econscius

Obama Administration Cannot Perform Simple Math

In Obama Administration, Racism, Regulation on January 12, 2012 at 1:16 am

 

We often hear how smart President Obama supposedly is.  If so, he really should teach elementary math to his own Department of Justice.

Holman Jenkins of The Wall Street Journal reports the Administration has sued a mortgage lender for discrimination on account of 210,000 minority borrowers paying above average higher fees or rates amongst a population of 525,000 minority borrowers. [1] 

The math is 210,000/525,000 = 40%.  That is less than half of the borrowers being given supposedly below average terms!

Lest we think that is just a one-off mistake, the same article points out the Justice Department also filed claims against two Los Angeles car dealers, saying 600 of 1,300 non-Asian buyers were charged more than the average Asian buyer.  Yes, they were accusing the car dealers of discriminating in favor of a minority group (Asians) though the math means only 46% of non-Asian car buyers were given the supposedly worse terms.

Anyone with exposure to elementary statistics knows results fall on what is called a “probability distribution”.  You will never take a sample of 4.4 million mortgage customers and get an exactly equal distribution of loan terms amongst all applicants.  You will never have the exact same distribution of credit scores amongst all applicants of different races.  This is incredibly obvious, at least to me.

While this sounds like silliness, we need to keep in mind every frivolous government lawsuit costs money, time  and aggravation for the companies that were sued.  It must be an ideological hatred of business that drives the Administration to attack businesses like it does.  Or, perhaps, they flunked math.

[1] http://online.wsj.com/article/SB10001424052970204124204577152684034890266.html?KEYWORDS=racism+everywhere

 

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