Some Good News Most Will Never Hear About

From  a link in the always interesting Marginal Revolution

Abstract

We test for discrimination against minority borrowers in the prices charged by mortgage lenders. We construct a unique dataset of federally-guaranteed loans where we observe all three dimensions of a mortgage’s price: the interest rate, discount points, and fees. While we find statistically significant gaps by race and ethnicity in interest rates, these gaps are exactly offset by differences in discount points. We trace out point-rate price schedules and show that minorities and whites face identical schedules, but sort to different locations on the schedule. Such sorting likely reflects differences in liquidity or preferences, rather than lender steering. Indeed, we also provide evidence that lenders generate the same expected revenue from minorities and whites. Finally, we find no differences in total fees by race or ethnicity.

Neil Bhutta

Board of Governors of the Federal Reserve System

Aurel Hizmo

Board of Governors of the Federal Reserve System

Date Written: March 14, 2019

Robert Louis Stevenson's Evolving View of Henry David Thoreau

In 1880, Robert Louis Stevenson published in Cornhill Magazine  "Henry David Thoreau: His Character And Opinions," a scathing and hilarious attack. He begins this way

 

 THOREAU'S thin, penetrating, big-nosed face, even in a bad woodcut, conveys some hint of the limitations of his mind and character.  With his almost acid sharpness of insight, with his almost animal dexterity in act, there went none of that large, unconscious geniality of the world's heroes.  He was not easy, not ample, not urbane, not even kind; his enjoyment was hardly smiling, or the smile was not broad enough to be convincing; he had no waste lands nor kitchen-midden in his nature, but was all improved and sharpened to a point.  


Stevenson's view of Thoreau as a sort of ascetic kill-joy is shared, I think, by many inmates in schools, where Thoreau is "forced" upon them. "Who is this guy to tell me...?" is a natural enough reaction, especially among those pursuing the American Dream or even the Great American Dollar. But this view of Thoreau is terribly incomplete. For one thing, Thoreau is a very funny guy, in the Great American Wisecracker tradition. For another, for all his irony he was not really a faker. He is sometimes charged with not living up to claims he never made, or would ever dream of making. 

Stevenson himself came to alter his view of HDT quite dramatically, and in so doing gave an example of fair mindedness one would seek far and wide in Journlandia without ever encountering. In Familiar Studies of Men & Books [1882], he recanted his earlier view by narrating his correspondence with a Dr. Jaap, who had written in reply to the Cornhill essay. Dr. Japp, who knew Thoreau, gave evidence from actually witnessed events, not from interpretation of text. Stevenson opens by attacking his earlier approach as a "perversion" (of Justice?) because interpretation should not be based on limited evidence reinforced by personal values:

Here [in the Cornhill essay] is an admirable instance of the "point of view" forced throughout, and of too earnest reflection on imperfect facts.  Upon me this pure, narrow, sunnily-ascetic Thoreau had exercised a great charm.  I have scarce written ten sentences since I was introduced to him, but his influence might be somewhere detected by a close observer. Still it was as a writer that I had made his acquaintance; I took him on his own explicit terms; and when I learned details of his life, they were, by the nature of the case and my own PARTI-PRIS, read even with a certain violence in terms of his writings.  There could scarce be a perversion more justifiable than that; yet it was still a perversion. 

And in the end, Stevenson thought, much about Thoreau remains enigmatic. 

 Thoreau's theory, in short, was one thing and himself another: of the first, the reader will find what I believe to be a pretty faithful statement and a fairly just criticism in the study [i.e. the Cornhill essay]; of the second he will find but a contorted shadow. So much of the man as fitted nicely with his doctrines, in the photographer's phrase, came out.  But that large part which lay outside and beyond, for which he had found or sought no formula, on which perhaps his philosophy even looked askance, is wanting in my study, as it was wanting in the guide I followed.  In some ways a less serious writer, in all ways a nobler man, the true Thoreau still remains to be depicted.

It would be a shame if someone missed out on the pleasures of reading Thoreau because of hasty judgment. 

Selections from Stevenson

Cornhill essay here:  

Recantation here:


Why Trump should lay off GM

Most dangerous in this regard is the endless call for good jobs for all American workers, which from the progressive left could translate guaranteed employment, high minimum wages, compulsory unionization, early retirement, and much more. Such calls from any quarter are always misconceived. The ideal social objective should never be to create jobs as such. It should be to let businesses create jobs that produce more in social value than the cost of the labor that goes into the job. As the old adage in the garment industry had it, “you don’t make up in volume what you lose on each piece.” Putting government subsidies into the political hopper reduces the likelihood of achieving that objective. Make-work and featherbedding are dangerous first steps down the wrong path. But if one president is allowed to disrupt markets in the international sphere, why can’t the next president do so domestically as well? Sadly, the harmful effects of subsidies and restraints on trade only compound one other. To keep the economy humming, remember that these are the twin evils in labor markets, no matter which president is at the helm.

© 2018 by the Board of Trustees of Leland Stanford Junior University

--Richard Epstein


Catholic and Muslim Misery in London

Catholics in England in the time of Titus Oates were much worse off than are Muslims in England today. One big difference is that the courts were useless.  Judicial murders slaughtered in large numbers. Wild accusations were enough to hang someone.

Sydney Smith Explains Monarchy

DIVISION OF POWER.

THE prize of supreme power is too tempting to admit
of fair play in the game of ambition; and it is wise to
lessen its value by dividing it : at least it is wise to do
so, under a form of government that cannot admit the
better expedient of rendering the executive hereditary;
an expedient (gross and absurd as it seems to be) the
best calculated, perhaps, to obviate the effects of ambition
upon the stability of governments, by narrowing the
field on which it acts, and the object for which it con
tends.— [Edinburgh Review. 1803.]


Sudden Freedom

Iraq and so many countries minted in the twentieth century can attest to the wisdom of Sidney Smith in 1803. Why is this so hard to get?

SUDDEN FREEDOM.
A NATION grown free in a single day is a child born
with the limbs and the vigour of a man, who would
take a drawn sword for his rattle, and set the house in a
blaze, that he might chuckle over the splendour.—[1803.]