White House: Big Data Causes Big Disparate Impact
3rd May 2014
Steve Sailer deals with some inconvenient truth.
The brighter folks within the Obama Administration are starting to figure out what I’ve been saying for some time: that a lot of the hype over Big Data and apps and the like are businesses trying to get around traditional regulations, including regulations against discrimination. For example, one of the costs that government imposes on licensed taxi drivers is that they are supposed to drive customers wherever they want. But with the new ride sharing apps, drivers can just look up possible gigs offered on their smartphones and say, “Florence and Normandie? Let me Google that … uh-oh. Re-ject-ed! Ventura and Laurel Canyon? Accepted!”Back in 1982, my Advanced Marketing Models professor in B-School got to talking about predictive systems used by lenders, insurance companies, and the like. Somebody asked if they really work to identify bad risks. Oh, sure, they really worked, he replied. The problem is that the use of truly powerful predictive factors, like race, have been outlawed and the government is leery of the use of approximate factors like zip code. So they don’t work as well as they did a few years ago. This is a quiet way for the white majority to subsidize the black and brown minority in terms of mortgage defaults, insurance rates, etc.