craschworks

http://www.polyfacefarms.com/articles.html

Everything I Want to Do Is Illegal
JOEL SALATIN / Acres v.33, n.9, Sept 2003 1sep03

Everything I want to do is illegal. As if a highly bureaucratic regulatory system was not already in place, 9/11 fueled renewed acceleration to eliminate freedom from the countryside. Every time a letter arrives in the mail from a federal or state agriculture department my heart jumps like I just got sent to the principal’s office.

And it doesn’t stop with agriculture bureaucrats. It includes all sorts of government agencies, from zoning, to taxing, to food inspectors. These agencies are the ultimate extension of a disconnected, Greco-Roman, Western, egocentric, compartmentalized, reductionist, fragmented, linear thought process.

ON-FARM PROCESSING

I want to dress my beef and pork on the farm where I’ve coddled and raised it. But zoning laws prohibit slaughterhouses on agricultural land. For crying out loud, what makes more holistic sense than to put abattoirs where the animals are? But no, in the wisdom of Western disconnected thinking, abattoirs are massive centralized facilities visited daily by a steady stream of tractor trailers and illegal alien workers.

But what about dressing a couple of animals a year in the backyard? How can that be compared to a ConAgra or Tyson facility? In the eyes of the government, the two are one and the same. Every T-bone steak has to be wrapped in a half-million dollar facility so that it can be sold to your neighbor. The fact that I can do it on my own farm more cleanly, more responsibly, more humanely, more efficiently, and in a more environmentally friendly manner doesn’t matter to the government agents who walk around with big badges on their jackets and wheelbarrow-sized regulations tucked under their arms.

OK, so I take my animals and load them onto a trailer for the first time in their life to send them up the already clogged interstate to the abattoir to await their appointed hour with a shed full of animals of dubious extraction. They are dressed by people wearing long coats with deep pockets with whom I cannot even communicate. The carcasses hang in a cooler alongside others that were not similarly cared for in life. After the animals are processed, I return to the facility hoping to retrieve my meat.

When I return home to sell these delectable packages, the county zoning ordinance says that this is a manufactured product because it exited the farm and was reimported as a value-added product, thereby throwing our farm into the Wal-Mart category, another prohibition in agricultural areas. Just so you understand this, remember that an on-farm abattoir was illegal, so I took the animals to a legal abattoir, but now the selling of said products in an on-farm store is illegal.

Our whole culture suffers from an industrial food system that has made every part disconnected from the rest. Smelly and dirty farms are supposed to be in one place, away from people, who snuggle smugly in their cul-de-sacs and have not a clue about the out-of-sight-out-of-mind atrocities being committed to their dinner before it arrives in microwaveable, four-color-labeled, plastic packaging. Industrial abattoirs need to be located in a not-in-my-backyard place to sequester noxious odors and sights. Finally, the retail store must be located in a commercial district surrounded by lots of pavement, handicapped access, public toilets and whatever else must be required to get food to people.

The notion that animals can be raised, processed, packaged, and sold in a model that offends neither our eyes nor noses cannot even register on the average bureaucrat’s radar screen — or, more importantly, on the radar of the average consumer advocacy organization. Besides, all these single-use megalithic structures are good for the gross domestic product. Anything else is illegal.

ON-FARM SEMINARS & ‘AGRITAINMENT’

In the disconnected mind of modem America, a farm is a production unit for commodities — nothing more and nothing less. Because our land is zoned as agricultural, we cannot charge school kids for a tour of the farm because that puts us in the category of “Theme Park.” Anyone paying for infotainment creates “Farmadisney,” a strict no-no in agricultural zones.

Farms are not supposed to be places of enjoyment or learning. They are commodity production units dotting the landscape, just as factories are manufacturing units and office complexes are service units. In the government’s mind, integrating farm production with recreation and meaningful education creates a warped sense of agriculture.

The very notion of encouraging people to visit farms is blasphemous to an official credo that views even sparrows, starlings and flies as disease threats to immunocompromised plants and animals. Visitors entering USDA-blessed production unit farms must run through a gauntlet of toxic sanitation dips and don moonsuits in order to keep their germs to themselves. Indeed, people are viewed as hazardous foreign bodies at Concentrated Animal Feeding Operations (CAFOs).

Farmers who actually encourage folks to come to their farms threaten the health and welfare of their fecal concentration camp production unit neighbors, and therefore must be prohibited from bringing these invasive germ-dispensing humans onto their landscape. In the industrial agribusiness paradigm, farms must be protected from people, not to mention free-range poultry.

The notion that animals and plants can be raised in such a way that their enhanced immune system protects them from kindergarteners’ germs, and that the animals actually thrive when marinated in human attention, never enters the minds of government officials dedicated to protecting precarious production units.

COLLABORATIVE MARKETING

I have several neighbors who produce high-quality food or crafts that complement our own meat and poultry. Dried flower arrangements from one artisan, pickles from another, wine from another, and first-class vegetables from another. These are just for starters.

Our community is blessed with all sorts of creative artisans who offer products that we would love to stock in our on-farm retail venue. Doesn’t it make sense to encourage these customers driving out from the city to be able to go to one farm to do their rural browsing/ purchasing rather than drive all over the countryside? Furthermore, many of these artisans have neither the desire nor time to deal with patrons one-on-one. A collaborative venue is the most win-win, reasonable idea imaginable — except to government agents.

As soon as our farm offers a single item — just one — that is not produced here, we have become a Wal-Mart. Period. That means a business license, which isbasically another layer of taxes on our gross sales. The business license requires a commercial entrance, which on our country road is almost impossible to acquire due to sight-distance requirements and width regulations. Of course, zoning prohibits businesses in our agricultural zones. Remember, people are supposed to be kept away from agricultural areas — people bring diseases.

Even if we could comply with all of the above requirements, a retail outlet carries with it a host of additional regulations. We must provide designated handicapped parking, government-approved toilet facilities (our four household bathrooms in the two homes located 50 feet away from the retail building do not count) — and it can’t be a composting toilet. We must offer x-number of parking spaces. Folks, it just goes on and on, ad nauseum, and all for simply trying to help a neighbor sell her potatoes or extra pumpkins at Thanksgiving. I thought this was the home of the free. In most countries of the world, anyone can sell any of this stuff anywhere, and the hungering hordes are glad to get it, but in the great U.S. of A we’re too sophisticated to allow such bioregional commerce.

EMPLOYING LOCAL YOUNGSTERS & INTERNS

Any power tool — including a cordless screwdriver — cannot be operated by people under the age of 18. We have lots of requests from folks wanting to come as interns, but what do we call them? The government has no category for interns or neighbor young people who just want to learn and help out.

We’d love to employ all the neighboring young people. To our child-awning and worshiping culture, the only appropriate child activity is recreation, sitting in a desk, or watching TV. That’s it. That’s the extent of what children are good for. Anything else is abusive and risky.

Then we wonder why these kids grow up unmotivated and bored with life. Our local newspaper is full of articles and letters to the editor lamenting the lack of things for young people to do. Let me suggest a few things: digging postholes and building a fence, weeding the garden, planting some tomatoes, splitting some wood, feeding the chickens, washing eggs, pruning grapevines, milking the cow, building a compost pile, growing some earthworms.

These are all things that would be wonderfully meaningful work experience for the youth of our community, but you can’t simply employ people anymore. A host of government regulatory paperwork surrounds every “could you come over and help us . . . ?” By the time an employer complies with every Occupational Safety & Health Administration requirement, posts every government bulletin requirement, with-holds taxes, and shoulders Unemployment Compensation burdens and medical and child safety regulations — he or she can’t hire anybody legally or profitably.

The government has no pigeonhole for this: “I’m a 17-year-old home-schooler, and I want to learn how to farm. Could I come and have you mentor me for a year?”

What is this relationship? A student? An employee? If I pay a stipend, the government says he’s an employee. If I don’t pay, the Fair Labor Standards board says it’s slavery, which is illegal. Doesn’t matter that the young person is here of his own volition and is happy to live in a tee-pee. Housing must be permitted and up to code. Enough already. What happened to the home of the free?

BUILD A HOUSE THE WAY I WANT

You would think that if I cut the trees, mill the logs into lumber, and build the house on my own farm, I could make it however I wanted to. Think again. It’s illegal to build a house less than 900 square feet. Period. Doesn’t matter if I’m a hermit or the father of 20. The government agents have decreed, in their egocentric wisdom, that no human can live in anything less than 900 square feet.

Our son got married last year and wanted to build a small cottage on the farm, which he now oversees for the most part. Our new saying is, “He runs the farm, and I just run around.” The plan was to do what Mom and Dad did for Teresa and I — trade houses when children come. That way our empty nest downsizes, and the young people can upsize in the main family farmhouse. Sounds reasonable and environmentally sensitive to me. But no, his little honeymoon cottage — or our retirement shack — had to be a 900-square-foot Taj Mahal. A state-of-the-art accredited composting toilet to avoid the need for a septic system and sewer leach field was denied.

When the hillside leach field would not meet agronomic standards and we had to install it in the floodplain, I asked the health department bureaucrat why. He said that essentially the only approvable leach fields now are alongside creeks and streams, because they are the only sites that offer dark-enough colored soils. Sounds like real environmental steward-ship, doesn’t it?

Look, if I want to build a yurt of rabbit skins and go to the bathroom in a compost pile, why is it any of the government’s business? Bureaucrats bend over back-wards to accredit, tax credit, and offer money to people wanting to build pig city-factories or bigger airports. But let a guy go to his woods, cut down some trees, and build himself a home, and a plethora of regulatory tyrants descend on the project to complicate, obfuscate, irritate, frustrate, and virtually terminate. I think it’s time to eradicate some of these laws and the piranhas who administer them.

OPTING OUT OF THE SYSTEM

I don’t ask for a dime of government money. I don’t ask for government accreditation. I don’t want to register my animals with a global positioning tattoo. I don’t want to tell officials the names of my constituents. And I sure as the dickens don’t intend to hand over my firearms. I can’t even use the “U” word.

On every side, our paternalistic culture is tightening the noose around those of us who just want to opt out of the system — and it is the freedom to opt out that differentiates tyrannical and free societies.

How a culture deals with its misfits reveals its strength. The stronger a culture, the less it fears the radical fringe. The more paranoid and precarious a culture, the less tolerance it offers.

When faith in our freedom gives way to fear of our freedom, then silencing the minority view becomes the operative protocol. The Native Americans silenced after Little Big Horn simply wanted to

worship in their beloved Black Hills, use traditional medicinal herbs to cure diseases, educate their children in the ways of their ancestors, and live in portable homes rather than log cabins. By that time these people represented absolutely no threat to the continued Westernization and domination of the North American continent by people who educated, vocated, medicated, worshiped, and habitated differently.

But coexistence was out of the question. Just like the forces that succeeded in making it illegal for me to use the “O” word, the Western success at Wounded Knee quashed the little guy. What does the Organic Trade Association have to fear from me using the “O” word? If society really wants government certification, my little market share will continue to deteriorate into oblivion. If, however, the certification effort represents a same-old, same-old power grab by the elitists to exterminate the fringe play-ers, it is merely another example of fear replacing faith.

Faith in what? Faith in diversity. Faith in each other. Faith in people’s ability to self-educate, thereby making informed decisions. Faith in seekers to find answers. Faith in marketplace dynamics to reward integrity and not cheating. Faith in Creation to heal. Faith in healthy plants and animals to withstand epizootics. Faith in earthworms to increase fertility. Faith in communities to function efficiently and honorably without centralized beltway interference. Faith in Acres U.S.A. to arrive every month with a cornucopia of insight and information.

Our culture’s current fear of bioterrorism shows the glaring weakness of a centralized, immunodeficient food system. This weakness leads to fear. Demanding from on high that we irradiate all food, register every cow with government agencies, and hire more inspectors does not show strength. It shows fear.

Indeed, official policy views all these minority production and marketing systems that have been shown faithful over the centuries to be instead things that threaten everyone and everything. As a teepee dwelling, herb healing, home educating, people loving, compost building retail farmer, I represent the real answers, but real answers must be eradicated by those who seek to build their power and fortunes on a lie — the lie being that genetic integrity can be maintained when corporate scientists begin splicing DNA. The lie that, as Charles Walters says, toxic rescue chemistry is better than a balanced biological bath. The lie that farms are disease-prone, unfriendly, inhumane places and should be zoned away from people.

Those of us who would aspire to opt out — both consumers and producers — must pray for enough cleverness to circumvent the system until the system cannot sustain itself. Cycles happen. Because things are this way today does not mean they will be this way next year. Hurrah for that.

Often, the greatest escapes occur at the moment the noose becomes tightest. I’m feeling the rope, and it’s not very loose. Society seems bound and determined to hang me for everything I want to do. But there’s power in truth. And for sure, surprises are in store that may make

society shake its collective head and begin to question some seemingly unalterable doctrines. Doctrines like the righteousness of the bureaucrat. The sanctity of government research. The protection of the Food Safety and Inspection Service. The helpfulness of the USDA.

When that day comes, you and I can graciously offer our society honest food, honest ecology, honest stewardship. May the day come quickly.

Joel Salatin raises grass-fed beef, pastured poultry, rabbits and more on a model diversified farmstead, Polyface Farm, in Virginia’s Shenandoah Valley. He is the author of Salad Bar Beef, Pastured Poultry Profits, You Can Farm, and Family Friendly Farming, available from Acres U.S.A. for $30 each, plus shipping and handling. To order, call 1-800-355-5313 or visit our website.

Acres U.S.A. is the national journal of sustainable agriculture, standing virtually alone with a real track record — over 30 years of continuous publication. Each issue is packed full of information ecoconsultants regularly charge top dollar for. You’ll be kept up-to-date on all of the news that affects agriculture — regulations, discoveries, research updates, organic certification issues, and more.

To subscribe, call
1-800-355-5313
(toll-free in the U.S. & Canada)
512-892-4400 • fax 512-892-4448
P.O. Box 91299 • Austin, TX 78709
[email protected]
Or subscribe online at:
www.acresusa.com

Some nifty treehouse designs here

Via Pigdog

Cocksuckers. Ian McShane's Al Swearengen is one of the great villains of all time. It's a pity that there probably won't be a fourth season.

Via flutterby, comes this video of the Scarpar motorized snowboard in action.

Some of you may be interested to know that an unabridged audiobook of Peter Beagle's “The Last Unicorn” (read by Beagle himself) is now avialable:

http://www.conlanpress.com/html/audiobooks.html

Now I know what to get for Christmas…

Via

Via Boing Boing

http://www.salon.com/tech/feature/2006/05/22/prosper/print.html

The virtual moneylender
A new Web site allows you to borrow money from strangers in cyberspace. It may even free you from credit card debt and the usurers at the local payday loan center.

By Farhad Manjoo

May. 22, 2006 | The middle-aged woman in Janesville, Wis., who recently posted a request for $5,000 on Prosper.com, an online marketplace for personal loans, chose a screen name that elegantly distills her station in life. BusyLady52 is indeed a busy lady. By day, she works for the county in an office job; at night, she's a dispatcher for the city bus line. In addition, she cares for her aging and ailing parents and a younger sister who suffered a debilitating brain injury in 1987. Yet all this work has brought neither security nor much satisfaction, and BusyLady52 now strives to crawl out from under a lifetime of debt.

In a photograph that BusyLady52 posted alongside her request, she looks positively regal, with a fur-trimmed V-neck shawl, a pretty necklace and a bright smile. The effect is endearing, and the picture, together with a short note explaining her situation, signals authentic desperation. Like many of the listings on Prosper, this one seems to whisper, Will you take a chance on me?

Prosper is a marketplace brimming with woe. In this respect it is not so different from a dating site, except that on Prosper people are looking for money, which is immeasurably more useful, and often harder to come by, than love. Love will sometimes find you in the dark when you least expect it, and change your life. This almost never happens with money. If you aren't born with it, there are really only two legitimate ways to get it: You work for it, trading your time and effort, or you borrow it, putting on the line your reputation, assets and future income. For vast numbers of Americans today, the first option simply isn't working out, and the second choice — borrowing — has become a way of life. The problem isn't just record debt, but also the terms. Credit cards offer rates that are fluid and unpredictable, with high fees and little sympathy for hardship. Worse still are payday loan centers, which lend out money at obscene rates — 400 percent or more on an annual basis — yet have become a necessary crutch for many.

Prosper bills itself as an Internet-age alternative to such creditors. The system, which has been in operation since February, is at once ingenious and faintly surreal; its premise is that strangers — lenders and borrowers — will come together to execute meaningful, serious and risky transactions in a self-consciously anonymous environment, not unlike the way buyers and sellers do business with each other on eBay. If they succeed, “person-to-person” lending sites like Prosper — competitors are coming online soon — could upend the credit industry, bringing transparency and fairness to a market not known for either. Borrowers who've been shut out of the loan market find money at reasonable interest rates, and people with money to lend get a return that can surpass that of other investments. Prosper, which manages the loan, takes a small cut of the deal. (Borrowers pay 1 percent of each loan and lenders pay .5 percent on the money owed to them.)

There is much to question about this setup. Critics and skeptics wonder about the risks involved for both borrowers and lenders, the site's adherence to equal-opportunity regulations, and, most important, the very logic behind its operations, the idea that people with money will actually lend to people in need, especially to borrowers who have poor financial records. Yet the idea sounds intuitively attractive to many who follow the credit industry and are familiar with its pitfalls. “Looking at it from 10,000 feet, this is a great idea,” says Elizabeth Warren, a professor at Harvard Law School who's an expert on bankruptcy law. “It could have the wonderful effect of making markets work the way they should, driving down the amounts charged for loans to the true marginal cost.”

Warren suggests that Prosper is much more than a novel Web site — it's an example, she says, of one of the ways the Internet might transform the credit industry into a fairer, more equitable business. “There are things going on in the lending industry that if it were transparent would never occur,” she says. At least in theory, sites like Prosper hold the potential to free many in the middle class from the stranglehold of credit card debt and to give low-income Americans a way out of the debt traps laid by unseemly payday loan centers.

Another intriguing possibility is that Prosper can help instill financial discipline in people who've had trouble with money all their lives. Warren points out that one of the questions that people who study debt and bankruptcy in America wrestle with is “whether anyone should be lending money to people who are already in financial trouble.” The answer would seem to depend on the borrower. For some people in debt, a little bit of money offered at a reasonable rate can set the world right again, while for others, as a wise man once said, mo' money, mo' problems. But determining which borrowers can be saved from those who are simply undisciplined is a labor-intensive task, and mainstream creditors — credit card firms and payday loan centers — hardly make the effort. They charge everyone a high rate with the expectation that some will default, and others will live forever in lucrative, revolving debt.

The virtual world of Prosper offers a far more personal experience. Trading money on the site is an intensely social activity, in which lenders sit in constant judgment of the most intimate aspects of borrowers' lives, scrutinizing their financial histories and making public guesses about their responsibility. Successful borrowers, meanwhile, must convince lenders to part with their money, not only by disclosing their finances, but by pleading their cases directly, promising to work harder at managing their money.

And the process seems to be working. Many of the lenders on Prosper, for instance, know almost nothing about BusyLady52, not even her name (which she asked me not to publish). What they do know about her (a middling credit score, a couple of current delinquencies) is the sort of thing that would render her ineligible for a traditional loan. Yet lenders saw in her story some spark of genuine responsibility, a possibility that she'd do well if given a chance. More than 50 people got together to give her a total of $5,000 at a 16 percent rate. She now says she's determined to set her money straight again, if only to prove herself to those who invested in her. “Grateful?” she says. “When I got up this morning and saw the money in my account — oh, you have no idea.”

Late in 2003, Richard Duvall, a technology entrepreneur in the U.K., left Egg, the world's largest online bank, which he had founded in 1998. At the time, he says, he had more money in the bank than he'd ever had in his life. To the credit bureau, however, Duvall apparently looked like a risk. “Two days after I left Egg, I went into a cell shop, and after spending two hours choosing a phone, I went up to the counter and said, 'I'd like this one,'” Duvall recalls. The sales clerk asked Duvall a series of questions to assess his credit-worthiness: Was he employed? How long had he lived in his home? (As it happened, he'd recently moved.) The answers were not satisfactory. “They said, 'We can't give you that phone. You don't meet our requirements for a loan.'”

Duvall's story expresses the idea that animates person-to-person lending: Good people are being overlooked. Traditional creditors use a trove of data to assess us all, thoroughly scrutinizing our financial records and giving each of us a score. But because these scores are determined by algorithm rather than human beings, they invariably miss important aspects of our financial lives. In Duvall's case, the mobile phone shop's credit program overlooked the money he had in the bank.

For Duvall, the cellphone incident was a spark of inspiration, one of the reasons he hit upon the idea for Zopa, a person-to-person lending site that opened in the U.K. in March 2005. Duvall, who's now the CEO of Zopa, says the firm now has 70,000 members, and has made millions of dollars in loans. A U.S. version of the site will open this summer, serving, at first, only California.

On Prosper, it's common to find borrowers who claim that traditional credit agencies have overlooked some meaningful measure of their finances. To put up a loan listing on the site, borrowers determine the amount they're looking for and the maximum interest rate they're willing to pay. (You can borrow up to $25,000 on Prosper; depending on what state you live in, you might face a minimum loan amount as well.) Borrowers give Prosper a few bits of personal information — annual income, bank account number and Social Security number — and authorize the site to collect financial data from credit agencies. Prosper shows potential lenders the data it collects, including a credit grade, the number of credit lines the borrower has opened in the last decade, the number of delinquencies he's had, and his ratio of debt to income.

Often, though, borrowers will argue that these numbers don't tell the whole story. Sometimes, they have a point. If I told you about Person X, who had a credit rating of H.R. — “high risk,” the lowest rating — a string of recent delinquencies, and a 20 percent debt-to-income ratio, you'd probably conclude that she was heading straight to bankruptcy. Lending this person money would be about as profitable as throwing it into a fountain and waiting for your wish to come true. But what if I also told you that this person, Suzy, had accumulated her debt while she was studying at Harvard Law School? And what if I mentioned that she had just graduated with honors, and had accepted a job at a Manhattan firm with a starting salary of $140,000 a year? She only needs a loan to tide her over until she starts work. Now I tell you that she's willing to pay a 20 percent interest rate on your money. Would you take a risk on her now?

To be sure, things on Prosper, as in real life, are not always so clear-cut. You won't usually find the Harvard Law student with a guaranteed future salary looking to pay a high rate for a loan. But there are many whose future incomes look assured, and who appear to be much better credit risks than the numbers would suggest. William Bulck is a 26-year-old student in Milwaukee, Wis. Prosper gives Bulck a credit grade of C, which is about average; according to Experian, a credit reporting agency, there is a small but not insignificant chance that someone with this credit score will default on a loan. Bulck has a debt-to-income ratio of 10 percent, which is not terrible, but not great either. When Bulck went in search of a traditional bank loan to help him pay his way through school, he met with one rejection after another. “I have a friend who is a bank manager, and when I talked to him, the first place he said to try was Prosper.”

Early in May, Bulck put up a request for a loan of $2,800, offering an interest rate to lenders of 13.9 percent. “This loan is probably the hardest thing I have had to ask for in a very long time, and I appreciate your help,” his listing began. Bulck went on to describe his situation. He receives financial aid, he said, but his next disbursement doesn't come until August, and he'd have a hard time until then. But he assured possible lenders that his future looked bright. He's in his last year of school, and he expects to find a job soon. “I don't anticipate any problems paying this loan back,” he wrote.

Despite his assurances, a risk-averse investor would have found much to be wary of in Bulck's listing. His chosen field of study is creative writing, not a major known for the swiftness with which it places graduates in steady employment. There's a more basic problem, which is whether you can trust him. Bulck posted a photograph — he's seated at a desk, writing, a cat perched nearby — and though he looks decent enough, it would have been impossible for any lenders to know for sure that Bulck was really a student due to get a financial aid check in August, and was not, instead, just practicing his creative writing to get some quick cash.

As it happened, people believed Bulck's story, and he got his loan. But that's not the case with everyone. Lending money on Prosper is no different from lending money in real life — it's possible, and some might say likely, that some people aren't who they say they are, and that they won't pay you back. Prosper is explicit with lenders about this risk, and it advises people to get around it by diversifying. If you have $5,000 to invest in Prosper, the site encourages you to spread your money among many people. Every loan on Prosper lasts for three years (borrowers face no penalty for paying the loan early). If you give $50 to 100 people who have a credit grade of C, chances are that over the course of three years, some people — about three, according to Experian — will default on their loans. But if you get a 14 percent return on your money from those who do pay you back, you'll make more than $1,000 on your $5,000 investment, enough to cover your losses.

To understand why Prosper has the potential to become a blessed alternative for many borrowers, it helps to understand the enormous changes that have occurred in the American financial service industry during the past three decades. The story begins in 1978, when the Supreme Court handed down a unanimous decision that revolutionized the credit industry, and consequently laid the foundation for the dismal state of American households' finances. In Marquette National Bank v. First Omaha Service Corp., the court essentially invalidated state usury laws — the laws that set a legal limit on the interest rates banks could charge for credit. The court decision allowed companies like Citibank to provide Americans with credit cards at sky-high rates, a deal that proved attractive both to customers, who were willing to pay for what looked like easy money, and to the bank corporations, which cashed in on the appetite for credit. (The PBS program “Frontline” has put together an excellent history of the industry.)

Some economists argue that the surge in easy credit was good for the economy, as Americans began to spend at an increased pace. But the rise of credit cards also caused a consequent rise in credit debt. American consumer debt now totals more than $2.1 trillion, and it is growing rapidly. Moreover, says Michael Stegman, a management professor who directs the University of North Carolina's Center for Community Capitalism, the credit card industry usurped the market for traditional, lower interest-rate bank loans. The unsecured loan business — that is, loans made to people who don't put down an asset, such as a house, as collateral — dried up. “Today you can't walk into a bank, even with good credit, and get an unsecured loan for, say, $15,000,” Stegman says. “And if you've got any kind of impaired credit, forget it.” Many people, that is, have no alternative but to borrow money using credit cards.

For Americans with the lowest incomes, another dangerous force emerged in the 1990s: the payday loan industry. These retail centers offer money at high cost on a short-term basis — they'll give you cash on Tuesday in return for a promise of payback on Friday. As Jeanne Ann Fox, who studies the payday loan industry at the Consumer Federation of America, points out, loan centers don't make the true costs of such loans clear to customers. A typical two-week loan will cost you in the neighborhood of $15 or $20 in interest per $100 in principal. For people who need money immediately — and studies show that many payday loan customers are using the cash for food and other necessities — such a fee might sound reasonable. What the loan centers don't say is how much these loans work out to on a long-term basis. A $20 fee for a two-week, $100 loan represents an enormous annual interest rate — a 521 percent APR.

The long-term rate is important because studies show that people who take out short-term loans are often repeat customers, borrowing a steady flow of money from several payday centers over the course of a year. Twelve states currently have laws on the books that effectively ban payday loan centers; of the rest, the state that has kept the closest watch on the industry is Colorado. Last November, Paul Chessin, one of the state's assistant attorneys general, published a comprehensive study of how payday loan centers operate in the state. Chessin found that the average payday loan customer in Colorado obtains about nine payday loans per year. In a given year, this average customer, Chessin wrote, “pays a total of $477.16 in finance charges and is indebted for a total period of just over five out of twelve months.”

People who study the payday loan industry have a name for the hole in which these repeat customers find themselves — the “payday loan trap,” or “debt treadmill,” which describes the cycle of taking on payday loans just to keep financing previous loans. Chessin found that repeat customers are quite lucrative to loan centers. In Colorado, people who borrow 12 or more times per year account for two-thirds of the payday loan business in the state. (You can read Chessin's study in PDF format here.)

One curious feature of the payday loan business is its almost complete lack of price competition. The industry has seen explosive growth in recent years, with loan centers dotting urban and suburban storefronts across the land. In Colorado, there were fewer than 200 loan centers in 1997; by 2005, the number had grown to more than 600. Economists predict that intense competition leads to lower prices — in this case lower interest rates for loans. But Chessin found that the average APR on loans has remained virtually steady (at slightly under 400 percent). “We have not seen price competition in this industry,” says the Consumer Federation of America's Jeanne Ann Fox. “Even when there's a lender on every corner, you don't find that.”

A representative for the Community Financial Services Association of America, the payday loan industry association, did not respond to my inquiries. The industry has maintained, however, that it needs to charge three-digit interest rates because it is offering extremely risky loans. This would seem to make intuitive sense — after all, these companies are lending money to people who have low incomes, and they do not take any collateral in return for the money. If a substantial number of their customers are likely to default, you'd expect payday loan firms to charge rates high enough to keep their business profitable.

But Chessin's study undercuts that argument. He points out that between 1996 and 2004, payday lenders in Colorado reported an average “charge-off rate” — the rate of loans that weren't paid back — of 3.34 percent. Chessin notes that this is comparable to the loss rate for most bank loans. “For the same period, the charge-off rate for all consumer loans made at commercial banks was 2.69 percent; for credit cards, it was 5.15 percent,” Chessin writes. What this means is simple: Payday loan customers aren't deadbeats — indeed, they may be good credit risks.

All this data builds to a compelling conclusion about the credit industry today. Financial institutions appear to be making exorbitant profits from loan products — payday loans and credit cards — that are by all measures overpriced. The high interest rates are tenable only through a lack of transparency. Customers don't really know the true price they're paying, and don't have any real alternative to these products. Such a market, though tremendously profitable, is ironically also vulnerable to competition from a more nimble, inventive upstart. That is exactly the role that sites like Prosper aim to play.

I met Chris Larsen, Prosper's co-founder and CEO, at the company's austere headquarters in a small office space on the first floor of an old building in San Francisco's financial district. Larsen, who in 1996 co-founded E-Loan, one of the first Internet loan brokers, is an understated fellow, and when he talks about the credit industry, he doesn't sound especially impassioned about the possibility that his company might transform it. Still, there's no mistaking that Larsen, who has long been feted for his consumer-rights advocacy — in 2003, he spent $1 million of his own money to push California to adopt a tough financial privacy bill — is on a mission.

“My opinion of the consumer credit industry is that it works well in the formation of credit, but it's really a problem by the time it gets to the consumer,” he says. “You have consumers being misled, it's too expensive, not very transparent, and not very open.” He adds, “Access to credit is right up there with healthcare and education in terms of being fundamental to a society. You have so many bad things going on in the current system, so many bad things.”

Shane Garza, a 29-year-old information technology manager in Grand Rapids, Mich., might be the sort of customer that Larsen has in mind when he describes the difficulties some Americans have with credit and debt. At the same time, Garza, a serial borrower, illustrates how Prosper may not work for everyone, and how tough it can be to determine whether someone who's made bad decisions with money deserves any more.

“My problems started with these payday loans while trying to get caught up on my rent,” Garza wrote on a Prosper loan request he posted in mid-April. Garza has an extremely poor financial record. According to the credit information on Prosper, his credit grade is H.R., he has a debt-to-income ratio of 8 percent, and he has opened 29 credit lines in the last seven years, with two current delinquencies. He posted a list of the various sums he owed to payday loan firms: Magnum Cash Advance, $700. Sonic Cash, $400. Payday 2day, $400. Mr. Cash, $300. NE Cash, $200. 10 Dollar Payday, $300. My Cash Now, $400. CPD, $300. Cash Advance Net, $500. “I have been paying the minimum amount for over 4 months and I can not take it any longer,” he wrote on Prosper. “I get paid biweekly and they take over 500 each pay period. If I can just get these consolidated, I will be in the clear.”

But this loan was not the only request that Garza had posted. From the middle of March to early May, he put up about a dozen requests, withdrawing many of them within a couple days. His story was not exactly consistent in each of these postings — he varied the amount he was requesting, varied his tone (sometimes he was terse, sometimes verbose, sometimes he was solicitous), and even changed the photos he used. In some listings he included a photograph of himself, while in others he put up a picture of a woman dressed in a tight shirt, and in one he used an image of a cute puppy. On the Prosper message boards, one user asked, “What is up with the different pictures? Some are a guy and some are a girl … what is up with that? Are you trying to go for sex appeal or something?”

For lenders, deciding whether to give money to people with bad credit isn't easy; a poor financial record arouses all kinds of suspicions — Is this person lazy or just unlucky? — and the suspicions are hard to overcome. In many respects, Garza looks like someone who needs to be saved. Were you a lender with a deep sense of social mission, you might give him money just out of charity. But he also looks like someone who needs some serious financial discipline. Giving him more money might only make his situation worse.

“The truth is I am addicted to debt, and I don't know why,” Garza tells me on the phone. He says he learned this fact about himself on Prosper, as a consequence of his loan requests. Each time he posted a listing, people would ask him some very basic questions about his financial life — “If you're in debt, why do you want to borrow more money?” — that he says awakened him to the destructiveness of his behavior. The Prosper message boards are peopled with some extremely savvy financial experts, “and they make it a point to call you out on certain things you mention in your loan request,” Garza says. He spent three years in credit counseling, but it was only on the Prosper message boards that he'd learned some of the very basic facts about money — “Don't spend money on things I can't afford,” Garza says. He explains that he's been paying off his various debts diligently since he came on to the site. “The fact that there's this site changed the way I think about money. Everything I learned about money is due to Prosper.”

I don't know whether to believe Garza's tale of conversion-by-Prosper. It will be some time, perhaps, before it's possible to tell whether the site made any difference to his financial life. But early in May, Garza posted his final loan request on Prosper, asking for just $1,000 at a rate of 23.75 percent. “I would like to take out this loan to help my credit. I have a very bad rating and I am not going to blame anyone other than myself for it,” he wrote. Twelve people got together and funded his loan.

At the moment, this is a rarity on Prosper — people with credit ratings of H.R. seldom find funding. Some observers think this might be a permanent feature of the marketplace. “There are some consumers who have no credit or extremely bad credit who will be hard-pressed to find anyone on Prosper who'll take a risk on them,” says Jennifer Tescher, director of the Center for Financial Services Innovation.

Some lenders I spoke to said they were opposed to Prosper becoming a haven for people with low credit scores. They were afraid other lenders might flee if borrowers with low credit ratings continue to obtain loans and then default on their commitments. (When borrowers default, Prosper contracts with a collection agency to try to get back the money.) There is some logic to this. At the moment, the idea of trading money with strangers might sound, to many people, fairly scary, and maybe the best way to encourage lenders to put their money in Prosper would be to keep people like Garza away from the site.

Prosper has taken many measures to combat fraud and mischief. The company complies with state lending laws that set maximum interest rates lenders can get for their loans — the rate runs from a low of 6 percent in Pennsylvania to a high of 24 percent in several states; you can't charge someone a payday-loan-comparable 400 percent rate on Prosper. Prosper is also subject to regulation by the Federal Reserve and the Federal Trade Commission, and must also comply with the federal Truth in Lending Act and the Equal Credit Opportunity Act, which prohibits racial and gender discrimination.

Larsen has faith in what he thinks of as Prosper's main asset — the sense of community it fosters between lenders and borrowers. In fact, the site attempts to cultivate community by encouraging both lenders and borrowers to join affinity groups. On Prosper, you can declare an affiliation to any number of organizations — there are Prosper groups for Harvard alumni, for people from Guam, for Christians, for people who love Apple computers, and many more. Larsen points out that you can get better rates on your lending and borrowing if you belong to a group, but if you default on your obligations, your actions will adversely impact others in the group. This is meant to keep borrowers in line. The idea is that people who belong to a group will feel an enhanced obligation to pay back a loan to remain in the good graces of their fellow Apple users or Harvard alumni.

This sort of peer pressure has long been used as a tool to goad borrowers into paying back micro-loans in the developing world. It reflects, says Elizabeth Warren of Harvard, an axiom of money lending. “Making decisions about whom to repay when you're in financial trouble is less about law and more about social relationships,” she points out. Every one of the Prosper borrowers I spoke to agreed on this point. They were all so grateful to the people who'd taken a chance on them that they put their Prosper loans ahead of any other debt they had to repay.

And that goes for Garza. “I swear to God, it's been a revelation to me,” he says of his experience on Prosper. “I swear, it's the best thing that's happened to me on the Internet.”

http://www.digitalhistory.uh.edu/historyonline/immigration_chron.cfm

1795 Naturalization Act restricts citizenship to “free white persons” who reside in the United States for five years and renounce their allegiance to their former country.
1798 The Alien and Sedition Acts permit the President to deport any foreigner deemed to be dangerous. A revised Naturalization Act imposes a 14-year residency requirement for prospective citizens.
1802 Congress reduce the residency requirement for citizenship to five years.
1808 The importation of slaves into the United States is prohibited.
1831 Pennsylvania permits bilingual instruction in English and German in its public schools.
1840s Irish Potato Famine; crop failures in Germany; the onset of industrialization; and failed European revolutions begin a period of mass immigration.
1848 Treaty of Guadalupe Hidalgo, concluding the Mexican War, extends citizenship to approximately 80,000 Mexican residents of the Southwest.
1849 California Gold Rush spurs immigration from China.
1850s Know Nothing political party unsuccessfully seeks to increase restrictions on naturalization.
1854 Chinese immigrants are prohibited from testifying against whites in California courts.
1870 Naturalization Act limits American citizenship to “white persons and persons of African descent,” barring Asians from U.S. citizenship.
1882 Chinese Exclusion Act restricts Chinese immigration.
Immigration Act of levies a tax of 50 cents per immigrant and makes several categories of immigrants ineligible to enter the United States, including “lunatics” and people likely to become public charges.
1885 Alien Contract Labor Law bars prohibited any company or individual from bringing foreigners into the United States under contract to perform labor here. The only exceptions are those who were brought to do domestic service and skilled workmen who should be needed here to help establish some new trade or industry.
1891 Congress makes polygamists, “persons suffering from a loathsome or a dangerous contagious disease,” and those convicted of “a misdemeanor involving moral turpitude” ineligible for immigration. The act establishes the Bureau of Immigration within the Treasury Department.
1892 Ellis Island opens; serves as processing center for 12 million immigrants over the next 30 years.
1901 After President William McKinley is assassinated by a Polish anarchist, Congress enacts the Anarchist Exclusion Act, which allows immigrants to be excluded on the basis of their political opinions.
1907 Expatriation Act declares that an American woman who marries a foreign national loses her citizenship.
Under the Gentleman's Agreement with Japan, the United States agrees not to restrict Japanese immigration in exchange for Japan's promise not to issue passports to Japanese laborers for travel to the continental United States. Japanese laborer are permitted to go to Hawaii, but are barred by executive order from migrating from Hawaii to the mainland.
1913 California's Alien Land Law prohibits “aliens ineligible for citizenship” (Chinese and Japanese) from owning property in the state. It provides the model for Similar acts in other states.
1917 Congress enacts a literacy requirement for immigrants over President Woodrow Wilson's veto. The law requires immigrants to be able to read 40 words in some language. The law also specifies that immigration is prohibited from Asia, except from Japan and the Philippines.
1921 Quota Act limits annual European immigration to 3 percent of the number of a nationality group in the United States in 1910.
1922 Cable Act partially repeals the Expatriation Act, but declares that an American woman who marries an Asian still loses her citizenship.
1923 In the landmark case of United States v. Bhaghat Singh Thind, the Supreme Court rules that Indians from the Asian subcontinent could not become naturalized U.S. citizens.
1924 The Johnson-Reed Act limits annual European immigration to 2 percent of the number of nationality group in the United States in 1890.
Oriental Exclusion Act prohibits most immigration from Asia, including foreign-born wives and children of U.S. citizens of Chinese ancestry.
1934 The Tydings-McDuffie Act, which provided for independence for the Philippines on July 4, 1946, strips Filipinos of their status as U.S. nationals and severely restricted Filipino immigration by establishing an annual immigration quota of 50.
1940 The Alien Registration Act requires the registration and fingerprinting of all aliens in the United States over the age of 14. The act classifies Korean immigrants as subjects of Japan.
1942 Filipinos are reclassified as U.S. citizens, making it possible for them to register for the military.
Executive Order 9066 authorizes the military to evacuate 112,000 Japanese Americans from the Pacific coast and placed them in ten internment camps.
1943 The Chinese Exclusion Act is repealed. By the end of the 1940s, all restrictions on Asians acquiring U.S. citizenship are abolished.
Congress creates the Bracero Program a guest worker program bringing temporary agricultural workers into the United States from Mexico. The program ended in 1964.
1944 In the case of United States v. Korematsu, the Supreme Court upholds the internment of Japanese Americans as constitutional.
1945 The War Brides Act allows foreign-born wives of U.S. citizens who had served in the U.S. armed forces to enter the United States.
1946 Fiancés of American soldiers were allowed to enter the United States.
The Luce-Cellar Act extends the right to become naturalized citizens to Filipinos and Asian Indians. The immigration quota is 100 people a year.
1948 The Displaced Persons Act permits Europeans displaced by the war to enter the United States outside of immigration quotas.
1950 The Internal Security Act, passed over President Harry Truman's veto, bars admission to any foreigner who is a Communist or who might engage in activities “which would be prejudicial to the public interest, or would endanger the welfare or safety of the United States.”
1952 McCarran Walter Immigration Act, passed over President Harry Truman's veto, affirms the national-origins quota system of 1924 and limits total annual immigration to one-sixth of one percent of the population of the continental United States in 1920. The act exempts spouses and children of U.S. citizens and people born in the Western Hemisphere from the quota.
1953 Refugee Relief Act extends refugee status to non-Europeans.
1954 Operation Wetback forces the return of undocumented workers to Mexico.
1965 Immigration and Nationality Act repeals the national origins quota system and gives priority to family reunification.
1980 Refugee Act, enacted in response to the boat people fleeing Vietnam, grants asylum to politically oppressed refugees.
1986 The Immigration Reform and Control Act gives amnesty to approximately three million undocumented residents and provides punishments for employers who hire undocumented workers.
1988 The Redress Act provides $20,000 compensation to survivors of the World War II internment of Japanese and Japanese Americans.
1990 The Immigration Act of 1990 increases the number of immigrants allowed into the United States each year to 700,000.
1995 California voters enact Proposition 187, later declared unconstitutional, which prohibits providing of public educational, welfare, and health services to undocumented aliens.
1996 The Illegal Immigration Reform and Immigrant Responsibility Act strengthens border enforcement and makes it more difficult to gain asylum. The law establishes income requirements for sponsors of legal immigrants.
The Personal Responsibility and Work Opportunity Act, Congress makes citizenship a condition of eligibility for public benefits for most immigrants.
1997 Congress restores benefits for some elderly and indigent immigrants who had previously received them.
1998 The Agricultural Research, Extension, and Education Reform Act and the the Noncitizen Benefit Clarification and Other Technical Amendments Act restore additional public benefits to some immigrants.
The American Competitiveness and Work force Improvement Act increases the number of skilled temporary foreign workers U.S. employers are allowed to bring into the country.

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/07/AR2006050700721_pf.html

U.S. Immigration Debate Is a Road Well Traveled
Early-20th-Century Concerns Resurface
By Michael Powell
Washington Post Staff Writer
Monday, May 8, 2006; A01

NEW YORK — They were portrayed as a disreputable lot, the immigrant hordes of this great city.

The Germans refused for decades to give up their native tongue and raucous beer gardens. The Irish of Hell's Kitchen brawled and clung to political sinecures. The Jews crowded into the Lower East Side, speaking Yiddish, fomenting socialism and resisting forced assimilation. And by their sheer numbers, the immigrants depressed wages in the city.

As for the multitudes of Italians, who settled Mulberry Street, East Harlem and Canarsie? In 1970, seven decades after their arrival, Italians lagged behind every immigrant group in educational achievement.

The bitter arguments of the past echo loudly these days as Congress debates toughening the nation's immigration laws and immigrants from Latin America and Asia swell the streets of U.S. cities in protest. Most of the concerns voiced today — that too many immigrants seek economic advantage and fail to understand democracy, that they refuse to learn English, overcrowd homes and overwhelm public services — were heard a century ago. And there was a nub of truth to some complaints, not least that the vast influx of immigrants drove down working-class wages.

Yet historians and demographers are clear about the bottom line: In the long run, New York City — and the United States — owes much of its economic resilience to replenishing waves of immigrants. The descendants of those Italians, Jews, Irish and Germans have assimilated. Manhattan's Little Italy is vestigial, no more than a shrinking collection of restaurants.

Now another wave washes over. Fully 38 percent of New York's 8 million residents are foreign-born, nearly the same percentage as a century ago.

“It would be easy to say the short-run costs of immigration outweighed the benefits,” said Joe Salvo, a director at New York's City Planning Department. “But the benefits are longer term. We wouldn't be the superpower we are if we hadn't let them in.”

Advocates of stricter enforcement argue that those who came a century ago were different because they arrived legally. Movies and novels depict customs agents at New York's Ellis Island — that keyhole through which 16 million immigrants passed from 1882 to 1922 — examining immigrants and their papers with a capricious eye toward shipping back laggards.

Peggy Noonan, a former speechwriter for President Ronald Reagan, wrote about her Irish forebears in a Wall Street Journal column: “They waited in line. They passed the tests. They had to get permission to come. . . . They had to get through Ellis Island . . . get questioned and eyeballed by a bureaucrat with a badge.”

But these accounts are flawed, historians say. Until 1918, the United States did not require passports; the term “illegal immigrant” had no meaning. New arrivals were required only to prove their identity and find a relative or friend who could vouch for them.

Customs agents kept an eye out for lunatics and the infirm (and after 1905, for anarchists). Ninety-eight percent of the immigrants who arrived at Ellis Island were admitted to the United States, and 78 percent spent less than eight hours on the island. (The Mexico-United States border then was unguarded and freely crossed in either direction.) “Shipping companies did the health inspections in Europe because they didn't want to be stuck taking someone back,” said Nancy Foner, a sociology professor at Hunter College and author of “From Ellis Island to JFK: New York's Two Great Waves of Immigration.” “Eventually they introduced a literacy test,” she added, “but it was in the immigrant's own language, not English.”

At the peak of that earlier wave, 75 percent of immigrants landed in New York. Some, like Germans fleeing failed revolutions, sought democracy. Others, like the Jews fleeing Russian pogroms, sought safety.

But perhaps half of the Italian immigrants returned to Italy, often with cash to buy a farm or own a business. Greeks, too, returned in large numbers. “People complain about Mexicans coming for economic reasons, but they don't realize how many earlier immigrants just sojourned here,” said Richard Wright, a geography professor at Dartmouth College. “The rates of return are staggering.”

When Congress enacted immigration quotas in the 1920s, it left the door ajar for Northern Europeans and Mexicans, whom even then American businesses sought as cheap labor. By contrast, in 1882 Congress enacted the Chinese Exclusion Act, barring the Chinese from U.S. shores. And when Congress contemplated a similar law for the Japanese, the government in Tokyo instead entered into an agreement with the United States to prohibit immigration and avoid international humiliation.

Still, European immigrants found plenty of backlash. Nativist sentiments ran strong, and white Protestant reformers championed English-language instruction and temperance, the latter reflecting the Establishment's disdain for hard-drinking immigrants. The Germans set up 121 breweries in Brooklyn and Manhattan alone.

Politicians cast a wary eye at Kleindeutschland, the 300,000-person Little Germany in Lower Manhattan (no trace of the enclave exists today), and called on Germans to stop being “hyphenated” Americans. As Italians and Poles and Jews and Slavs poured into New York City, native-born Americans complained about the “mongrelization” of the “white race.”

Immigrants returned the favor, giving voice to the alienation of the new arrivals. “I never thought of myself as American” as a child, Norman Podhoretz wrote in his 1967 book, “Making It.” “In Brooklyn there were no Americans; there were Jews and Negroes, Poles and Irishmen.”

Debates arose that still resonate. Radicals worried that immigrants depressed working-class wages, and there is evidence that this was so. Labor organizing took off most successfully after Congress moved to shut off the immigration funnel in the 1920s. “Because people kept coming in, union organizing efforts doesn't really take off until the 1920s and '30s,” said Fred Siegel, a historian at Cooper Union College. The Establishment heaped scorn upon those who rallied for better wages. Immigrants, the New York Times editorialized in the late 19th century, should avoid “insane imitations of the miserable class warfare of Europe.”

“There was a great fear in that the European revolutions might come to the United States,” said James Green, author of “Death in the Haymarket,” an account of immigrant sentiment and labor unrest in Chicago in the 1880s.

Other worries seem now like artifacts from a forgotten age. For all that Americans worried about the primacy of English at the turn of the 20th century, most first-generation immigrants quickly shed native languages — in polyglot New York no single language could dominate. This remains true as the three largest immigrant groups — Dominicans, Chinese and South Asians — share no language but English. (The vast Spanish-speaking Mexican influx into Southern California is another matter and potentially more problematic as immigrants have less incentive to drop a shared language, say sociologists.)

By the 1950s, Germans, Irish and Jews had abandoned immigrant enclaves. Although barriers of prejudice remained — Ivy League schools and white-shoe law firms in New York maintained stringent “Jewish” quotas well into the 1960s — the sons and daughters of these immigrants moved quickly into white-collar professions.

Italians, Poles and Greeks took a much slower climb up the socioeconomic ladder. Like today's Mexican immigrants, these earlier immigrants often came from rural lands and stressed work over education; sociologist Foner notes it was unusual for a child of Italian immigrants to finish high school. When in the late 1960s the City University of New York allowed any high school graduate to enroll regardless of grades, Italians were the greatest beneficiary. Studies so far show a similar pattern for Mexicans: The second generation is doing better economically than the parents but not keeping pace with other ethnic immigrant groups.

“There was a lot of catching up for the Italians and Poles, and a lot of social costs which this imposed on the country,” said Christopher Jencks, a professor of social policy at the John F. Kennedy School of Government at Harvard. “I don't see any reasons the Mexicans can't catch up, too, but three or four generations is a long time.”

In a pattern perhaps rooted in human nature, each generation of immigrants tended to look down on those who followed. Journalist Jacob A. Riis, a Danish immigrant, remarked upon this in his 1890 book “How the Other Half Lives.” “The once unwelcome Irishman has been followed in his turn by the Italian, the Russian Jew, and the Chinaman,” Riis wrote, “and has himself taken a hand at opposition, quite as bitter and quite as ineffectual, against these later hordes.”

Lewis Fidler, portly and quick-witted, grew up in the 1960s in East Flatbush and Flatlands, working-class Brooklyn neighborhoods with a smattering of professionals. He recalls listening as Italian and Jewish neighbors — the sons and daughters of immigrants — sat on porches and worried about an influx of black immigrants from Jamaica, Trinidad and Barbados. These newcomers, the adults insisted, would run down the neighborhood.

Now Fidler is a city councilman in much the same district, and East Flatbush and Flatlands remain working-class neighborhoods with a smattering of professionals. Except that his constituents are West Indians — the Italians and Jews have moved on.

The transition was in fact rough. Two decades ago, vacant stores, marijuana fronts and chop shops for stolen autos pockmarked the avenues. Now restaurants with bright blue awnings boast of the best jerk chicken, and a public park is being renovated to add cricket fields.

“The old-timers can't get over the fact that the bagel shop is now a roti shop,” Fidler said. “But we've got lots of young families, and all they want to talk about are the schools.”

Fidler, who is Jewish, is fine with that. “I run up bigger majorities in the West Indian precincts because the immigrants just want guys who deliver.”

From Madison Grant and the Racialist Movement:

The effect was felt at both the state and federal level. Twenty-four states passed laws encouraging sterilization of those who were retarded, insane, or had criminal records. At the Federal level, in 1921, Albert Johnson, head of the House Committee on Immigration and Naturalization, began a series of hearings on immigration. He appointed Harry Laughlin, who in 1922 would be one of Grant's co-founders of the American Eugenics Society, as an expert witness on eugenics. In 1922, Laughlin reported extensively on racial differences in IQ as measured by the new army intelligence test.

In 1923, Grant's close friend Henry Fairfield Osborn, the famous paleontologist who named “tyrannosaurus rex,” spoke enthusiastically about intelligence testing: “We have learned once and for all that the Negro is not like us.”

Congress restricts immigration.
This was precisely the kind of thing Grant and others had been saying for years. These ideas helped pass the Johnson Act of 1924, which established national origin immigration quotas of 2 percent of the number of foreign-born already in America as determined by the census of 1890. This greatly reduced the flow of immigrants from non-traditional sources, a policy that remained essentially unchanged until 1965.

(Note: I don't consider American Renaissance, a website devoted to white nationalism, to be a generally reliable source. However, in this case, their bias would be, if anything, to portray Grant and immigration quotas in an excessively positive light. )