Streetwise Professor

July 13, 2016

Which Side is Obama on? Now We Know: Feeding the Flames of Racial Discord

Filed under: Politics — The Professor @ 5:20 pm

Obama’s greatest opportunity as president was to advance race relations in this country. They have obviously improved almost miraculously since the Civil Rights and Jim Crow eras, but in 2008 they could have definitely improved even further. Sadly, in the past seven plus years, they have regressed rather than progressed. Obama squandered an opportunity that he was uniquely placed to exploit.

Uniquely placed, but sadly not uniquely qualified, as events have made all too clear. For rather than pour oil on troubled waters, Obama has thrown it on the fire. He does it with such regularity that I must conclude that is hardwired, or a conscious choice: which is worse, I can’t say. The horrific events of the past days represent the zenith of this behavior–at least I hope so.

The crux of the problem is that Obama is an echo chamber for Black Lives Matter memes, and a defender of and advocate for the organization. BLM is a divisive, confrontational, and frankly racist organization that is exacerbating tensions, rather than doing anything to reduce them, or to correct the underlying problems. BLM marches routinely involve chants advocating the murder of police (“Pigs in a blanket, fry ’em like bacon”). Obama has hosted leaders of this group at the White House, and praised their effectiveness, saying that he was “confident that they are going to take America to new heights.” A sobering thought, that.

The less incendiary part of BLM rhetoric is still fundamentally dishonest, and it is this part that Obama repeats on every occasion in which these issues are even tangentially relevant–or sometimes when they are appallingly inappropriate, as at the memorial service in Dallas yesterday. In particular, the BLM/Obama rhetoric cites racial disparities in deaths in confrontations with police; arrest and incarceration rates; and capital sentencing rates as evidence of deep-seated “institutional racism.”

These statistics–and those citing them–are fundamentally dishonest because these numbers are clearly not the whole truth, and fractional truths (I will not dignify them by calling them “half-truths”) can be as manipulative and misleading as an outright lie. These certainly are.

Telling the whole truth would require confronting an ugly reality: there are substantial racial disparities in criminality (and in rates of victimization–a fact BLM is outrageously silent about with the exception of police killings).

Take, for instance, the oft-repeated statistic that African Americans represent a proportion of those killed by police that is double their proportion of the population. But they commit murder in a proportion four times that of their share of the population: and they also are victimized by murder in a similarly disproportionate ratio (which should be your major concern if you truly believe black lives matter). In every statistic related to violent crime, African Americans are disproportionately represented as both perpetrators and victims–and in ratios that typically exceed the 2-1 police killing statistic. This is true in the case of murders of police officers, where African Americans are the killer 43 percent of the time, in contrast to their 12 percent share of the population: they make up about 26 percent of those killed by police.

These hard facts have hard implications that speak directly to how to interpret statistics not just on arrest and incarceration rates, but on deaths at the hands of law enforcement. Namely, because of their greater involvement in crime, African Americans are  disproportionately likely to have hostile interactions with law enforcement. Further, police will rationally infer, based on the limited information that they inevitably have to act on, that all else equal African Americans pose a greater threat to  them than do non-African Americans. This makes a bad outcome more likely when a police officer confronts an African American than when confronting someone of a different race.

Most of the law enforcement shootings are ruled justified. But citing statistics embracing all shootings, and failing to put those into the sad context of life in many minority neighborhoods in the United States, BLM–and Obama and the left generally–insinuate that they are prima facie evidence of racial injustice.

This is a pattern for Obama. Further, he routinely expresses tendentious opinions about controversial cases, some of which (Trayvon Martin) are hard cases, and some of which (the shooting of Michael Brown) prove not to be, once the facts are known (often only after a Herculean effort to rescue those facts from mendacious misinformation). After Ferguson, Obama told the UN–the UN!–the following:

I realize that America’s critics will be quick to point out that at times we too have failed to live up to our ideals; that America has plenty of problems within its own borders.  This is true.  In a summer marked by instability in the Middle East and Eastern Europe, I know the world also took notice of the small American city of Ferguson, Missouri — where a young man was killed, and a community was divided.

A low, dishonest characterization, that. One that slyly embraces the utterly false narrative about the death of Michael Brown. For although Obama describes the death in the passive voice (“a young man was killed”) and does not identify the killer, this is of little moment when (a) everyone knows that the “young man” was black and he was killed by a white policeman, and (b) this episode was raised in a paragraph beginning with an admission that American has “failed to live up to our own ideals.” The judgment that Obama renders about Brown’s death in that paragraph is blindingly obvious, regardless of the Delphic phrasing. Indeed, by comparison the rhetoric of BLM is refreshingly honest and preferable in that respect.

This tendency was on display again in the aftermath of two police shootings in the last week, one in Baton Rouge the other in a Minneapolis suburb. Speaking about the second episode, the death of Philando Castile, Obama repeated the as yet uncorroborated statements of Castile’s girlfriend, who was in the car with him when he was shot. The live stream she put on Facebook was indeed disturbing, but it starts after Castile was shot, and as yet we know not what chain of events culminated in the shooting: we have just heard her version. But without knowing the facts, Obama validated the narrative that the shooting was unjustified, and then used the tragedy as another opportunity to deliver a soliloquy on racial disparities in the American criminal justice and law enforcement systems.

This rush to judgment contrasted jarringly with Obama’s reticence to pass judgment on the motives of the mass killer of five Dallas policemen despite the fact that the (black) police chief of Dallas had said that the murderer–Micah Xavier Johnson–had expressed his solidarity with BLM, his hatred of whites, and his intention to kill white police officers. Obama’s reticence to interpret Johnson’s avowed motives also clashed with his easy assertion that Charleston church shooter Dylann Roof was driven by racial hatred.

Speaking yesterday at a memorial service for the officers, Obama did acknowledge Johnson’s racism: he really had little choice after the blowback from his initial claim that Johnson’s intent was inscrutable (and his previous refusal to acknowledge the avowed motives of Muslim murderers in Orlando and San Bernardino). But the speech was nonetheless another exercise in his obfuscation of realities in order to insinuate pervasive institutional racism. He mentioned Philadro Castile and Baton Rouge shooting victim Alton Sterling in the same sentence as the five dead officers, thereby drawing a sort of equivalence where none exists, other than the fact that people are dead. But it got worse:

But America, we know that bias remains. We know it, whether you are black, or white, or Hispanic, or Asian, or native American, or of Middle Eastern descent, we have all seen this bigotry in our own lives at some point. We’ve heard it at times in our own homes. If we’re honest, perhaps we’ve heard prejudice in our own heads and felt it in our own hearts. We know that. And while some suffer far more under racism’s burden, some feel to a far greater extent discrimination’s stain. Although most of us do our best to guard against it and teach our children better, none of us is entirely innocent. No institution is entirely immune, and that includes our police departments. We know this.

And so when African-Americans from all walks of life, from different communities across the country, voice a growing despair over what they perceive to be unequal treatment, when study after study shows that whites and people of color experience the criminal justice system differently. So that if you’re black, you’re more likely to be pulled over or searched or arrested; more likely to get longer sentences; more likely to get the death penalty for the same crime. When mothers and fathers raised their kids right, and have the talk about how to respond if stopped by a police officer — yes, sir; no, sir — but still fear that something terrible may happen when their child walks out the door; still fear that kids being stupid and not quite doing things right might end in tragedy.

When all this takes place, more than 50 years after the passage of the Civil Rights Act, we cannot simply turn away and dismiss those in peaceful protest as troublemakers or paranoid.

Again, the recitation of incomplete and decontextualized statistics in the most inflammatory–and inappropriate–circumstances. Suggesting that law enforcement is racist at the funerals of five policemen (killed by an admitted racist, no less) is to insinuate that as part of that system these officers were racist too.

One particularly outrageous line is another BLM theme: “When mothers and fathers raised their kids right, and have the talk about how to respond if stopped by a police officer — yes, sir; no, sir — but still fear that something terrible may happen when their child walks out the door.” Tragically, something terrible may indeed happen to those children with shocking likelihood, but it is orders of magnitude more likely that the perpetrator of the terrible thing will not be a policeman, but another African American. And what about all those children whose mother and father did not raise them right, and all too often don’t raise them at all? Obama’s framing is yet another denial of some very unpleasant realities.

In the aftermath of the Trayvon Martin death, Obama said that the son he never had could have looked like Trayvon. He has not said the same about the dozens of young men shot down within blocks of his former Kenwood home.

Another particularly outrageous slur is the statement that “peaceful protest[ers]” are “dismissed” as troublemakers or paranoid. Check out the BLM-led protests in Ferguson, Atlanta, or Minnesota, which have been anything but peaceful. As for the rhetoric of BLM leaders, it is more than fair to characterize it as paranoid and intended to stir up trouble and strife–or worse. But since he insinuates that all protesters are peaceful, even when some are not, and that their complaints are valid, even when almost all are not, he absolves the violent and the provocateurs, and encourages the distortion of the truth.

Perhaps the worst line in the speech–again completely inappropriate in this setting–was this: “We flood communities with so many guns that it is easier for a teenager to buy a Glock than get his hands on a computer or even a book.”

Unpacking the mendacity of that statement would take many posts. A few things. First, just who is this “we”? I haven’t flooded guns anywhere: have you? This invocation of collective guilt (excluding himself, of course) is a common leftist trope. Second, it is patently absurd to say that it is easier for a teenager to get a Glock (starting price around $500) than a computer or a book. This is not an issue of availability or cost: it is an issue of choice. Third, and perhaps worst of all, is the denial of individual responsibility and moral agency to the “teenager” who chooses a gun over a book. But recognizing that would raise thorny and uncomfortable questions, when Obama’s purpose is to push easy nostrums (namely, gun control) and to condemn Americans and American institutions.

This is not a matter of mere rhetoric. There is a short distance between words, especially a president’s words, and especially a black president’s words on a racially charged matter, and actions. An extremely dangerous dynamic is at play, and incredible care is needed to avoid accelerating it.

Micah Johnson targeted police because of his belief that they target black men. In the day after the Dallas atrocity, police officers in Missouri, Tennessee, and Georgia were targeted. When police are targeted (and this has been a concern of police since Ferguson, and events in Baltimore) they are more likely to perceive a threat and shoot in response, which creates another cause célèbre which inflames the likes of Micah Johnson. And on and on it goes.

By repeating and embracing crucial elements of the fundamentally dishonest BLM narrative, Obama validates the aggrieved, and aggravates the dynamic. When a Sister Souljah moment is needed, Obama instead enables latter day Sister Souljahs–and worse.

So what is to be done? Honesty, and the avoidance of inflammatory fractional truths, would be a start.

So would be a full-throated condemnation of BLM and a concerted effort to marginalize it and to empower more responsible voices.

But I hold out little hope that Obama will do these things. He has already made plain his allegiances.

Indeed, he made them even more abundantly clear today: rather than condemning BLM, he is embracing it. The day after the memorial service in Dallas, he hosted BLM organizer Deray McKesson at the White House for a private meeting for three hours. (How many  people does Obama meet with privately for three hours? In his own cabinet, even?) (McKesson called the meeting a “convening.” What the hell is a convening? It’s not a noun!)

To meet with McKesson any time would be bad, but to do so the day after speaking at a memorial service for five police officers murdered by  a man who had told Dallas police negotiators that he was “upset by Black Lives Matter,” is beyond appalling. Step back for a minute and think about this. The day after turning a speech intended to honor slain policemen into another of his dreary lectures on America’s inveterate racism, he confers with the leader of an organization dedicated to the proposition that law enforcement routinely oppresses and assassinates African Americans.

Back in the ’60s, the refrain was “which side are you on?” We know exactly which side Obama is on.

It is deliberate, and it is a signal. And what it signals is that rather than using the power of his office to push back against an inflammatory movement that is in the midst of ramping up confrontations (with demonstrations planned in 37 cities on Friday), he is putting his power and authority behind that movement. Again, rather than pouring oil on troubled waters, throwing fuel on the fire. It is beyond disturbing.

What can others do? Perhaps the most practical and feasible step would be to enhance the credibility of investigations of law enforcement officers who employ deadly force, and to punish officers who employ it unjustifiably. This does not mean whitewashing police conduct–the exact opposite. Officers acting reasonably will prevail even searching investigations. But at the same time, it does mean that concerted efforts must be taken to de-politicize these investigations and cases. When major political figures (not just Obama, but Minnesota governor Dayton or the mayor of Baltimore) express their opinions on these police shootings, especially when the gun smoke still hangs in the air and the facts are not known, justice cannot prevail, and the credibility of the process is undermined. Demagogues like BLM exploit such doubts about process to fuel conflict.

The only margin I can see on which it is practically possible to reduce the frequency of confrontational interactions between police and African Americans in particular is the drug laws. This is obviously a complex and fraught subject, but criminalization of drugs clearly is a major reason for hostile interactions between police and people of all races, but African Americans in particular. It also contributes to violent criminality in minority communities most notably. The War on Drugs is problematic to say the least, and one of its most problematic aspects is how it exacerbates tensions between minorities and law enforcement. This is a good reason to rethink how it is fought, and whether it is worth fighting at all.

But that isn’t going to happen overnight, and maybe not ever. In the meantime, perhaps the best that can be achieved is “first, do no harm.” Unfortunately, a president in the best position to do good cannot muster even that.





July 6, 2016

Brexit: Breaking the Cartel of Nations. Could Position Limits Be a Harbinger?

Filed under: Clearing,Commodities,Derivatives,Economics,Politics,Regulation — The Professor @ 7:50 pm

One of the ideas that I floated in my first post-Brexit post was that freed from some of the EU’s zanier regulations, it could compete by offering a saner regulatory environment. One of the specific examples I gave was position limits, for as bad as the US position limit proposal is, it pales in comparison to the awfulness of the EU version. And lo and behold! Position limits are first on the list of things to be trimmed, and the FCA appears to be on board with this:

Britain-based commodity exchanges may have some leeway in the way they manage large positions after the UK exits the European Union, but they will still have to comply with EU rules from 2018, experts say.

Position limits, a way of controlling how much of an individual commodity trading firms can hold, are being introduced for the first time in the Markets in Financial Instruments Directive II (MiFID II) from January 2018.

Britain voted to leave the EU last month, but its exit has to be negotiated with the remaining 27 members, a process that is meant to be completed within two years of triggering a formal legal process.

“It is too early to say what any new UK regime will look like particularly given pressure for equivalence,” James Maycock, a director at KPMG, said, referring to companies having to prove that rules in their home countries are equivalent to those in the EU.

“But UK commodity trading venues may have more flexibility in setting position limits if they are not subject to MiFID II.”

. . . .

Britain’s Financial Conduct Authority (FCA) said in a statement after the Brexit vote that firms should continue to prepare for EU rules. But it has previously expressed doubts about position limits on all commodity contracts.

“We do not believe that it is necessary, as MiFID II requires, to have position limits for every single one of the hundreds of commodity derivatives contracts traded in Europe. Including the least significant,” said Tracey McDermott, former acting chief executive at the FCA in February this year.

“And I know there are concerns, frankly, that the practical details of position reporting were not adequately thought through in the negotiations on the framework legislation.”

Here’s hoping.

This could explain a major driver behind the Eurogarchs intense umbrage at Brexit. Competition from the UK, particularly in the financial sector, will provide a serious brake on some of the EU’s more dirigiste endeavors. This is especially true in financial/capital markets because capital is extremely mobile. Further, I conjecture that Europe needs The City more than The City needs Europe. Hollande and others in Europe are talking about walling off the EU’s financial markets from perfidious Albion, but the most likely outcome of this is to create a continental financial ghetto or gulag, A Prison of Banks.

If financial protectionism of the type Hollande et al dream of could work, French, German and Dutch bankers should be dancing jigs right now. But they seem to be the most despondent and outraged at Brexit.

A (somewhat tangential) remark. Another reason for taking umbrage is that the UK has served as a safety valve for European workers looking to escape the dysfunctional continental labor markets. This is especially true for many younger, high skill/high education French, Germans, etc. (especially the French). With the safety valve cut off, there will be more angry people putting pressure on European governments.

This could be a good thing, if it forces the Euros (especially the French) to loosen up their growth-and-employment-sapping labor laws. But in the short to medium term, it means more political ferment, which the Euro elite doesn’t like one bit.

This all leads to a broader point. Cooperation is a double edged sword. The EU’s main selling point is that intra-European cooperation has led to a reduction in trade barriers that has increased competition in European goods markets. But the EU has also functioned as a Cartel of Nations that has restricted competition on many dimensions.

I note that one major international cooperative effort spearheaded by the Europeans is the attempt to reduce and perhaps eliminate competition between nations on tax. “Tax harmonization” sounds so Zen, but it really means cutting off any means of escape from the depredations of the state. But tax is just one area where governments don’t like to compete with one another. Much regulatory harmonization and coordination and imposed uniformity is intended to reduce inter-state competition that limits the ability of governments to redistribute rents.

This is one reason to believe that Britain’s exit will have some big upsides, not just for the UK but for Europe generally. It will invigorate competition between jurisdictions that statists hate. And it is precisely these upsides which send the dirigistes into paroxysms of anger and despair. Feel their pain, and rejoice in it.


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