Death of the Democrats’ Toxic Social Justice Theory – “Disparate Impact”

Progressivist distortion of objective justiceBy Jeff Rutherford

“Disparate Impact” is the Progressive Movement’s legal and political battle cry that claims any policy  – public or private – which affects different groups of people unequally is unfair and must be punished by the government.  Even in cases where the policy had no discriminatory intent and the unequal outcome is merely happenstance, the Progressives’ coercive vision of justice drives them to aggressively attack policies they accuse of being unfair.

The Birth of Disparate Impact, a Progressive Bludgeon

An excellent account of Disparate Impact’s origins can be found in this June 2012 article, “The Dead End of Disparate Impact,” by University of Professor Amy L WaxPennsylvania law professor Amy L. Wax.  The saga began in 1971 when the U.S. Supreme Court case Griggs v. Duke Power Company ruled that the company had unfairly discriminated against black job applicants when it required a high school diploma and set a minimum IQ level as conditions of employment.

The unanimous Griggs decision ruled that these disqualifying standards were not sufficiently related to the job, and were a violation of Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, religion, sex, or national origin.  To me the ruling was probably reasonable – assuming it was indeed true that power company jobs did not require much education or intelligence.  I have not looked deeper into that aspect.

Unfortunately, the Griggs ruling also established precedent for imposing a burden on employers to prove their hiring standards are directly justifiable as a business necessity, or face penalties and legal prosecution.  This burden and its potential liability consequences have become the devil’s playground for Progressives.

Disparate Impact Fuels Endless Witch Hunts

Across the four decades since Griggs, Disparate Impact activists have exploited its liability aspect to weave a sticky spider web of legal and political impediments to hiring of workers, even in cases where the hiring standards are justified.  In one such case that went all the way to the Supreme Court in 2009 — Ricci v. DeStefano — the Justices ruled 5-4 to condemn the reverse discrimination committed against firefighters seeking promotion by the city of New Haven CT – due to the city’s misguided pursuit of Disparate Impact doctrine.  This ruling began to turn the tide against the absurd extremes being pushed by Disparate Impact activists.

Ricci v DeStefano.

In her 2012 article, Prof. Amy Wax observed:

“As applied to race and employment, the disparate-impact rule should be repealed by Congress or abolished by the courts. The Supreme Court’s vast expansion of the concept of discrimination in Griggs was a mistake: well intentioned, perhaps, but not well suited to realities of America’s work force and society. The civil-rights laws should return to their original purpose, which was to eliminate double standards and adverse treatment targeted at disfavored groups. After all, Title VII, by its own terms, forbids discrimination “because of” race, gender, and other characteristics — and says nothing about eventual outcomes.”

True to form for Progressivism, Disparate Impact activists haven’t confined their overreach to just the politics of employment.

Disparate Impact Crashes the Housing Mortgage Industry

The Housing Boom and Bust - SowellEconomist Dr. Thomas Sowell wrote a 19-chapter book in 2009 explaining The Housing Boom and Bust, including how federal bank regulators put intense hidden pressure on mortgage lenders to drastically lower their loan qualification standards and approve mortgages for applicants who were clearly at risk for default.  The Progressive agents in government arm-twisted the mortgage industry into becoming a welfare program, financially guaranteed only by the unsuspecting taxpayers (via the eventual bailouts).  Bank executives and loan officers that resisted, citing the need for prudent financial caution, were told they’d be hit with huge fines, accusations of racism released to the media, and even criminal prosecution – all fueled by the Disparate Impact’s warped doctrine of coercive social justice.  This despite the obvious justifiable link between objective loan qualifications – like income level and credit history – and a financial lender’s “business necessity.”  The doctrine had mutated away from the narrow logic of the 1971 Griggs ruling, into a distorted travesty.

I have read dozens of populist rants from both the hard left and the hard right that persist in solely damning “greedy Wall Street bankers” for the 2007-2008 housing/mortgage crash.  If you’re one of them, I implore you to read Sowell’s book.  Don’t have the time or the $10?  No problemo.  Here are five key excerpts from Sowell’s sixth chapter called “The Politics of the Housing Boom”:  [First, second, third, fourth, fifth.]  If you stubbornly disagree with me – from either a Progressive or Libertarian perspective – but you won’t bother to at least read these credible excerpts I’ve placed at your mouse’s feet, then you’re not honestly serious about understanding and debating politics.

Disparate Impact Blocked From Disrupting

Home Insurance Pricing

Judge Richard LeonThe latest development in the Disparate Impact saga occurred on Nov 3rd, and is analyzed in a Nov 7th  Investor’s Business Daily editorial, Judge Strikes Down Obama’s Disparate Impact Rule.  The editorial quotes extensively from U.S. District Judge Richard Leon’s blistering ruling in the case of American Insurance Association, et al. v. United States Department of Housing & Urban Development, et al., including these:

“The application of disparate-impact liability to the provision of pricing of homeowner’s insurance would require a disastrous departure from long-established risk-based underwriting practices.”

“In order to ensure that their facially neutral underwriting practices do not result in any disparate outcomes amongst protected groups, insurers would be required to turn a blind eye to established actuarial principles in favor of race-based insurance decisions.”

In the near future, the entire Disparate Impact issue as pertaining to the financing and insuring of housing will possibly be settled in the current term of the U.S. Supreme Court, by a case called Texas Department of Housing and Community Affairs v. The Inclusive Communities Project.  Keep an eye on it here.


Intentional discrimination is illegal and should not be tolerated.  Unintentional disparities in housing/lending/insurance pricing outcomes are not the fault of the financial or housing industries.  These financial companies are not government welfare programs, and should not be strong armed by the Progressive agents in government to operate as such.

The true causes of these disparities are the alarming erosion of public education and family structure in the predominantly Progressive-governed urban population centers.  Let’s focus America’s attention and resources on finding cost effective solutions to those true causes, and stop punishing the wrong parties through regulatory brute force.  Once more in the words of law professor Amy Wax:

“In the sphere of employment, the key questions are: ‘Why do some people compete more effectively than others for jobs and social rewards?’ and ‘What can be done about it?’ These questions are complicated and pressing, and the law of disparate impact does nothing to address them. It in fact only distracts us from finding urgently needed answers.”


About Necessary and Proper

Jeff believes in the Individual's ability to excel when liberty and freedom of choice are protected. Also believes in the Community's ability to take care of the vast majority of its own issues and needs when the federal government leaves the Community's resources and sphere of control alone. State and local choice produce better results than centralized federal control.
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2 Responses to Death of the Democrats’ Toxic Social Justice Theory – “Disparate Impact”

  1. Basically, the system would like us to believe that equality under the law means using the law to treat people differently based on race, ethnicity, and religion. Like the way we can only have Peace by keeping the War on Terror going strong.
    Double-speak’s come a long way since Orwell’s day.


    • Thanks for the comment, syn.

      I get your point about double-speak. I’ve touched on that theme a few times (here and here). Equality being achieved through unequal treatment is a great example. I don’t agree that Peace through War is as good an example, as anti-American terrorism is an extremely difficult issue that may take many decades to resolve, if ever. It’s far more than a matter of semantics.

      Thanks for visiting, and for dropping anchor on the follower list. 🙂
      – Jeff


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