October 8, 2008

For visitors from Michael Barone's blog

If you are coming here from Michael Barone's blog, my two main articles on "the diversity recession" are my recent one on the relationship between Karl Rove's primary political initiative and the lack of oversight of mortgage lending and my June article laying out the basic theory and going after both Democrats and Republicans.

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

36 comments:

Dennis Dale said...

I propose a betting pool on how long before Brock sounds the alarm. Hour blocks would probably be more suitable than days.

Anonymous said...

I'm in: at or before 3 p.m. EST

Some pre-weekend Media Matters histrionics would certain liven up the slow news day, financial crisis aside, that Friday looks to be.

Anonymous said...

When I was in a blog-row with some PC Leftist and I supported some non-PC libertarian's claim that the "diversity recession"-hook might be correct, he just couldn't believe it. Now, I wasn't even supporting this position, I just claimed that it was possible and probably one reason (out of probably many others too: greed, stupidity, perverse CEO-incentives, excessive FED money printing, excessive leverage, etc., etc.) of the housingbust.

This guy just couldn't stand the possibility of this "poor-people-make-bad-creditors"-these to be true. It was beyond limits of reason for him.

Sure, nobody needs to check if CEO's were indeed greedy or motivated by perverse incentives by some kind of research. Nobody needs to deconstruct the creditcrunch to conclude if deregulation or "neoliberalism" were indeed the main causes of the drama. See, all that is a given for most of the left.

To even think that poor people (especially non-White poor people) might be unable to pay back their loans was just too much for him. For the record: I don't blame poor people at all. They wanted a house -- what kind of coldhearted idiot can blame someone for that?

Why is it that Western brains have become so ideological? This leftist was clearly smart -- no doubt about it. It isn't just leftists either, who can't think outside-off-the-box. Rightwingers and libertarians are equally dogmatic in their own know-it-all-isms and convictions. I can understand why SOME are like that, they lack the smarts to think for themselves, so they need an ideological framework to feed them arguments. But where are all the intellectuals? They can think. So what's their excuse? Whatever happened to investigating the naked truth? That's all we need to know. Nothing else should matter.

Why can't people just say: "Hey, you kno what? That sounds like an interesting take on the matter, BUT we need to check the facts to see if it's not just logically plausible, but also factually correct. For now, we can't say anything for sure. Let's be prudent."

But no. Here we are in the middle of a blame game, while the whole financial system is experiencing a melt-down. We need more disinterested analysis from smart anti-ideological researchers who want to know the truth -- and nothing but the truth.

Anonymous said...

I'm getting irritated that we haven't gotten hard core analysis of the diversity recession concept from the intellectual right. Get TAC to cut Nicholas Stix a check already.

Dennis Dale said...

12:00 noon today (Thurs.) EST. Just to clarify: I'm claiming 12:00 to 12:59 PM.
Any side action on the over/under?

Anonymous said...

Steve,

Here is some academic support for your diversity recession theory:

http://www.independent.org/pdf/policy_reports/2008-10-03-trainwreck.pdf

(hat tip: "CARPE DIEM" blog)

Once again, you are ahead of the intellectual curve...

Anonymous said...

Anonymous asks "Why have Western brains become so ideological?"

Answer: Because when the truth is off limits, it will be replaced by lies, sort of like the concept of vacuum. Just choose an orthodoxy that makes you rich or feel morally superior to others, and there you are.

For instance:

1. Blacks commit a disproportionate amount of violent crime.

2. Millions of immigrants from Mexico and Central America have fundamentally altered life in the USA, and will continue to do so.

3. Israel has a very powerful lobby which has a profound influence on US policy in the Middle East.

Perfectly sensibly conclusions, supported by facts. However, pointing out any one of these truths will get you fired from your job or worse. There are other examples (i.e. pointing out differences between men and women). These false orthodoxies were once almost exclusive to the Left, but the Right has jumped on the bandwagon too (watch Sean Hannity if you criticize Israel, or capitalism)(Perhaps the Right learned how well this tactic worked for the Left and got tired of getting shouted down?)

How we got here is complicated, but it's pretty clear to me how "the system" works. I call it the "Dictator's Table" syndrome.

Remember that footage of Saddam Hussein sitting around a table with his "advisors?" I'd imagine most of them were thinking to themselves: "Invade Kuwait? Is this guy nuts?" But nobody wanted to be the first to say anything, because they knew that if they did, the other guys would fall all over themselves to be the first to stick a knife in you and get in The Big Guy's good graces --- even if they agreed with you that Saddam was nuts. That's sort of where we are now. Affirmative action? Everybody hates it, but most of us have moved on from college or grad school and have carved out a niche in the work place, so why speak out against it and risk getting jumped by the other guys at the table?

At some point, this constant lying begins to warp one's mind in some way. I suspect there's something clinical to it, but I'm not an expert in this area. People afflicted by this mania become even angrier and more extreme. Hence, the vituperative and irrational nature of what passes as "policy" discussion these days.

Anonymous said...

Anyone see this Slate article?

Apparently, linking mortgage failures to high-risk minorities is both "offensive" and "entirely wrong."

Apparently, the culprits are those guys in top hats and gloves with canes and gold pocket watches.

Anonymous said...

On the Liebowitz "Trainwreck" paper, he talks of the loosened lending standards to increase poor and minority ownership, however, see his summary on page 26 and he lays the brunt of the catastrophe upon speculators. He admits that he needs much more data, but laments it may not be available to test his hypothesis.

He cites Nevada, Florida, and California as places where speculation was rampant and sees it as correlation, and thus causation, with foreclosures.

What else do those states have in common and has been noted in many places? Why would speculation be highest among those places, though? The other day I opined on whether a side effect of illegal immigration, higher health care costs, could be indirectly related to our woes. If the report on Drudge is to be believed, then perhaps not. It may be far more directly related.

Has anybody seen it confirmed, or know anything about the report that an estimated 5 million illegals have mortgages?! I find this hard to believe.

Anonymous said...

Anon -- no one ever disagreed with Saddam because he killed anyone who did. And their families.

Moreover, the amount of money pouring into America from the Saudis and others dwarfs the Israeli lobby.

To give one example, the Global Warming movement is largely funded by Gulf Oil money, as is the movement to free Jihadis in Gitmo. Both Clinton and Obama have raked in uncountable amounts of cash from the Saudis and other Gulf interests.

Anonymous said...

"To give one example, the Global Warming movement is largely funded by Gulf Oil money."

This seems counter intuitive, but I have thought for some time that someone with an ax to grind was funding it. Got any evidence?

Anonymous said...

"""To give one example, the Global Warming movement is largely funded by Gulf Oil money."

This seems counter intuitive, "

More like down right insane.

Anonymous said...

Why is it that Western brains have become so ideological? This leftist was clearly smart -- no doubt about it.

Never underestimate the ability of very smart people to believe very stupid things.

Anonymous said...

He cites Nevada, Florida, and California as places where speculation was rampant and sees it as correlation, and thus causation, with foreclosures.
What else do those states have in common and has been noted in many places? Why would speculation be highest among those places, though?


California and Arizona are both nonrecourse states, meaning that defaulting borrowers whose mortgage balances exceed the amounts their houses fetch at foreclosure sales are not personally liable for the deficiencies. Jingle Mail (abandoning one's property and mailing the lender the keys) can be a reasonable option in these states.

On the other hand, Nevada and Florida, two of the other hardest-hit states, allow collection of foreclosure deficiencies.

Anonymous said...

Moreover, the amount of money pouring into America from the Saudis and others dwarfs the Israeli lobby.

If anyone ever trusted anything testing99 ever said, you now know he is insane.

To give one example, the Global Warming movement is largely funded by Gulf Oil money, as is the movement to free Jihadis in Gitmo. Both Clinton and Obama have raked in uncountable amounts of cash from the Saudis and other Gulf interests.

Completely, utterly, insane.

Anonymous said...

Keep in mind that this train wreck is not over. There are many politicians and community organizers that want the loose lending to non-credit worthy folks to continue.

What has been lost has been lost. What we need to focus on now is making sure this does not happen again.

Anonymous said...

testing99 sed:
"To give one example, the Global Warming movement is largely funded by Gulf Oil money.."


Why would Gulf Oil fund the Global Warming movement? I read an interview with a sheik and he sounded terrified about alternative energy and electrical cars in the medium to long-term; would make sense too. In Germany Daimler and BMW have made deals with the largest power utility RWE concerning electrical gas stations in the major cities. Yesterday it seems Renault and the French utility have done the same thing for France. Now that is the beginning of a straight drain on Gulf Oil revenues since most of the power here comes from Coal or Nuclear, with some gas, windmills and water. I'm just curious. Maybe you know more?

Anonymous said...

Bill,
The author of that article is clearly a leftist, but he is not entirely wrong. Since we in America-and the rest of the West- produce very little that is tangible much of the increase in our standard of living has been based on credit. This isn't just spending money you don't have, it's basing a lifestyle on money you don't have, and it happened at every level of society. Poor minorities were less able to keep up with their payments than the more well-off, but at least here in the DC metro area credit card debt of $40,000 is not uncommon among well-educated people with good jobs. Poor minorities are the symptom, not the disease.

Anonymous said...

What has been lost has been lost. What we need to focus on now is making sure this does not happen again.-- anonymous

This is not hard to do if you're a bank with its head squarely on its shoulders.

They were featured in today's daily e-mail tip courtesy of Harvard Business Review. The date on the their corresponding blog post seems odd-- is it misdated, or is this story already a month old? But it is right on the mark.

And they link to a two-month-old New York Times story which some happy souls are now thanking themselves they read and heeded.

Who'd have thought Paramus, New Jersey, the capital of common sense?

Nevertheless, some think they'll suffer along with everyone else.

Anonymous said...

Hudson City isn't the only bank that has made out well so far -- it's just the only one that got press because Jim Cramer talked about it on his show. One thing Hudson City has done is to limit its business to the more affluent towns in the NY-NJ-CT metro area. The other thing is that it demands fat downpayments on all its mortgages. That does wonders for your default rates.

Dave

Anonymous said...

I'd like to see more study done on the link between mass immigration and the real estate bubble in general. One commenter has suggested that this crisis can't have been caused by minority defaulters because these bubbles happened in Britain and Spain, too. But just like the US, Britain and Spain have seen high immigration rates over the last decade.

In Spain immigrants make up about 11% of the population, not much different from the US, and the increase in recent years has been fairly dramatic - in 2003 alone the population climbed by 2.1%, most of whom were immigrants, and equivalent to adding over 6 million people to the US in a single year.

Britain has had legal immigration rates roughly comparable to the US, and saw legal immigration reached 292,000 in 2005, and then surpassed 600,000 between June 2006-June 2007. This does not include the estimated 50,000 illegals who enter annually.

How have the British benefitted? Consumer debt has soared. The national debt, as a percentage of GNP, climbed
from 30% to 35%
during a so-called economic boom.

Much of the justification for rising home prices was based on rising demand, and rising demand is due mostly to immigration, since that's where even the US sees most of its population growth. And rising home prices led to banks assuming they would continue to rise and making bad lending decisions as a result.

Moreover, immigration causes a more immediate spike in housing demand than a jump in the birthrate. There's about a 20 year lag between the birth of a new child and the need to provide him with his own place, so markets have plenty of time to take that demand into account. For immigrants, the demand for housing is immediate, more or less.

Have countries with higher immigration rates seen higher growth in real estate prices?

Do countries with higher immigration rates have lower savings rates? Canada, with one of the highest immigration rates in the world, has also seen growing consumer debt soar. (Now that oil prices are declining, will Canada getw worse, too?)

Most surveys on immigration and its links to a strong economy tend to focus on GNP growth. But GNP growth does not directly measure how immigration improves the long-term welfare of its present citizens. Indeed, most of the people who conduct and flout these surveys tend to look at people as economic widgets in the economic machine. As one report in the London Guardian stated in 2002, "as the indigenous population is producing fewer children than in the past, immigration may well prove to be the main economic motor."

These studies never seem to take into account, or much even care about, why natives are producing fewer children. They just assume that it's inevitable, and that if the natives aren't gunna squeeze out babiues, well, doggone it, we're gunna import people who will. But that's the way democracy is supposed to work, ain't it?

Anonymous said...

More mass migration/real estate bubbles: Canada's starting to feel it, too. One of the overheated places: Hongcouver.

Anonymous said...

I am Lugash.

Why is it that Western brains have become so ideological? This leftist was clearly smart -- no doubt about it. It isn't just leftists either, who can't think outside-off-the-box. Rightwingers and libertarians are equally dogmatic in their own know-it-all-isms and convictions. I can understand why SOME are like that, they lack the smarts to think for themselves, so they need an ideological framework to feed them arguments. But where are all the intellectuals? They can think. So what's their excuse? Whatever happened to investigating the naked truth? That's all we need to know. Nothing else should matter.

I think it's the absence of religion in modern life. I think people need something to truly believe in, rather than just being some sort of blank entity that goes through life consuming. When religion fell by the wayside, politically correct thinking replaced it for a lot of people. Race, environment, gender, etc. When these people are presented with thinking about cold hard data, probabilities, risk, changing conditions, etc. they default and go with their "religion". Blacks aren't criminals... they're products of the racist environment. Lending 300K to an undocumented drywaller isn't insane... it proves that illegals are just like us.

For that matter, the investment banks acted in the same manner. Think of all the stupid shibboleths that we heard to justify the bubble. House prices never go down, people will beggar themselves to pay the mortgage, they're not making more land. If you tried to argue with anyone about these things two years ago, you were considered a heretic. The Wall Street guys ignored the data to pursue the "alpha".

For the next round of fun, watch what happens when people lose their religion about their 401K. Or the dollar as the reserve currency.

I am Lugash.

Anonymous said...

"What has been lost has been lost. What we need to focus on now is making sure this does not happen again.-- anonymous"

Why do people always say this. You know, some ernest fool says something along the lines of: "It's not helpful to lay blame. What we need to do is figure out what to do going forward. We need to move on."

Hell with that. I want to wallow in recriminations. I want the guilty identified, humiliated, and punished.

Anonymous said...

Testing RKU's Truth said...

More mass migration/real estate bubbles: Canada's starting to feel it, too. One of the overheated places: Hongcouver.


Well, DUH!!!!

EVERYONE knows that high rates of immigration tend to drive up housing prices. It's basic Economics 101...

Just a couple of days ago, the WSJ had a big op-ed by a free market economist saying that America needs to increase its immigration inflow in order to keep up housing prices and mitigate the Financial Meltdown.

Freddie and Fannie used to produce lots of materials on the importance of immigrant homebuyers to the housing market.

The argument going on is something entirely different, namely whether higher mortgage *default* rates by blacks+Latinos were a major factor behind the Meltdown, which I tend to doubt...

Remember that most immigrant homebuyers (by dollars) are NOT Latinos, and almost none of them are blacks.

As for immigrants causing a rapid increase in home prices, for decades that was touted as a feature not a bug!

Dennis Dale said...

I am goulash.

1 large onion
2 lbs beef chuck
4 tbsp flour
2 cloves garlic, chopped
1 1/2 cups beef or chicken broth
1/2 cup water
1/4 tsp pepper and 1tsp salt
3 tsp red vinegar
2 bay leaves
3 tablespoons oil
1 tablespoon paprika
1 pkg egg noodles

In 4 quart pot, sauté onions in oil for about 3 minutes or until they become soft. Meanwhile, dredge meat in flour.
Sauté on both sides until brown; add remaining ingredients. Cover pot and simmer or low flame and cook for 90 minutes. Serve over cooked noodles.

I am goulash.

Anonymous said...

The argument going on is something entirely different, namely whether higher mortgage *default* rates by blacks+Latinos were a major factor behind the Meltdown, which I tend to doubt...

Who are you having that argument with? The argument is that diversity contributed in myriad ways to the problem, only one of them being higher default rates.

Simple question: do you admit that all those other issues contributed to the crisis? Yes/No/Somewhat will suffice.

As for immigrants causing a rapid increase in home prices, for decades that was touted as a feature not a bug!

Not by AFF folks. The people touting that as a feature of high immigration are pretty much the same idiots who got us into this crisis.

You cannot maintain AFF for long when home prices are climbing 15-20% annually but incomes are only climbing 2-3% annually. It's a recipe for neofeudalism.

And why are you blaming the AFF folks for arguments made by entirely different people?

Just a couple of days ago, the WSJ had a big op-ed by a free market economist saying that America needs to increase its immigration inflow in order to keep up housing prices and mitigate the Financial Meltdown.

Ah, the good old WSJ. As predictable as a case of diarhhea after dinner at Taco Bell. Steve predicted that argument 4 days before the Journal made it. I predicted that it would happen in the Journal. Not that it proves I'm a genius - I am a genius, but it only proves how predictable they are.

Economy's growing hand over fist? We need more immigration to fill the jobs being created. Economy's bleeding jobs? Need more immigrants to raise home prices. Quality of life falling? Need more immigrants to do something. Is there ever a "problem" for them for which more immigration is not the solution?

Hell with that. I want to wallow in recriminations. I want the guilty identified, humiliated, and punished.

Has anyone - has ANY SINGLE person - stood up and said "You know what, folks? I screwed up. I supported the policies that led to this mess and said 'damn the consequences.' Blame me."

535 congressmen and 1 president and not a single one of them has said "my bad"?

Where are the guillotines? I think we'll know come November 4th if this nation has any future whatsoever. If voters don't have the brains to fire the folks responsible, Democrat and Republican, then it's all over.

Anonymous said...

Thanks, dennis dale, for my only laugh of the day.

Anonymous said...

Wow. Barone has written a hard-hitting column about Obama, The Coming Obama Thugocracy, and now links to iSteve. I've always admired his analysis, but I have a new found respect for him.

Truth said...

"In Spain immigrants make up about 11% of the population, not much different from the US, and the increase in recent years has been fairly dramatic..."


The immigration in Western European countries is mostly from Eastern Europe. I think we all know that.

Anonymous said...

The immigration in Western European countries is mostly from Eastern Europe. I think we all know that.

On this point we're talking about real estate bubbles, not minority defaults. It doesn't matter from whence the immigrants come, the effect on demand is the same, more or less.

Anonymous said...

The immigration in Western European countries is mostly from Eastern Europe. I think we all know that.

Actually, alot of the immigrants in Spain are from Latin America. I don't know if Spain is importing Mestizons or higher class people, but alot are from the former colonies.

Anonymous said...

The immigration in Western European countries is mostly from Eastern Europe. I think we all know that.

The quote in question was talking about Spain, where the largest groups are latinos (with the sreet gangs to prove it) and magrebins. But who cares where they're from? When you're given lemons, make lemonade. Anything to besmirch the immaculate rep of the sacred immigrant/minority!

lugash/goulash. lmao. I was waiting for someone to send that guy up from the first day I saw him.

Truth said...

"On this point we're talking about real estate bubbles, not minority defaults. It doesn't matter from whence the immigrants come,"

Actually, my friend, it does matter as we are on a website which has the seminal agenda of promoting IQ establishing life choices, as a function of race.

Not only does this site promote it, it seems as everyone who posts here is card-carrying member, so I would have to say that my point is valid.

Anonymous said...

Actually, my friend, it does matter as we are on a website which has the seminal agenda of promoting IQ establishing life choices, as a function of race.

What the hell is that supposed to mean?

Truth said...

"What the hell is that supposed to mean?"

I'll translate for you:

All dem' white foriners mean somethin' cause' y'all think only white folks is smart round' here.