In that line of thinking ("banks are racist"), what's the exaplantion for why there's nobody disrupting the market, providing loans (at a premium) to minority investors and making off with large profits?

You've put "banks are racist" in speech marks, but I can't find where you're quoting it from.

The question is begging an easy answer to a structural problem. But note that, when a pandemic unfairly makes it expensive for businesses with disproportionately white shareholders to lend, the taxpayer spends trillions to make it cheaper.

Edit: Isn't that exactly what JP Morgan Chase are talking about doing about in the link?

"Banks are racist" is my very short summary of the supposed situation. The problem I have with such explanations is the same I have with "women get 20-30% less money for the absolute same work". Since labor is the major cost factor in most industries, any company exploiting that arbitrage would stomp their competitors.

Why wouldn't anyone want to get rich off of lending to minorities? Pecunia non olet, I'm sure even a committed racist would be quite happy to make 10% by lending to African Americans instead of 5% by lending to WASPs in a highly competitive market. They may not want to deal with them personally, but that wouldn't stop them. It's even more astonishing that rich Black people wouldn't do it, so I believe it requires a bit more of an explanation.

> But note that, when a pandemic unfairly makes it expensive for businesses with disproportionately white shareholders to lend, the taxpayer spends trillions to make it cheaper.

Are the shareholders mostly white? It's my understanding that most large investors are pension funds, insurance companies and the like, not individuals. We've supposedly saved the banks in pretty much every country because we'd wipe out those institutions, not because of some private individuals with giant investments.

A) They are doing it

B) Markets aren't perfect

C) You have to fight against, or change the influence of (through, say, commentary in the media), the government's funding and regulation.

>Are the shareholders mostly white? It's my understanding that most large investors are pension funds, insurance companies and the like, not individuals.

Who owns and benefits from the funds?

If "they" are doing it, where's the issue? Markets may not be perfect, but they're not that bad, especially when huge profits are waiting to be collected with little risk.

> Who owns and benefits from the funds?

Everybody that gets any kind of pension or has any kind of insurance. Is your point that the majority of those may be white and therefore they should've let them crash?

> If "they" are doing it, where's the issue? Markets may not be perfect, but they're not that bad, especially when huge profits are waiting to be collected with little risk.

See C

>Is your point that the majority of those may be white and therefore they should've let them crash?

If you truly think that's what I'm saying, we're on very different pages. The pensions have greater political power than the people in black areas. Both of them have the same problem - an unfair pressure that drives costs of lending up - but when it affects the majority rich and white investors, spending money to fix it is much more palatable.

Tim O’Reilly has been talking about that with his fund recently:

https://news.ycombinator.com/item?id=23657403

>Every policy has a differential impact, that doesn't mean we chose not to address them when we see them.

What do you mean? If every policy has a differential impact, then your contention is that therefore we must address every differential impact?

If, let's say, bank has a policy that you need 20% down payment to qualify for a mortgage, and let's say this has a differential impact on some group, how do you go about addressing this?

You don’t have to have racist intents to execute a policy that enforces racism. Unfortunately when we talk about systems of society within humans, individual human intentions begin to dissipate.

>If, let's say, bank has a policy that you need 20% down payment to qualify for a mortgage, and let's say this has a differential impact on some group, how do you go about addressing this?

You look to see why that's the case, and if it happens to be that those people have been recently (relative to society) emancipated slaves who've barely had 4 generations in a society that still systemically kills them via law enforcement, then you do whatever you can to change that.

We don't need to chose to address every differential impact, only the ones that we see as being bad, or particularly worthy of attention, for example the systematic exclusion of black people from the normal financial tools that allow us to build wealth.

I agree with this goal, but I don't see systemic exclusion in this article because the article didn't bother to do any investigation to understand where these policies came from. I keep reiterating this, but debt is an incredibly dangerous financial tool and you have to take extra care in differentiating someone being denied a loan because the objective risk profile is high vs being denied a loan because the bank is following racist policies.