I think we are approaching this from two entirely different universes.
I am looking for cause and effect; I want to see data that supports or detracts from the proposition at hand. PROVE TO ME that X caused Y (including actual statistics).
Your proposal of Diversity causing the housing crash reads to me as a soft philosophical argument that is by definition unprovable -- and undisprovable.
At the very least, I see no proof in your writings. They are cogent arguments that leap from A to B to C -- but they lack the rigorous statistical evidence to demonstrate something convincingly to people who insist on hard data.
In my belief system, I use as few assumptions as possible. I try to avoid things that are unquantifiable. Statistical back testing is just on way to do that.
But even softer analyses such as war-gaming and alternative scenarios have to have some reasonable basis for proceeding. It cant be all assumptions, beliefs guesses and hunches.
This shows heartening progress in just a few days. Before he was exposed to my work, Mr. Ritholtz was denouncing and demonizing anybody who shared my views.
Here's a sample of what he wrote at the beginning of this week:
I’ve run out of patience with tired memes and discredited claims by fools and partisan.
The rhetoric of those pushing nonsense on the public in an attempt to confuse rather than illuminate — the phrase is “agnotology” – only serves to aid the lobbyists working on behalf of the Banks and Investment houses to maintain the status quo. ..
The nonsense rhetoric blogged about has no cost to those pushing these discredited memes ...
Now, having finally read my articles, he admits I offer "cogent arguments." He no longer seems to think he can prove them wrong, so he's insisting that I haven't proved them right.
He today argues, not incorrectly, "but they lack the rigorous statistical evidence to demonstrate something convincingly to people who insist on hard data."
Of course, that tends to be true of all historical writing. As the venerable historian Jacques Barzun wrote at age 93 in his summa, From Dawn to Decadence, in one of his 12 modest dictums summing up what he's learned during his career as a historian:
The historian does not isolate causes, which defy sorting out even in the natural world; he describes conditions that he judges relevant, adding occasionally an estimate of their relative strength.
Further, let me point out, that I'm not done yet collecting data. For example, we now know the subprime default rates by race for the state of Massachusetts. We now know, on a national level, the default rates by race for FHA loans in the 1990s. Eventually, somebody will apply the same laborious process to the Big One -- California -- and then we will be a lot farther along.
In summary, as Mr. Ritholtz more or less admits, my arguments, long ignored, distorted, or demonized, deserve a place at the table in any discussion attempting to discern the historical causes of the present unpleasantness.