#166 Where DEI Goes to DIE

#166 Where DEI Goes to DIE

Diversity, Equity, and Inclusion programs discriminate, so they can’t survive the market.

President Biden is requiring all federal agencies to create a Diversity, Equity, and Inclusion (DEI) team.  It seems like the Dems want to distribute everything equally, except votes.  Think about their claim, “Help me stomp my opponent so I can make everything equal.”  Well, how about sharing your votes?

The most powerful man in the world is talking about equity again.  The hypocrisy is just so rich.  If he wants equity, why would he ever sign an Executive order?  Wouldn’t it be more equitable to allow Congress to make laws?  And, the word “equity” is being misrepresented in these presidential mandates.  I unpack more of this in podcast #90 titled Equality vs Equity.

Equity should mean “the quality of being fair and impartial.” However, the administration has a plan to award 15 percent of federal procurement dollars to small businesses “owned and controlled by socially and economically disadvantaged individuals.” So, the same opportunities WON’T be given to all groups. The government already has a procurement procedure in place that awards contracts to the most efficient companies. The economics textbook I use at Dallas Baptist University is authored by Gregory Mankiw and he makes it very clear: You can distribute goods and services efficiently or equally, but not both.

The president even had the gall to command that DEI folks be given higher-level positions.  Get it?  He’s demanding higher status for people who are supposed to produce equity.  Kinda like the Inflation Reduction Act that increased spending.  This creates more hierarchy to reduce hierarchy. 

Here’s a thought exercise I’ve explained many times in class: If it were true that equally qualified women are being paid less than men, and whites more than blacks, you would expect profit-seeking companies would hire women of color in order to gain an advantage on the cost of labor.

The fact that this isn’t happening suggests that the pay gap claims are NOT true. And if the claim isn’t true, government money allotted to remedy this situation is money poorly spent.  But, that’s what the government often does.

Policies that Promote Production

History has shown that it’s free markets that grow economies and reduce poverty. Government regulations and spending like the DEI program, simply transfer money from taxpayers to nonpayers, which creates stagnation, not growth.

Long-term, the only way for people to get out of poverty is by increasing the value of the product of their labor. Transfers don’t do this.

DEI is not DEI

A friend, whose company has been negatively affected by DEI, explained that the DEI officer in his company was a white woman.  When she was publicly accused of not being qualified – that is – she was not black, she defended herself by explaining that she had adopted black children.  Ok, hold it: Just the fact that she was accused, and then, that she felt she had to defend her identity with blacks: Both of those are indications of a LACK of DEI. 

We should expect DEI officers to reflect the diversity of the American population: About 65% Caucasian, 13% black, about 15% Hispanic, and a few native Americans and Pacific Islanders.  But, based on the anecdote mentioned above, they do not.  DEI officers are not diverse, they are not equitable, nor are they inclusive.

And DEI is designed to produce less diverse thinking.  The people in the room might be more diverse in skin color, but not diverse in thinking, where it matters most.  If you asked for a measure of success, do you think someone might claim, “Our staff is 100% in favor of diversity.”  Think about it…….

Opportunity Cost

The Wall Street Journal editorial board wrote a column recently, titled “The Tyranny of the DEI Bureaucracy: Diversity, equity and inclusion offices become weapons to intimidate and limit speech.”

They pointed out that Jay Greene of the Heritage Foundation reports that the average major university now has 45 DEI personnel. The University of Michigan has 163 DEI officers. Ohio State and the University of Virginia each have 94. Georgia Tech has 41 DEI personnel but only 13 history professors.  Liberals like to support the redistribution of money, but in this case, they are redistributing it UP: From lower-income taxpayers who support the state university, to the DEI directors at the public university, who make more than the average tax-payer.  More data: The University of Michigan pays its diversity officers on average—about $124,000 with benefits. Until he retired from the position last summer, Michigan’s chief diversity officer, Robert Sellers, was paid over $431,000 a year. His wife, Tabbye Chavous, now has the job, at the vice provost rank and a salary of $380,000.  Hmmm, am I the only one who noticed that the man-made about 13% more than a woman doing the same job….with the middle part of the DEI title being “equity?”

Thomas Sowell says that when you pay someone to find discrimination, don’t be surprised when they do.  DEI officials have a vested interest in ensuring that the grievances of identity politics continue lest the offices have no reason to exist.  If the DEI problem is ever solved, these numerous DEI officers will have to find some productive job to do.  So expect this insanity to continue. 

When politics overrides merit, as in DEI, politicians impose their mediocrity on everyone. In the former Soviet Union, political commissars dominated everything, crushed incentive, and the human spirit, and destroyed their nation. You DO realize that today, American families make about $70,000 a year, while Russian families make about $12,000

How can these Universities field competitive sports teams?  Is their cheer, “Go, fight…..equal outcome?!!!?”  And there’s more hypocrisy in Universities: Most would count at least six levels of hierarchy: President, Provost, Dean, Full Professor, Associate Professor, then Assistant professor.  If you want to keep going, there’s a lecturer and teaching assistant.  Do you think the DEI folks at Universities even notice these titles on the door when entering and leaving their offices?  How can there be the title “Chief DEI Officer?”  So as the head of equality, she’s more equal than her subordinates.  Isn’t that oxymoronic, like giant shrimp or government efficiency?

DEI is essentially a Neo Marxist religion being forced on America.  That’s because it produces a class system that’s intent on destroying the class system.  But, those of us who read Animal Farm in high school know that the pigs are simply more equal than the other animals.

Private Property

A close friend recently shared his experience of going through a forced DEI program with his tight-knit team of four people.  Three of them challenged the entire process, stating that the DEI nonsense DISCOURAGED them from practicing their “true selves,” which the organization wanted them to do.

So who owns the thoughts of the employees?  We would like to assume the thoughts are owned by the individual, but DEI mandates that folks think the way the DEI apparatchiks force them to.

The market won’t allow discrimination. DEI will fail in much the same way ESG is failing. You can’t win when you commit large investments to non-productive segments of the organization.

I guess you should start to worry when your church hires a DEI director.  Because that would mean your church is not in line with the scripture from Galatians 3:28, There is neither Jew nor Greek: there is neither bond nor free: there is neither male nor female. For you are all one in Christ Jesus.

Competitive Advantage

My consulting partner and I were doing a seminar on DEI for a rather large global company.  One of the 15 people around the table bravely complained, “This nonsense is harming our competitive advantage.”  The Vice President calmly stated, “We have made a commitment to our shareholders to improve our ESG score.”  End of conversation.  Hold it: What about their ROI, ROE, EBITA, and share value?

It also reduced their competitive status.  In terms of opportunity cost: They were wasting time on the DEI nonsense, instead of performing the work that served their customers.  So DEI had the OPPOSITE effect it was intended to have.

Texas A&M University has joined a growing list of public university systems across the country that will END the use of DEI policies in both its hiring and student admissions. “No university or agency in the A&M System will admit any student, nor hire any employee based on any factor other than merit,” said John Sharp, chancellor of The Texas A&M University System.

Oh, so maybe the market WILL solve this problem.  DEI Universities will perform discriminatory hiring based on race, and their performance will lag.  A prime example is when Gordon Klein, a UCLA accounting lecturer, refused to grade black students more leniently, so the DEI folks put him on leave and he was banned from campus.  Ostensibly, for refusing to treat his students differently because of their skin color.  That will lower the competitiveness of UCLA.  Universities that hire and reward based on merit will outperform DEI schools, and there will be a two-tier system.  Guess who followed A&M: Texas Tech, who is one of their major competitors.  And, guess who MAINTAINS their DEI program: A&M’s direct competitor: The University of Texas.  So, the market will work: Students will choose the higher quality at A&M or lower quality at UT.  Don’t you just love it when the market works?

So, THAT’s where DEI will go to die: The Market. 



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