Saturday, October 16, 2004

Ethnic Divisiveness: Majority-majority, Majority-minority, Minority-minority

Recently, the City of Detroit paid a company going by the name of PowerNomics a 6-figured sum to come up with some idea about how to improve the city's economy. Part of the report recommended the development of an African Town... perhaps not an unreasonable idea given the existence of Greektown and Mexicantown. But the report became contentious when it accused Hispanics, Arabs and other minority immigrants of "depleting community resources and taking jobs from blacks"... as if job creation was a zero-sum game.

Why bring this up?

This is how the "herd mentality" works. This is the source of conflict. "We are right, they are wrong." It is the process whereby we identify with "our group"... race, religion, ethnicity, politics, city, state, nation... and seek to validate our shortcuts... beliefs, "facts", "truths"... by demonstrating the shortcomings of shortcuts held by "outsiders".

In this case, a black businessman and consultant addresses a predominantly black government group in a predominantly black city and tries to convince them that the government must provide special assistance to an "official minority" to the exclusion of others.

Well, so what? This is nothing new. Happens all the time.


Recounting previous points:

  • we have an instinct to survive, acquire, and pass on our DNA
  • we survive best in "herds"
  • herds are structured to satisfy the strong and accomodate the weak
  • the rules of one herd may vary from others based on experience and environment
To this list, let's add
  • herds will not readily accept "outsiders"
Why, because outsiders alter the dynamics of the herd and may not play by the rules of the herd. Therefore, they are seen as a threat to the survival of the herd.

So, in the example above where we have used Detroit as a "herd", a black "majority-minority sub-herd" views with suspicion new "minority-minorities sub-herds" such as Arabs, Koreans, Hispanics, etc. They are "stealing" jobs and resources that "rightfully" belong to the "majority-minority". In this example, the "majority-minority" has a dysfunctional perspective regarding the successes of the "minority-minorities". What is ignored is, the other minorities:
  • in many cases, have started with less resources when they arrived than the black citizens of Detroit already had
  • have had a significantly different attitude toward individual effort and group cooperation
  • have had a greater alignment with the "majority-majority" with regard to business and education
  • have had a significantly different attitude toward family unity and responsibility
  • have not regarded themselves as "victims", but rather as the recipients of great opportunity
In this example, the experiences of one herd versus others have caused choices and perspectives that are dysfunctional versus the functional choices and perspectives of others.

Now remember, this is a generalization about the "herd", not of specific individuals within the "herd" that may be seen as "strange" (geeks?) or "not with it" (not adhering to the norms of the herd). Yet, ultimately, it is the outliers that represent the possibility for the dysfunctional herd to eventually change and become functional (in comparison to other herds).

It is from the outliers that change, new perspective, new understanding, progress, greater functionality, competitive advantage... and better chance at survival originate. It is also from outliers that the opposite may occur... from which the Adolf Hitlers or Usama Bin Ladens may emerge. Identifying the emerging functional from the emerging dysfunctional may not be simple from within the herd.

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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)