4 ms·

> Why does it have to be a business model? Humans are not rational actors. True! I guess my real point was why no arbitrageurs eating the free money up? > The

> Why does it have to be a business model? Humans are not rational actors. True! I guess my real point was why no arbitrageurs eating the free money up? > The segregation era almost certainly lost tremendous amounts of money for retail businesses as a whole, but their management still went along with it. I don't think I agree with that. If the larger society was racist and would not go to a business that was segregated, then the business owner made a "rational" business decision to keep the wealthier customers ... at least that could be true. > The remaining implicit bias in many businesses still loses tremendous amounts of money for retail businesses as a whole (see the various "wealthy black celebrity treated like a shoplifter" news stories, for example), but people still do it. I have seen some of those anecdotal stories, but it remains that there certainly are (and have been) other businesses very happy to take money from "wealthy black celebrity" customers. I get your angle, but it still seems like something is missing, especially now in non-segregated times.

toufiqbarhamov 8y ago
If you’d been neglected and abused for your whole childhood, then finally managed to run away and escape, you’d be out of your bad situation right? How long do you think it would take for you to catch up to the adults who weren’t raised that way? Evidence suggests that you never would, unless you were so gifted that you could compensate for your past. Most people won’t be that gifted, and won’t thrive. What I’m saying is that the missing ingredient is context. The market is a competition in many ways, and black people only got the chance to compete on a nominally fair playing field over the last few decades. Remember the Tuskeegee syphilis experiment only ended in 1972. Rodney king was nearly beaten to death in 1991. Families that were impoverished, segregated, and denied an education and voting rights take time to recover. A history of aggressive policing of the “war on drugs” hasn’t helped either. So at what point does it occur to you that the missing ingredient is history that only people like you and me get to forget?
- mhuffman 8y ago
  I get all of that, but it in no way explains the question that I asked. How do the terrible atrocities of the past cause auto lenders of today to deny minorities loans based on racism alone and not business sense? That is my question and that is what this post is about. TFA has evidence that people are going out of their way now to deny car loans to people that would otherwise be eligible for those loans except for their race. I am not doubting that this is happening, I am trying to determine why it would be and how no start-up has recognized the "market inefficiency" and opened a "we specialize in loans to black and hispanic people" and made billions and billions of free dollars currently being neglected.
  - toufiqbarhamov 8y ago
    I see, well I still think that I can help here. How do the terrible atrocities of the past cause auto lenders of today to deny minorities loans based on racism alone and not business sense? Because attitudes take time to change, and if we didn’t know that before the resurgence of facism in places like Brazil, Italy, Austria, Hungary and other countries should reach us that. The same people who thought it was acceptable to redline, or even kill people over their race still do, they’ve just changed their language. Some of their children doubtless feel differently, others almost certainly inherent their attitudes from their parents and communities. The older generation with its concentration of wealth and influence also haven’t changed. As another person said, people are not rational.
    - mhuffman 8y ago
      I understand, and agree with the "stickiness" of both racism and poverty, but like I mentioned above, home loans are one thing because maybe those racist people thought that "the blacks" where going to bring down their property values or make eyes at their daughters if they lived in the neighborhood. So even though it was terrible and misguided, it was rational from their warped perspective. But car loans? In 2019? It is just so baffling to me. Both why they would do it, and also why no one else at all is stepping up to get that money.
      - joejerryronnie 8y ago
        Two things can be equally true - systemic racial bias is a thing and has wide-ranging effects, and it doesn’t really make sense to discriminate on issuing auto loans in 2019. I mean, regardless of your personal feelings toward someone, you’re just losing out on commission if you deny the loan. Also, it probably doesn’t matter if you think they can pay the loan back as it will just get packaged and sold several times to other institutions. There are probably other factors which weigh in more heavily than the loan processor’s person biases, e.g. the credit score system, minorities may be less willing to challenge the initial rate offered, people perhaps negotiating from a weaker position if they don’t have multiple credit options available (bank, credit union, heloc), etc.
- lsiebert 8y ago
  I mean, the War on Drugs wasn't incidentally racist. It was intentionally racist. https://www.nydailynews.com/news/politics/nixon-aide-war-drugs-tool-target-black-people-article-1.2573832 https://www.nydailynews.com/news/politics/nixon-aide-war-dru... And nominally fair is correct. It's not fair now, but people say that it is. Sure there is stuff left over from past racist policies that impact people. For example Black families on average have 1/10th the wealth of a white family, in large part because of redline mortage practices and other policies that undermined home ownership for black people. But it's also wrong to suggest that everything is fair now, and black people just haven't caught up because of historical injustices. There's still strong evidence of systemic racial bias against Blacks (and Latinx people) in traffic stops, criminal sentencing, resume responses (including controlled experiments with identical resumes save for different names), hiring rates etc. And this is not just statistics in RL, but studies show that people are biased, even if they don't think they are. It's sadly quite easy, if you are white, to not see the issue, and if you don't see it it's easy to think it's not a problem anymore. It's still a huge problem.

toufiqbarhamov 8y ago

If you’d been neglected and abused for your whole childhood, then finally managed to run away and escape, you’d be out of your bad situation right? How long do you think it would take for you to catch up to the adults who weren’t raised that way? Evidence suggests that you never would, unless you were so gifted that you could compensate for your past. Most people won’t be that gifted, and won’t thrive. What I’m saying is that the missing ingredient is context. The market is a competition in many ways, and black people only got the chance to compete on a nominally fair playing field over the last few decades. Remember the Tuskeegee syphilis experiment only ended in 1972. Rodney king was nearly beaten to death in 1991. Families that were impoverished, segregated, and denied an education and voting rights take time to recover. A history of aggressive policing of the “war on drugs” hasn’t helped either. So at what point does it occur to you that the missing ingredient is history that only people like you and me get to forget?

mhuffman 8y ago
I get all of that, but it in no way explains the question that I asked. How do the terrible atrocities of the past cause auto lenders of today to deny minorities loans based on racism alone and not business sense? That is my question and that is what this post is about. TFA has evidence that people are going out of their way now to deny car loans to people that would otherwise be eligible for those loans except for their race. I am not doubting that this is happening, I am trying to determine why it would be and how no start-up has recognized the "market inefficiency" and opened a "we specialize in loans to black and hispanic people" and made billions and billions of free dollars currently being neglected.
- toufiqbarhamov 8y ago
  I see, well I still think that I can help here. How do the terrible atrocities of the past cause auto lenders of today to deny minorities loans based on racism alone and not business sense? Because attitudes take time to change, and if we didn’t know that before the resurgence of facism in places like Brazil, Italy, Austria, Hungary and other countries should reach us that. The same people who thought it was acceptable to redline, or even kill people over their race still do, they’ve just changed their language. Some of their children doubtless feel differently, others almost certainly inherent their attitudes from their parents and communities. The older generation with its concentration of wealth and influence also haven’t changed. As another person said, people are not rational.
  - mhuffman 8y ago
    I understand, and agree with the "stickiness" of both racism and poverty, but like I mentioned above, home loans are one thing because maybe those racist people thought that "the blacks" where going to bring down their property values or make eyes at their daughters if they lived in the neighborhood. So even though it was terrible and misguided, it was rational from their warped perspective. But car loans? In 2019? It is just so baffling to me. Both why they would do it, and also why no one else at all is stepping up to get that money.
    - joejerryronnie 8y ago
      Two things can be equally true - systemic racial bias is a thing and has wide-ranging effects, and it doesn’t really make sense to discriminate on issuing auto loans in 2019. I mean, regardless of your personal feelings toward someone, you’re just losing out on commission if you deny the loan. Also, it probably doesn’t matter if you think they can pay the loan back as it will just get packaged and sold several times to other institutions. There are probably other factors which weigh in more heavily than the loan processor’s person biases, e.g. the credit score system, minorities may be less willing to challenge the initial rate offered, people perhaps negotiating from a weaker position if they don’t have multiple credit options available (bank, credit union, heloc), etc.
lsiebert 8y ago
I mean, the War on Drugs wasn't incidentally racist. It was intentionally racist. https://www.nydailynews.com/news/politics/nixon-aide-war-drugs-tool-target-black-people-article-1.2573832 https://www.nydailynews.com/news/politics/nixon-aide-war-dru... And nominally fair is correct. It's not fair now, but people say that it is. Sure there is stuff left over from past racist policies that impact people. For example Black families on average have 1/10th the wealth of a white family, in large part because of redline mortage practices and other policies that undermined home ownership for black people. But it's also wrong to suggest that everything is fair now, and black people just haven't caught up because of historical injustices. There's still strong evidence of systemic racial bias against Blacks (and Latinx people) in traffic stops, criminal sentencing, resume responses (including controlled experiments with identical resumes save for different names), hiring rates etc. And this is not just statistics in RL, but studies show that people are biased, even if they don't think they are. It's sadly quite easy, if you are white, to not see the issue, and if you don't see it it's easy to think it's not a problem anymore. It's still a huge problem.