Governing the Financial Crisis through Crime

CNBC's Rick Santelli rant against President Obama's bailout last Thursday, has apparently resonated with many Americans. According to Brian Stelter's reporting in the NYTimes Santelli appearing live from the Chicago Board of Trade said:

“The government is promoting bad behavior,” he said, and later implied comparisons to Cuba and asked the traders around them whether they wanted to pay their neighbors’ delinquent mortgages. When the traders started to boo, Mr. Santelli said, “President Obama, are you listening?”

The "bad behavior" line is part of a larger set of conservative talking points that have been in use since the fall aimed at framing the catastrophic levels of mortgage foreclosures as the result of irresponsible and fraudulent behavior by borrowers that took on mortgages they could not possibly afford. There were implications that government linked corporations Freddie Mack and Fannie Mae were some how complicit in this fraud as an effort to promote home ownership among the poor and minorities.

Three quick points should be made about this line of attack on the economic recovery strategy. First, there is plenty of crime running around in the financial crisis, most of it among the business classes mortgage brokers and lenders and investment banks. There is little doubt that the financialization of our economy requires not only more regulation, but some criminal law enforcement against those who abuse their positions of trust in a system rife with conflicts of interest. Second, the conservative critique ignores this massive fraud to focus on those participants in the mortgage crisis who look the most like much politicized and racialized notions of street crime, i.e., the poor and minorities. Third, it is really this cultural formation, one linking the poor, minorities, and the role of personal immorality in their disadvantages that the "bad behavior" line is really aimed at reviving for one reason. It was just this soured view of the poor and government that helped halt the war on poverty in the 1960s and shift us toward the war on crime that has dominated our political imagination ever since and which the new financial crisis now threatens to dislocate (in a way the war on terror never could because it built on the war on crime).

The Advantages of Renting

Check out the very interesting interview between Scott Simon and Canadian professor and author Richard Florida this morning about the role of home ownership in the US economy in recent history and the possible return of renting as the most economically advantageous mode of housing tenure in the future. As Scott points owning a home has been held out not only as the epitome of the "American dream", but also a social policy that leads to positive social outcomes like more personal responsibility and connection to neighborhoods. That policy, fueled since the New Deal by the mortgage interest tax deduction, and in recent years by policy choices of the Fed and possibly Fannie and Freddie, now lies at the heart of the economic crises we are facing. Should President Obama commit his bailout to trying to restore that policy?

Richard Florida offers a compelling story about why Obama should consider strategies that will allow renting to replace home ownership for many of the present victims of the mortgage crisis. According to Florida, renting is a better fit with the careers of young adults, careers that routinely require rapid relocations to different cities and which offer the best lifestyles to those who can live very close to where they work. Home ownership may have fit the mid-20th century with its single worker, lifetime career model families, but today's young workers are better off being able to move easily and to find attractive housing closer to where they work.

This rental approach, which would benefit from a significant rethinking of current government policies, offers some very attractive gains on the environment and energy use, assuming that more rental housing will be in higher density formations in close proximity to public transportation. It would also help reduce our commitment to governing through crime and the resulting culture of fear and control. As Scott Simon pointed out, we treat home ownership as a kind of crime reduction strategy because it is supposed to make people more personally responsible and more committed to their communities. Richard Florida notes that a recent empirical study fails to find significant differences in major parameters of well being (both individual and community) between home owners and renters. Notice that our policies preferring home ownership have helped stigmatize rental properties and people who rent as associated with higher crime risk (a self fulfilling prophesy depresses many urban neighborhoods). Moreover home ownership tends to make people more fearful and sensitive about crime in their community. As David Garland suggests in his book, The Culture of Control, suburbs left empty by two career families produce a sense of looming menace to their residents. Higher density apartment neighborhoods close to public transportation, offices, and shopping, will rarely appear empty and menacing.

Home ownership also inculcates crime fear by producing a subject inherently concerned about the risk of future declines in property values. While the renter will be mainly concerned by actual threats of crime to themselves or their family, the home owner is necessarily more concerned about rumors of crime and their impact on housing prices.

Richard Florida suggests that great depressions produce fundamental shifts in the geography of the economy. The long boom following the New Deal was built around home ownership. Ironically it helped generate the regime of governing through crime which helped shatter the political force of the New Deal (which might have been able to hold the housing bubble in greater check). In its collapse, Florida suggests, we should look for the opportunity to facilitate a new geography of capitalism. Fear of crime, now the major product of the governing through crime regime, will remain one of the strongest obstacles to convincing Americans to embrace this new geography (see the post below).

President's Day Memo: Thank You Mr. President

For an outstanding month of leadership. I know its just the beginning. If I may, sir..

Forget criminal justice, social justice, victims rights, civil rights, it all comes down to this. America's large metropolitan areas, vast urbanized areas in which millions of Americans live in relatively close proximity, and which often have traditional large cities at their centers, are where a sustainable environmental and economic future for America will emerge, or not.

Over the last half century, those metropolitan areas have grown in a familiar but now obviously dangerous direction, i.e., towards maximum dispersal outwards toward the fringes of the metropolitan areas. The motivations and incentives for the change were legion, but all presupposed this, Americans with economic means, to a large extent independent of race and ethnicity (although nothing ever is fully so), sought to distance themselves from the risks associated with large cities and in particular their central neighborhoods. The primary risk was violent crime, associated than by numerous links to other maladies associated with cities, e.g., drugs, chaotic schools, parks with large numbers of homeless people and drug users, etc.

That era is over. Global warming is making this lifestyle unaffordable to the planet. The bursting of the real estate bubble (itself quite linked to the priority of fear of crime) has perhaps now also made this lifestyle unaffordable to the hard-pressed two worker families that make up most of our middle classes in America.

Central cities hold most of the keys to solving both problems. Only by persuading large portions of Americans to live in high density, low energy urban hubs can we create an environmentally and economically sustainable future for the American middle class. Fear of violent crime and the myriad of media charged associations through which that fear is woven through the American imagination (which includes fear of public transportation, housing, schools, etc.) constitutes a major impediment to persuading Americans to move back into central cities and assures that the most marketable forms of reurbanization will reproduce the highly securitized and racially segregated patterns of the suburbs.

For four decades the complex of public policies favoring law enforcement and harsher punishment for crime crime, known as the war on crime, has been our primary strategy for making the fear of violent crime go away. Now, with an unprecedented portion of our population and wealth locked in mass incarceration, it is clear that the war has become a major source of that fear. These practices now assure an ever larger population of prisoners and former prisoners who cannot easily be integrated into a society premised on fear and who cannot easily be governed in ways compatible with democracy and human rights. Law enforcement priorities and parole policies assure that large cities are the primary focus of mass incarceration (even as the rural location of prisons transfers their political and economic value to the peripheries of the metropolitan areas).

The present crisis offers a once in a generation opportunity to cut through the many Gordian knots that now tie political leadership up and with the war on crime (to produce what I call "governing through crime"). A rapid shift of resources from incarceration toward reinvesting social services in central city neighborhoods that house some of the neediest and most expensive citizens (the elderly and very young) in an infrastructure that is often the most expensive can create a robust and economically sustainable civil order ahead of the rebuilding of middle class neighborhoods in the huge swaths of currently underutilized lands that exist near the centers of almost every major American city (just look down at Detroit on your next night flight from Chicago to Washington).

Turning this around will not be easy. The federal government has helped encourage and incentivize the war on crime in many ways, but state law is the primary engine of mass incarceration and its corollaries. From the start of your administration, however, you can take every opportunity to withdraw federal encouragement. For example, instead of funding 100,000 new police officers for American communities, an incentive to invest in law enforcement solutions to insecurity, why not fund 100,000 public safety positions and leave it up to local governments to figure out whether they need another police officer, or another drug treatment provider, or another community mental health worker.

To make sure this is a bipartisan as the war on crime has been, come to California and meet with Governor Arnold Schwarzenegger who now knows more than any governor in the nation about how mass incarceration constitutes the "toxic assets" of our government sector (the potential costs of which now threaten the future of the whole state). I can assure you and Governor Schwarzenegger of a very warm welcome here in Berkeley if you wish to hold your meeting at our flagship public university (one of those assets that may soon need to be sold off in favor of prison spending) and a city that has long innovated in urban governance.

California Prison Population Ordered Reduced: Three Judge Panel Issues Tentative Ruling

A special panel of three federal judges, Stephen Reinhardt of the Ninth Circuit Court of Appeals, Lawrence K. Karlton, of the Eastern District of California, and Thelton E. Henderson of the Northern District of California, issued a tentative ruling yesterday in the mammoth prison conditions litigation known both as Coleman v. Schwarzenegger and Plata v. Schwarzenegger after the lead plaintiffs in two class action prison lawsuits that have wound their way through courts since 1995 and 2002 respectively. The judges announced there readiness to order California to reduce its prison overcrowding from its current status of nearly 200 percent above the design capacity, to a level between 120 and 145 percent of design capacity, and below 100 percent of design capacity for those facilities housing "clinical" populations, presumably those with mental illness or acute health problems (with a more precise target likely to be named in the final ruling).

The court dismissed as unworthy of further discussion the questions of whether current prison overcrowding was preventing the remedying of unconstitutional gaps in the provision of treatment to the mentally ill among the prison population, and general medical care to the full population, or whether there was any current alternative to prisoner release (as defined broadly by the Prison Litigation Reform Act, the primary piece of federal statute law governing prison remedies in federal court). Remarkably the state's main argument seems to have been that the Special Master and Receiver appointed by the panel previously are doing such a good job managing the implementation of better mental health and general health services that their work alone constitutes adequate relief short of a prisoner release order. As the tentative ruling notes there is some irony here. "[T]he defendants have opposed the Receiver's work in Plata and are seeking the dissolution of the Receivership."

The main focus of the opinion was on whether this relief could be achieved without an adverse impact to public safety (which the PLRA requires courts to give "substantial weight" to prior to ordering any prisoner release). Drawing on well known researchers on the California prison population like Dr. James Austin,the panel strongly endorsed a combination of parole reform (presumably aimed at reducing parolees being returned to prison for minor violations of their parole conditions), diversion of "low risk" prisoners to other sanctions, and some form of "good time credits" to reduce the sentences on a gradual basis for all California prisoners that perform to a specific standard (like good behavior and active rehabilitative programming where available).

Gitmo Blues: Don't Worry Closing Guantanamo Won't Endanger America's Lead in Global Incarceration

Daily Show host Jon Stewart last night skewered Republicans who have been decrying the closing of Guantanamo and suggesting that Americans ought to be terrified by the prospect of having Gitmo terrorists like Khalid Sheik Muhammed housed in American prisons by pointing out that the USA is simply number one in the world when it comes to locking up people. [Watch the episode, may be time limited].

Indeed, there is something comical about the degree to which mass incarceration remains invisible to American political leaders both left and right. On the left, lawyers, activists and politicians have decried Guantanamo without mention of the fact that preemptively locking up members of a dangerous class has been our policy toward domestic urban insecurity for decades. On the right, references to closed Alcatraz as a possible site for Gitmo detainees belie the proliferation of super-max prisons across America since the 1980s.

But in the spirit of John Stewart, we should note that at at time when American global prowess in industries like banking and automobiles is melting away, the closing of Guantanamo poses little danger of a long term decline in our status as the clear global leader in incarceration.

The Logic of Deterrence from Gaza to Oakland

Israel's fierce air war against Hamas and its operatives and infrastructure in Gaza provides a window into one of the most important forces at work in our own war on crime, i.e., deterrence. Deterrence is the economic theory, dear to both criminology and state-craft, which holds that actors will alter their behavior to maximize the net sum of costs and benefits.

Both Israeli officials and citizens defend the action as necessary to restore deterrence by making Hamas understand the high cost of shooting their rockets into southern Israel. For example, in today's New York Times, peacenik David Grossman even while making the case for restraint emphasizes this logic:

NOW, after the heavy blow that Israel has dealt to the Gaza Strip, we would do best to halt, turn to the leaders of Hamas and tell them: Until last Saturday, we restrained ourselves in responding to the thousands of Qassam rockets fired at us. Now you know how severe the retaliation can be.

But as with the criminal law, deterrence works well to curb opportunism among those actors who already have strong incentives to continue non-aggressive (even if generally chilly) relations, but works very poorly to curb those actors who have no incentives to avoid the chaos of crime or war; and indeed may have psychic or political incentives to foment violence and chaos.

Is Israel's deterrence broken? There are dozens of Arab and Muslim states in Israel's vicinity. None of them, not even the broken state of Lebanon, has lifted a military finger against Israel. Deterrence works. However for Hamas and for the people of Gaza generally, the base line conditions of life are not high enough to establish the normal incentives that deterrence presumes. If life is one of bare survival and abject humiliation, even a relatively high risk of death, especially an exciting, quick, and morally honored death is insufficient to restrain their desire to inflict pain and fear on their hated enemy (at least for the masculine culture which appears to dominate Palestinian society).

Israeli's understand deterrence probably better than any other people on earth, but their basic anger and mistrust of the Palestinians, especially after the second intifada, is such that they cannot bring themselves to do what they know they must. They know they must build up a true political alternative to Hamas, in the form of President Abbas and his Fatah Party in the West Bank, but they cannot bring themselves to make the political concessions necessary to produce for Abbas gains in sovereignty and legitimacy. They know they should be creating an economic alternative to Hamas in Gaza, by creating the possibilities for economic exchange that will pull young men into the entanglements of markets and diapers rather than honor and death, but they are too angry at Hamas for the humiliating capture of one of their soldiers. So they turn in the inevitable logic of deterrence to raising the collective punishment of Palestinians ever higher, even full while knowing it only exacerbates the fundamental limits on deterrence.

The parallels with our own war on crime, almost the same age as the four decade long Israeli occupation of Palestine, should be clear. Let us pray that President Barack Obama will show the wisdom necessary to save both Israel and the US states from this destructive logic.

Happy New Year

Crime and the Mayor: Not just an Oakland tale

As Mayor Ron Dellums reaches the midpoint of his term as Oakland's Mayor, the celebrated politician who served for years as one of Congress' few lions of the left, finds himself crucified on the issue of crime. So long as the public and the media (read the SFChron midterm report card) views Oakland as an unacceptably dangerous place do to crime, nothing else Dellums accomplishes will be considered success. However, mayors have few significant tools to address either crime or fear of crime.

In recent years many have come to believe that police, one of the few crime control tools that mayors at least influence, can make a difference. The best case of this, as my colleague Frank Zimring has shown in his book The Great American Crime Decline is New York City, which enjoyed approximately twice the crime decline that the rest of America enjoyed in the 1990s. But New York may turn out to be a unique case because of the enormous urban density that allows police pressure (especially on the heavily used subway system) to be maximally effective on both potential perpetrators and the general public (thus impacting both crime and fear of crime). Few American cities are like NYC in this regard, and certainly not sprawling Oakland.

The Mayor (and beleaguered Chief Tucker) are right to resist pressure to ratchet up arrests for the sake of a show of force. Simply feeding more young men into the jail and prison system can have little if any effect on crime or fear of crime. But what are they to do? Nobody I know has a great answer. The simplest solution, taking the drug trade away from criminal gangs (by creating a legal and heavily regulated and taxed market for the most popular and safest drugs) combined with new jobs for urban youth would produce a dramatic change in both crime and fear of crime, but mayors and chiefs of police can do nothing about that.

However, the Mayor is wrong to think that it is simply media failure to highlight the positive that is generating his political malaise. After a generation of war on crime, Americans, even in progressive Oakland, have come to believe that security against violent crime is the one and virtually only right that citizens have a claim to with government (read the case for this in my book, Governing through Crime).

My recommendation for the Mayor's New Year's resolution list is to play to your strengths. The Mayor must engage the public and the media in a sustained discussion of the real security challenges facing Oakland in which crime plays only a part. Moreover he should turn his formidable oratorical skills to a sustained attack on the failed war on drugs including shaming the incoming president (who has already signaled his timidity on this issue) to fundamentally reconsider it. His question should be the following.

Mr. President, as you have suggested, Oakland and other cities can help save America (and the world) from global warming by offering Americans a sustainable low carbon lifestyle based on diverse multi-use walking communities and public transportation. But how can you ask Oakland to help solve our national problem when the federal government continues to impose demonstrably failed policies that are sustaining a violent subculture that keeps middle class Americans from taking the responsible decision and moving back to the cities?