America’s police — the third rail

For decades, conventional wisdom has said that federal entitlement programs are the third rail of national politics. Any politician advocating reductions would be penalized at the election booth.

Many vital entitlement programs like the Social Security disability program are nearly broke, but no one discusses how to reform them to make them sustainable. Similarly, at the local level, spending on police has put massive pressure on budgets. But it would be political suicide for a politician to advocate reform.

Violent and property crime rates have dropped in America, but spending on police has soared since the 1990’s. According to a 2012 Justice Policy Institute report, the declining violent crime and property arrests have been replaced with drug arrests:

The Justice Policy Institute report breaks it down further:

Although crime rates are at the lowest they have been in over 30 years, the number of arrests has declined only slightly between 2009 and 2010 and the U.S. still spends more than $100 billion on police every year. This money goes to fund 714,921 sworn police officers and an increasing number of militarized police units.

The $100 billion of annual spending on police has lead America to have the highest incarceration rate in the world. As of 2009, the incarceration rate was 743 per 100,000 of population (0.743 percent). While the United States represents about 5 percent of the world’s population, it houses around 25 percent of the world’s prisoners. Large increases in police spending have propelled the incarceration rate (Justice Policy Institute report):

Fullerton, CA may be wasting money on its police force

Two Fullerton, California police officers were acquitted Monday in the brutal beating death of a homeless and mentally ill man, Kelly Thomas. Here is the story from Reuters:

The confrontation between six Fullerton police officers and Thomas was captured by a surveillance camera at the bus station and led to demonstrations in the community, as well as the ouster of three city council members in a recall election.

On the videotape, [police officer] Ramos is seen strapping gloves on his hands, balling them into fists in Thomas’s face and telling Thomas, whom he knew from previous encounters: ‘You see these fists? They are getting ready to f— you up.’

Krugman’s argument for bloated government

Paul Krugman, Nobel Prize-winning economist and New York Times columnist, is once again banging the drum for federal aid for state and local governments. In theory, the federal government has the capacity to prop up states and municipalities by providing stimulus dollars to keep economic activity from stalling. However, this would require Congress to raise the debt limit and the Treasury to borrow from bond markets to get the money. Krugman contends that this would cost little and that the Obama administration is postponing the recovery by not fighting for more money from Congress:

The federal government has been pursuing what amount to contractionary policies as the last vestiges of the Obama stimulus fade out, but the big cuts have come at the state and local level. These state and local cuts have led to a sharp fall in both government employment and government spending on goods and services, exerting a powerful drag on the economy as a whole.

What Krugman’s analysis overlooks is that government at the state and local levels has been ballooning for decades and that a contraction may be necessary to purge the system of bureaucracy and outdated programs. Krugman’s borrowing plan would simply freeze budgets which, on their own, are basically unsustainable for state and local governments. As their costs increase, there is no more “fiscal space” in many state and local budgets to maintain the status quo without large tax increases. So after Krugman’s proposed federal stimulus expired, states and municipalities would likely have to raise revenues to support their expanded size.

Arrests are up, but why?

Today both USA Today and Bloomberg reported a study from Professor Robert Brame of the University of North Carolina claiming that one in three people under the age of 23 had been arrested at least once. These shocking findings, based on self-reporting surveys the Bureau of Labor Statistics conducted with youths on their law-enforcement histories, represents a huge jump from 1965, when one in five under-23-year-olds reported that they had been arrested. Has the nation gone wild, or have the police gone wild arresting young people?

U.S. Census Bureau data shows us that the size of the combined 15-24 age group has remained fairly constant as the nation gets bigger and older. Meanwhile, expenditures for police protection at the local, state and federal level have sky-rocketed 125 percent in constant-dollar terms between 1982 and 2002, according to a report from the Bureau of Justice Statistics (page 5, table 2).

The Bureau of Justice Statistics report also details the rise in employment for local police officers, from 590,463 in 1982 to 888,321 in 2007 — an increase of 43 percent (Page 8, table 11). To put that into context, U.S. population rose 36 percent between 1980 and 2010.

The antidote to militarized police

As Occupy Wall Street protests have multiplied across the nation, we’ve seen a lot of pictures of paramilitary-looking police officers on the streets of American cities. The Reuters photo above was taken in Oakland, but it just as easily could have been shot in any number of cities. What most of these pictures have in common is that local law enforcement is dressed in military equipment and look ready to take on an army of invaders rather than peaceful protesters. It’s a big evolution from when police cracked down on the demonstrations at the 1968 Democratic Convention in Chicago wearing their everyday street uniforms.


Political heat at S&P for ratings downgrades?

The Daily Show – What Are You Friggin’ Nuts Over There?


S&P replaces president after U.S. downgrade

The board of directors of McGraw-Hill met Monday and voted to oust Deven Sharma as president of their Standard & Poor’s rating division. This forced resignation comes approximately three weeks after S&P downgraded the debt of the United States. Jon Stewart, in the clip above, jokes about political pressure brought to bear on the company by the U.S. government. I think he is spot on with his humor.

Last week the U.S. Department of Justice just happened to discuss publicly an investigation of S&P and the other major raters about ratings assigned before the financial crisis to mortgage-backed securities, even though this investigation has been ongoing since 2009. Why the sudden need to reiterate this publicly? S&P’s downgrade was a brave action. It’s a pity that Deven Sharma has to pay for it with his job. As I wrote previously:

Standard & Poor’s took one of the bravest actions that I’ve ever seen a rater take when it downgraded the United States one notch. Furthermore, this marks a new beginning for accurate credit analysis and truth in fixed-income markets. Keep speaking the truth, S&P.

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