So You Want To Boost The Economy? End Affirmative Action!

With America having
ruined its

excessive debt
, the new administration is urging more
hair of the dog that bit us: borrowing another $820 billion


“fiscal stimulus”.

Of course, in all the infrastructure
spending in the Democrats` bill, there`s no mention of
beefing up or speeding up

one massive infrastructure project
already underway: the

lagging border fence.

The rationalizations for the stimulus keep
changing. Obama`s latest featured money pit—wind
and solar energy!
—being a desperate throwback to last
summer when gasoline prices were twice as high.

Sure, none of it makes much sense. But for
Obama, politically, it`s a no-lose proposition. Either the
economy gets better and he takes credit; or the

economy flatlines and he demands more fiscal defibrillation

In either case, he gets to give huge
sums of other people`s money to the politically
well-positioned. The taxpayers will eventually have to pay
for all the new borrowing, but most of the bill will likely
come due after the 2012 election.

Our economic problem, though, is more
severe than a temporary downturn. We now know that our
purported wealth as of July 1, 2007 was illusory, based on a
mountain of leverage teetering on the unquestioned
assumption that some

in Palmdale would actually pay off their

half-million dollar mortgages.

From 2001 onward, there was

no real economic growth
, just pseudo-growth
ginned up by

home equity withdrawals
. Our

trade balance
, for example, averaged

over 5 percent
of GDP throughout Bush`s second term.

So, the real question is not how do we
stimulate consumption once again to unsustainable heights,
but: How do we become more productive? How do we make more
stuff that people want to buy? How do we get better at
creating more wealth?

The nation turns its eyes to Barack Obama,
whose single year of working for a for-profit corporation
made him

like a
spy behind enemy lines
(as I point out in my book
America`s Half-Blood
Prince: Barack Obama`s “Story of Race and Inheritance.”

) Obama has no experience in creating wealth, just in
extracting it from others to spend for his political

But, needless to say, the Republicans
have no clue what alternatives to offer.

The triumph of the globalist ideology
means that the globalists` vaunted playbook is exhausted.

Free trade? Tariffs have already been cut
almost to nothing—to

1.3 percent
on average!

Cheaper labor? 
The globalist recipe—outsourcing and insourcing once
well-paid jobs away from American citizens—has been followed
for decades. The plan was to drive wages down but keep
consumption up by offering Americans lots and lots of debt.
How`s that working out lately?

It took us a long time to get to this
dismal point, and it will take us a long time to get back on
the right path. So, let`s discuss long-term strategies for
how Americans can make enough money to pay the taxes on all
the debt the government has suddenly taken on.

The most obvious way for the government to
help Americans become more productive is to junk
government-required extravagances. Sure, these demands may
have seemed affordable when

homes were "worth"
a median half million, but now they must be reassessed with
a jaundiced eye.

The most obvious reform for boosting
productivity: end the national anti-discrimination

The assumption that lower economic
achievement by a minority must be the fault of the majority
has created costs vaster than previously imagined. For
example, economist
Edwin S.
`s recent report

Cost of Diversity
for the National Policy Institute
estimates the price of affirmative action, immigration, and
multiculturalism at eight percent of the GDP, or $1.1
trillion. (Peter
and Leslie Spencer
the shortfall at 4 percent of GNP in 1993, something that
no one else wanted to do
, and anonymous statistician La
Griffe de Lion wrote Affirmative
Action: The Robin Hood Effect
in 1999, in which he pointed out 
that "Whenever
someone gets preferential access to a job or a promotion
because of his race or ethnicity, someone else of a
different race or ethnicity gets displaced. In the U.S., the

displaced person is usually a non-Hispanic white.

The costs, direct and (especially)
indirect, of affirmative action are seldom properly
conceptualized. The public has been trained to assume that
racial preferences are common only in

college admissions
. But in fact the vast
industry causes

corporations to impose quotas on themselves

against discrimination lawsuits.

In 1978, the federal government adopted
that declared:

“A selection rate for any race, sex, or ethnic group which is less than
four-fifths (or eighty percent) of the rate for the group
with the highest rate will generally be regarded by the
Federal enforcement agencies as evidence of adverse impact

In other words, if your hiring procedures
mean that any
legally protected minority
is hired at a rate less than
80 percent of the rate of the group that does best, then you
are presumed guilty of discrimination unless you can prove
yourself innocent.

Racial quotas are, thus, the


by-products of our anti-discrimination laws and regulations.

anti-discrimination laws undermine productivity even when
only whites apply for the job—because they make it dangerous
to use objective measures of competence.

example, when I was at Dun & Bradstreet, I needed to

hire a computer programmer.
I asked the human resources
department for the standard D&B written test for

said they would never, ever create such a thing

because they would be

certain to be sued over it as discriminatory.
they assured me, I was free to ask orally all the
programming questions I wanted—as long as I never wrote
anything down.

Additionally, the costs of the

current assumption that only discrimination can explain
are even greater than Ed Rubinstein`s report

Consider the mortgage meltdown that
launched the global economic crisis. Both the

administrations demanded

degraded credit standards

could get their fair share of the American
Dream. Team Obama whistles the same tune. The catastrophic
expansion of subprime loans was justified by Obama`s

economics` expert
Austan Goolsbee [email
] in 2007 on the grounds that

“`Irresponsible` Mortgages Have Opened Doors to Many of the
York Times,
March 29, 2007]

A new

, however, by Boston Fed economists Kristopher S.
Gerardi and Paul S. Willen,

Subprime Mortgages, Foreclosures, and Urban Neighborhoods
has revealed that minorities in

at about twice the white rate on subprime

Previously, I noted that data from the
federal Home Mortgage Disclosure Act database has shown that
minorities, who make up one-third of the population, took

twice as many dollars per capita
as whites in subprime
mortgages during the Housing Bubble years of 2004-2007.

A back-of-an-envelope calculation says
that if the national foreclosure rates are similar to those
measured in
, minority borrowers
accounted for approaching two-thirds of the subprime
mortgage dollars defaulted.


(There`s a great
irony here: it was a 1992 Boston Fed study purporting to
show mortgage discrimination, authored future Clinton
appointee Alicia H. Munnell, that provided the rationale for
the feds` forcing the banks to make these risky loans. The
then-president of the Boston Fed,

Richard F. Syron
, who greeted it with the glad cry of
"Comports with common
sense, no more studies needed"
went on to bigger and better
things as…CEO of Freddie Mac, one of two federally-sponsored
. Yet it was

refuted at the time

in Forbes magazine (January 4, 1993) by Peter Brimelow and Leslie
Spencer, who pointed

to differential default rates.)

Racial quotas might be necessary for some
institutions, typically local monopolies such as utilities
police forces
, that aren`t disciplined by the market to
maximize efficiency. But clearly, it`s time to lift the dead
weight of the anti-discrimination regime from firms in
competitive markets.

The Republican leadership would of
course whisper back to us that we can`t possibly talk in
public about boosting the economy by eliminating racial
preferences because that involves … race. And, President
Obama is, you know …

Of course, that`s the kind of thinking

made Obama President

My advice to the GOP: At the moment, the
media is proclaiming that a black man being President is the
greatest thing that ever happened in the history of the
world. So use ju-jitsu.
Go with the flow. Say that Obama being President shows that

racial preferences were successful
—and that it`s time to
pare them back to help the economy get out of the ditch.

[Steve Sailer (email
him) is

movie critic

The American Conservative

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