Tuesday, May 27, 2014

Obama wasted American effort in Iraq, now will waste American effort in Afghanistan

A while back I wrote of the disastrous consequences of Obama's withdrawal of all American troops from Iraq:

    So, after so much American blood and treasure was spent on overthrowing Saddam Hussein and Iraq seemed to be emerging from its decades-long nightmare under Saddam, now it is instead threatening to become yet another failed nation under Iranian control and a potential training ground for extremists. Civil war between Shiites and Sunnis is breaking out and America is powerless to do anything about it. Iraq is falling into the same abyss that Syria has fallen into. All this, because Obama's disastrous "leading from behind," "hitting singles and doubles," toothless "redlines," foreign policy has withdrawn the American forces that would have given him the ability to influence the situation. ... It is possible to argue about the wisdom of George Bush's initial decision to invade Iraq. But, once that investment had been made (we are talking about 4500 American lives, after all, and Mr Obama is very fond of talking about investments), to withdraw all troops at the very moment when the investment was beginning to pay dividends is the action of an idiot.

Today we learned that Obama is going to withdraw all American troops from Afghanistan. Editorializes WSJ:

    Mr. Obama's total withdrawal is all the more dismaying given the hard-won gains he now puts at risk. As in Iraq after the 2007-2008 surge, Afghanistan has registered genuine, if fragile, military and political progress. ...[A]s in Iraq, these gains can be reversed, and the odds of reversal increase without a credible U.S. military presence to help the next Afghan president fend off the Taliban and its allies in Tehran and Islamabad. ... [B]y setting a date for zero, Mr. Obama is denying the next [American] President options if things don't go so well. What happens if the Taliban return to threaten Kabul or Kandahar, or if the "core" al Qaeda around Ayman al-Zawahiri reconstitutes itself again? It'll be much harder to send troops back once they've all gone.

Imagine you are the parent of a young man who gave his life in Afghanistan to prevent it from being used as a launching pad for jihad against America, jihad of the kind we saw on the morning of 9/11. We accomplished that goal. We got bin Laden. We defeated the Taliban. But now Obama is pulling out, once again snatching defeat from the jaws of victory. Such incredible waste.

Tuesday, May 20, 2014

Elizabeth Warren is a complete idiot

Here's her deep analysis of the financial crisis of 2008 on the Colbert Show:

    WARREN: I grew up in an America that was investing in kids. It was investing in public universities. It had a higher minimum wage. It was an America that said every kid would get a fighting chance. And that's how we built America’s great middle class. Then starting in about the 1980s, we turned in a different direction.

    COLBERT: You mean when Reagan came in and it was morning in America ...

    WARREN: Yes, that is the right time, when this happened. ... And what happened is that he had a couple of ideas. The first one was that they would fire the cops. Not the ones on Main Street but the ones on Wall Street, [the ones] making sure the biggest financial institutions actually followed the law. Those were the cops they got rid of. ... See if we don't have some basic rules, then what happens is exactly what happened then. And that is the big financial institutions made billions of dollars by cheating people on credit cards, mortgages.

So, according to Pocahontas' interpretation, we can blame it all on Reagan; he fired the regulators, and the evil, greedy bankers on Wall Street ran amok.

This is just nonsense.

In an earlier blog post, I mentioned that I have been reading Charles Calomiris' book Fragile by Design. According to Calomiris, there was no lack of regulators. Rather, regulators, policy makers, and politicians on both sides of the aisle knew exactly what was going on. In fact, they had planned it and actively promoted it: the massive expansion of easy credit, which turned out to have such disastrous effects on low- and middle-income individuals, was precisely what they intended all along:

    The subprime crisis was, first and foremost, the outcome of a political bargain. Since the 1980s, and accelerating through the 1990s and 2000s, banks, along with GSEs, were allowed to grow into enormous enterprises. This expansion afforded them increased economies of scale, economies of scope, potential for market power, and levels of too-big-to-fail protection. In exchange, they had to share some of the resulting rents with activist groups — a move that policy makers saw as a politically easy way to address the serious social and economic problems that affected America’s urban poor. This situation created an opportunity for activist groups to leverage the rules so that they could garner a share of the rents being earned by banks for themselves and their members.

    Banks would not engage in this kind of rent sharing without limit, however. They knew that they would be able to do more at lower cost to themselves if they could either sell the resulting high-risk mortgages to Fannie or Freddie or support them with low levels of prudential capital, which meant securitizing them. Thus activists used their influence in Congress in the banks’ favor to impose HUD mandates on Fannie and Freddie mortgage purchases and to force Fannie and Freddie to loosen their underwriting standards. Fannie and Freddie went along, but only on condition that they were granted the right to finance their mortgages and mortgage-backed securities with money that they borrowed, with an implicit guarantee of their debts coming from taxpayers.

    Once the basic rules of this game were laid down in the early 1990s, the game unfolded in a predictable manner. ... Policy makers and regulators fully understood what was happening. They could have stopped the subprime mortgage risk machine by changing the rules about HUD mandates or prudential capital requirements, but they chose not to do so. Instead, regulators stood by and watched: in essence, they subcontracted the regulation of banking to private firms [Moodys and S&P] that sold ratings and whose incentives were therefore aligned with those of issuers and purchasers of securities, who wanted those products to have inflated ratings. Politicians and regulators from both sides of the political aisle were involved in actively supporting this game and in passively permitting it to unfold. [emphasis added]

The subprime crisis did not occur because the banks and Fannie and Freddie were not following the law, but precisely because they were following the law all too well. Populist groups like ACORN lobbied politicians to force the banks to create more subprime credit. They also lobbied politicians to use their influence to force Fannie and Freddie to weaken their underwriting standards so they could purchase and securitize more subprime loans. The politicians, seeing that subprime lending was an easy way for them to funnel resources to low-income households, readily acquiesced. The banks originated the loans and Fannie and Freddie packaged up the toxic stuff and transmitted the poison throughout the global financial system. And the regulators did nothing to stop this because they knew easy credit for the un-creditworthy was precisely what the politicians wanted. This was the so-called "Let them eat credit" strategy that Raghuram Rajan, former Chief Economist at the IMF, has so eloquently described in his book Fault Lines. Writes Rajan:

    [T]he government’s response to rising inequality—whether carefully planned or the path of least resistance—has been to encourage lending to households, especially but not exclusively low-income ones (the government push for housing credit was just the most egregious example). ... As I argue in my recent book Fault Lines, “let them eat credit” could well summarize the mantra of the political establishment in the go-go years before the crisis.

Consider the worst possible interpretation of the banks' actions. That is, assume for a moment that it all started with the banks; assume they were greedy and wanted to grow to enormous size so they could make money hand over fist; assume the banks were the first ones to loosen underwriting standards. Even if this scenario were correct (which, according to Calomiris, it is not), politicians on both sides of the aisle, persuaded by activist groups on the Left, went along with the expansion of subprime credit because it was politically expedient; and the regulators, though fully aware of what was happening, did nothing to stop it.

In sum, Warren's characterization of the 2008 panic as somehow Ronald Reagan's fault is completely bogus. (Apparently, the statute of limitations for The Gipper is even longer than it is for Dubya.) Senator Warren is held up by the Left and its supporters in the mainstream media as their new champion. In reality, she is just another simple-minded Democratic political hack who thinks she can gain power by repeating the mantra "Reagan, Bush, Koch Brothers" over and over again.

Monday, May 19, 2014

Give me a break, Pocahontas.

The idiot EJ Dionne gushes about Elizabeth Warren, her of the high cheekbones and Native American recipes, and the new darling of the Left:

    Oh yes, and it really bugs her when people assert that "corporate" and "labor" are "somehow two sides of the same coin." She asks: "Does anyone think that for every billionaire executive who can afford to write a check for $10 million to get his candidate elected to office, there is a union guy who can do the same? Give me a break."

There may not be one union guy, but there are certainly several unions that regularly write checks to get their candidates elected to office, for example, AFSCME, the NEA, the IBEW, the UAW, the CJU, and SEIU, just to name those in the top 10 of all-time political donors. In fact, the SEUI gave $850K to Rethink PAC, which opposed Scott Brown when he was running for reelection against Warren.

Give me a break, Pocahontas! Like so many other Democrats, you are just another politician bought and paid for by unions.

Calomiris vs Johnson

I've been reading Charles Calomiris' book Fragile by Design. Excellent book. Very well researched. Good combination of politics, history, and finance.

The conclusion I draw from it is that it is far better to invest in Canadian banks over the long run than in American banks. This is because the American banking system is too much influenced by populist groups (like ACORN operating under the provisions of the Community Reinvestment Act) that are intent on using American banks merely as a conduit for funneling cheap credit to borrowers who are inherently poor credit risks. To claim that this problem can be solved by greater regulation is nonsense because the degree to which banks are regulated is also determined by politics, and stricter regulation would only thwart the desires of populist groups for cheap credit, so that it will never happen. In other words, populist groups will lobby politicians to reject sound credit underwriting standards because such standards would guarantee that credit was never granted to their low-income constituents.

The Canadian banking system, on the other hand, has been shaped by a government that has managed to resist the influence of populist groups. So, the Canadian banks, while being highly leveraged, are much more stable than American banks over the long run because the former have not diluted their underwriting standards under political pressure in order to funnel credit to inherently uncreditworthy individuals.

All that said, there also seems to be a general consensus (for example, see here and here) that right now there is a significant housing and credit bubble in Canada. Household borrowing is at the same level it was at in the US right before the crash in 2008 and real estate prices are sky high (in particular, in places like Vancouver). Thus, although it is probably true that when this bubble bursts, Canadian banks will come out of it solvent and in far better shape than the US banks came out of 2008, nevertheless the inevitable crash will still have an impact on them.

So, I guess the general investment thesis to be derived from all these considerations is: watch for a bursting of the credit and housing bubble in Canada and for a significant pullback in the price of Canadian bank stocks (for example, RY, TD, BMO, CM), and then invest in Canadian banks.

For a contrary view (the Canadian banking system, composed of a few, very large, highly leveraged banks, is doomed), read the blog post entitled The Canadian Banking Fallacy by Simon Johnson. I think Johnson's arguments are weak in comparison to Calomiris'. For example, Johnson notes that at the beginning of the financial panic in 2008 Canadian banks were much more highly leveraged than American banks, and consequently were much more risky. Well, if that was the case, then why weren't their default rates as high as those experienced by American banks and why didn't more of them fail or require government bailouts?

Johnson wrote the book White House Burning, in which he argues that the reason why Americans weren't able to repulse the Brits in the War of 1812 is because American citizens weren't taxed enough in order for the government to be able to support an army; from this he draws the conclusion that we had better tax ourselves more today (presumably, to forestall another sack of Washington). IMHO, weak. To think, as Mr Johnson apparently does, that the additional revenues raised by increased taxes will be "invested" for the "general welfare" instead of being funneled by bought-and-paid-for politicians to special interest groups (whether ACORN or defense contractors) is sheer naiveté.

Sunday, May 18, 2014

Yes: apparently, there is no room for compassion in the US

In an editorial entitled In U.S., there's no room for compassion, The Seattle Times indignantly sermonizes:

    You probably know the story. A terrorist group in Nigeria kidnaps nearly 300 schoolgirls. The reason is found in the abhorrent ideology from which it derives its name: Boko Haram — Western Education Is Forbidden. The families of the girls turn to their government for help and it shrugs. The story is likewise ignored in America by “news” media too busy handicapping the chances of Hillary Clinton’s grandchild in the 2054 midterms to bother with anything so picayune as a mass kidnapping.

    So supporters take to Twitter with a hashtag: #BringBackOurGirls. It spreads like fire. Michelle Obama, Ellen DeGeneres, Malala Yousafzai, Jesse Jackson, Amy Poehler and millions of lesser-known names all join the campaign.

    Does it “solve” the problem? Of course not. Who would be so naive as to think it would? Is it the only thing we should be doing in response? Again, no.

    But does the international attention spur Nigeria’s lackadaisical government to take the abduction more seriously and to accept international help — including from the United States — it has previously spurned? Yes. Does the hashtag campaign force media to pay attention to a tragedy that was being ignored? Again, yes. Moreover, it delivers to the parents of these girls the same simple, sustaining message as the cards and texts in the hypothetical above: We are with you.

    It’s hard to see how anyone — anyone — could regard that as a bad thing. But at least some political conservatives do. As noted, Limbaugh, Will and the National Review have all pronounced themselves unimpressed. Donald Trump, Ann Coulter and Fox’s Steve Doocy have also made attempts at ridicule. ... [I]n its behavior here, the right does not so much seem estranged from a competing ideology as from its own humanity.

What I find troubling is: while the Left professes its deep concern for young girls in Nigeria, at the same time it is totally unconcerned about the ongoing horrors of partial-birth abortion here in America. The leading lights of Liberalism -- why, we are told, even that great daytime moral philosopher Ellen DeGeneres herself -- wring their hands over the plight of innocents in Africa and bemoan the loss of "humanity" on the Right, while at the same time they turn a blind eye to the grisly slaughter that continues in their own backyard.

Where were all the hashtags of moral outrage when the inhuman practices of the abortionist Kermit Gosnell were being revealed? Isn't partial birth abortion an even more "abhorrent" practice than "Boko Haram?" Isn't it hard to see how "anyone -- anyone --" can countenance such a practice? Why didn't the Left launch a campaign on Twitter at that time to "force the media to pay attention to the tragedy that was being ignored," the tragedy consisting of the almost assembly-line extermination of the unborn and the murder of young mothers that takes place on a daily basis here in our own country?

Until I hear the Left start to advocate on behalf of the innocents in the womb, I will judge their professions of concern for innocent girls in Nigeria to be nothing more than the most disgusting kind of moral hypocrisy. Yes, there is no room for compassion in the US; compassion for the helpless unborn, that is.

Saturday, May 17, 2014

Vanila Singh, Republican candidate for 17th Congressional District in California, opposes SCA-5 and irresponsible government spending

In a recent blog post, I criticized SCA-5, the constitutional amendment proposed by the California Democratic Party that would substitute racial discrimination for meritocratic considerations in the admissions process at the University of California.

On her website, Dr. Vanila Singh, Republican candidate for Congress in my 17th District in California, expresses similar views on the issue:

    The American Dream is firmly rooted in education. Recently in Sacramento, some lawmakers proposed to reintroduce racial discrimination into college admissions with a bill known as SCA-5. In the two centuries since our country’s founding, many Americans have dedicated their lives to the pursuit of equality of opportunity, and the primacy of merit. Granting college admissions, promotions, or other rewards on the basis of race, sex or factors other than merit undermine their work and sacrifice. Now more than ever we should be rewarding our high achievers with choices, and not limit their ability to self determine. I stand against racially divisive politics, and will fight for fairness and excellence objectively and without prejudice. [emphasis added]

In that same blog post, I wrote about some of the personal and family values that I have encountered in my Asian, Indian, and Eastern European co-workers over the last 30 years in Silicon Valley:

    In my opinion, [immigrants from India, China, and Russia] are natural constituents of the Republican Party. My experience is that they have conservative family values. They believe that one should get ahead through hard work, not government handouts. They understand the financial mess the US finds itself in and find it repugnant. Their value system is decidedly entrepreneurial and meritocratic. Statements like President Obama's "You didn't build that" are counterintuitive to them.

On her website, Dr. Singh expresses similar sentiments:

    As a mother, I am deeply concerned that the opportunities we had for advancement in our education and careers are declining for our children. We continue to borrow for ourselves against their futures. Society is failing our children: the very definition of the American Dream—that the next generation will have better opportunities than their parents—is quickly moving out of their reach. Most middle class families feel like we are falling behind. We are seeing our jobs limited or outsourced—gone for good. We watch as the real costs of living—putting food on the table, gas in our cars, heating our houses, and educating our children—continue to soar. ... Washington spends our hard earned money irresponsibly—racking up billions of dollars in unpaid bills each day and asking us for more! A dollar wasted by the government is a dollar which cannot then be used for someone truly in need, in our schools, or on our crumbling infrastructure. What we spend should have some relationship to what we earn—just like we manage our homes.

Well put, Vanila. You go girl! You have my support and my vote.

Wednesday, May 7, 2014

More pictures of the chaos Obama has created by withdrawing American troops from Iraq

In late April, David Ignatius wrote in the Washington Post:

    Iraq appears to be slipping back into civil war, and Sheik Zaydan Aljabiri, one of the political leaders of the Sunni insurgent group known as the Tribal Revolutionaries, seems confident that his side is winning. ... Brutal sectarian war has come again to Iraq, and many say it's as bad as in the dark days of 2007. "In some ways, it's almost scarier today," says a Pentagon official who follows Iraq closely. The Iraqi military isn't strong enough to fend off the Sunni insurgents, so Prime Minister Nouri al-Maliki is relying increasingly on Iranian-trained Shiite militias. ... "It's only going to get worse," warns Maj. Gen. Ali Shukri, a retired Jordanian commander who was the late King Hussein's special adviser on Iraqi tribes. ... A vivid snapshot of the battle raging in Anbar province comes from Jalal al-Gaood, who's running for parliament in Wednesday's election. ... "Everyone tells me they've never seen what's happening on the ground now," says Gaood sorrowfully. "Hell has come to these villages and towns. It's far worse than before." ... Zaydan ... warns: "Iraq is not now a state. It is led by gangs."

Sunday, May 4, 2014

Obama's disastrous foreign policy failures in Iraq; or: The consequences of a foreign policy based on "hitting singles and doubles," "leading from behind," and toothless "redlines"

Dexter Filkins has just published a lengthy article in The New Yorker (not, the last time I looked, an appendage of FoxNews), entitled What We Left Behind, describing how Iraq is descending once again into civil war between Shiites and Sunnis. Filkins basic conclusion: the renewed chaos in Iraq and the effective loss of the country to Iran is a direct consequence of President Obama’s decision to withdraw all American troops from Iraq.

It is worthwhile to quote extensively from Filkins’ article. Filkins starts by describing the renewed sectarian violence in Iraq:

    The bombs are back, sometimes a half-dozen a day, nearly always deployed by Sunnis to kill Shiites. … This month’s election will be the first without American supervision. The recent violence, along with [Prime Minister Nuri al-Maliki’s] growing authoritarianism, has prompted many to imagine the future in the darkest terms. … I asked [Hanaa Edwar, who runs a nonprofit called Al-Amal (Hope),] about the elections, whether change might save the country. She looked at me with tired eyes. “We are going into—how do you say it?” she said. “The abyss?” a colleague offered. “Yes—the abyss,” Edwar said. “Yes, yes, yes.”

Filkins then goes on to describe how, in the wake of the success of George Bush’s surge and an election that had produced a plurality of votes for a secular, pro-Western, anti-Iranian candidate, President Obama snatched defeat from the jaws of victory: first, Obama did nothing as Prime Minister Maliki was dictated to by the Shiite regime in Iran; then Obama, against the wishes of all parties involved, simply withdrew all American troops, the only force that was keeping the peace between rival sectarian factions.

    In parliamentary elections [in March of 2010], Maliki’s Shiite Islamist alliance, the State of Law, had suffered an embarrassing loss. The greatest share of votes went to a secular, pro-Western coalition called Iraqiya, led by Ayad Allawi, a persistent enemy of the Iranians. “These were election results we could only have dreamed of,” a former American diplomat told me. “The surge had worked. The war was winding down. And, for the first time in the history of the Arab world, a secular, Western-leaning alliance won a free and fair election.”

    But even though Allawi’s group had won the most votes, it had not captured a majority, leaving both him and Maliki scrambling for coalition partners. And despite the gratifying election results, American officials said, the Obama Administration concluded that backing Allawi would be too difficult if he was opposed by Shiites and by their supporters in Iran. “There was no way that the Shia were not going to provide the next Prime Minister,” James Jeffrey, the American Ambassador at the time, told me. “Iraq will not work if they don’t. Allawi was a goner.”

    Shortly after the elections, an Iraqi judge, under pressure from the Prime Minister, awarded Maliki the first chance to form a government. The ruling directly contradicted the Iraqi constitution, but American officials did not contest it. “The intent of the constitution was clear, and we had the notes of the people who drafted it,” Sky, the civilian adviser, said. “The Americans had already weighed in for Maliki.”

    But it was the meeting with [Qassem Suleimani, who is a commander of the Qods Force, a division of the Iranian Islamic Revolutionary Guard Corps (IRGC), and who is listed by the United States government as a "terrorist"] that was ultimately decisive. According to American officials, he broke the Iraqi deadlock by leaning on [Moqtada al-Sadr, the Iranian-backed guerrilla commander] to support Maliki, in exchange for control of several government ministries. Suleimani’s conditions for the new government were sweeping. Maliki agreed to make Jalal Talabani, the pro-Iranian Kurdish leader, the new President, and to neutralize the Iraqi National Intelligence Service, which was backed by the C.I.A. Most dramatic, he agreed to expel all American forces from the country by the end of 2011.

    The U.S. obtained a transcript of the meeting, and knew the exact terms of the agreement. Yet it decided not to contest Iran’s interference. At a meeting of the National Security Council a month later, the White House signed off on the new regime. Officials who had spent much of the previous decade trying to secure American interests in the country were outraged. “We lost four thousand five hundred Americans only to let the Iranians dictate the outcome of the war? To result in strategic defeat?” the former American diplomat told me. “Fuck that.” At least one U.S. diplomat in Baghdad resigned in protest. And Ayad Allawi, the secular Iraqi leader who captured the most votes, was deeply embittered. “I needed American support,” he told me last summer. “But they wanted to leave, and they handed the country to the Iranians. Iraq is a failed state now, an Iranian colony.”

    The consequences became clear when negotiations began over the crucial question of withdrawing American troops after 2011. The leaders of all the major Iraqi parties had privately told American commanders that they wanted several thousand military personnel to remain, to train Iraqi forces and to help track down insurgents. The commanders told me that Maliki, too, said that he wanted to keep troops in Iraq. But he argued that the long-standing agreement that gave American soldiers immunity from Iraqi courts was increasingly unpopular; parliament would forbid the troops to stay unless they were subject to local law.

    President Obama, too, was ambivalent about retaining even a small force in Iraq. For several months, American officials told me, they were unable to answer basic questions in meetings with Iraqis—like how many troops they wanted to leave behind—because the Administration had not decided. “We got no guidance from the White House,” Jeffrey told me. “We didn’t know where the President was. Maliki kept saying, ‘I don’t know what I have to sell.’ ” At one meeting, Maliki said that he was willing to sign an executive agreement granting the soldiers permission to stay, if he didn’t have to persuade the parliament to accept immunity. The Obama Administration quickly rejected the idea. “The American attitude was: Let’s get out of here as quickly as possible,” Sami al-Askari, the Iraqi member of parliament, said.

    Many Iraqi and American officials are convinced that even a modest force would have been able to prevent chaos—not by fighting but by providing training, signals intelligence, and a symbolic presence. “If you had a few hundred here, not even a few thousand, they would be coöperating with you, and they would become your partners,” Askari told me. “But, when they left, all of them left. There’s no one to talk to about anything.”

    “We used to restrain Maliki all the time,” Lieutenant General Michael Barbero, the deputy commander in Iraq until January, 2011, told me. “If Maliki was getting ready to send tanks to confront the Kurds, we would tell him and his officials, ‘We will physically block you from moving if you try to do that.’ ” Barbero was angry at the White House for not pushing harder for an agreement. “You just had this policy vacuum and this apathy,” he said. “Now we have no leverage in Iraq. Without any troops there, we’re just another group of guys.” There is no longer anyone who can serve as a referee, he said, adding, “Everything that has happened there was not just predictable—we predicted it.”

So, after so much American blood and treasure was spent on overthrowing Saddam Hussein and Iraq seemed to be emerging from its decades-long nightmare under Saddam, now it is instead threatening to become yet another failed nation under Iranian control and a potential training ground for extremists. Civil war between Shiites and Sunnis is breaking out and America is powerless to do anything about it. Iraq is falling into the same abyss that Syria has fallen into. All this, because Obama's disastrous "leading from behind," "hitting singles and doubles," toothless "redlines," foreign policy has withdrawn the American forces that would have given him the ability to influence the situation. And then, we are asked to believe that Obama can prevent Iran from acquiring nuclear weapons when, with troops on the ground in Baghdad, he could not even stand up to the Iranian government and prevent it from dictating the shape of the Iraqi government.

It is possible to argue about the wisdom of George Bush's initial decision to invade Iraq. But, once that investment had been made (we are talking about 4500 American lives, after all, and Mr Obama is very fond of talking about investments), to withdraw all troops at the very moment when the investment was beginning to pay dividends is the action of an idiot.

Friday, May 2, 2014

Obama troubled by Oklahoma's botched execution of convicted killer, but not by Gosnell's abortions/murders of innocent babies

We learn today that President Obama is "troubled" by Oklahoma's botched execution of Clayton Lockett. As reported by the Christian Science Monitor:

    “In the application of the death penalty, we have seen significant problems,” such as racial bias and the execution of innocents, as well as the "deeply troubling" execution of Clayton Lockett, [President Obama] said, responding to a question at a joint press conference with German Chancellor Angela Merkel on Friday. “All these do raise significant questions about how the death penalty is being applied," he added. ... Lockett had been sentenced to death for shooting a 19-year-old woman and allowing his accomplices to bury her alive.

Where was Obama's sense of outrage and why did he remain silent when the horrors of the abortion mill run by Kermit Gosnell were being revealed? Apparently, Mr Obama finds it troubling that a man convicted of shooting an innocent woman and burying her alive should have to suffer during his execution, but he feels no compunction whatsoever when innocent unborn children are pithed during a partial birth abortion procedure or even murdered (their spinal columns "snipped") after they have been fully delivered.

The fact that Mr Obama expresses concern for the one practice while he blithely ignores the barbarity of the other is moral hypocrisy of the most revolting kind.

Disparate impact and data science, Part 2: garbage in, garbage out

I recently wrote a blog post describing how disparate impact doctrine and data science are on a collision course. Today, the Obama Administration released a report, Big Data: Seizing Opportunities, Preserving Values, that illustrates this point nicely. The report states:

    The fusion of many different kinds of data, processed in real time, has the power to deliver exactly the right message, product, or service to consumers before they even ask. Small bits of data can be brought together to create a clear picture of a person to predict preferences or behaviors. These detailed personal profiles and personalized experiences are effective in the consumer marketplace and can deliver products and offers to precise segments of the population -- like a professional accountant with a passion for knitting, or a home chef with a penchant for horror films.

    Unfortunately, "perfect personalization" also leaves room for subtle and not-so-subtle forms of discrimination in pricing, services, and opportunities. For example, one study found web searches involving black-identifying names (e.g., "Jermaine") were more likely to generate ads with the word "arrest" in them than searches with white-identifying names (e.g., "Geoffrey"). This research was not able to determine exactly why a racially biased result occurred, recognizing that ad display is algorithmically generated, based on a number of variables and decision processes. [emphasis added]

The study cited is “Discrimination in Online Ad Delivery by Latanya Sweeney. Ms Sweeney writes:

    [T]he EEOC uses an "adverse impact" test, which measures whether practices, intentional or not, have a disproportionate effect. If the ratio of the effect on groups is less than 80%, the employer may be held responsible for discrimination. ... Notice that racism can result, even if not intentional and that online activity may be so ubiquitous and intimately entwined with technology design that technologists may now have to think about societal consequences like structural racism in the technology they design. [emphasis added]

Ms. Sweeney then goes on to demonstrate that, yes, web searches for "black-identifying" names do, in fact, more frequently result in the display of ads with the word "arrest" in them than searches for "white-identifying" names:

    This study raises more questions than it answers. Here is the one answer provided. ... A greater percentage of ads having "arrest" in the ad text appeared for black identifying first names than for white identifying first names." ... There is discrimination in delivery of these ads.

The problem with the conclusion that there is "discrimination in the delivery of these ads" is that it is based on the single premise that statistical analysis alone can determine whether discrimination has taken place regardless of whether any intent to discriminate can be identified. The validity of this premise is dubious, at best. How can discrimination take place if there is no intent to discriminate? Is there any such thing as "structural racism?" Or does racism require human intention?

Roger Clegg lays out the argument against this premise:

    "Disparate impact” is the favored but dubious legal theory of the Obama administration. It’s being used to attack everything from election integrity to the financial industry when DOJ doesn’t have any evidence of intentional discrimination. This theory lets DOJ attack completely race-neutral laws and practices that it doesn’t like for policy reasons. ... The 14th and 15th Amendments prohibit state actions only where there is “disparate treatment” on the basis of race. The U.S. Supreme Court has made clear that in the context that means actions undertaken with racially discriminatory intent. Thus, congressional legislation must be aimed at preventing intentional racial discrimination, not just actions that may have just an effect that disproportionately affects racial minorities. This is especially so in light of federalism concerns and the fact that, as Justice Antonin Scalia noted in Ricci v. DeStefano, the disparate-impact approach actually encourages race-based decision making, which would violate the Constitution’s guarantee of equal protection.

Ms Sweeney goes on to suggest some proposals for "remedying" disparate impact:

    [T]echnology can do more to thwart discriminatory effects and harmonize with societal norms. ... Search and ad technology already reason extensively about context and appropriateness when deciding to deliver the best content to the reader. With some expansion, technology could additionally reason about the social and legal implications of content and context, too.

In other words, if algorithmically generated ad displays produce politically incorrect results, we should alter the algorithms. Such an action may seem rather innocuous in the case of ad placement, but if this same principle were applied to other areas, for example, the algorithmic evaluation of loan applications, it could have seriously detrimental effects. For example, as I wrote in my previous blog post on disparate impact and data science:

    Suppose, for example, that you have an algorithm that mines data in an attempt to determine the set of features that are best able to predict whether a prospective borrower will default on a loan or commit some kind of fraud. (Such algorithms are a well-known part of machine learning and statistics and are referred to under the general heading of feature selection.) Suppose further that the algorithm, presumably operating quite impartially and without human intervention [that is, with no intention to discriminate], discovers that the features that are most predictive of default are gender, race [or, since race may not be recorded, a proxy for race, such as a race-identifying name], and marital status. That is, the algorithm may find that if you are a single black mother then the probability of you defaulting or committing fraud is predicted to be high, whereas if you are a married white male, the predicted probability is small. What, then, are you supposed to do with the model?

    I have actually heard professional data scientists say that they would suppress consideration of these features in the predictive model. In other words, data scientists are actually being forced to pervert software algorithms so that they produce corrupt results, simply because they are afraid that the uncorrupted results will be politically unacceptable and subject them to attacks from the race and gender Stasi. There are even some misguided data scientists who willingly embrace the corruption of their science as the price that has to be paid in exchange for the advancement of certain "protected groups."

    This is the corrupt state of affairs that we have arrived at because of policies like disparate impact, which promote race- and gender-based prejudice over scientific understanding. Imagine what would happen in a field like Physics if scientists distorted their results to achieve such political ends.

When Ms. Sweeney talks about "expanding" search technology so that it can "additionally reason about the social and legal implications of content and context," she is coming very close to recommending that algorithms be modified to produce politically correct results. She should think again. As every computer scientist knows: garbage in, garbage out.

Update: Another problem with Ms. Sweeney's analysis is that it emphasizes that general algorithmic decisions may be unjust with regard to particular individuals. For example, Ms Sweeney demonstrates that when web searches are performed for the black-identifying names of black professionals with advanced degrees those searches still produce more ads with the word "arrest" in them. Ms. Sweeney is concentrating on individuals and ignoring aggregate results. It may be the case that Ms Sweeney, an individual with a black sounding name who holds a PhD in Computer Science, is unlikely to default on a mortgage. However, such a fact would not necessarily invalidate the results of an algorithm that found that black-identifying names were, on average, a feature that was predictive of default. There are always exceptions to rules. But that does not mean that the rules are useless. On occasion, you will find an individual Italian who doesn't like spaghetti. That does not mean that Italians in general do not eat a lot of spaghetti.