Wednesday, May 02, 2018

The ambiguity of discrimination

Last week I stopped briefly at the supermarket to pick up a few items. When I was done, I approached the checkout counters from the far end of the supermarket, passing stations 17, 16, and 15 that were closed. In most American supermarkets, each checkout counter is really in a lane, flanked on both sides by "impulse purchases" like candy and tabloid newspapers and scandal magazines. The checkout lanes have tunnels of about 5 meters before the conveyor belt actually begins. I saw that stations 14 and 13 both had their lights on, meaning they were open, and as I came up to 14, I looked down the tunnel and saw the cashier handing the customer the receipt, so I knew I could enter and immediately get checked out. As I turned down the lane for counter 14 and got ready to put my few items from my cart onto the conveyor belt, I heard a voice from the other side of the tunnel (in lane 13) say, "I can also take you over here." I looked up and saw the head of a blond woman speaking to me; she was the cashier from lane 13, walking in her "tunnel", perhaps re-arranging the candy on the shelves. Since there was no one in front of me, and especially since my cashier in lane 14 was African-American, I was not about to switch lanes. That would have required backing up and going around the candy and magazine racks to enter her lane. My daughter had just emailed me two days earlier with a story in the NY Times about the rules readers "of color" follow to avoid being harassed by security or store attendants, rules like "don't throw away your receipt before you leave a shopping center," "put your American Express Platinum Card next to your driver's license so a police officer will see it when they ask for an ID" and "do not wear a large purse or many layers of clothes when you walk into a store." So I was not about to switch lanes. I just started putting my items on the conveyor belt. After I had put my items on the conveyor belt and walked up to the cashier, the cashier from lane 13 said to my cashier, "They never see you when you're old."

I was stunned. She thought I was discriminating against her for being "old." I had barely seen her face, did not know her age or think of her as "old," and was not thinking about that at all. I was concerned about not appearing to discriminate against an African American, but more importantly, I just took the first empty lane! I was mostly trying to save time. The cashier in lane 13 apparently did not realize that I could not actually see that her lane was empty as I approached the checkout counters; because of the "tunnels" of impulse items, I could only see each lane as I came up to it. I had taken the first empty lane.
In this photo, I returned to the scene days later. Lane 14 is not open this day, but you can see that one cannot see the cashier over the displays.
From my point of view, it is clear I was not discriminating against an old person, but maybe other people do discriminate. And this is what makes claims of discrimination so difficult to prove. I can easily dismiss this instance, but I cannot say that it never happens. Indeed, I suspect that the cashier in lane 13 has probably experienced some discrimination, which led her to impute discrimination in me. It would be easy for me to accuse her of being oversensitive, or of imagining things. But that would be missing the point. People who do not experience discriminatory treatment can easily dismiss it, and not admit even when it really does happen.

I sheepishly told my cashier, "I just took the first empty line." She just smiled.

Tuesday, May 01, 2018

Insurance Magic and Medical Mess

We received a statement from our insurance company today that is astonishing. For a regular diagnostic test (don't remember what it was, but it is part of an annual physical), the company doing the diagnostics charged $1,149.22. Seems kind of expensive.

The crazy part is below:


Somehow, Blue Cross Blue Shield was able to "negotiate" a $1,067.80 discount! The insurance company only had to pay $81.42, and we did not need to pay anything.  I wish I had that kind of power; that is a 93% discount, meaning I could buy a $75K Alfa Romeo for just $5,313.

How is this type of "discount" even possible? It should be criminal to charge the full price, given the steep discount possible.

Note also that the services were provided on January 22nd, but the insurance company did not pay until April 10th, roughly 80 days later. The delay in payment raises costs for the provider. And it suggests this case had to go through a lot of people's hands before it was decided, and all that effort costs money too. The overhead is all cost that is not working on health. And the "negotiation" of the discount is also an additional cost.

When my mother fell and broke her hip in Sicily ten years ago, she had a hip replacement in a small hospital. We were lucky that the surgeon there was a professor at the University of Catania, so she received excellent care. But what was most notable was that the hospital did not have an accounting department. We did not have to pay anything! We could say that the hospital reduced costs by eliminating the accountants. Unfortunately, that is probably not a sustainable solution either, but it certainly seems like a lot of human effort is being wasted in bill tracking and negotiating "discounts." Without all these accountants, the prices could probably be lower for everyone.

Wednesday, March 28, 2018

Guns and Culture


There are few things as puzzling to foreigners as American “gun culture.” Indeed, it is hard for many Americans to understand each other on this issue as well. A recent article by Chad Huddleston in Sapiens.org (an online magazine of anthropology) does something that in our polarized environment is actually courageous: it tries to present “preppers,” those people who try to prepare for natural disasters and calamities, in a sympathetic light. This is of course what all anthropologists do: we examine misunderstood people and customs, and show how they make sense, at least to the natives. Huddleston is also interested in media portrayals, and discusses how the term “survivalists” came to be viewed negatively so the new term “preppers” emerged. Huddleston’s article notes how ordinary most members of the prepper community are, and how helpful they can be in emergencies. The extreme forms of prepping, like building bunkers, are rare—in fact there are none in his group in southern Illinois.
  
The preppers appeal to an ethos I actually understand, that is the idea of being prepared and able to live off the land. In a sense, it is the legacy of the “frontier myth,” and the ethos promoted by Cub Scouts and Boy Scouts. I remember as a 10 year old trying to learn to walk “Indian style”, with one foot in front of the other (and not in two parallel tracks), to make less noise and leave fewer traces, and being interested in learning about edible plants. In my 20s, I bought a copy of the US Army Survival Manual, just out of interest, for general knowledge. (You can see a copy of one such manual here. Interestingly, this is from a website called www.prepers.info and the cover page has an anti-state message “Reprinted as NOT permitted by U.S. Department of the Army, but by we the citizenry who paid for it.” I suppose there is an interesting and possibly valid copyright issue here, but note the kooky anti-state rhetoric of preppers, too, something Huddleston downplays.)

March For Our Lives protesters in STL 24 March 2018
The preppers article also made me reflect on the fact that many gun owners, indeed most, are very careful and responsible with their weapons. It is really a minority that insist on being able to carry them all the time. There really should be a way to find a reasonable compromise between the extreme of anyone being able to buy and carry a gun (which is the “pro-gun” NRA position) and a complete ban on guns (which is not the gun control position, but the NRA straw man).

As a result of the Parkland shooting (BTW, shouldn’t it be called a massacre when 17 people are killed? The 1929 Saint Valentine’s DayMassacre only involved 7 deaths), many young people have taken the lead in demanding gun control. A number of proposals have been discussed, including
  • Ban on sales to people under 21 years of age (like for sale of alcohol)
  • Ban on assault rifles
  • Ban on “bump stocks” and other means of converting rifles to automatic
  • Ban on large magazines (which hold many bullets)
  • Stricter background checks on gun purchasers.

 Missouri is definitely a gun state. Our current governor became somewhat famous (or infamous, depending on your point of view) for a campaign ad in which he shoots a machine gun for nearly the entire 30 second ad. (See Time magazine’s report here and this sarcastic take from The Verge)  He won. A Democrat who ran for senate had to defend himself against the typical Republican charge that Democrats want to take away people’s guns by running an ad showing him assemble a machine gun blindfolded, while saying he just wants more effective background checks. The Washington Post said it was the best political ad as of September 15, 2016.  He lost. 

March For Our Lives, STL 24 March 2018
It seems hard to understand why some sort of compromise is so difficult. Sure, some extremists argue that citizens should be allowed to own any weapon they want, but it is not legal to own a bazooka or tank, so there are some limits. Once we agree on that, the question is only what those limits should be.

I remember apologists for authoritarian regimes in Eastern Europe and in Taiwan used to argue that Western-style democracy caused polarization and caused dissent. I have never been convinced of this; authoritarian regimes just suppress the dissent, along with valuable alternative points of view. At some point, those dissident views will explode. On the other hand, it does seem that in some cases, especially recently, Americans are extremely polarized on certain issues like gun control. I think the problem is not democracy, but the “special interests” that muddy the issue, at least temporarily. In the long run, these issues get resolved.

Indeed, the US has been able to resolve most of these kinds of issues. When the founders debated whether to select representatives based on population or by state, they compromised by having a House of Representatives with members representing districts of similar population, and two senators for each state in the Senate. It may not be the most elegant solution, but it works. Only on slavery were Americans never able to compromise, at great cost.

The NRA actually promotes safe gun use, and it seems to me that many and perhaps most responsible gun owners could agree to the Parkland students’ proposals, but the NRA is vehemently opposed. Many commentators have noted that the NRA has changed over the past 50 years from being an association of gun owners to a lobby group for gun manufacturers (see here and here). The NRA has expanded the meaning of the 2nd Amendment well beyond what people understood it to mean in the 1950s (see here). The percentage of Americans who own guns has been declining, as has the number of hunters. This is in part due to increasing urbanization. At the same time, largely it seems with the encouragement of gun manufacturers, an increasing percentage of gun owners now own multiple weapons (66 percent, I have read). The gun manufacturers need to encourage increased use and purchases of guns to stay in business. The gun manufacturers made a lot of money after Obama was elected in 2008 because people rushed out to buy weapons due to the fear that he was going to restrict gun sales. That did not happen. And no regulations were passed even after Sandy Hook, where a shooter killed 20 children and 6 adults. When Trump won, there was no comparable rush to buy weapons. As a result, one manufacturer has just gone bankrupt

The problem is not democracy itself, but how the NRA, with the support of gun manufacturers, has been able to frame any talk of gun control as an infringement of liberty and the right to own a gun. Even now, the students are attacked for wanting to take away people’s guns. Alvin Chang on Vox pointed out that Fox News downplayed news of the march and framed it as a “March Against Guns.” Even though the activists clearly did not argue to ban guns but for specific gun control measures, Fox News portrayed “this as a much larger war, waged by liberals and the media, to take away people’s guns. It is, again, leaning into the fractures of this country and triggering the anxieties of its viewers.” Since Fox News is the main source of news for 19 percent of 2016 voters, it shapes reality for a huge proportion of the public.

Bill Clinton was in St Louis last week as part of a speaker's series (not a political event), and a friend gave us tickets to go hear him speak. The one issue he became really excited about, quite emotional, was gun control. He even joked, “You can tell I don’t care about this issue.” He noted that it is not the money that the NRA gives to politicians that matters, it is the fact that they deliver thousands of votes. NRA members will vote on this single issue. They are perhaps only 20 percent of voters, but they are a reliable block. Clinton asked the audience: “Are you willing to vote on just this issue?”

He also made a point of saying that guns are not a cultural issue but a public safety issue. At first I did not understand why that was important to him. It seems he thinks that if it is a cultural issue, then because of relativism, we just have to accept and respect “gun culture.” For example, if a group of people want to use peyote or to butcher a goat as part of a religious ceremony, we might agree to allow that as part of their culture. But we would not allow people to shoot guns into the air in celebration since the bullets can land on people and hurt them. This is an interesting point, but it is not an anthropological understanding of culture. It is very clear that guns have potent cultural meanings for many Americans, so it is indeed a cultural issue, from an anthropological point of view.

To be clear, Clinton was not advocating confiscating all guns, and specifically said that in remote rural areas, many people understandably feel they need a gun for their self-defense. He was only supporting the kinds of measures proposed by the Parkland students. This is also interesting, because it is true that some people feel more safe and secure knowing they have a gun. In reality, because the gun has to be locked away and unloaded, there are only some situations in which a gun could protect its owner. And of course, it is well documented that many guns end up being used in the heat of an arguments and in suicides, so may actually be making people less safe. But this powerful cultural view of guns as providing safety is not something that is going to change in my lifetime. And I myself feel safer in my house knowing I have a security system, even though I don’t think it really works. I have a front door that is nearly entirely made of glass, so it would be easy to “break in” and by the time the alarm company called me and determined it was an emergency and sent the police, I would certainly be either dead or a hostage. Nevertheless, having the alarm somehow makes me feel safe. Irrational, but emotionally true. Guns are probably the same: they make owners feel safe, even though they don’t actually make people safe. We have all seen enough movies where the guns save the hero that we come to believe it, regardless of the statistics. Just like we believe the home security system ads.

It is significant that everyone is finally talking about gun control. It will be interesting to see whether the movement can sustain itself, and whether some sort of compromise is possible. Extremists on either end of the debate will always object, but there should be a middle ground that well over half of Americans can agree on.

Thursday, January 11, 2018

AT&T and Kafkaesque Bureaucracy

Almost ten years ago, I wrote a blog post about my difficulties in getting AT&T to stop sending me a bill for $0 (yes, zero dollars). Incredibly, AT&T is still sending the bills to my old office. I have occasionally tried to stop them, but each time I hit a dead end and gave up. Yesterday, one of the recent letters was forwarded to me, so I decided to make another effort to stop the bills. I ended up spending an hour and a half in chats with 4 different people, AND THE PROBLEM IS STILL NOT SOLVED!!!

I don't know what is crazier: that AT&T cannot stop wasting $1.15 per month to mail me a bill for $0, or that I wasted an hour and a half of my life trying to get them to stop.


A brief summary of the old story: in the old days (1980s and '90s), before Skype and before cell phones, we used to use a "calling card" to make phone calls from public phones. Instead of having to deposit a lot of change, we called a toll-free 800 number, then put in our card number and a PIN, and then dialed the number we wished to call. Every month, we got a bill in the mail, and paid by check. (I know, it sounds very archaic.) We had a Sprint card, and then for some reason we switched to AT&T. We did not use this card to call from Hong Kong, because long-distance charges from Hong Kong were always much cheaper than from the US. But when we were in the US, this was the only way for us to use public phones to call other US numbers.

Once cell phones were available, in about 2004, we got a "pay as you go" SIM card for our phone that allowed us to call and receive US calls. We had no monthly bill; we paid $1.00 per day that we used it, and $0.10 per minute. We paid in advance, and our calls charge were deducted from our account. It was great, and we kept that phone number until we moved back to the US. That plan was originally from a company called Cingular, which was later bought out by AT&T. But this SIM card never was linked to the calling card (this is an important detail for below).

Back to the present: I have called the 1-888 toll free number in the past and know that the first step is that one has to input one's phone number or 16-digit number that I don't have, so I tried by going to the www.att.com/customerservice website, as directed by the bill. Very soon, a chat window appeared, so I decided to reply to Laura, and tell her I'm trying to stop the $0 bills. She transfers me to the billing department, where I speak to Charles. (I'm using their "real" names because it seems they are all in the Philippines and are not using their real names anyway. AT&T has a nifty feature where I was able to get a transcript of my chats.)

Charles asks me all sorts of questions, I repeat what I'm trying to do, I wait for a while, then he asks me for my phone number in case we get disconnected. I think, how nice, so I give it to him.

Charles : Thank you.
Charles : Do you have wireless services?
Me : Yes
Charles : Thanks for confirming.
Charles : Let me connect you to our wireless department to check this for you.
Annabelle : Hello! My name is Annabelle. I hope you are having a great day! How may I help you today?                                                 
So, when he asks if I have wireless services, I do not understand that he means "Are you getting wireless services from AT&T?" In fact, I am not. But basically, he did not know what to do, so he dumped me onto Annabelle! And I told her so.

Me : Can you read the chat history or should I start over?
Annabelle : Please allow me to review the items you raised to save time.
Me : Frankly, I think Charles just dumped my case on to you, as it has nothing to do with wireless...
Annabelle : Yes.
Annabelle : You are not in the US right now, correct?
As you can see, I had to start over, explaining that I am indeed in the USA....
She then tells me to call a phone number for the GoPhone department, even though I assure her it has nothing to do with phones.

Annabelle : As I check one of our specialist this is being handled by our GoPhone department, so you may directly contact them so that you can be further assisted with this, okay?
Annabelle : I can provide you their direct contact information.
Me : But this has nothing to do with our GoPhone account. It was for a calling card.
Annabelle : Yes, they are the one who handles calling cards as well.
Me : OK, how do I contact them?
Annabelle : Let me provide you their direct contact information.
Annabelle : It is 1-800-901-9878.
Annabelle : Just contact them directly so that the bill will be stopped from sending you.
Me : OK, I'll try

As I feared, the number was of no use; I do not have the numbers they want for me to move forward with the call. The voicemail just hung up on me.

I was livid. Fortunately, an AT&T survey popped up, so I gave them all zeros.

To my surprise, another window popped up, saying they were going to upgrade the case, asking if I was willing. So, of course I agreed. Now I was talking to Medwin B. Interestingly also was very confused about calling cards; I had to describe the whole process to him, and explain that it was not a prepaid calling card.

Medwin B : Joseph, is the calling card re-loadable once you already consumed the minutes do you get a chance to reload it?
Medwin B : Or is it disposable calling card?
Me : No; we got a bill. It is not disposable either.
Me : We are talking about a product that is dead for more than 10 years. I've been trying to stop these bills for $0 for over 10 years
Medwin B : Do you still have the phone number associated with that account?
Me : It was not associated with an account because we lived in Hong Kong at the time.
Me : Sorry, I mean it was not associated with a phone number because....
Me : We got bills in the mail, based on usage, and paid by check. The bills just keep coming, charging $0, even though we have not been using it for over 10 years.
Medwin B : I appreciate all the information and I am digging deeper here to help you. May I know how do you place a call using that calling card?
Me : :) I feel really old, talking about ancient technology. I called an AT&T 800 number, keyed in the code on the card plus a PIN, then the desired phone number.

Then he asked if I could send him a scan of the bill, and I said I could. Here is his text:
Medwin B : You can scan it and send an email to including your request to Foundation@att.com.
Medwin B : Or you can also call 800-591-9663 .
Medwin B : That is the best option I am seeing here after digging deeper to my resources here.                                                 
I did both. To my great frustration, it turns out both the email address and the phone number are for AT&T's charitable foundation. I got an auto reply email that began:
Thank you for contacting the AT&T Foundation.  Our funding priority is our Aspire Program.  We are committed to supporting organizations implementing verifiable, evidenced-based interventions focused on improving high school retention rates and preparing students – especially those most at-risk – for college or career. 
He, like Annabelle, and Charles, just dumped me. My case was probably lowering their performance on their metrics. I'm insulted that they pushed me off so easily; I feel like a fool for falling for what is obviously not relevant. What is annoying is that AT&T has all sorts of features, like the survey and the chat function, and the record of the chat, that are designed to provide good service, but they don't have PEOPLE who can navigate their system properly to solve a problem.

I am not entirely altruistic in trying to get AT&T to stop, so they save the wasted postage; in the back of my mind, I'm worried AT&T will start charging me for my non-existent card, and then I'll have bill collectors chasing me. I'm totally at a loss as to how to stop this. It is a both funny and frightening example of Kafkaesque bureaucracy.

I wonder if I switched my cell phone plan to AT&T whether they would be able to resolve this. I don't dare try.

Monday, October 30, 2017

Arbitrage or scam?


NPR's Planet Money recently replayed and updated a 2014 show called "Free Money" about two guys in Utah who buy used textbooks online at the end of semesters, when students are selling their books and prices are low, and then re-sell them at the start of the semester when prices are high. From a certain point of view, they are providing a service: they help make the market in textbooks work by buying and selling them. They also take a risk, because they store them for months and the books may not have a market the next semester (if, for example, a new edition or a better textbook comes out). But some people do not like what they do; one woman saw it as just jacking up the prices on her daughter's textbooks. The Utah guys are doing classic arbitrage, the taking of advantage in price differences between two markets, and it has always been controversial. If after a hurricane, I drive to the stricken area with a truck full of electric generators and sell them for five times what I paid for them, some will say that I'm offering a service (after all, without me, the generators are not available at all, and in any case, no one is forcing the buyers to buy from me) and others will say I'm profiteering and behaving immorally by taking advantage of other people's distress. Both arguments have validity and it is sometimes difficult to balance the two ideals of a free market and our sense of a "fair price".

The two friends selling books are able to make money and run their business because they post their books on Amazon.com, which creates a marketplace; without Amazon, it would be much more difficult to find these two guys who are selling a fairly small number of books. Theirs is not a big business. They are not like Abe.com, or my favorite, BetterWorldBooks.com (which is run as a social enterprise, meaning they do not try to maximize their profits; it also happens to be run by a graduate of my alma mater, and near my home town in Indiana). These bookstores, as far as I can see, do not raise their prices at the start of the semester, but run a store with stable prices. They do not do arbitrage; they are the market.

Last week, I ordered two air mattresses on Amazon, because we will be having a lot of guests over Christmas. They arrived over the weekend, but I was shocked to find that they arrived in a Walmart.com box. I was sure I had not bought them from Walmart. I remembered that I had to search long and hard to find what I wanted, and that I had bought them not from Amazon directly but from a different Amazon-affiliated vendor, "Posh Products USA" (Amazon page here). So why did the mattresses come from Walmart? At first I was confused.

The answer was in the bottom of the box, on the receipt, which had several surprises. First, it showed that my mattresses had been ordered by "Monica McCoy" to be shipped to me. I have never heard of or met Monica McCoy. Second, Monica only paid $7.97 each for the mattresses, and the total order came to $21.93 for two mattresses including shipping and handling. I paid $17.03 for each mattress, for a total of $34.06 (I'm not sure why I was not charged sales tax on that). So Monica made $12.13 in arbitrage profits, and she never touched my mattresses. She simply took my money, and turned around and ordered the mattresses from Walmart.com for me.

This seems very odd; it is odd that such a gap (i.e. arbitrage opportunity) even exists in this age of digital data. And I can't help but feel a bit cheated: why did Amazon not give me a lower price? The two men in the NPR story actually bought the books, stored them, and shipped them themselves. But Monica is just trolling for buyers. In fact, she may not have placed the order for the mattresses at all; if she's clever, her computer is set up to automatically place the order on Walmart when a sucker like me places an order with Monica. Well, now I know: before shopping at Amazon, I need to do comparison price shopping at Walmart and Target and other stores.

The Amazon page for Posh Products USA (which is a ridiculous name that should have given me pause!) shows that Monica sells a wide variety of products--obviously whatever she can identify an arbitrage opportunity in. There is a leaf blower, candy, a shaver, cat food, and on and on, 2168 products in all. Here is a "business" that may make money but is hardly providing any social value (it is helping people discover cheaper items, but charging more for them than someone else does, who is also able to ship it to you!)

I can't help but feel a bit taken advantage of, because Monica's only service was listing the mattress on Amazon.com. I suppose she researched this, and I should be thankful that she is sharing the savings with me. But it seems to me that the fact that the product never passed through her hands is what makes this arbitrage a bit more distasteful than most.

One additional curious aspect of this story is that on the Walmart website, there are two prices for the same mattress that I bought. One is the $7.97 price, and the other is $22.89. The first is a "Special buy" and the second is "Reduced Price" (providing more evidence that marketing terms are meaningless). The list prices of the two mattresses are very different, too, but the mattresses are the same (they look like they are different colors in the online photo, but the $7.97 mattresses I received are the blue color like the $22.89 mattress, so I'm sure they are the same). So we can see how Monica set her price; it is half-way between her price of $7.97 and the "full" price of $22.89.

I'm just glad I did not go on to the Walmart.com site and buy them at the higher price.

Tuesday, August 01, 2017

Scams and Freedom

One of the problems with a "free economy" is that it offers many opportunities for scammers. This was first brought home to me when in 1983, my Bulgarian roommate (not of Bulgarian descent, but literally from Bulgaria) in New York came back to our Columbia apartment with what he thought was a great deal on a camera lens. He was from a communist country, and naively believed he was getting a good deal, when in fact he had bought a damaged lens. He was understandably angry that such illegal (or at least immoral) activity could occur in a major city. For him, this was an indictment of the "free" market. I just thought it was the result of his naivete and greed (for a good deal, "too good to be true"), and unscrupulous merchants, but agreed that it should be illegal, though it turned out there was nothing my roommate could do.

It turns out that there a number of types of scams that occur when you buy a house. Your purchase of the house, and the mortgage you take out, are all public information, so people take that information and try to cheat new home buyers. We got the following letter in the mail:

The letter looks like it comes from our bank, the Busey Bank. The phrase "Notice: Financial Information Enclosed" is actually misleading. Inside, it has a return envelope, with the official "No Postage Necessary" seal. It looks important and official.



Then the card inside seems official because it has our name and address, the name of the bank, and even the exact figure of our mortgage amount (I've redacted the personal information, even though you can probably find it somewhere on the internet). It implies that I have to provide this information to comply with a mortgage protection plan that I already have.

What is astonishing, also, is that this arrived just about 10 days after we closed on our house, and just days after we moved in.

Only if you read the fine print do you realize it is not from the bank. The fine print says: "Information provided by Mortgage Protection Division. Not affiliated with any lending institution. All mortgage obtained only through public records. Benefits and carriers will vary coverage and are subject to underwriting approval."  This "Division" is the name of a company, not a division of my bank. Sneaky.

This is really a sales pitch attempting to get me to buy mortgage insurance. They want me to give them more information, including our phone numbers, so they can try to sell insurance. Fortunately, at our closing, when I signed for the mortgage, our banker told us to ignore all these junk mail solicitations, but my wife and I still found ourselves looking at these twice to make sure they were not important (once my wife simply handed it to me to take care of, thinking it was important--and she's a lawyer!)  It is well known that mortgage insurance is a bad deal for consumers; but it is very profitable, as much as 40 percent return to the insurance company, which leads company to try to drum up this business, hence the junk mail.

It is sometimes difficult to draw the line between deception and advertising. Plus, attempts to protect consumers can end up hurting them. Lisa Servon has studied payday loans and argues that they actually provide a service to poor people, and should therefore not be banned, though well-meaning liberals increasingly push for such legislation. There are certain emergency situations where paying a high interest rate on a loan makes rational economic sense. J.D. Vance in Hillbilly Elegy gives an example where he took out a payday loan to avoid his rent check bouncing, which would have cost more than the interest he paid on his payday loan, not to mention the cost to his credit score.

So maybe I'm being like the well-meaning liberals who want to ban payday loans because they don't understand the needs of the poor, but I find it astonishing that deceptive practices like the marketing for mortgage loans are allowed. I suppose they are a price we pay for having a free and dynamic economy. Still, I also wonder how people in that industry sleep at night, knowing they are getting business by misleading customers, both in their solicitation methods (with the misleading letters) and in the products they sell (which are not as good as simple term life insurance). One thing is sure; I'm being very American in expecting the market, and indeed the world, to be fair. Most peasants have long known the world is unfair and that the elites are out to exploit and take advantage of them. I think my friends in Taiwan believe scams and deception are inevitable (even though most people are very honest in Taiwan). It is a sign of the society and times I grew up in that I can believe deception should be banned. For most people, it is all too common, a given of market life. And perhaps it is.

Monday, June 19, 2017

On Loving and Racism

June 12, 2017, was the 50th anniversary of the US Supreme Court decision Loving v Virginia, which overturned a Virginia state law making interracial marriage illegal. It finally eliminated all such racial bans across the US. There was considerable interest in the case in the US (see for example here and here). 

Mildred and Richard Loving
The case involved a white man, Richard Loving, who married a woman, Mildred Jeter Loving, who was of mixed African and Native American descent. They grew up in a mixed race community, and knew each other because Richard was friends with Mildred’s brother, with whom he shared an interest in car racing. Interracial marriage was illegal in Virginia at the time, so they had gone to Washington DC to get a marriage license. Shortly after they were married, they were arrested in July 1958, in the middle of the night, by an eager sheriff. They avoided jail by agreeing to leave Virginia, but were homesick in DC and so, with the help of civil rights lawyers, and even though they did not seek to be activists, they appealed their case all the way to the Supreme Court. Fifty years ago, in a unanimous decision that reversed decades of legal precedent for anti-miscegenation laws, the Lovings won their appeal and were free to live in marriage in Virginia.

One aspect of the story that few people realize, and that I was not aware of growing up in the US, is that these racial laws are not that old. The law used against the Lovings was the “Racial Integrity Act” of 1924. I understood that the laws were “an instrument of ‘White Supremacy’”, as Chief Justice Earl Warren had written in his unanimous opinion, but I did not understand, growing up, that these laws had to be strengthened and reinforced to continue to mark the lines between the races, and indeed to create the lines. Many earlier laws had been repealed from the 1860s to the 1880s (e.g. in Illinois, Michigan, and Washington). Similar laws were repealed in 15 states between 1948 and 1965, in many cases probably because they also discriminated against Asians (California in 1948, Indiana 1965; see full list here). The Loving v Virginia case overturned anti-miscegenation laws in the remaining 16 states, mostly in the Deep South.

Many articles celebrating Loving Day, as it has become known, comment on the increase in frequency of interracial marriage. According to Pew, the rate has increased from 3 percent in 1967 to 17 percent today. Public opinion has changed too: according to a University of Chicago GeneralSocial Survey poll, only 14 percent of nonblack adults say they are “very or somewhat opposed” to a close relative marrying a black person, compared to 63 percent in 1990. (Of course, this is what they say to pollsters; the real number is likely to be higher, since there is strong social pressure to be non-racist--which is actually good.)

But it is worth looking more closely at these figures. First of all, it is striking that whites are the group with the lowest rate of intermarriage, just 11 percent, compared to 18 percent for blacks. For Asians, it is 29 percent, and for Hispanics it is 27 percent. Even more striking is that 39 percent of US-born Hispanics and almost half (46 percent) of US-born Asians marry outside their group.
As an aside, black men are twice as likely as black women to marry outside their group (24 vs 12 percent), while Asian women (36 percent) are much more likely that Asian men (21 percent) to marry out. (See details from Pew here).

Since whites are the larger group, it is perhaps not surprising that mixing is less common than in the minority groups. But I wonder if a good deal of the intermarriage is within “people of color” and thus not having as much effect on whites as might be assumed.

Furthermore, much of the supposed intermarriage may be between people who are already “mixed” themselves. A Eurasian man, born to an Asian mother and white father, will legally be considered Asian (the US government defines race matrilineally), but may not be treated as “Asian” in white American society. His marriage to a “white” woman will not raise as many eyebrows as his mother’s marriage may have.

Similarly, a white man married to a Cuban-American woman may be considered a “mixed marriage” because she checks the box as “Hispanic,” but in terms of phenotypic appearance, it is possible she could pass for white… or at least as Italian. It may not really be considered by their families as a "mixed marriage."

The issue is really a matter of our definition of “race” and culture. In a NY Times article printing reminiscences of mixed marriages, many wrote about “cultural differences.” If the couples grew up in different countries, or in different subcultures within the US, this may be an issue. But the story of Loving v Virginia is about “race,” not about culture; it is about not being able to marry because of what one looks like. The whole issue of race in America is confused, and intermarriage is making it more so. “Hispanics” are recognized as an “ethnic group” but are put on the same order of difference as “race.” Yet clearly a Hispanic’s experience in the US will be different depending on whether they are an Argentine who looks white like Lionel Messi (or the Pope) or a Dominican who looks black and indigenous like the baseball player RobinsonCanĂ³

Gradually, American definitions of “race” have to change. Chief Justice Earl Warren had questioned the notion of a “pure race” in his questions to the lawyer for the state of Virginia, but the final decision did not address that issue, focusing just on the idea that anyone should be able to marry whoever they want. As one commentator points out, it is unfortunate that the Supreme Court did not challenge the very concept of race.

I am uncomfortable with the hope for more interracial marriage as a solution to America’s racial problems. It sounds like the inverse of eugenics, and it does not really address the racism at the root of discrimination. Racism is a cultural idea; it does not spring naturally from physical differences. There are  Yet, confusing categories does serve a purpose. We can call this the Sneetches Theory of antiracism, after the Dr. Seuss story of Sneetches with stars on their belly who discriminated against those who did not have a star. Technology to add and remove the star created confusion of categories, after which all lived happily together (see video of the story here). My father served in Puerto Rico during WWII, and he told me segregation in the military seemed ridiculous because brothers, with the same mother and father, would be assigned to “white” or “Negro” units, based on their physical appearance and the mood of the officer in charge on that particular day. Clearly “race” was a problematic category, and it undermined attempts to “keep them in their place.”

But ultimately, racism will be defeated through cultural change, not biological change. As in the story of the Sneetches, only when people agree to drop the categories will racism be overcome.

I heard a disturbing interview with Pat Buchanan on This American Life. Buchanan was asked how he felt that he had run for president three times in the 1990s and lost, but Trump took most of his ideas and won. (He said he was fine with it, happy the country is being saved.) In the interview, he defended his anti-immigrant position, a basically racist view, saying the country is already too divided, so the US should not let in non-white immigrants. He claims they do not assimilate. He thinks the US was better before 1960 when it was “majority European white” and when asked why he is against immigration, he says “I feel more comfortable with the folks [I] grew up with.” Until Trump’s election, these views were dying out with Buchanan’s generation. It remains to be seen whether the racism of the Alt Right is the last gasp of the reactionaries, or will be strengthened and emboldened by the Trump administration. In any case, I find it surprising and disappointing that intelligent people like Buchanan can say such racist things, fifty years after Loving v Virginia.