One only can envision the opportunities for shakedowns of mortgage lenders not getting aboard the diversity express – and the fearful compliance by lenders. Already, the capitulation has begun. Recently, the American Bankers Association advised its roughly 5,000 member institutions to give rejected minority loan applicants “a second look.” Such reconsideration, noted the ABA, “can result in suggested changes in underwriting standards.” Translation: Banks should be more willing to lose money on bad loans if they make them to blacks and Hispanics.
Disturbing as this expanded role for the legislative branch is, it may have an equally potent rival in the judicial branch. Any number of Obama-friendly (if not Obama-appointed) federal judges are working overtime to force racial-ethnic diversity upon for-profit and educational institutions. The affirmative action juggernaut, for example, got a huge boost last November 15 when the U.S. Court of Appeals, Sixth Circuit, invalidated a ban on race-based admissions at the University of Michigan and other public colleges and universities in the state. By a thin 8-to-7 margin, the court ruled that the ban, approved by 58 percent of Michigan voters in a November 2006 referendum, violated the U.S. Constitution’s Equal Protection Clause. With typically convoluted reasoning, Judge R. Guy Cole, writing for the majority, stated that the referendum “targets a program that inures to the benefit of the minority and reorders the political process in Michigan in a way that places special burdens on racial minorities.” The new arrangement, he said, “undermines the equal protection clause’s guarantee that all citizens ought to have equal access to the tools of political change.”
In the view of Judge Cole (who is black), a race-neutral higher education admissions process somehow creates “special burdens” on nonwhites because of the likelihood of lower admissions rates. This sophistry, in large measure, was made possible by the unwillingness of any branch of government to challenge the doctrine of disparate impact. A silver lining: The State of Michigan plans to appeal the ruling to the U.S. Supreme Court, especially in light of the Ninth Circuit Court of Appeals’ ruling this April upholding a similar ban (Proposition 209) in California.
Racial favoritism possibly got an even bigger boost in September when the City of St. Paul, Minn. unexpectedly withdrew its appeal of a February 2012 circuit court decision to U.S. Supreme Court. The case, which appeared on the Supreme Court docket as Magner v. Gallagher, grew out of an allegation that St. Paul’s aggressive enforcement of its housing code had a disparate impact against minorities. A group of residential landlords, led by Thomas Gallagher, invoked the Fair Housing Act to invalidate the enforcement procedure, though not the code itself. City officials, led by Vacant Building Manager Steve Magner, moved to have the case dismissed. A district court granted the motion, arguing the code enforcement was not discriminatory. Gallagher appealed, and an Eighth Circuit Court sided with him and denied Magner’s request for a rehearing. Magner and other city officials in turn filed an appeal with the U.S. Supreme Court, which granted them certiorari. But the City of St. Paul for some reason pulled out.
Some leading members of Congress believe they know why: The Department of Justice had put the squeeze on the city. A group of ranking Republican lawmakers and oversight committee chairmen sent Attorney General Holder a letter in September which stated in part: “Mr. Perez fretted that a decision in the city’s favor would dry up the massive mortgage lending settlements his division was obtaining by suing banks for housing discrimination based on disparate effects rather than any proof of intent to discriminate.” The letter suggested the department made a quid pro quo deal: In exchange for St. Paul dropping its appeal, the DOJ would refrain from intervening in a separate $180 million suit against the City invoking the False Claims Act. Justice Department officials deny using such intimidation. A DOJ spokesperson said, “The decision was appropriate and made following an examination of the relevant facts, law and policy considerations at issue.”
Even if the Justice Department is truthful in letter, it is dishonest in spirit. The department, which for the next four years will be in the hands of affirmative action fanatics, has proven to be unyielding in its application of the disparate impact standard as broadly as possible. Currently the DOJ has at least five active lending discrimination suits and has opened another 30 investigations. At a Columbia University forum last February, Holder asked about affirmative action: “The question is not when does it end, but when does it begin? When do people of color truly get the benefits to which they are entitled?”
In a nutshell, Holder has summarized the Obama administration’s arrogance and contempt for constitutional liberty. Never mind that diversity enthusiasts regularly use intimidation to extract financial concessions from their targets under the guise of combating discrimination. Never mind as well that there might be good reasons to oppose such an approach to law. Holder insists the process barely has begun and thus must expand radically. As for his notion that people are morally entitled to the fruits of others’ labors by virtue of not being white (“people of color”), it is nothing less than a rationale for legalized theft.
Affirmative action began in earnest more than 40 years ago. And its pace is accelerating. The real question should be: When will it end? One thing is for sure: It’s not going to end, or even begin to end, as long as Eric Holder’s employer, Barack Obama, occupies the White House. Obama’s success as a presidential campaigner in 2008, if one recalls, rested heavily on his self-constructed image as a racial “healer,” someone who by virtue of mixed-race heritage and uplifting rhetoric could bring the nation together. But just underneath the surface was a man whose self-definition was heavily driven by his patrimonial (i.e., East African) ancestry and animosity toward whites. Even a cursory reading of his 1995 book memoir, “Dreams from My Father: A Story of Race and Inheritance,” reveals as much.
Obama and allied anti-white shakedown artists, from Eric Holder to Al Sharpton, see government coercion of white-managed institutions as laudable because the goal is full social equality. Unfortunately, it’s a goal that can’t be achieved without chipping away at the foundations of liberty. And in any event, it is unachievable.
A little over 50 years ago, well before affirmative action platoons swung into action, the late Austrian economist-legal philosopher Friedrich Hayek, in his classic book, “The Constitution of Liberty,” foresaw the futility of this project. He wrote:
From the fact that people are very different it follows that, if we treat them equally, the result must be inequality in their actual position, and that the only way to place them in an equal position would be to treat them differently. Equality before the law and material equality are therefore not only different but are in conflict with each other; and we can achieve either the one or the other, but not both at the same time…(W)here the state must use coercion for other reasons, it should treat all people alike, the desire of making people more alike in their condition cannot be accepted in a free society as a justification for further and discriminatory coercion.
This, then, is the central problem. The current administration believes that because whites as a whole are better off than nonwhites, their advantageous position necessarily must be due to illegal and immoral “discrimination.” Obama, Holder, Perez and other affirmative action soldiers decry any social arrangements that allow whites, even under an assumption of color-blindness, to come out ahead. They see such an outcome, by its very nature, as unfair.
This view is 180 degrees removed from the principle of rule of law. “Discriminatory coercion,” to use Hayek’s term, is precisely what describes the Obama administration’s approach to law and social policy. And it is whites, not nonwhites, who have much to lose. The mandatory “diversity” of Obama’s first term in the White House may be an omen of a far more onerous set of mandates in the second term.
Carl F. Horowitz is director of the Organized Labor Accountability Project of the National Legal and Policy Center, a Townhall.com Gold Partner organization dedicated to promoting ethics in American public life.
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