moving out of the city,” he said quietly. “That boy of hers is gonna get out there and won’t have a clue about where, or who, he is." 
“It’s tough to take chances with your child’s safety." 
“Life’s not safe for a black man in this country, Barack. Never has been. Probably never will be." 
A secretary buzzed, reminding Reverend Wright of his next appointment. We shook hands, and he agreed to have Tracy prepare a list of members for me to meet. Afterward, in the parking lot, I sat in my car and thumbed through a silver brochure that I’d picked up in the reception area. It contained a set of guiding principles-a “Black Value System”-that the congregation had adopted in 1979. ... There was one particular passage in Trinity’s brochure that stood out, though, a commandment more self-conscious in its tone, requiring greater elaboration. “A Disavowal of the Pursuit of Middleclassness,” the heading read. “While it is permissible to chase ‘middleincomeness’ with all our might,” the text stated, those blessed with the talent or good fortune to achieve success in the American mainstream must avoid the “psychological entrapment of Black ‘middleclassness’ that hypnotizes the successful brother or sister into believing they are better than the rest and teaches them to think in terms of ‘we’ and ‘they’ instead of ‘US’!”

It's informative to quote that "value" in full from Trinity's website, much of which Obama left of Dreams:
8. Disavowal of the Pursuit of “Middleclassness.” Classic methodology on control of captives teaches that captors must be able to identify the “talented tenth” of those subjugated, especially those who show promise of providing the kind of leadership that might threaten the captor’s control. 
Those so identified are separated from the rest of the people by: 
Killing them off directly, and/or fostering a social system that encourages them to kill off one another. 
Placing them in concentration camps, and/or structuring an economic environment that induces captive youth to fill the jails and prisons. 
Seducing them into a socioeconomic class system which, while training them to earn more dollars, hypnotizes them into believing they are better than others and teaches them to think in terms of “we” and “they” instead of “us.” 
So, while it is permissible to chase “middleclassness” with all our might, we must avoid the third separation method – the psychological entrapment of Black “middleclassness.” If we avoid this snare, we will also diminish our “voluntary” contributions to methods A and B. And more importantly, Black people no longer will be deprived of their birthright: the leadership, resourcefulness and example of their own talented persons.

Keep in mind that Senator Barack Obama donated $26,770 to Jeremiah Wright's church in 2007, according to his tax return. That's while he was running for President.

How do we make sense of all of this seemingly conflicting information about Obama? I suspect the simplest answer is that Obama never quite made sense out of it all either.

May 8, 2012

Foote: 12 reasons why the Mortgage Meltdown wasn't an Inside Job

Economist Christopher Foote of the Boston Fed, who debunked the Freakonomics abortion-cut-crime theory in late 2005 by pointing out that Steven D. Levitt's results stemmed from a couple of dumb mistakes in his programming, and two colleagues have a paper arguing against the mortgage meltdown being, in the words of the Oscar-winning documentary, an Inside Job (or, at least, of misaligned incentives):
Why Did So Many People Make So Many Ex Post Bad Decisions? The Causes of the Foreclosure Crisis 
Christopher L. Foote, Kristopher S. Gerardi, and Paul S. Willen 
Abstract: 
This paper presents 12 facts about the mortgage market. The authors argue that the facts refute the popular story that the crisis resulted from financial industry insiders deceiving uninformed mortgage borrowers and investors. Instead, they argue that borrowers and investors made decisions that were rational and logical given their ex post overly optimistic beliefs about house prices. The authors then show that neither institutional features of the mortgage market nor financial innovations are any more likely to explain those  distorted  beliefs than they are to explain the Dutch tulip bubble 400 years ago. Economists should acknowledge the limits of our understanding of asset price bubbles and design policies accordingly.

Foote et al presents 12 "myths" about the mortgage meltdown that they say don't hold up to scrutiny. While I find this to be an excellent framework for thinking about causes of the mortgage disaster, personally, I find some of the myths seems pretty reasonable even after reviewing Foote's graphs. 
For a concrete example, consider the size of required downpayments. Morgenson and Rosner (2011) write that because of the Clinton Administration’s emphasis on homeownership:
[I]n just a few short years, all of the venerable rules governing the relationship between borrower and lender went out the window, starting with the elimination of the requirements that a borrower put down a substantial amount of cash in a property (Morgenson and Rosner 2011, p. 3).
It is true that large downpayments were once required to purchase homes in the United States. It is also true that the federal government was instrumental in reducing required downpayments in an effort to expand homeownership. The problem for the bad government theory is that the timing of government involvement is almost exactly 50 years off. The key event was the Servicemen’s Readjustment Act of 1944, better known as the GI Bill, in which the federal government promised to take a first-loss position equal to 50 percent of the mortgage balance, up to $2,000, on mortgages originated to returning veterans. The limits on the Veteran’s Administration (VA) loans were subsequently and repeatedly raised, while similar guarantees were later added to loans originated through the Federal Housing Administration (FHA). 

Okay, but here's the graph they use to document this assertion, showing Loan to Value percentages in Massachusetts over the years. Notice anything?
Yes, the aqua LTV 100 (i.e., zero down or even cash back) spiked from about 8 percent in 2002 to 24 percent in 2006 at the peak of the bubble.  

Here's a graph from USA Today that I found at Dr. Housing Bubble, showing California's similar spike in zero down home-buying:
The First-Time Buyers (41% in 2006) are especially important because that's mostly where new demand comes from, and incremental demand is much of what drives up prices.

In general, Foote et al frequently argue that because various policies or conditions existed well before the crisis, such as less than 20% downpayments, then loosening downpayments didn't contribute much to the bubble and bust. But, that's overlooking the famous Boiling Frog problem: turning up the heat gradually might not cause a noticeable problem for the frogs in the pot for awhile, but eventually it does. 

Moreover, in the case of lower and lower downpayments, there appears to have been a phase shift when requirements hit zero down. A 3.5% downpayment required for a VA or FHA loan might not sound like much, but cash on the barrel-head scares off the total riff-raff and conmen, plus the government regulations lessened fraud in appraisals and the like. The zero down loans that George W. Bush greenlighted to federal regulators in his October 15, 2002 speech at the White House Conference on Increasing Minority Homeownership were a not insignificant cause of the Bubble.

Still, I would agree with Foote that Tulip Mania-style overoptimism is a big part of the explanation. But where did this over-optimism come from? 

I woud argue that a host of evidence, such as the biggest appreciation and biggest losses happening in the four Sand States of California, Nevada, Arizona, and Florida, that "diversity" played a huge role, especially in the ban on critical thinking about diversity that has been inculcated in the U.S. An immigration bubble preceded and then egged on a housing bubble, and nobody was supposed to say anything bad about it, especially not in internal company documents that could get your firm in trouble for a discrimination lawsuit.

It's really asking a lot of people to tell them over and over that only evil ignorant racist losers notice patterns and then expect them to notice the patterns and respond intelligently.

April 15, 2012

The Demand for Black Rage

Last summer, I wrote about Bruce Norris's play about real estate and race in Chicago, Clybourne Park. (Here's an interview with Norris.) The NYT has an article about rehearsals for its opening on Broadway that unintentionally makes an important point about how Nice White People want middle class African-Americans to be driven to the edge of violence just by the thought of things that happened to blacks before they were born. 
Seven Actors Face a Big Challenge: He Just Said That? 
By PATRICK HEALY 
THE seven actors in the new Broadway play “Clybourne Park” were mostly strangers to one another when they met for the first table read of this stinging comedy by Bruce Norris in January 2010. They had no real comfort zone among them as they began to wade through the mudslide of racial indignities set off by white characters arguing about integration in 1959 Chicago. 
Midway through Act I, for instance, the character Jim — a white minister in the middle-class neighborhood of the title — becomes tongue-tied asking if “Negro” is more courteous than “colored.” Later a white homeowner named Karl Lindner questions Francine, a black maid, if she ever skis; after a stunned double-take, she says no. Lindner jabbers that “there is just something about the pastime of skiing that doesn’t appeal to the Negro community.” 
The scenes were so charged that the play’s director, Pam MacKinnon, decided she would never rehearse Act I for two days in a row without interspersing the second act, which is set in 2009 and includes new black characters who step up to the fight.
Even so, some actors asked for breaks to blow off steam. “If somebody hurts your feelings, you remember that feeling — it lives in you,” recalled Crystal A. Dickinson, who plays the maid, during an interview with the cast on the set of the play. “Now imagine that feeling 17 times in a row.” 
A likely contender this June for the Tony Award for best play, “Clybourne Park” has had an unusually long and rough road to Broadway, where it opens on Thursday. The cast members had to come to terms with the discomfiting contradictions in their characters; Mr. Norris won a Pulitzer Prize for the Off Broadway production of the play and waited to see if it would reach Broadway; and this new production nearly collapsed because of a falling-out between him and a former producer. The head-spinning events often seemed of a piece with the whiplash from the revelations and did-he-just-say-that? dialogue in the show itself. 
Typical of Mr. Norris’s style, the play takes place in two time periods. The Eisenhower-era Act I centers on whites preparing for the arrival of a black family on the block — and not just any black family, but the Youngers of Lorraine Hansberry’s landmark 1959 play “A Raisin in the Sun,” in which the move to Clybourne Park represents a dream fulfilled. Act II is set 50 years later, in the same house, as white yuppies seek to gentrify a neighborhood that has become a black enclave. (The same actors play different characters in each act.) 
... That the production survived is joy enough for the actors to regard the emotional rigors of the play, during rehearsal two years ago as well as now, as worth the trouble. As they stretched out on the sofas and armchairs of 406 Clybourne Street on the stage of the Walter Kerr Theater, the cast even struggled to recall some of the earlier touchy moments — not for a lack of memories but because the relief of reaching Broadway trumped them.

In other words, the actors couldn't really remember any of this until the NYT reporter worked hard to dredge up largely forgotten memories. Or perhaps the actors made up these memories to give the NYT what it wanted? These are professional Broadway actors, and it was still evidently hard for them to initially conjure up what the reporter wanted from them.
... Perhaps the most vicious lines in the play are delivered by Mr. Shamos, both as Karl (the only “Clybourne” character actually in “Raisin”) and as Lindsey’s husband, Steve. During the pre-Broadway tryout of this production in Los Angeles this winter Mr. Shamos would hear gasps and even hisses at some of Karl’s lines, especially during matinee performances attended by school groups. After the first preview performances on Broadway last month some theatergoers moaned when the actors paused after a particularly harsh line by Karl. The next day Ms. MacKinnon, the director, cut the pause because she didn’t want the audience to have a chance to turn against the character quite yet. 
Mr. Shamos said he was mostly able to shake off the audience reaction now but recalled feeling relieved during the early days at Playwrights when the actors would finish difficult scenes or go out to eat or get smoothies together. Rarely, though, would rehearsals or meals become consciousness-raising sessions where the actors talked at length about what the play brought up from their own lives.
“I think it’s good that we never tried to overexplain why we felt a line was offensive or overanalyze our reactions to the work,” he said. “We just wanted to be the purest communicators of the play.”

Basically, this racial anger among the black cast members didn't really happen, but NYT subscribers want to believe it did.

As Orwell, liked to say, who controls the past controls the future. My in-laws were nice white liberals who tried to make integration work, not fleeing the West Side of Chicago until their children had been mugged three times. By trying, they wound up losing half their net worth and my late father-in-law ended up with a 126 mile commute to his job in the orchestra at the Chicago Opera House. But that kind of history is unappreciated, to say the least. Nobody wants to hear about it, and especially nobody wants to hear any hard feelings about it.

This is particularly funny because the playwright himself identifies with the white people who were driven from their Chicago neighborhood:
ED: Why did the play coalesce around A Raisin in the Sun? 
BN: Well, as a child, when I saw Raisin my  point of identification with that play was the character of Karl Lindner. He’s the white man who comes to ask the Youngers not to move into Clybourne Park. That’s the character that appears in the first act of my play Clybourne Park.When I became attracted to that play, I always thought of myself as the antagonist, not as the hero. 
ED: You identified with Karl? 
BN: I identified with Karl and I identified with all of my culture, the people that I grew up around, as the people of Clybourne Park who did not want integration.

April 11, 2012

George Lucas to show Marin dark side of the Force

George Lucas of Star Wars fame has been struggling to build a big movie studio layout in Marin County, north of San Francisco, for decades. Now, 99% of the counties in the U.S. would be happy to have Lucasfilm create hundreds of mostly lavishly-paid jobs, but Marin is very much in the 1%. The Marin Independent-Journal reports:
Lucasfilm pulled the plug on its bid to develop the old Grady Ranch on Tuesday, citing bitter opposition from neighbors and regulatory delays, and said it intends to sell the land for a low-income subdivision development.

"Low-income," huh?
"The level of bitterness and anger expressed by the homeowners in Lucas Valley has convinced us that, even if we were to spend more time and acquire the necessary approvals, we would not be able to maintain a constructive relationship with our neighbors," the firm owned by billionaire filmmaker George Lucas added. 
"We love working and living in Marin, but the residents of Lucas Valley have fought this project for 25 years, and enough is enough," ... 
"We hope we will be able to find a developer who will be interested in low-income housing since it is scarce in Marin. If everyone feels that housing is less impactful on the land, then we are hoping that people who need it the most will benefit."

Take that NIMBYs! says George. He should check in with the Obama Administration, which says that Marin County is violating the Civil Rights Act by not building enough low-income housing for minorities. Marin County voters gave 78% of their vote to Obama in 2008, so they can hardly complain, right? So, think big, George: not semi-detached houses or condos, but Section 8!

April 3, 2012

Clintons' Chappaqua segregating minorities

There's nothing like thinking about local real estate to turn the most liberal into race realists:
Despite 2009 Deal, Affordable Housing Roils Westchester 
By PETER APPLEBOME 
WHITE PLAINS — When Westchester County agreed to a far-reaching affordable housing agreement in 2009, federal officials heralded a new era for desegregation in communities around the country. 
“This is consistent with the president’s desire to see a fully integrated society,” said Ron Sims, then the deputy secretary with the Department of Housing and Urban Development. “Until now, we tended to lay dormant. This is historic, because we are going to hold people’s feet to the fire.” 
But rather than signaling a transformative moment, the settlement has led to an often rancorous tug of war, complicated by politics and real estate prices in one of the nation’s wealthiest areas, where the residents include notables like Bill and Hillary Rodham Clinton and Gov. Andrew M. Cuomo. The result is raising questions about Westchester’s commitment to complying with the agreement and just what a “fully integrated society” might mean, cost and look like in a largely developed suburban county. ...  
Westchester is ahead of schedule in building the 750 affordable residences required by the settlement, but there are complaints that rather than representing true economic and racial integration, many of the housing units are far from the heart of affluent white communities. Westchester and HUD remain at a testy impasse over the county’s responsibility to ensure that its towns and villages end exclusionary zoning practices.

The deal was that Westchester County took $52 million in federal funds for affordable housing, spent them in low rent parts of the county, and now the feds want to use that to force the high rent municipalities within the County to diversify.
After a federal judge ruled that the county had “utterly failed” to meet its obligations, it agreed to the settlement. The deal required the county to spend $51.6 million to build 750 units of affordable housing in 31 overwhelmingly white communities within seven years, and to market those units to nonwhites aggressively. ... The settlement also required the county to “use all available means as appropriate” to promote nondiscriminatory housing, including pushing towns and villages to alter zoning rules that discouraged the construction of apartments. Pound Ridge, for example, covers 23.5 square miles, but no land is zoned for multifamily use.

... The monitor and HUD had argued that Mr. Astorino violated the settlement when he vetoed the bill, which would have prohibited landlords from discriminating against tenants who receive housing subsidies. ... 
Craig Gurian, executive director of the group that sued the county, said much of the housing that had been approved or proposed was adjacent to low-income communities in neighboring towns or otherwise isolated from the rest of the wealthier community. 
The proposal for Chappaqua, home of the Clintons, calls for what would be the tallest building in the town, dropped into a no-man’s land between railroad tracks, a highway and a bridge. New housing completed in Rye hugs the border of largely minority Port Chester, across two busy highways from the rest of Rye. Forty-six units scheduled for Larchmont sit in a virtually unpopulated block behind a strip mall, squeezed in against railroad tracks and Interstate 95.

Not surprisingly, New York Times readers have a lot to say on this article. One liberal reader even has started to get a clue about the high-low squeeze play against the middle in the name of diversity:

RMC 
NYC 
I live in Chappaqua, and will take bets that the "tallest building in town" will never get built. First, the NYT article neglects to mention that the railroad tracks run through the center of town. Residents of the proposed building would not be isolated from others in Chappaqua, since people live on both sides of the bridge that runs over the tracks. The building, however, would be a hideous eyesore that would blight what is in reality a small hamlet, not a "town." "Town" is three blocks long and one block wide. To build the proposed development would be like erecting a Levittown in Greenwich Village. 
Nor is Chappaqua opposed to racial diversity; on the contrary, this is a town of Democrats, and people welcome diversity. The problem is that the HUD settlement -- and I never thought I'd side with a Republican -- has brought every avaricious developer within 100 miles running into Westchester, shouting "racist" at anyone who opposes his or her aesthetically insensitive, environmentally unsafe, shoddy development plan. The Chappaqua proposal purports to comply with federal and state environmental regulations but, in a letter to our local online newsletter, newcastlenow.org, several local architects and lawyers pointed out numerous ways in which it does not. 
The HUD deal is a clumsy way of achieving social equality that has not promoted diversity, but rather left residents helpless in the face of greedy developers. It should be thrown out.


And here's a useful suggestion ...
Rich 
Reston, VA 
Or better yet, chop a couple of acres off the Clinton's estate in Chappaqua and put either 24 townhouses or an eight-story apartment on that site for affordable housing. With the Secret Service already there, there's even no need to burden Chappaqua with having to fund extra police. 
And it's all legal, thanks to the 2005 Supreme Court ruling in Kelo vs. City of New London that the government can seize private property when it benefits the public. 
A win-win for everyone -- problem solved!


March 13, 2012

Matthew Yglesias's "The Rent Is Too Damn High"

Please read my response to Mr. Yglesias' contention that he wasn't a victim of "Knockout Game" because he was only knocked down, not out, here.

I wrote on May 15, 2011 upon hearing of the beating:

I'm terribly sorry to hear about this crime. Yglesias should make sure to take it easy for a few days after being punched in the head in case there is some delayed reaction affecting his balance -- e.g., don't ride a bicycle in traffic.

Beyond physical injuries, well, I've never been the victim of street violence, but judging from the psychological trauma I've felt merely from being the victim of burglars -- the reminder of one's own insecurity, the insult to one's self-respect -- that aspect of crime shouldn't be overlooked. And being punched and kicked by strangers is far worse.

Like me, Yglesias greatly enjoys walking, and being mugged while out walking can ruin a wonderful hobby.

No details on the attackers, but, with no apparent monetary motive, this might have been a racial hate crime.

It will be interesting to see whether this despicable violence against perhaps the leading opinion journalist of his young generation creates much media attention, or whether it's dropped down the memory hole as too uncomfortable to think about. Yglesias, with his enthusiasm for promoting urban living and walkability, is a leading spokesman for a broad movement I feel warmly toward -- well-educated younger people who are attempting to reclaim urban areas for the urbane. But this crime against a public face of the movement -- while he was walking through an urban space, no less -- demonstrates the risks involved.

For more on whether this could be considered a racial hate crime, see my post of May 16, 2011.

May 16, 2011

Thinking about hate crimes

The apparent random racial beating over the weekend of Matthew Yglesias, perhaps the most influential political blogger of his generation, raises questions about what ought to be considered a hate crime.

There's a vast amount of confusion in our society because the megaphone is routinely seized by hate-filled pundits who denounce everybody they hate as being driven by hate. So, the concept of a "hate crime" is murky, to say the least.

But, society does have an interest in deterring through harsher penalties crimes not of passion but of premeditated malice, cold-blooded crimes that occur only because of animus toward groups. Quite possibly, "hate crimes" is the wrong term completely for these types of actions, but that seems to be what we are stuck with.

My view is that motivation for a crime should matter some in punishing the crime.

For example, by way of analogy, I particularly loathe witness-murdering.

Consider two homicides:

- A man comes home and finds another man in bed with his wife. In a jealous rage, he strikes the man with a blunt object. He immediately calls 9-11 and asks for an ambulance for his victim.

- Two men are robbing a liquor store with a confederate. One robber realizes that the lone customer in the store went to school with him and could identify him. He tells his colleague (in a conversation recorded on a hidden security camera's microphone) that because he already has two strikes against him, if that customer testifies, he'll go to jail for life. So, he then shoots the customer and the clerk to silence them. There are no other motives for the murders.

I think that in an era of long sentences, the death penalty can play a useful role in stigmatizing and deterring cold-blooded witness-murdering, but it wouldn't be right in the first case, a classic crime of passion.

Similarly, consider two crimes that might be subject to additional hate crime penalties:

- A man comes home and finds another man in bed with his wife. In a jealous rage, he calls her a "bitch" and punches her.

- Two men are sitting around bored and decide to go "polar bear hunting," planning to punch any random white man they see walking through their neighborhood in the back of the head, then kicking him.

Now, it's not uncommon for prosecutors to attempt to pile on hate crime penalties in cases where a member of a less legally privileged group uses, during a fit of rage, an epithet for a member of a more legally privileged group. But, clearly, the cuckolded man didn't sock his cheating wife because she was a woman, but because she was cheating. Punishing him extra for saying the epithet "bitch" is severely confusing cause and effect for no good purpose in deterring future violence.

In contrast, the second case is one that the law might well use additional penalties to deter because, like witness-murdering, it's rational and malign. There's no other motive for attacking a random white man other than the satisfactions of attacking a random white man.

Or consider, these two cases:

- Two men are sitting around talking angrily about their neighbor who dissed them yesterday and might be making time with one of the guys' woman. Then they see a man who kind of looks like the neighbor walking by in the dark. Enraged, and under incorrect apprehension of his identity, they punch random passerby Matthew Yglesias in the back of the head.

- Two men are sitting around bored and decide to go "polar bear hunting" and thus punch in the back of the head the first white guy they happen to see walking by, who happens to be Matthew Yglesias.

The first case seems to me like a pretty average screwed-up crime among the screwed-up classes, which should be punished in a pretty average fashion -- fairly harshly, according to my views, but there's no obvious reason for incremental penalties. It wouldn't be the kind of crime that strikes other as worth imitating.

The second case, however, seems like a classic racist hate crime. There was no motivation whatsoever for this violence to occur other than boredom and racial animus. Society has an interest in punishing more heavily in the name of deterrence otherwise pointless crimes carried out not in the heat of passion but with malice aforethought.

At minimum, society has an interest in keeping stuff like this from becoming fashionable. Say, or example, a third person videoed the attack on Yglesias, and the whole point of the attack was to have something cool to post on YouTube.

Granted, proving in court the lack of any other motive is often difficult, and so be it. Better ten guilty men go free and all that. But, it is reasonable to have the threat of additional penalties for violence carried out for rational but malign reasons, such as witness-murdering or polar bear hunting.

Of course, all this logic chopping isn't very relevant to how most people think about hate crimes, which is in Who-Whom terms. Matthew Yglesias is extremely well-plugged into the world of Washington punditry, but it doesn't occur to his peers that this attack on him could possibly be a hate crime ... because he's white.

From my review in Taki's Magazine:
On May 14, 2011, Matthew Yglesias, a prominent Washington, DC liberal blogger and proponent of urban living, was walking home alone after a dinner with fellow pundits when he became the victim of an apparent anti-white racial hate crime. In what sounds like a game of Knockout King or Polar Bear Hunting, “a couple of dudes ran up from behind, punched me in the head, then kicked me a couple of times before running off” without stealing anything. This shameful attack happened merely a mile north of the US Capitol Building. 
Four decades ago, a popular witticism was that a neoconservative was a liberal who had gotten mugged by reality. Today, the rules of crimethink have grown rigid enough that even getting mugged in reality doesn’t seem to have put much of a dent in Yglesias’s worldview, judging from his new e-book The Rent Is Too Damn High. ... Yglesias argues that if only real estate developers were freed to Build, Baby, Build, we would enjoy a low-rent golden age.

But, there's a problem with living in a low-rent neighborhood ...

Read the whole thing there.

February 17, 2012

A strange story

Here's an odd story from the BBC:
'Stolen' $9m jewels found in drawer 
Red faces over 'missing' jewels 
Five years after their disappearance, jewels thought stolen from the wife of the US ambassador to the Netherlands in 2006 have been found in the Hague. 
Dawn Arnall realised her 7m euro (£5.9m; $9.3m) gems were missing months after staying in a Dutch hotel. 
Unknown to her, the jewellery had been found and was held for safekeeping by the hotel, AFP reports, before being given to an employee as unclaimed. 
The employee, assuming the items were costume jewellery, forgot about them. 

Must be tasteful looking if everybody assumed they had to be costume jewelry.
Only after she recently found them in a drawer and took them to a jeweller for valuation did their true worth emerge. 
They were then handed in to police and have since been returned to the US. 
Mrs Arnall, whose husband Roland was the US ambassador to the country prior to his death in 2008, had received an insurance payout for her loss.

What adds interest to this was that subprime billionaire Roland Arnall, whom Bush had appointed Ambassador to the Netherlands for raising $12 million for him, who was the biggest donor to Arnold Schwarzenegger and, before him, Gray Davis, who co-founded the Simon Wiesenthal Center and the brow-beating Museum of Tolerance, was the founder of a couple of the biggest and worst subprime boiler rooms, Ameriquest and Argent. Previously, he had founded the notorious Long Beach Mortgage, which Washington Mutual bought.

In 2006, Arnall paid a $325 million fine to settle a lawsuit brought by 49 state attorneys general. Yet, Congress approved his nomination as ambassador. (Overall, states performed somewhat better in regulating subprime than feds, who mostly egged them on. The states were operating, on average, under older laws, while the feds were operating mostly under the U. of Chicago-style consensus that emerged over the last generation or so.) Here's Arnall's obituary by E. Scott Reckard of the L.A. Times, who covered subprime in real time better than anyone else. Roland invented the "stated income loan," which did so much to help people realize the American Dream.

His widow Dawn is being sued by his brother for $47.6 million. The brother claims that Roland claimed he was strapped for cash because of the $325 million fine.

I've never been tempted to write detective novels, because I have the world's worst criminal mind. I couldn't invent a scam to save my life. But, this jewelry discovery sounds like it would make a good opening chapter in a mystery.

In general, here we are five years down the road from the first subprime collapses, such as that of New Century Financial in February 2007. Has anybody tried to fictionalize the SoCal subprime scam artists yet?

February 9, 2012

Not getting the joke ...

As I was saying about David Brooks' recent "Flood the Zone" column, much of what appears in the New York Times these days is a lot funnier and makes more sense if you read it as if it were a parody that I had written. For example, this op-ed is full of facts straight from the pages of iSteve but processed through a terminally SWPLest mindset. If you read it as a covert anti-illegal immigration essay, it makes a lot more sense.
Designing a Fix for Housing 
By JEANNE GANG and GREG LINDSAY 
RECENT efforts to fix the housing market — including Thursday’s $26 billion settlement with five of the nation’s biggest banks — have focused purely on the financial aspects of the slump. A permanent solution, however, must go further than money to address issues that have been at the core of the crisis but have been wholly ignored: design and urban planning.
... Take Cicero, Ill., a Chicago suburb that we studied as part of a new exhibition on the housing crisis at the Museum of Modern Art. The town may be infamous as the base of Al Capone or the site of anti-integration protests in the 1950s and ’60s, but today 80 percent of its residents are Latino, half of them foreign born. 
Cicero is representative of a suburban transformation that went little noticed during the housing bubble and bust: suburbs have replaced inner cities as the destination of choice for new immigrants. 
Indeed, nearly half of all Hispanics now live in suburbs, and new arrivals favor them over cities by two to one. Immigrants are one reason the number of suburban poor climbed 25 percent nationwide between 2000 and 2008. They’re also why Cicero was hit so hard by the housing crisis, with 2,049 foreclosures in 2009 alone — the second highest in Illinois, after Chicago. 
Here’s where design comes in. Most of Cicero’s housing is detached, single-family homes. But these are too expensive for many immigrants, so five or six families often squeeze into one of Cicero’s brick bungalows. This creates unstable financial situations, neighborhood tensions and falling real estate values. 
Too often, we see such mismatches as a purely financial issue. But instead of forcing families to fit into a house, what if we rearranged the house to fit them? 
This doesn’t mean bulldozing Cicero’s housing stock. Instead, it means using existing, underused properties that might be renovated to provide a better fit. In Cicero’s case, that might mean turning to the scores of abandoned factories around it. 
Such buildings are often no man’s lands thanks to fears of industrial contamination, which have left older suburbs pockmarked by blight while jobs and homes sprawl outward. But new techniques like “phytoremediation” — using plants like poplar and willow trees to absorb toxins — open the door to safer, less-expensive rehabilitation. 
What remains is a wealth of steel, masonry and concrete that could be recycled into flexible live/work units. Rather than force Cicero’s residents to contort themselves to fit the bungalows, their homes can expand or shrink to fit them. 
There’s one problem with such a plan: it’s illegal under Cicero’s zoning code. The town’s rules are typical of most suburbs, including the segregation of residential, commercial and industrial facilities; prohibitions on expanding and reusing buildings for new homes and businesses; and tight restrictions on mixed-use properties. Cicero’s code also defines “family” in a way that excludes the large, multigenerational groupings now common across the country. 
... But new housing forms also demand new types of financing. Starting in the 1990s, subprime lenders targeted low-income and minority suburbs like Cicero, even when many residents would have qualified for prime loans. Latino homeowners tend to disproportionately invest savings in their homes, and as a result they lost two-thirds of their wealth between 2005 and 2009. 
Jeanne Gang and Greg Lindsay are, respectively, an architect and a visiting scholar at the Rudin Center for Transportation Policy and Management at New York University.

If Cicero is full of abandoned factories, why does Cicero need more immigrants to not work in them? If five or six immigrant families crowded into a single Cicero bungalow can't generate enough income to pay back the mortgage, is "design" really the big problem here?

Coming next? Perhaps Tyler Cowen will revive his call for America to be covered by vast Latin American shantytowns because they are so creatively vibrant.

January 8, 2012

Affinity scams and subprime

Here's a good NYT article on one example of what seems like a general pattern in the subprime disaster: affinity scams in which immigrant brokers fleece their co-nationals.
Financial Ruin of Immigrants Tied to Broker 
By ADAM B. ELLICK 
For years, a self-made real estate magnate named Edul Ahmad personified the collective dreams of Richmond Hill, Queens, which is populated by many immigrants from Guyana, in South America. Mr. Ahmad drove a yellow Lamborghini, sponsored a cricket team and held white-glove parties at a lavish banquet hall that he owned. At a prominent intersection near the border of Richmond Hill and South Ozone Park, his smiling face looked down from a large billboard that promoted his real estate services. 
Many residents responded, taking out high-risk mortgages that they were told they could readily afford. 
In July, it all came crashing down. Agents from the Federal Bureau of Investigation arrested Mr. Ahmad, charging him with masterminding a $50 million mortgage fraud that seemed to exemplify a nationwide phenomenon of celebrated immigrant brokers who were accused of preying on their own. ... 
Mr. Ahmad, 44, is charged with luring buyers into subprime mortgages, inflating the values of their properties and concealing his involvement by using straw buyers, like his wife and the Guyanese-born captain of the United States cricket team, Steve Massiah.

Guyana, by the way, is supposed to have the highest percentage of its nationals living in the U.S. of any country. The organization GuyanaUSA argues that so many Guyanese have moved to America that the U.S. might as well take over the whole country.

December 21, 2011

Obama's Popguns of Singapore

From the NYT:
Countrywide Will Settle a Bias Suit 
By CHARLIE SAVAGE 
WASHINGTON — The Justice Department on Wednesday announced the largest residential fair-lending settlement in history, saying that Bank of America had agreed to pay $335 million to settle allegations that its Countrywide Financial unit discriminated against black and Hispanic borrowers during the housing boom. 

The British defense of Singapore after Pearl Harbor is famously (although not necessarily all that accurately) said to have suffered from the long-held assumption that Singapore's big guns must point out to sea to defeat an attack by an enemy navy. Yet, the Japanese army, not the navy, came by way of the Malaysian mainland.

Similarly, for decades, the conventional political wisdom was that the main problem with the mortgage business was its irrational refusal to do enough business with blacks and Hispanics. Thus, the government laboriously constructed legal and political guns to pound down this intractable problem.

Over time, the more politically nimble sort of lenders, such as Angelo Mozilo of Countrywide, came around to the government's point of view that they were leaving money on the table. In 2003, Mozilo trumpeted in a Harvard address that Countrywide was going to lend $600 billion (with a b) to minorities and low income communities. And then in early 2005, Mozilo upped the commitment to a trillion bucks, with Countrywide's board member Henry Cisneros (Clinton Administration HUD secretary) delegated to advise him upon it.

When the mortgage system went into the ditch in the Sand States in 2007-2008, however, it  turned out that the problem was largely one of lenders lending too much to minorities, which had driven up home prices to unsustainable levels.

Here we are in late 2011, and the Obama Administration has just fired one of its guns at the most notorious symbol of mortgage mania: Countrywide. Of course, its guns are still pointing in the wrong direction. More amusingly, the big gun turns out to be popguns.
A department investigation concluded that Countrywide loan officers and brokers charged higher fees and rates to more than 200,000 minority borrowers across the country than to white borrowers who posed the same credit risk. Countrywide also steered more than 10,000 minority borrowers into costly subprime mortgages when white borrowers with similar credit profiles received regular loans, it found.

Let's do some math: $335 million divided by 200,000 minority mortgage borrowers equals a $1,675.00 payout per victim of racism. That's out of 2.5 million mortgages examined, according to Business Insider. Hhmmhmmmhmm ... Keep that in mind as you read onward.
Attorney General Eric H. Holder Jr. said the settlement showed that the Justice Department would “vigorously pursue those who would take advantage of certain Americans because of their race, national origin, gender or disability,” adding: “Such conduct undercuts the notion of a level playing field for all consumers.  It betrays the promise of equal opportunity that is enshrined in our Constitution and our legal framework.” 
The settlement is subject to approval by a federal judge in California; according to the proposed consent order filed Wednesday, Countrywide denied all of the department’s allegations. 
Dan Frahm, a Bank of America spokesman, stressed that the allegations were focused on Countrywide’s conduct from the years 2004 to 2008, before Bank of America purchased it. ...
The problems stemmed from a Countrywide policy that gave loan officers and brokers the discretion to alter the terms for which a particular applicant qualified without setting up any system to comply with fair-lending rules, the department said. Lending data showed that Countrywide ended up charging Hispanics and African-Americans more, on average, than white applicants with similar credit histories.

So, if you are Asian or white and you got cheated by Countrywide's boiler room operation into paying higher fees on your mortgage than you should have, you are out of luck because you are the wrong race?

Basically, Countrywide and independent mortgage brokers were running high pressure boiler rooms during the peak of the housing bubble. To up commissions, their salesmen often stuck a bunch of extra fees in the fine print. Moreover, they talked about 5% (10,000 out of 200,000 minority borrowers who extra fees) into getting subprime loans with higher interest rates who would have qualified for prime loans.
In 2007, for example, Countrywide employees charged Hispanic applicants in Los Angeles an average of $545 more in fees for a $200,000 loan than they charged non-Hispanic white applicants with similar credit histories. 

Of course, the joke is that $545 in rip-off fees is a pittance compared to how much was lost on these loans on average.

Of course, it's not as if Countrywide tried to keep secret that they were going after minority borrowers.

For salesmen whose commissions pay off when fees are paid at closing, not when the borrowers write their monthly checks, being told to rope in marginal minority customers is like telling hyenas to eat raw meat. Countrywide's office in high-IQ Santa Monica was notoriously hard to make money at, but their Inglewood office in the 'hood brought in huge margins.

This is highly reminiscent of the argument between Malcolm Gladwell versus Judge Richard A. Posner and myself about whether or not car salesmen consciously exploit blacks and Hispanics. As Gladwell wrote in 2006:
One of the most bizarre reactions that I received from reviewers of Blink is an absolute inability to accept the notion of unconscious prejudice. Here is an example from a fairly well known writer named Steve Sailer. Sailer, in turns, quotes from a very hostile review of Blink in The New Republic by Richard Posner.

Posner and I said that of course car salesmen rip off blacks and Latinos consciously. While Gladwell claimed that the car salesmen who charge blacks and Latinos higher prices are, when you stop and think about it, the real victims. If only they had read Blink and realized that they were unconsciously assuming that blacks and Latinos were easier to rip off than, say, Armenians or Koreans, then they would have stopped doing it, and the car salesmen would have made more money!
Independent brokers processing applications for a Countrywide loan charged Hispanics $1,195 more, the department said. ...

Of course, a much higher fraction of the independent brokers exploiting Hispanics were Hispanics themselves. This shouldn't be a surprise: Countrywide issued many press releases over the years patting itself on the back for all its hiring of Hispanic salesmen and its efforts to find independent Hispanic brokers. The mortgage meltdown has some of the attributes of a classic affinity scam, like Mormons getting suckered by a Mormon conman.
“Chances are, the victims had no idea they were being victimized,” said Thomas E. Perez, the Justice Department’s assistant attorney general for civil rights. “It was discrimination with a smile.” 
In addition, from 2004 to 2007 — the peak of Wall Street firms’ demand for subprime loans that they purchased, bundled and resold as securities, a major cause of the ensuing financial crisis ...

And Fannie Mae and Freddie Mac's peak demand, too, or that was more like 2005-2008. Countrywide was famously in bed with Fannie.
...— Countrywide allowed its brokers and employees to steer applicants who qualified for regular mortgages into a riskier and more expensive subprime loan. 
The odds of a minority applicant being steered into such a loan were more than twice as high as those for a non-Hispanic white borrower with a similar credit rating, the department said. About two-thirds of the victims were Hispanic and one-third were black, the department said.

Oddly enough, steering into a subprime loan apparently only happened to about 5% of these minority victims of higher fees, and to only about 0.4% of all Countrywide borrowers examined by the Justice Dept. I'm surprised that percentage isn't higher. We've been hearing for years about how the foreclosure crisis was caused by minorities getting forced into subprime loans, but with notorious Countrywide, it was quite rare.

Now the Justice Department quantifies the discrimination and comes up with a price tag of $1,675 each -- a distinct anti-climax. I mean $335,000,000 is about Angelo Mozillo's compensation during the last decade even after his SEC mini-fine.
If a judge approves the settlement, victims will receive between several hundred and several thousand dollars, with larger amounts going to those who were steered into subprime mortgages despite qualifying for regular loans.

Let's repeat that: "several hundred and several thousand dollars:" not exactly a home run for Eric Holder's theory of what caused the meltdown; more like a foul tip.
... Under federal civil rights laws — including the Fair Housing and Equal Credit Opportunity acts — a lending practice is illegal if it has a disparate impact on minority borrowers. Against the backdrop of the foreclosure crisis, the Obama administration has made a major effort to step up the laws’ enforcement.

So, it's a disparate impact case. I guess that's why white and Asian victims of being cheated by Countrywide can't get any compensation. The blacks and Hispanics are evidently getting paid the difference between what they paid in points and other mortgage fees and the average of what whites paid, not the difference between what they paid and what an honest broker would have charged them. What Countrywide should have done was rip off whites and Asians even more so then the Obama Justice Dept. wouldn't have a complaint.
In early 2010, the division created a unit to focus exclusively on banks and mortgage brokers suspected of discriminating against minority mortgage applicants, a type of litigation that requires extensive and complex analysis of data.

While they were crunching the numbers, perhaps they could have calculated the default rates on these loans. My guess is that even with the surplus origination fees Countrywide / Bank of America came out the loser in the long run due to defaults. (Of course, other losers include Fannie and the public.) To have had these risky mortgages make sense as paying propositions, Countrywide would have had to charge vastly higher fees.
Working with bank regulatory agencies and the Department of Housing and Urban Development, the unit has reached settlements or filed complaints in 10 cases accusing a lender of engaging in a pattern or practice of discrimination. 
The Federal Reserve first detected statistical discrepancies in the loans Countrywide was making and referred the matter to the Justice Department in early 2007, according to a court filing disclosed in 2010 as part of a civil fraud case brought by the Securities and Exchange Commission against Angelo R. Mozilo, the former chief executive of Countrywide.

In other words, the normal federal regulatory system noticed this disparate impact problem in early 2007, well before Countrywide cratered in 2008. Good to know that the Feds were on the watch against the really important mortgage lending problem!

In summary, there's a general problem with rip-off sales practices, whether in mortgage lending or auto sales. Experience, however, shows that fighting rip-offs by focusing on discrimination is a losing proposition. What happens is that clever people rip off not clever people, which has disparate impact on blacks and Hispanics.

But the problem can't be explained that way, because then it leads to the inference that blacks and Hispanics are less clever on average. So, enforcement tapers off because the whole subject becomes too embarrassing.

Clearly, the anti-discrimination method of regulating mortgage lenders turned out to be extremely bad as a way to prevent boiler room fraud and excess. It was not uncommon for lenders to respond to complaints about predatory lending to minorities by saying, "Okay, we'll lend more to minorities. (Fannie is buying!) And we'll hire some of your NGO's foot soldiers as loan counselors. And maybe make a donation to your fine organization. After all, we all have to do our part in fighting racist redlining."

We need instead to say that the clever shouldn't rip off the clueless, and it doesn't matter what races the clever and the clueless belong to. We all get clueless in the end.