NBEconomics: Draft Whitey! Affirmative Action Failure in the NCAA and Ivy League.

The NBA is 80.9% “people of color” and 19.1% “white” , which, is almost the exact opposite of the United States demographics where 79.96% of the population is “white”. “In the NCAA In Division I men’s basketball, African-Americans accounted for 57.2 percent of the student-athletes and whites accounted for 29.4 percent.”

Sally Kohn seems to think overreprsentation is proof of unjust discrimination. What would happen if the NCAA forced schools to get more white players? Say NCAA recruiters gave high school “white” kids a bump in ratings because the rating system seems to benefit “black” players and the NCAA gave scholarships for being “white”. Let’s just say they succeeded, more “white” players received scholarships due to adjusted ratings and “white scholarships”.

What would happen on the court? Would “white” players get more playing time than before?

Would “white” players make the NBA?

If so, for how long?

If the previous rating system was accurate, raising player ratings based on anything other than ability means putting lower ability players in a league with accurately rated, high-level players. Maybe the higher-level players would take it easy on the inferior “white” players.

Remember the Behaviour Framing Grid and if a person is motivated (social norm+ individual incentive), able and has opportunity that person is likely to act.  If a player is better, the player is able to win. If the player is in the game, the opportunity is obvious. If the player wants to win, clearly the player is motivated. The score board does not care about the aesthetics, thus there is no incentive for the player to care either.

Maybe the player would be looked down on by breaking social norms, but would the negative social consequences of dunking on low rated players be greater than the individual incentive of winning and positive social consequences of winning? Would negative social consequences of beating “white” players be worse than the negative consequences of losing to someone everyone knows doesn’t deserve to be there?

It is a safe bet on average, “white” affirmative action players would get crushed in Division I. Putting “white” players on the court because they’re “white” and not necessarily good, is a receipe for disaster. No doubt, there would be some “white” players that preformed well, they would be a extrodinarily small percentage. At the NBA level, that minority of “white” affirmative action players would be even less likely to succeed. In fact, I would wager that the best players would have a greater advantage than before “white” benefits implementation  because their competition would be weaker. The better players would stand out more, making it less likely “white” affirmative action players would be drafted at all.

There is an easy answer for how Jackie Robinson broke the color barrier in 1947, the NBA’s was shattered in 1950, the NFL in 1946 before the civil rights acts of the 1960’s. The coach at a small school has ability, opportunity, and motivation to put black players on his Texas Western team. He has no reason not to, after all, he’s already suffering from the negative consequences of losing. The score board does not care about “race”. Politicains and do-gooders do.

NCAA Basketball: NCAA Tournament-East Regional-North Carolina vs Notre Dame
Mar 27, 2016; Philadelphia, PA, USA; North Carolina Tar Heels head coach Roy Williams celebrates with his team defeating the Notre Dame Fighting Irish in the championship game in the East regional of the NCAA Tournament at Wells Fargo Center. North Carolina won 88-74. Mandatory Credit: Bill Streicher-USA TODAY Sports
Malcom Gladwell via Business Insider


If you read the title you know where this is going. I’ve read a lot from Malcolm Gladwell. He rarely dips his toe clearly in politics, but he could not help himself in the 4th chapter of David and Goliath.

Gladwell argues that the students may be much better off selecting a second-choice school instead of attending the Ivy League due to the level of competition and pressure to perform. Gladwell interviews Ivy League drop-outs who believe that they would have stayed in their field of study and graduated if they went to a less-competitive university.

They became “canon fonder” for the kids that went to private school their entire lives, just like the “white” affirmative action players would get crushed by players that grew up in AAU, intense basketball culture.

Gladwell makes the same argument against affirmative action, getting in doesn’t mean success. He contends that lowering admission standards for people because they are a minority puts them “in a school one higher tier than they would otherwise be able to attend.” Gladwell cites a study by Richard Sanders, which found “more than half of all African-American law students in the United States (51.6%) are in the bottom 10% of their class and almost three-quarters fall in the bottom 20%.”

Gladwell concluded, “We take promising students… who happen to be black and offer to bump them up a notch. And why do we do that? Because we think we’re helping them! Sure enough, by every conceivable measure (likelihood of graduating from law school, likelihood of passing the Bar Exam, likelihood of actually practicing law) black students who chose the big pond offered by affirmative action do markedly worse than those of equal academic credentials who attended their natural school.”

Affirmative Action is another program that means well, but ultimately gets in the way.



The Advertising Effect: Adam Ferrier’s Masterpiece on Behavioural Economics

A quick glance at Adam Ferrier’s twitter leaves little doubt that he would be considered a US conservative. That doesn’t mean his work is not accurate. His book, The Advertising Effect: How to Change Behaviour, contains almost everything I learned in 1000-2000 Psychology and Sociology classes for $27. That’s about $20,000 of college classes for $27. It covers several classic studies, is well cited and entertaining. It’s a great read and a better listen on audio book.

Previously, I covered human nature according to Judaism, Christianity and Evolutionary Psychology(EP). We’re all motivated by self-interest. Ferrier provides the Behaviour Framing Grid to help understand where self-interest falls in decision making. The image below is from a great summary at Digital Intelligence Today.


Ferrier cites Fishbein in stating three conditions that are “necessary and sufficient for adopting a behavior”:

  1. One’s motivation.
  2. One’s “ability to perform the behaviour”.
  3. If one has the opportunity to perform the behaviour.

As the Behaviour Framing Grid shows, the more motivated (individual incentives +social norms) and the easier (ability+opportunity) it is for one to act, the more likely one is to act. Ferrier sums up individual incentives as asking, “What’s in it for me?” He also understands that humans are social, so social norms play into motivation. However, pro-social behavior is just another way of sustaining one’s self, thus selfish. The desire to have approval of others is an individual incentive. Ferrier’s point is that the if others’ approve of a behaviour, the more likely one is do that behaviour.

Ease is of ability + opportunity and at times better understood as ability – obstacles. There are countless kids that are motivated to be NBA players and every few NBA players. Having athletic ability to perform at an NBA level is obviously a requirement to play in the NBA as is the NBA existing in the first place for anyone to have the opportunity to play in it.

All of it makes perfect sense. Bill Gates was more likely to go into computing than pro-basketball because he had more computing ability. He also had opportunity to use computers, his parents bought computers for their son’s school, according to Malcolm Gladwell’s Outliers. What would you find more motivating, something you have ability to do and access, or something you’re not as good at and have little access? Gates was likely more motivated toward computing. He had acceptance from his parents and a social group to code with. He was later offered a job coding in high school, another individual incentive.

What motivates people go back to alcohol? It seems many ask why people do something; the more accurate question is why not? Alcohol use can feel good and comes with a social group that, in many cases, is stronger than the stigma of alcohol abuse. Ease can also be high. Alcohol is readily available, and easy to use. Sometimes Ease is better described as ability – obstacles.

Let’s use the framing grid on PPACA (Obamacare). What are the individual incentives for using government healthcare? What is the public opinion of using government healthcare? How much ability does one have to have to use government healthcare? How much opportunity does one have to use government healthcare?

What’s in it for the one?

Why not use it?

It seems Ferrier’s Behaviour Framing Grid and Milton Friedman’s perspective on government programs are congruent. Government programs are likely to expand.

Ferrier’s book is fun, provides great information critical for understand our zeitgeist,  examines questions we all should and makes:

  • Can behaviour change professionals really change behavior?
  • If they can how ethical is the practice?
  • If not, how can Psychologists charge for the service?
  • “Today’s consumer is marketing saturated, not marketing savvy.”
  • Action changes attitude faster than attitude changes action.

Much of the coming pieces on this little blog will use the Behaviour Framing Grid as part of the lens to view politics, philosophy and economics(duh). I haven’t even touched the action spurs and Cognitive Behavior Therapy(CBT). Here’s what’s coming this year based on this idea:

  • Collectivism: The Great Evil of Our Time
  • NBEconomics: Micheal, Magic, Bird and Nash’s Equilibrium
  • Love, Agape, and Altruism

We’ll cover the action spurs as well. More on the way.


The Smokey the Bear Effect: What Forests, Housing, and Healthcare have in common.

According to Thomas Swetnam at the University of Arizona, every time there is a forest fire, it leaves a scar in the rings of surviving trees. Across thousands of tress these fire scars appeared every 5-10 years from the 1600s until about 1900. What changed?

The US Forest Service was formed in 1905 to stop all forest fires. They did a great job stopping small fires that burnt up scrubs, small trees and only damaged large trees. Since these small fires never started there was more fuel for bigger fires. According to Stephen Pyne via NPR, “Over the past several years, even as fewer fires have struck the Southwest, they’ve burned more land. The U.S. Forest Service now spends about half its budget on firefighting.”

The Forest Service sought to end all forest fires, but they ended up creating bigger, more damaging fires. Trees that would have survived the smaller fires and returned to regular growing burned in the larger, hotter fires fueled by the Forest Service’s policy. It’s called “The Smokey the Bear Effect.”

If you believe in evolution, the forests had become so large through the process of natural selection. Those forests existed because they were stable, despite the small fires. In fact, the small fires were part of the reason the forests had grown so large. There was a natural equilibrium between the forests and fires that allowed the forest to become it’s size. When the US Forest service stepped in, the balance changed, but natural selection still applied. A new equilibrium had to be reached.

Capitalism is a the natural selection of businesses. Businesses constantly compete with each other in the environment of the marketplace to provide customers with a product for the most value while still making a profit for the business. Afterall, the business that doesn’t cover expenses, dies. Even non-profits have to cover their expenses.

An equalibrium in which the business makes more than it spends must be reached to survive. Businesses that can survive, do; the ones that can’t, don’t.

Home loans were of the safest bets for investment. Banks had reached an equilibrium: they did not loan to people who were credit risks or could not afford the payments which allowed them to profit. Then, in their desire for everyone to own a home, the government stepped in and forced banks to provide “affordable housing” loans, which, lowered the standards to get a home loan. Banks gave loans to people who would not merit a loan in the past; those people didn’t pay on the loan, banks took huge losses and the market collapsed.

Not only did those people the government sought to get homes lose their homes, other home owners lost value on their homes when foreclosed homes flooded the market, raised supply of homes, thus lowered home prices. Retirement accounts that relied on the banks and mutual funds took a hit as well.

It’s another form of the Smokey the Bear Effect. Government got involved then made the problem they tried to solve even worse by tampering with the natural equilibrium.

Barack Obama wanted everyone to be have health insurance. Just like the banks and home loans, health insurance companies did not cover people who were high risks because insurers would spend more than they made if they did so. Then government stepped in with the PPACA(Obamacare) forcing insurers to cover everyone including high-risk clients and 100% financial liability pre-existing conditions. The results again: 4.7 million lost coverage because their plans did not meet the new PPACA standards, “one-third of counties are projected to have just one insurer on their Obamacare exchanges this year”, premiums cost 99% more than before the PPACA.

In my exchange with Consumer’s Union on Twitter, once I questioned them directly on premiums they decided not to respond.

Why does government interference lead to the compounding of the problems they seek to solve in healthcare, affirmative action, and housing? See Milton Friedman, Adam Smith, and Thomas Sowell. The free market allows the real experts to do their jobs, and competition between businesses creates the highest value product. Just like natural selection, in free-market capitalism the best businesses survive and thrive. Their policies and practices are not arbitrary; they exist to allow the business to survive. If those policies are changed, the business will die. If the business inflates their prices, their competitors will make a equal quality product at a lower price and drive the former out of business. The constant competition keeps even the largest companies from taking advantage of consumers.

When government steps in to save bad businesses, like George W. Bush did to save the banks or Barack Obama to save the auto industry, businesses have no incentive to change their policies that caused failure. After all, they’ll just get bailed out when they fail, with each failure successfully growing, hurting more people.

If government got out of the market, bad businesses would fail, allowing the rest of the market prosper; just like small fires would burn vulnerable trees allowing the rest of forest to grow.

Government can’t prevent forest fires or market bubbles. It can only make them bigger.


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