May 27, 2009

Sonia Sotomayor v. Frank Ricci

Emily Bazelon writes in Slate:
Judge Sonia Sotomayor is smart and sharp, and her formidable track record on the bench should put to rest any lingering doubts that she isn't. (Speaking of which: Why was the left, or at least the center, criticizing one of its own?) But there is a mystery in Sotomayor's recent history: a brief, unsigned opinion in the difficult race case now before the Supreme Court, Ricci v. DeStefano. Sotomayor punted when Ricci came before her, to such a degree that she raised more questions than she answered.

Ricci is a hard case with bad facts—a case that could do serious damage to Title VII, one of Congress' landmark civil rights laws.

Actually, Ricci is a easy race case with simple facts -- a representative example of how Title VII routinely works. It's only a hard case if your goal is to somehow, someway, preserve the dominant "disparate impact" concept.
In 2003, the city of New Haven, Conn., decided to base future promotions in its firefighting force—there were seven for captain and eight for lieutenant—primarily on a written test. The city paid an outside consultant to design the test so that it would be job-related. Firefighters studied for months. Of the 41 applicants who took the captain exam, eight were black; of the 77 who took the lieutenant exam, 19 were black. None of the African-American candidates scored high enough to be promoted. For both positions, only two of 29 Hispanics qualified for promotion.

Something that hasn't been mentioned is that the the liberal complaints about the 2003 test stem from innumeracy about the effects of a small sample size. In the 1999 New Haven firefighter's promotion exam, which didn't cause major protests by the black minister who is the white mayor of New Haven's chief vote-gatherer in the black community, the racial gap in average scores was the same as on the 2003 test. However, in 1999, two blacks scored far enough out toward the right edge of the distribution that they were promoted. In 2003, however, although the average distribution of scores by race was the same, there didn't happen to be any blacks who scored particularly highly relative to the black average. The difference in whether 2 blacks passed in 1999 or 0 in 2003 is just a matter of small sample sizes.

The politicians didn't raise a stink in 1999, but did in 2003, because their statistical sophistication is at the black and white level.
In other situations like this, minority candidates have successfully sued based on the long-recognized legal theory that a test that has a disparate impact—it affects one racial group more than others—must truly be job-related in order to be legal. You can see why New Haven's black firefighters might have done just that. Why promote firefighters based on a written test rather than their performance in the field? Why favor multiple-choice questions over evaluations of leadership and execution? It's like granting a driver's license based solely on the written test, only with much higher stakes. ...

First, the promotional exam wasn't "solely" written. Forty percent of the score was based on oral exam. And the city had attempted to rig the oral results by stacking the panels of out-of-state senior firefighters brought in to judge the oral results by putting two minorities to one white on almost every three man scoring panel.

However, the city's collective bargaining contract with the fireman's union mandated a 60% weighting for the written test? Why? Well, one reason is that the firemen wanted to be evaluated partly objectively. They didn't trust the politicians to be objective in whom they favored to give them orders in life or death situations, so they wanted at least a majority of the score on the promotional exam to be unbiased by racial prejudice.

The district court judge who heard Ricci's case ruled against him and his fellow plaintiffs. They appealed to the 2nd Circuit, the court on which Judge Sotomayor sits. In an unusual short and unsigned opinion, a panel of three judges, including Sotomayor, adopted the district court judge's ruling without adding their own analysis. As Judge Jose Cabranes put it, in protesting this ruling later in the appeals process, "Indeed, the opinion contains no reference whatsoever to the constitutional claims at the core of this case. … This perfunctory disposition rests uneasily with the weighty issues presented by this appeal."

If Sotomayor and her colleagues were trying to shield the case from Supreme Court review, her punt had the opposite effect. It drew Cabranes' ire, and he hung a big red flag on the case, which the Supreme Court grabbed. The court heard argument in Ricci in April. New Haven didn't fare well.

The high court's decision in the case will come in June, before Sotomayor's confirmation hearings. The problem for her will not be why she sided with New Haven over Frank Ricci. The four liberal-moderate justices currently on the court are likely to agree with her, in the name of preserving Title VII as a tool for fair hiring. There's even an outside chance that Justice Anthony Kennedy will follow along. The problem for Sotomayor, instead, is why she didn't grapple with the difficult constitutional issues, the ones Cabranes pointed to. Did she really have nothing to add to the district court opinion? In a case of this magnitude and intricacy, why would that be?


Well, Ms. Bazelon, I think you may find that you just answered your own question! Judge Sotomayor no doubt shares your goals on policy (preserve Disparate Impact) but is much more aware of the facts. If trying to hush up the Ricci case was the best she could come up with, then that's the best anybody on the left could come up with.

Very similarly, the Obama Administration doesn't want to make Ricci the Waterloo of Disparate Impact. The case is both so representative and so well prepared in details (e.g., notice choosing Ricci over his fellow plaintiffs as the lead plaintiff -- you know how the left loves to dig up personal scandal on sympathetic-sounding conservatives these days, so I suspect the firemen's lawyers carefully chose a guy with the few skeletons in the closet), that they would be happy if Anthony Kennedy just tersely sent it back to district court for retrial on the facts. (Years later, Frank Ricci would probably get his promotion, but the system would continue.) What Obama is terriffied of is the Supreme Court using Ricci as a precedent-setting case.

Hence, Sotomayor's attempt to bury the case is exactly in line with the Obama Administration's desires. Which is hardly surprising, since they nominated her for the Supreme Court.

My published articles are archived at iSteve.com -- Steve Sailer

May 25, 2009

Sorry

I likely won't be posting new material or moderating comments on Monday evening or Tuesday. Please check back later in the week.

My published articles are archived at iSteve.com -- Steve Sailer

May 23, 2009

Questions

Conor Friedersdorf quotes John McPhee:
In the First World War, General Ulrich Wille led the Swiss to victory. Victory consisted of successfully avoiding the conflict. As someone put it, “We won by having no war.” In the Second World War, the victorious Swiss general was Henri Guisan, of the Canton de Vaud. There is a General Guisan Quai in Zurich, a Quai General Guisan in Geneva. In every part of Switzerland, there are streets and plazas and equestrian statues—there are busts on plinths overhung with banners and flags—doing honor to the general of an army that did not fight.

Is Switzerland the only country that puts up statues of leaders esteemed for staying out of wars?

I've never heard much about the leaders who kept Turkey out of WWII (until declaring war on Germany toward the end) -- a remarkably sensible decision in a bellicose era (consider highly civilized and non-martial Italy's pointless participation in both World Wars). Turkey was, like Germany, a loser from the Versailles Treaty, but, unlike Germany, it kept its head.

Belarus still hasn't fully recovered from Nazi and Soviet tank armies fighting back and forth across its land. If Turkey had come in on either side early on, it might have been similarly afflicted. But I've never heard who deserves credit for Turkey being both strong enough and sensible enough to avoid war. Occasionally, somebody (e.g., Paul Johnson in Modern Times) gives Franco some credit for Spain sitting out WWII, but I never hear about the Turks who decided to give war a pass.

Presumably, this is partly due to Turkey's continuing Ataturk cult of personality (who died in 1937), which serves to tie together perhaps the oldest (and thus most innately fractious) agricultural civilizations in the world.

So, what's the story behind this dog that didn't bark fact?

UPDATE: By the way, the Turks fought hard on the U.S. side in the Korean War. Turkish troops, for example, rescued a U.S. Army unit including a 19-year-old artillery officer named Jerry Pournelle.

My published articles are archived at iSteve.com -- Steve Sailer

May 22, 2009

NYT reporter / deadbeat's Argentine firecracker wife

Ever since the New York Times Magazine ran that sob story by NYT Federal Reserve reporter Edmund Andrews about how he had been lured by lenders into taking on too big a mortgage to pay back, what with his $4k per month alimon payments, anonymous posts have been showing up in various blog's comment sections saying that a missing part of the story involved the reporter's new wife, Patricia Barreiro, an Argentine immigrant with a passion for fashion.

Megan McArdle has now tracked down the facts that Andrews left out of his book. She paid eight cents per page to look at court documents:
In September 1998, California bankruptcy court records indicate that Patty and her first husband declared bankruptcy. The financial statement they filed with the court indicated family income of $174,000 in 1996, $87,000 in 1997, and $126,000 in the first nine months of 1998. The income fluctuations are not surprising, given that her husband was in the film production industry. By the time of the filing, the couple owed about $30,000 on 8 credit cards, over $200,000 in back taxes, and almost $15,000 in private school tuition, as well as substantial car and mortgage payments.

In 2007, nearly as soon as she was eligible, Patty Barreiro filed again in Montgomery Country. When called for comment yesterday, Andrews was unavailable, but there is no question that it is his wife: his income and occupation are prominently featured in the docket.

This is really highly unusual. For starters, the overwhelming majority of people who file bankruptcy do not make anything close to $100,000 a year--the standard estimate when the 2005 bankruptcy reform was passed was that about 80% of filers had household incomes below the median income in their state. The number of affluent people who file twice is even smaller, and has presumably gone down since the 2005 filing largely eliminated abusive serial Chapter 13 filings, which used to be used, often by quite wealthy people, to forestall evictions or foreclosure.

The bankruptcy code requires filers to wait 8 years after a previous Chapter 7 discharge. Barely four months after she became eligible, Patty Barreiro filed again. And the filing shows some suggestion of strategic debt management.

Ms. Barreiro filed separately from Andrews, and had to amend the filing to include Andrews' income after a complaint from a creditor who wanted to force her into a Chapter 13 repayment plan. She filed when her income was at rock bottom, consisting only of unemployment; the timing may have just excluded having to declare $5,000 in freelance editing income Andrews mentions in the book. And she shed what appear to be jointly incurred debts, such as a Comcast account. Comcast does not service the address listed on the 1998 filing, but as I can attest (to my sorrow), it is the main cable provider in Silver Spring, where she moved to live with Andrews in 2004.

Serial bankruptcies can, of course, happen to anyone with enough bad luck. But they usually don't. And when they do, they usually hit people with marginal incomes that leave no margin for error in the budget. Most people, even in LA, are able to build a sustainable budget out of an income in the low six figures.

Moreover, pesky bad luck isn't really the picture painted by either filing. Rather, Ms. Barreiro seems to have spent most of the last two decades living right up to the edge of her income, and beyond, and then massively defaulting. If you structure your finances so that absolutely everything has to go right, it's hard to blame the mortgage company when you don't quite make it.

Andrews has been admirably open about many of the poor decisions and the wishful thinking that led him deep into debt. Nonetheless, he has laid much of the blame onto irresponsible bankers and mortgage brokers. The missing bankruptcies substantially undermine this basic narrative arc of Andrews' story. Particularly in his book, the bankers are the villains, America's current troubles are the inevitable denouement of their maniacal greed, and the Andrews household stands in for an American public led, by their own greed and longing and hopeful trust, into the money pit.

Sure, the two married couples had seven children between them, but what's that to stand in the way of Love? And a "stately" home in Maryland?

By the way, an unwritten part of the story of the mortgage meltdown has to do with quiet importation of Fiesta Culture attitudes toward saving and spending.

My published articles are archived at iSteve.com -- Steve Sailer

Global Warming: the obvious implications

The single largest problem posed by global warming would be if the seas rose and increasingly inundated Bangladesh, an extremely densely populated (current population 156 million) and low-lying region long vulnerable to typhoons (e.g., George Harrison's Concert for Bangladesh). One obvious way to mitigate this vulnerability would be to increasingly encourage Bangladeshis to use birth control.

Similarly, one of the most obvious causes of increased carbon emissions is mass immigration from the Third World to the First World (e.g., from Mexico to America). So, more stringent restrictions on immigration would be an obvious policy implication.

Somehow, though, I don't think Al Gore has ever gotten around to mentioning either of these bits of logic.

If Global Warming is such an all important topic, then surely these simple steps for mitigating it should be on the table, surely. And yet, they just never seem to come up. It's not so much as that they've been rejected as that they simply are, literally, unthinkable.

My published articles are archived at iSteve.com -- Steve Sailer

May 21, 2009

Games: the black hole of art

So much creative talent goes into video games these days, but the downside is that games are something you either do or you don't, so there's little in the way of reverberations in the rest of society.

This isn't just an old fogey picking on young folks' video games either. This is also true of my favorite minor art form, golf course architecture, another game-based art. It has been practiced on an aesthetically high level in the U.S. for a century now, since Charles Blair MacDonald's National Golf Links of America emerged on Long Island in 1909. But, what does any non-golfer know or care about golf course architecture?

My published articles are archived at iSteve.com -- Steve Sailer

May 20, 2009

May 19, 2009

R. J. Stove's "A Student's Guide to Music History"

This handsome 135 page paperback by R.J. Stove, A Student's Guide to Music History, listing on Amazon for only $8.00, is a near perfect introduction or brush-up for anyone interested in Western classical music. Performing miracles of concision, it provides sprightly portraits of several score of the top composers. You can read the book straight through in about four hours. Or you can read it sitting at your computer and call up on Youtube just about any piece mentioned in the book.

My published articles are archived at iSteve.com -- Steve Sailer

"Reflections on the Revolution in Europe"

From "Fear Masquerading as Tolerance" by Christopher Caldwell in Prospect, presumably from his upcoming book Reflections on the Revolution in Europe: Immigration, Islam, and the West:
The policing of tolerance had no inbuilt limits and no obvious logic. Why was ‘‘ethnic pride’’ a virtue and ‘‘nationalism’’ a sickness? Why had it suddenly become criminal to ask questions today that it was considered a citizen’s duty to ask ten years ago? Erudite philosophers of tolerance such as Jürgen Habermas might have been able to untangle such questions and draw the proper distinctions. Political elites could resolve them by fiat. But they left the person of average intellect and social status feeling confused and disempowered. A democracy cannot long tolerate a system that makes an advanced degree in sociology or a high government position a prerequisite for expressing the slightest worry about the way one’s country is going.

The virtues of the multicultural era were elite virtues. The British sociologist Geoff Dench suspected, with good reason, that favouring elites was a large part of the point of multiculturalism. Conflicts in a striving meritocracy, he noted “can probably be managed more easily where there are groups whose membership of the nation is ambiguous, who are very dependent on elite sponsorship, and whose presence flushes out ethnocentric responses among the masses which can then be held against them. A society tied to the notion of meritocracy may therefore have a particular need for minorities.”

My published articles are archived at iSteve.com -- Steve Sailer

John McWhorter on how archaeology is racist

In the New Republic, John McWhorter has a column up, including vague swipes at me, resenting the fact that most evidence of a Stone Age great leap forward in culture comes from Europe. Because (follow me closely here), we know that everybody is the same, the fact that most of the prehistorical evidence for sudden progress comes from Stone Age Europe is "socially unsavory" (i.e., racist).

Personally, I don't care much about paleoanthropology, but this is just another example of how political correctness is anti-science. Here are hardworking scientists carefully digging up stuff, but some Broadway musical expert implies that they are racist for finding it and publicizing it.

My published articles are archived at iSteve.com -- Steve Sailer

May 18, 2009

Tierney on Miller's "Spent"

My published articles are archived at iSteve.com -- Steve Sailer

Mozilo Mania

Joe Weisenthal at Clusterstock is reading up on one of the central figures in predatory securitizing, Angelo Mozilo of Countrwide, the country's largest mortgage originator during the Housing Bubble. His take on it is that Mozilo wasn't a cynic, he was a believer in the profitability of lending money to traditionally underserved borrowers:

Mozilo viewed himself as something of a populist, fighting for the little guy -- as did the editors of La Opinion.

So in addition to learning that Mozilo was incredibly insecure, the article also offers a gem about Fannie Mae (FNM) and Freddie Mac (FRE) and their role in Countrywide's success:

NYT: While he is sanguine about the stock price, Mr. Mozilo remains volatile about so much else. Particularly irksome are calls by Alan Greenspan, the Federal Reserve chairman, to shrink Fannie Mae and Freddie Mac, the quasi-government institutions that buy huge numbers of mortgages from financial institutions, notably from Countrywide.

"Fannie and Freddie are a threat to his banks," Mr. Mozilo said of Mr. Greenspan, whose agency regulates big bank holding companies. By buying his mortgages and thus freeing up his capital to solicit even more business, Fannie and Freddie are a big reason Mr. Mozilo has driven Countrywide past the Citigroups and the Wells Fargos to the top of the mortgage heap. "If it wasn't for them," he said of Fannie and Freddie, "Wells knows they'd have us."

Wow.

Now this is damning on a couple of levels, one simple, one a bit more complex. The obvious phenomenon was that Countrywide made a gigantic business, winning market share by turning itself into an organ of the government. Courtesy of Fannie and Freddie it had an extremely low cost of capital (even Wells Fargo could barely compete, and as Warren Buffett will tell you, Wells' cost of capital is very low), and a toilet down which to flush all the loans it wanted to make.

That alone is bad.

But it's not quite true that Countrywide just saw Fannie and Freddie as trash receptacles. Countrywide was a big believe in aggressive lending, and it thought that it was engaging in good, profitable lending to people that other banks wouldn't go touch. Remember, Mozilo was a populist. He had a chip on his shoulder. And he obviously was extremely proud of the fact that he, along with some other lending pioneers, had discovered that lending to poor people with marginal credit -- people that bankers had tradtionally turned their noses up -- were profitable. Mozilo didn't see himself as just a salesman and packager of trash.

Fannie and Freddie allowed Countrywide to get big, but Mozilo thought that the core business was inherently profitable, which is why, Countrywide held onto some of its loans in order to "smooth" (read: goose) its earnings. If Mozilo just thought he was selling garbage, he wouldn't have held onto a penny of it;.

That's an empirical point that deserves more looking into -- how much did Mozilo hang onto his loans versus how much did be securitize them. But it's clear his business model was dependent upon Fannie and Freddie keeping the firehose of government-backed cheap credit flowing to him.

My published articles are archived at iSteve.com -- Steve Sailer

California

California's top political columnist, Dan Walters of the Sacramento Bee, writes:

Memo to Californians from everyone else in the world: You folks out there in sunshine land caused this historic global recession, and it's time for you to mend your ways.

Farfetched? Not really.

A very good case can be made that California's developers, mortgage lenders and house-hungry but income- deficient residents, with state and local officials as enablers, created an unsustainable housing bubble. And when that bubble burst, leaving holders of mortgage bundles – many of them overseas banks – with little more than toilet paper, it created a banking crisis that spread to virtually every other segment of the global economy.

No, it was not confined to California. It happened in a few other high-growth states such as Florida, Arizona and Nevada. But nine of the 10 top issuers of subprime and no-documentation mortgages were headquartered in California, and the state has been ground zero for the collapse of those mortgages as adjustable interest rates "reset" upward, having recorded more than a half-million foreclosures and other symbols of distress.

My published articles are archived at iSteve.com -- Steve Sailer

California foreclosure rates and mortgages by race

In response to my new VDARE.com article on what the data show about the origin of the mortgage meltdown in California -- i.e., that there's a very close correlation in California's top 20 metro areas between minority lending (especially minority subprime lending) in 2006 and foreclosure filing rates in 2009 -- I was asked about other correlations.

I'm happy to oblige below, but I would recommend that you read my VDARE.com column first to see the highlights graphed, then come back here to wallow in the correlation coefficients in tabular form.

So, here are the correlation coefficients between RealtyTrac's Q1-2009 foreclosure rates for the top 20 metro areas in California and the federal government's Home Mortgage Disclosure Act database records of racial groups' prime and subprime shares of total mortgage dollars in 2006.

"r" is the correlation coefficient, which runs from -1.00 (perfect inverse correlation) to 1.00 (perfect correlation). In the social sciences, 0.2 is typically considered low, 0.4 moderate, and 0.6 high.

Race Type Share r
Total Total 100%
Total Prime 73% -0.90
Total Subprime 27% 0.90
NH White Total 44% -0.78
NH White Prime 38% -0.83
NH White Subprime 6% 0.21
Not NH White Total 56% 0.78
Not NH White Prime 35% 0.50
Not NH White Subprime 21% 0.89
Asian Total 15% 0.18
Asian Prime 12% 0.06
Asian Subprime 3% 0.48
Black Total 5% 0.48
Black Prime 2% 0.42
Black Subprime 3% 0.51
Hispanic Total 31% 0.67
Hispanic Prime 16% 0.51
Hispanic Subprime 15% 0.78
Other Total 5% 0.02
Other Prime 4% -0.36
Other Subprime 1% 0.62
Hisp & Blacks Total 36% 0.79
Hisp & Blacks Prime 19% 0.62
Hisp & Blacks Subprime 17% 0.87
NAMs Total 41% 0.81
NAMs Prime 23% 0.62
NAMs Subprime 18% 0.88

You can call up the HMDA data here. (Table 11-3: Conventional Home Purchase First Lien Loans, with "Reported Pricing Data" (subprime) vs. "Not Reported Pricing Data" (Prime)).

My published articles are archived at iSteve.com -- Steve Sailer

May 17, 2009

r = 0.89

Here are a couple of the graphs from my new VDARE.com article on the causes of the default crisis, focusing on the Big One: California.


And here's a scatterplot of foreclosure filing rate (vertical axis) v. share of total home purchase lending in 2006 that went to minorities by way of subprime mortgages:

r = 0.89.

It's important to note that you won't get the same insanely high correlation coefficient across the whole country. There's no where to go but down from r = 0.89. There are heavily Hispanic areas like the Rio Grande Valley where the economy is so dull and the cultural level so low that there was never a Housing Bubble. Same for black areas in Mississippi and the like.

Still, California is absolutely the central thread to understanding what went wrong with the economy, and the pattern is absolutely clear in California.

Read the article here.

My published articles are archived at iSteve.com -- Steve Sailer