Tag: Crime

The War against Cash, Part I

Politicians hate cash.

That may seem an odd assertion given that they love spending money (other people’s money, of course, as illustrated by this cartoon).

But what I’m talking about is the fact that politicians get upset when there’s not 100 percent compliance with tax laws.

They hate tax havens since the option of a fiscal refuge makes confiscatory taxation impractical.

They hate the underground economy because that means hard-to-tax economic activity.

And they hate cash because it gives consumers an anonymous payment mechanism.

Let’s explore the animosity to cash.

Immigration and Crime – What the Research Says

The alleged murder of Kate Steinle in San Francisco by illegal immigrant Juan Francisco Lopez-Sanchez has reignited the debate over the link between immigration and crime. Such debates often call for change in policy regarding the deportation or apprehension of illegal immigrants. However, if policies should change, it should not be in reaction to a single tragic murder.  It should be in response to careful research on whether immigrants actually boost the U.S. crime rates. 

With few exceptions, immigrants are less crime prone than natives or have no effect on crime rates.  As described below, the research is fairly one-sided.       

There are two broad types of studies that investigate immigrant criminality.  The first type uses Census and American Community Survey (ACS) data from the institutionalized population and broadly concludes that immigrants are less crime prone than the native-born population.  It is important to note that immigrants convicted of crimes serve their sentences before being deported with few exceptions.  However, there are some potential problems with Census-based studies that could lead to inaccurate results.  That’s where the second type of study comes in.  The second type is a macro level analysis to judge the impact of immigration on crime rates, generally finding that increased immigration does not increase crime and sometimes even causes crime rates to fall. 

Majority of Americans Misperceive Crime Trends

According to a recent Gallup survey, the majority of Americans think that crime is on the rise. This misperception persists year after year. Only 21 percent of Americans realize that crime is actually falling. Consider murder and rape alone:

Murder and rape are not the only crimes that are falling. The downward trend in U.S. crime rates also holds for simple and aggravated assaults as well as robberies. Crime, in other words, is falling across the board.

 

 Furthermore, the fall in crime is not limited to the United States. Globally, crime is down. For example, consider the homicide rate in Europe over the last century:

 

Why do most people perceive the world as increasingly crime-ridden despite statistical evidence to the contrary?

Harvard professor and HumanProgress.org advisory board member Steven Pinker provided a number of reasons for our deeply ingrained pessimism during a recent Cato event, “If Everything is Getting Better, Why Do We Remain So Pessimistic?” which can be viewed here. His book, The Better Angels of Our Nature, offers a more in-depth look at the decline of violence.

Newsweek: Back in Print, Confused as Ever

Dumb arguments against libertarianism are increasing, as guardians of the expansive state begin to worry that the country might actually be trending in a libertarian direction. This may not be the dumbest, but as Nick Gillespie said of a different argument two weeks ago, it’s the most recent:

‘You Ready to Step Up?’

The deadly drug war in Long Island’s Hempstead ghetto is a harrowing example of free-market, laissez-faire capitalism, with a heavy dose of TEC-9s
To be fair, author Kevin Deutsch never uses the terms “laissez-faire” or “free-market” in his detailed article, so we should probably direct our disdain at Newsweek’s headline writers. Deutsch does portray the second-ranking guy in the Hempstead Crips as a businessman seeking to “recruit talent, maximize profits and expand their customer base.” But even the drug dealer gets the difference between selling prohibited substances and doing business in a free market:
“We’re looking to market, sell and profit off drugs the way any business would handle their product,” Tony says. “Only our product is illegal, so more precautions need to be taken. It’s all systematic and planned, all the positions and responsibilities and assignments. All of that’s part of our business strategy. It’s usually real smooth and quiet, because that’s the best environment for us to make bank. But now, we at war, man. Ain’t nothing quiet these days.”
Deutsch describes the competition between the local Crips and Bloods in terms not usually seen in articles about, say, Apple and Microsoft or Ford and Toyota:
As for strategies, they seem to have settled on a war of attrition, aiming to kill or maim as many of their enemies as possible….
 
They’re far better armed and willing to use violence than the smaller neighborhood cliques scattered throughout Nassau County….
 
They’re also able to keep out other competitors through use of brute force….
 
It’s one of hundreds of similar conflicts being fought by Bloods and Crips sets throughout the country. These battles breed shootings, stabbings and robberies in gang-plagued, low-income neighborhoods each day. 
These are, of course, just the sorts of consequences that libertarians and economists expect from prohibition. As Tim Lynch and I wrote in the Cato Handbook on Policy a decade ago,

drug prohibition creates high levels of crime. Addicts commit crimes to pay for a habit that would be easily affordable if it were legal. Police sources have estimated that as much as half the property crime in some major cities is committed by drug users. More dramatic, because drugs are illegal, participants in the drug trade cannot go to court to settle disputes, whether between buyer and seller or between rival sellers. When black-market contracts are breached, the result is often some form of violent sanction, which usually leads to retaliation and then open warfare in the streets.

Jeffrey Miron of Harvard’s economics department and Cato made similar points in his book Drug War Crimes, as have such economists as Milton Friedman and Gary Becker. Miron also noted that prohibition drives up the prices of illegal drugs, making the trade attractive to people with a high tolerance for risk. And so in that sense, it’s true that some people will usually enter the prohibited trade – in alcohol, gambling, prostitution, crack, or whatever – and will employ some techniques that are also used in normal business enterprises. As Tyler Cowen says, there are markets in everything. Given our natural propensity to truck, barter, and exchange in order to improve our own situation, we can expect people to step into any trade, prohibited or not. Better that such trade should take place legally, within the rule of law, than underground, where violence may be the only recourse in disputes.

When the government bans the use and sale of a substance, and imprisons hundreds of thousands of people in an attempt to enforce that prohibition, that’s not “laissez-faire, free-market capitalism.” Duh. 

Mexican Violence and Unauthorized Immigration

The murder rate in Mexico is a serious and troubling issue that I’m frequently asked about in relation to immigration. Although far lower than in other Central American countries, the Mexican murder rate is almost three times as high as it was in 2007 – and potentially much higher. But, do unauthorized Mexican immigrants come to the United States to avoid the violence in their home country?

I decided to plot the number of Mexican nationals apprehended by Customs and Border Protection (CBP) on the left axis, an admittedly imperfect measurement of the intensity of unauthorized immigration, and the murder rate in Mexico per 100,000 people on the right axis.

Sources: Sources: Customs and Border Protection U.S. Border Patrol Statistics and Trans-Border Institute.

According to Washington Post Exposé, People Who Utilize Tax Havens Are Far More Honest than Politicians

Using data stolen from service providers in the Cook Islands and the British Virgin Islands, the Washington Post published a supposed exposé of Americans who do business in so-called tax havens.

Since I’m the self-appointed defender of low-tax jurisdictions in Washington, this caught my attention. Thomas Jefferson wasn’t joking when he warned that “eternal vigilance is the price of liberty.” I’m constantly fighting against anti-tax haven schemes that would undermine tax competition, financial privacy, and fiscal sovereignty.

Even if it means a bunch of international bureaucrats threaten to toss me in a Mexican jail or a Treasury Department official says I’m being disloyal to America. Or, in this case, if it simply means I’m debunking demagoguery.

The supposedly earth-shattering highlight of the article is that some Americans linked to offshore companies and trusts have run afoul of the legal system.

Among the 4,000 U.S. individuals listed in the records, at least 30 are American citizens accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct.

But the real revelation is that people in the offshore world must be unusually honest. Fewer than 1 percent of them have been named in a lawsuit, much less been involved with a criminal case.

This is just a wild guess, but I’m quite confident that you would find far more evidence of misbehavior if you took a random sample of 4,000 Americans from just about any cross-section of the population.

School Choice Lowers Crime

New research by Harvard professor David J. Deming studied the crime rates of young adults who participated in a random lottery at the middle or high school level. The lotteries decided whether students were able to attend a school of their choice or whether they were forced to attend their assigned public school. Students who won the lottery committed significantly fewer crimes as young adults than those who lost it. So here is another in the long list of educational outcomes improved by market freedoms and incentives.

Send this to a friend who is still on the fence about the merits of educational freedom.

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