December 2003 - cypherpunks-legacy

Re: Redlining
by Matthew J. Miszewski 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- At 11:31 AM 12/11/96 EDT, E. Allen Smith wrote: >From: IN%"mjmiski(a)execpc.com" "Matthew J. Miszewski" 11-DEC-1996 03:52:03.23 > >>This is the essence of, at least, my disagreement with you Red. I dont >>agree that redlining doesnt harm people. You see no harm. I do. > > Of course redlining causes harm to those who are redlined... they >can't get credit. But the same can be said of any system of keeping >track of who is likely to repay credit; it means that someone who has >defaulted on past loans won't get future ones. Quite simply, while I >would agree with you that racism certainly persists (it would be >difficult for me to grow up in the South and not see this), I would >argue that you have no evidence for that the basic motivation behind >redlining is that the people in such areas are less likely to repay >credit. Actually, my assertion was that the basic motivation was racism and ignorance. My example of student loan default rates should clear that up. College graduates generally live outside of redlines and yet are regularly offered credit. And yet default rates on student loans are outrageous (the government backing of these loans is irrelevant to individual creditworthiness). > -Allen Matt -----BEGIN PGP SIGNATURE----- Version: 2.6.2 iQCVAwUBMq8lWbpijqL8wiT1AQF+HQQApA1oGLXhfaxKH8MyDi3HCH2sk2LzKqSB 3DDgKPfyU0nRtGvaLk5xN+8LqmKoQsccJX9Z50+c6Tj+ENE8NAALw9NUsb8ZjV0a zB1iKG0eXgvm4X9Hvg9em/rjA6NlzXW037TJkyg9BCfhgUJN2bRF4J9wupTZJlI3 rzrXV9pgBN0= =/DwJ -----END PGP SIGNATURE-----

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Re: Redlining
by nobody＠huge.cajones.com 17 Dec '03

17 Dec '03

At 3:05 AM 12/11/1996, drose(a)AZStarNet.com wrote: >Many people of good will find racial discrimination to be abhorrent. Abhorrent? To the extent that stupidity is repugnant, I suppose you are right. However, I find it interesting that we are taught to see racism in terms of morals. The basic tone seems to be "Oh, we really shouldn't say such things ... even if they are true." What you don't hear very often is how racists miss out on friendships and valuable life experiences. Why not? Because typically the people condemning racism do not, in their hearts, believe it is worth knowing people in certain racial groups. Imagine a company which avoided hiring good people for dumb reasons. Why is this any different from any other foolish decision? Leave the abhorring to the company's poor stockholders. But, of course, many of the people who are doing the abhorring are unable to picture members of certain racial groups being great people to hire. (My comments are directed to the world at large and not drose(a)AZStarNet.com) Rather than promoting abhorrence for racism, it would be more constructive to discuss reality itself. This happens infrequently. Instead, we are encouraged to pretend reality is something other than what we believe. Topics of the African-American crime problem are considered to be inappropriate, yet it is a very real component of American urban life. Discouragement of thought and discussion is another hallmark of a totalitarian society. Thought and discussion are not conducive to blind obedience. Ironically, most African-Americans are better equipped to discuss their beliefs about racial groups than their "educated" "defenders". For example, check out the "Last Poets". You won't agree with everything these people have to say, but there is no question that they are speaking their minds, often brilliantly. (I consider the poem "Niggers Are Afraid of Revolution" to be their chef-d'oevre.) Another example can be found in the movie "Crumb". Much, if not all, of Crumb's work is unpopular amongst the "politically correct", often on the grounds that he is racially prejudiced. Crumb reports that African-Americans never object to his work and often give him positive feedback. Clearly, the people Crumb is talking to have the sophistication to recognize his advanced use of satire and courageous exploration of topics forbidden for discussion in American society. (Let me add that remailers are great. I would be reluctant to express these ideas in any other way for professional reasons.) African-Americans have clearly added a great deal to American culture. The great musical achievement of the 20th century is jazz and it was primarily developed by African-Americans. Jazz holds its own intellectually against any other genre of music from any time. Interestingly, jazz did not originate in an elite, like most great cultural achievements. It was developed by an oppressed minority which had only limited access to surplus resources. Jazz was developed in an astonishingly short time, really just a few decades. Most "cultured" Americans would give their eye teeth to go back in time and meet Mozart and his friends. Yet, a short time ago people capable of comparable achievements were available in the United States. Jazz has not received the recognition that it deserves in the United States. In Europe, jazz musicians are given something more like the respect they have earned. This is not to the credit of the United States. (Those who don't believe me should get "Love Supreme" by John Coltrane and listen to it carefully about 20 times. There are layers and layers of depth and meaning. Those who are accustomed to more organized forms of music will initially hear a sloppy performance. This is hard to understand because these are some of the most technically accomplished musicians who have ever lived. hat they are doing is stretching medium and extending the range of meaning which can be expressed. Particularly fascinating is how well the apparent sloppiness of each musician dovetails so well with what the others are doing. This is challenging, to say the least. The relationship with his God that Coltrane expresses is quite different from the one usually hears. Mozart, Bach, et al, have a tendency to fawn. Coltrane expresses a more intimate (dare I say "anarchistic"?) vision.) The canonical jazz musician spends hours and hours of work every day developing his technique, mostly through the love of the art, much like many of us do with computer programming. At any rate, those who wish to enlighten their fellows on the subject of racism can do better than "it's just wrong." >OTOH, I'm sure that as an attorney you are cognizant of the fact that >financial institutions have a fiduciary responsibility to their >shareholders. I'm afraid this misses the points that Matt and I have been discussing. Matt believes that redlining betrays the fiduciary responsibility of the banks. I believe that it doesn't matter. That is, if you want to go to a bank which is riskier and pays lower interest because it avoids good business, that is your problem. Red Rackham

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Re: Redlining
by Matthew J. Miszewski 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- At 11:25 AM 12/11/96 -0800, Douglas Barnes wrote: [snipped] >The more enlightened answer is to back off enough on the regulation so >that marginal loan markets become attractive business opportunities, >and any truly irrational lending practices (e.g. based on race) lead >directly to losing business to a competitor. This does appear to address both my moral concern (raced-based lending) as well as my liberty concern (favorability of less regulation). I support the repeal of much of the over-burdensome banking regulation already in existence. I continue to work closely with a Congresscritter who satrted off on the Banking Committee (Now has a good Ways and Means seat) whom I have expressed my concerns to. What helps is to have concrete deregulation proposals. In Wisconsin I have supported the extension of personal property tax exemptions to business computers (and an elimination of the personal property tax in total.) While discussions on the list often deal with theory it is important for those with the inclination, to act. Cypherpunks write Code (as in USCA? ;-) > >Doug > Matt -----BEGIN PGP SIGNATURE----- Version: 2.6.2 iQCVAwUBMq8417pijqL8wiT1AQG6oQP/R8FyZkLz7e6BanUVtP5cQnnwG6FpbupS OWVm/flpKhBOx5T/FL61z8GXbcmqfxqbeBju0MB0WpPJIl1p1nLXqAqsA30ffofY yj3CLN3MXPOYXipttuxYMQoFBjwr99C0kl6kIBYwfvOarR/fffNvoPTXKigM8tCX kpJnEV0Eufg= =MYuQ -----END PGP SIGNATURE-----

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Re: Redlining
by nobody＠huge.cajones.com 17 Dec '03

17 Dec '03

At 11:25 AM 12/11/1996, Douglas Barnes wrote an excellent article: >Another interesting aspect -- there's been huge growth in the "making >loans to folks with non-traditional or bad credit histories" market >recently, as the market for folks with good credit histories has >become saturated. This has been done largely by various NBFIs operating >outside of the normal "bank" structure, and specializing in certain >kinds of consumer loans. > >It is vitally important to realize that to a bank, a loan is a "product," >that they "sell" to customers. It is how the bank makes money. If >the market is operating properly, irrational refusals to loan on the >part of some institutions will create a market opportunity for other >institutions. This more true than ever before. Nowadays, banks commonly find themselves in the mortgage origination business. Once a mortgage is originated, it is packed up with many similar mortgages and sold off as a CMO. This means the bank can specialize in what it is good at, rather than speculating in interest risk. The CMO market is intensely competitive. Many people spend a lot of time looking for misperceptions of default rates and the like. Traders are not racists when they are trading, God bless their greedy souls. If it is really the case that mortgages are not being originated irrationally, there is an unbelievable opportunity. Originating mortgages does not require a great deal of capital and the turn around of what investment is needed should be well under a year. >The problem with banking & financial services is that they are already >so heavily regulated, and the barrier to entry is so high, that the >market seldom operates properly. Thus we see _more_ regulation piled >on (such as the CCRI) to address the problems that come about from the >previous piling-on of regulations. > >When there is little competition between banks, this creates a situation >which, viewed in isolation, seems "unfair" to those at the fringes of the >loan market. The superficial answer to this problem is to force banks >to lend in areas that are less profitable for them than their traditional >areas -- at this point banks almost begin to resemble monopoly public >utilities, which, when you look at the regulations they operate under, >is almost the case. > >The more enlightened answer is to back off enough on the regulation so >that marginal loan markets become attractive business opportunities, >and any truly irrational lending practices (e.g. based on race) lead >directly to losing business to a competitor. I would add that the purpose of the regulation is generally not to the benefit of customers, but the banking guild. Increased legislation and control favors people who can afford lawyers or have the political connections to prevent the need for lawyers. Regulation favors the established and not the poor Albanians. Opening a bank should be as easy as forming a corporation. There have been brief periods in U.S. history when this was the case. I have heard it worked quite well. Curiously, preferred stock in the banks was such a liquid market that it became treated as cash. Instead of making a deposit, you could buy some preferred stock. Note that this solves rather elegantly the problem of bank runs. Red Rackham

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I am a stupid cocksucker
by Secret Squirrel 17 Dec '03

17 Dec '03

This Christmas Cypherpunks get a special discount: I will suck you off for only $5. Red Rackham PS: I always sign my posts. I am so stupid. PPS: Please killfile me.

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"Bigotry" and related topics...a brief comment
by attila＠primenet.com 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- In <v03007801aed4bbe064e3(a)[207.167.93.63]>, on 12/11/96 at 11:47 AM, "Timothy C. May" <tcmay(a)got.net> said: ::The racial and ethnic groups which are most into "victimology" ::are the least successful--which is _cause_ and which is _effect_ may be ::debatable to many of you, but the correlation is very clear....maybe it's ::time they try something different, like getting their culture to embrace ::learning, reading, science, math, and business success, instead of glorifying ::victimization, crack cocaine, basketball stars, and pimps.) Not to harp, Tim, but the summation thought in and of itself is probably "discriminatory" to many as it, intentionally or not, appears to single out a specific ethicnic group. OTOH, without or without the description, the indicated class best fits your model above --and I agree with the thesis; even so far as to say that the implentation of CA's anti-affirmative action, which is now blocked by yet another bleeding heart liberal Federal judge, will reduce tension vis a vis ethnic relations --if the supposed victims (of the what was at one time the ethnic majority in CA), will stop crying. and so that everyone can see bigotry: when the demographic changes brought along their ethnic gangs, I moved the children to other schools. when the billboards in the far NW corner of LA city/county were converted to Spanish a couple years ago-- "...that's it; we're leaving! now, regardless of the cost!" -attila - -- Now, with a black jack mule you wish to harness, you walk up, look him in the eye, and hit him with a 2X4 over the left eye. If he blinks, hit him over the right eye! He'll cooperate. --so will politicians. -----BEGIN PGP SIGNATURE----- Version: 2.6.3i Charset: latin1 Comment: Encrypted with 2.6.3i. Requires 2.6 or later. iQCVAwUBMq884704kQrCC2kFAQGjvwP/eBEPNRxueY4OOsaTfUAUGctQqdaCSOyn DK5i3u581RTAqixccIgQbC7UpWhlmMwM4/Ildp0kcjxILUsBhoiPc2jnTbKNAejy dI+vONbPlduWsHWAB7xIZjl7lgNqawbD7kHnm3ivGA9UNqe6NSESobgNRNy1agyI NtgBWavsjQE= =IZOR -----END PGP SIGNATURE-----

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Re: Redlining
by nobody＠huge.cajones.com 17 Dec '03

17 Dec '03

At 11:47 AM 12/11/1996, Timothy C. May wrote: >1. The _general_ subjects of "bigotry" and "redlining" are not >closely related to themes of this list, though the implications of >strong privacy for these issues is certainly on topic. (And my views >on these implications are well known...I've seen no point to step in >to the debate to repeat them, and don't plan to argue with Matt M. >about the "evils of bigotry.") > >2. Many of the posts by Matt M. and "Red Rackham" and others have >been so massive, containing paragraph-by-paragraph rebuttals of >political and ethical points, that I've just given up on trying to >follow the points. > >If anyone has well-formed questions about how redlining and "bigotry" >is affected by strong cryptography and crypto anarchy, fire away. >Just don't bury them deep in a long diatribe about the evils of >"prejudice" and "discrimination." Didn't Tim May originate the "Generation of Science" thread or, earlier, the sliderule thread? I don't think either topic can said to be strictly cypherpunk unless a discrete logarithm sliderule has been invented. The truth is that I enjoyed those threads as did most others on the list. I would like to see more like them. And, I dare say that my posts are more worthwhile than 7 out of 8 posts we've been seeing on the list lately. >(Personally, and off-topic for the list (so I'll be brief),... Point 1: You obviously find the subject interesting enough to comment on it. Others probably also find it interesting. Point 2: Excuse me if I am wrong, but your comments look to me to be precisely on topic for this list, anyway. >...the ills of our society seem to me to have _very little_ to do >with "prejudice." In fact, most people are not "discriminating" >enough, in the sense that discrimination implies value judgements and >assessments of probable success based on data available. As someone >noted, the Asian communities in the U.S. are doing well and are quite >"discriminatory" in lending policies. Get used to it, as crypto >anarchy will make coerced transactions even more difficult. The >racial and ethnic groups which are most into "victimology" are the >least successful--which is _cause_ and which is _effect_ may be >debatable to many of you, but the correlation is very clear....maybe >it's time they try something different, like getting their culture to >embrace learning, reading, science, math, and business success, >instead of glorifying victimization, crack cocaine, basketball stars, >and pimps.) This obsession of "on topic/off topic" is not healthy for the list. It stifles brainstorming and the free exchange of ideas. Red Rackham P.S. Sorry for the length of some of the messages. That Miszewski had the temerity to actually stand up for his beliefs, so it was unavoidable.

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Re: Redlining
by E. Allen Smith 17 Dec '03

17 Dec '03

From: IN%"ichudov(a)algebra.com" 11-DEC-1996 14:01:18.43 >The problem is, people can choose what credit history they want to have >(I can be a saver or a spender, for example), but nobody can change the >color of their skin. >This is central point of the theory why discrimination based on credit >histories is OK, while the discrimination based on race is not. First, I would point out that redlining does not necessarily equal credit discrimination based on race; it may mean credit discrimination based on poverty, which has an unfortunately high correlation with being a member of some races. (I won't go into the explanations for why this is the case here; most people who try to explain it don't take enough factors into account.) Second, let's take a look at whether inequalities based on factors that people cannot change is something that is wrong. This topic is wider in its application than redlining and credit; one example important to me in my field is in genetic screening usage for insurance purposes. (In that case, you've also got that limits on insurance uses of data when individuals can gather the data in question mean that someone can predict their own chances of needing insurance... leading to those who are healthy not purchasing it, and those who aren't purchasing it.) The first topic to mention in this regard is that of privacy. I believe I am among most people in finding a question about my behavior (e.g, my sexual activities) significantly more intrusive than a question about my personal characteristics (e.g., my gender). But I would hope that everyone would agree that it would be idiotic and irresponsible not to have someone's payments for insurance vary with their behavior; this would encourage irresponsible behavior and discourage responsible behavior. The second topic to mention in this regard is that inequality due to factors one cannot change is a fact of life. This is particularly true of capitalism (e.g., someone who has a genetic tendency toward large size will consume more food and thus spend more money on food), but it is also a problem in any other economic system - economics is not all of life. Even if one concludes that inequality is wrongful and needs to be "alleviated", there are many areas more important than credit on which one would logically start... such as forbidding merit-based admissions, which are biased in favor of those with higher IQs. I trust that my audience sees exactly why this idea, and similar ideas, are ultimately nonsense? The third topic is that one commonly applied idea used by the proponents of absolute equality is that found in Rawls' _Theory of Justice_, under which the just outcome is said to be found by a group of people who do not know what situation they will be in. (This is a vast oversimplification of the book(s) in question, which upon closer examination may realize the idea I am about to write down.) The simplistic conclusion is that everyone will want everything to be the same, since any individual might be in a bad or good situation. But if you have a choice between 49 dollars and a 50/50 chance of 0 or 100 dollars, you should take the latter. In other words, a situation in which inequalities exist can still be one that is overall better than a fully equal situation. There are a number of respects in which the insurance and credit markets fall under this category. The most obvious is the direct cost of regulation. Less obvious but perhaps more important is the uncertainty factor; the use of more data (for an insurance or credit decision) leads to less uncertainty in the ultimate outcome, and thus to less risk of unexpected claims (for insurance) or defaults (for credit). Thus, smaller businesses (which are also made more possible by lowering other regulatory costs) can exist in a deregulated insurance or credit market. The removal of the current ogliopolistic situation in such markets for the initial insurance or credit grantor would improve prices. -Allen

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PGP Public Key Server beta release available!
by Marc Horowitz 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- The new PGP Public Key Server which has been running on pgp.ai.mit.edu for the past several months is now available as a beta release. This is the first public release of the code, and while it has proven mostly reliable, it is not guaranteed to be perfect. Because it uses hash tables and balanced trees instead of a flat file format, it trades a disk space for a substantial performance improvement over the old pgp-based key server. The PGP Public Key Server home page can be found at <http://www.mit.edu/people/marc/pks/>. This page contains links to the sources, the server running on pgp.ai.mit.edu, and my thesis, which documents the specification and design of the key server. If you have any problems, questions, or comments, I read comp.security.pgp.tech. That's probably the best forum for discussion and questions, but you can send me email, too. In order to have an idea how how many people are using this key server, if you install it, for public use or not, please let me know. Marc Horowitz marc(a)mit.edu -----BEGIN PGP SIGNATURE----- Version: 2.6.2 iQCVAwUBMq85Ce/JP4Ec8n/VAQE+pQP+OOKf9dC06RR/oL+wRPSVBg9TFOrnGhDu AT+qz2pAOchTnVZqPQKEDUr0mfDqmMhC9CU5oAjS36N3OFJoUwuwHSlt+4Ixnj9A ld0fVHKhyME4v+F6X/O7g6LOj07y6qIWcQqoGEqyFH08Keso8wXdH83BLjbN/8tl bwBpSZMUL7E= =Aqyq -----END PGP SIGNATURE-----

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Re: Redlining
by E. Allen Smith 17 Dec '03

17 Dec '03

From: IN%"mjmiski(a)execpc.com" "Matthew J. Miszewski" 11-DEC-1996 16:21:56.21 >Actually, my assertion was that the basic motivation was racism and >ignorance. My example of student loan default rates should clear that up. >College graduates generally live outside of redlines and yet are regularly >offered credit. And yet default rates on student loans are outrageous (the >government backing of these loans is irrelevant to individual >creditworthiness). That some groups not within redlines have high default rates is not an argument against groups within redlines having high default rates. The market distortion caused by government sponsorship is certainly relevant to whether individuals are offered credit; I would suggest that in many cases the students in question would not be offered credit, as per their high default rates, if it were not for government sponsorship removing the risk from the lender. You have also not bothered to answer the criticisms from Mr. Rackham about why, if the sole motivations were racism and ignorance, people would not be offering the residents of such areas loans; as (he?) pointed out, this would appear to be a particularly attractive move for middle-class blacks, if your assertion was the case. -Allen

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