Crime and Poverty

William Barr, William Scott Dwyer, and Patrick Fagan all agree that poverty is not a cause of crime (5; ÒPart 2Ó, 1; 3). Poverty does not directly cause crime; instead, it is a factor in the cause but, independently, it is not the root source (Barr 5). During the Great Depression, poverty levels were much higher than they are today, but crime actually declined (Barr 5; Fagan 3). From the mid-sixties to the mid-seventies, income was on the rise and crime moved right along with it (Fagan 3; Dwyer Part 21). In 1990, the income level was much higher than in was in 1903, but the murder rate in 1990 was ten times higher than the murder rate in 1903, which was at 1 per 1000 inhabitants (Dwyer Part 21)

Another argument presented by Barr and Dwyer, inverts the poverty/crime relationship by stating that crime actually causes poverty. One of the premises for this argument focuses on businesses and how crime deters potential employers from establishing them (Barr 2; Dwyer ÒCrime and Poverty, Part 1Ó). One reason for this is that crime against a business reduces revenue, raising prices in impoverished neighborhoods because merchants have to make up for any losses caused by theft. These high prices also suppress the standard of living in the community, as the income in the community cannot keep pace with the rise in prices. Blacks living in high crime areas suffer from poverty because they pay higher prices for food and other goods than do whites in neighborhoods with less crime (Dwyer ÒCrime and

Poverty, Part 1Ó). Crime also decreases the likelihood that an area sees improvement; Barr describes a Òsmall contractor who tried to rehabilitate inner-city housing for low income tenants. He had to give up because drug addicts would break in, rip out his improvements, and sell them for drug moneyÓ (2). 

Links:

The Cause of Crime, Anthony Holtzman Escareno

Household Poverty and Nonfatal Violent Victimization, 2008-2012A 

Village With the Numbers, Not the Image, of the Poorest Place

Voters Need to have Tax Incidence Drilled into their Heads

The Democrats are proposing new taxes but Aswath Damodaran calls it: The Billionaire Tax: The Worst Tax Idea Ever?:

Voters need to have Tax incidence drilled into their heads. If we raise a tax and raise some spending, who consumes more goods and services and who consumes less. If you tax unrealized capital gains on billionaires and spend it on a child tax credit, low income families with children will probably consume more goods and services BUT because billionaires consume so small a percent of their income, they will not consume less. So who will consume less, middle-class families will. How this works through the economy is hard to see, but they surely will. That may be OK but it would probably be much more efficient to do that through other means and I think as much as is reasonable possible people paying for something should know that they are.

Progressive consumption taxes and LVT (land value taxes) taxes seem to be the best ways to raise revenue if you need to do that, BUT the bigger problem is, too much taxing the non poor and inefficiently spending on the non-poor.

Examples: 

Social Security should pay $240/week to all retirees (better yet $240/week to all adult citizens instead).

Medicare should not pay for any treatments that the UK NHS does not provide and there is a lot of it, and UK NHS does not provide it because the cost is not close to worth the benefit. (Also an alternative less controversial way to cut medicare and other medical spending: This is an improved version of my idea for supporters of single payer healthcare.)

Military spending should be cut in half and spent without regard to congressional district.

Get that done and then if you still need more revenue we can talk.

Lower Taxes Higher GDP

This is from Scott Sumner here. 

While rich countries often have fairly high taxes (i.e. Sweden), between two otherwise similar rich countries the one with lower taxes usually has higher per capita GDP.  (And even Sweden’s economy improved after it cut back on its extremely high tax rates during the 1990s.)  That’s one reason why America’s per capita GDP is higher than Europe’s—we have lower tax rates. In general, rich countries with lower taxes (the US, Canada, Australia, Switzerland, Ireland, Singapore, etc.) tend to be richer than those with higher taxes.

People look at Sweden and say it has a good Government but I think that they get a bad deal, the USA voters do too but less so.

Governments are very inefficient and only certain east Asian countries seem to do significantly better that the USA. We can think of ways to do things much more efficiently but not with politics. 

For example Social Security looks like a simple efficient transfer but if it did not exist only maybe 10% to 20% of old people would be in bad shape, so a program that exists to help 10% to 20% of old people, mostly from the bottom 30% of earners, pays more money out to higher earners. 

That produces a lot of dead weight loss of taxation. Plus sub-optimal living and daycare arrangements. Even in healthcare where Sweden looks better than the USA, IMHO they pay for a lot of care that does not come out positive cost benefit. They spend much more than Singapore, with little to show for it.

Were the Crime Statistics Reliable Before 1970?

 I read that the crime statistics (including murder) for blacks before the mid 1970's were very unreliable. That the police would record a likely murder of black citizen as death from natural causes to avoid paperwork. 

According to Thaddeus Russel who studies vice, majority black areas were lightly policed and that was one of the reasons that the black caucus pushed the way Jason said they did.

That would undermine the story that the black crime rate was lower. On the other hand if Thaddeus is correct but police properly recorded the great majority or murders correctly them maybe defunding police would not result in a large (say up 50%) increase in murder. 

Is there proof either way?

Improving the Idea for Single Payer Supporters

 This is an improved version of my idea for supporters of single payer healthcare.

1. I had earlier proposed that we leave Medicare as it is due the political difficulty of changing it but this idea seems like it would appeal even to seniors on Medicare.

To give better incentives to Medicare recipients, we try giving Medicare recipients at age 65 a health saving account funded with $30k for them and then at 70 years old they get to keep what is left if anything but if they go over Medicare will pay for all of the overage, then again at 70 fund their health saving account with another $30k for them and then at 75 years old they get to keep what is left. Etc. until death.

2. Since it would be relatively cheap, and it’s among the most effective healthcare, and makes the plan more workable, the Government would cover children from the time that their mother gets pregnant until they turn 18 years old with only small copays like $20 visit to prevent abuse.

3. For each citizen turning 18 years old the Government would fund a medical savings account with $100,000 (this number might be too low or too high). Money from that account would be spent on any medical care that normally UK NHS provides for UK citizens. If an individual’s spending goes over $100,000 between the ages of 18 and 65 the Government pays for all the overage. When people reach age 65 the money left in the account would be theirs to keep.

4. If someone is diagnosed with diabetes or some other costly chronic disease before age 18 we might want to add some amount of money to their account.

5. We might have to do something to prevent people from delaying care when they are close to 65 years old.

Only increase the amounts for inflation by vote in hopes that due to this system healthcare spending would lag inflation.

Why this? Because too many USA citizens feel no compunction stealing from Government AND/OR insurance companies.

Heckman on Denmark vs the USA on Intergenerational Income Mobility

James Heckman on Inequality and Economic Mobility

Some comments on the econtalk podcast with James Heckman about his paper looking at intergenerational income mobility in Denmark vs the USA.  It seems it is reasonably close to that in the USA.

I’ve been following this debate for a long time and I feel I have a lot to say. This may not be the right forum so sorry.

First, I think Denmark is an odd selection. Italy and Spain have lower murder rates, less child abuse, and higher life expectancy. The difference in length of life between Italy and Denmark is about as big that difference between USA and Denmark. Also the Inuit (Greenland is part of Denmark like Puerto Rico is part of the USA). But the people talking about Denmark like the Government policies of Denmark and the Government of Italy and Spain are not so respected and they talk bout Denmark. If you rather talk up Italy and Spain you tend to not think it is there great Governments.

It seems that even since ancient times some have known that what people need to live a good productive life is wisdom. Like the wisdom in the Bible book of Proverbs, be diligent, save, don’t drink to much or do drugs too much etc.

Finally I am a UBI/NIT supporter because I think it can allow us to have a better welfare system and maybe even spend less Government money but some of my allies UBI/NIT supporters seem to think it will make the poor be much better people, that is, they’ll go and get better school, drink, commit less crime and take drug less. But IMHO there is only 1 reason to enact a UBI/NIT and that is to all the lowest earners among us to consume more goods and services and it might have corrosive effects among some of the poor. Even most of the poor today are richer than the middle class where in not so distance past so why think giving people more money will be revolutionary. Is it poverty that causes the lack of skill, drug use and crime or is it the lack of skill, drug use and crime that causes the poverty?

Scams and Education

I have for maybe 40 years believed that to fall for some scams one has to have a certain level of education. Organic food being the one that comes easiest to mind. The scientists who study fertilizers, pesticides and herbicides acknowledge that they are very safe and have greatly helped mankind. Yet the among those with post secondary education organic food s are quite popular even while among the less educated they have little draw.

BUT I realized that I have not applied that to my own beliefs about governance.

I support a UBI but less educated working people seem to think it will lead to bad outcomes, to too many people not working and perhaps getting high and drunk first thing every morning.

I support full legalization of all drugs except antibiotics without prescription. That includes heroin and even fentanyl. I think legal companies would dose more accurately. But most people think this will lead to more death and abuse.

I'm sticking with may positions but with a little less confidence. 

Added later:

I just (08/19/2021) ran into this: 

The most vaccine-hesitant group of all? PhDs