November 16, 2013
A guest post from (Roughly) Daily…
This year Sweden closed four prisons and a detention center… there simply aren’t enough prisoners to justify them. Sweden has one of the lowest incarceration rates in the world. And they seem to mean to do even better: though the crime rate is rising, the government is investing in prevention, not detention.
Conversely, the U.S. has the world’s highest incarceration rate (not counting North Korea, on which data is not available– though the Committee on Human Rights estimates that the rate is roughly equal to America’s). And though there are a few states (like Pennsylvania) in which prison populations are falling, it’s not looking to shrink overall.
Among the reasons: private prisons. Virtually nonexistent until the 1980s, private jails have spread across the nation, as for-profit corporations have built new facilities and bought older ones from cash-strapped states, operating them on contract. Lately, these companies have prevailed on their customers– the states– to agree to minimum guarantees. Some examples: Arizona has three private prison contracts requiring 100 percent occupancy; Oklahoma has three contracts at 98 percent occupancy; Louisiana and Virginia have occupancy rate minimums at 96 and 95 respectively.
As In the Public Interest (ITPI) reports
These contract clauses incentivize keeping prison beds filled, which runs counter to many states’ public policy goals of reducing the prison population and increasing efforts for inmate rehabilitation… some worried the terms would encourage criminal justice officials to seek harsher sentences to maintain the occupancy rates required by a contract…
Bed guarantee provisions are also costly for state and local governments. As examples in the report show, these clauses can force corrections departments to pay thousands, sometimes millions, for unused beds — a “low-crime tax” that penalizes taxpayers when they achieve what should be a desired goal of lower incarceration rates. The private prison industry often claims that prison privatization saves states money. Numerous studies and audits have shown these claims of cost savings to be illusory, and bed occupancy requirements are one way that private prison companies lock in inflated costs after the contract is signed…
Read ITPI’s full report (pdf), “How Lockup Quotas and ‘Low-Crime Taxes’ Guarantee Profits Guarantee Profits.”
And for a look at some approaches to improving the situation in the U.S. (spoiler alert– they don’t involve profit incentives to keep people in jail), read “Why America Has a Mass Incarceration Problem, and Why Germany and the Netherlands Don’t.”
As we rattle our chains, we might recall that it was on this date in 1916 that Margaret Sanger, fresh back from a stint in the Raymond Street jail, reopened the Brownsville Clinic in Brooklyn, NY– the first birth control clinic in the U.S. Sanger had been shut down and arrested before for obscenity (she offered a booklet called “What Every Young Woman Should Know,” explaining the female reproductive system and several contraceptive methods). This time, the police leaned on her landlord to evict her, and the clinic closed almost as soon as it reopened.
November 10, 2013
Two thousand years ago Roman senators grumbled that their women used too many Indian spices, silks and fine cottons, and that India was draining the Roman empire of bullion. Pliny the Elder called India the ‘sink of the world’s precious metal’ when he heard that a Roman ship touched an Indian port daily.
The Portuguese similarly complained in the 16th century that their hard won gold and silver from South America was being lost to India. The British Parliament echoed this refrain in the 17th century. But India kept sucking Western bullion because Western consumers hankered after Indian luxuries and Indians were not interested in Western goods. As books had to be balanced, they were balanced with bullion. Only Britain’s Industrial Revolution reversed the flow in the 19th century when Indians finally found something they wanted from the West—cheap, durable cottons from the mills of Lancashire — as handlooms worldwide gave way to machine-made cloth…
And still India absorbs about a quarter of the world’s gold. Given the one-way flow of gold over the centuries, a staggering amount has accumulated in India; the World Gold Council estimates it to be over 20,000 tons, worth $1.1 trillion– or half of India’s GDP… most of which is held, outside of the financial system, by temples and religious organizations or families (that pass the gold along to daughters as “stridhana” ["woman's wealth," which usually takes the form of gold jewelry] as inheritance at their weddings.
As Gurcharan Das (a former CEO of Procter & Gamble India) argues in The Times of India, this is both a problem and an opportunity. The most fundamental problem, obviously, is the unavailability of most of these gilded assets for productive investment. But a more timely issue is impact on India’s appetite for gold on the value of the Rupee. Though the national government has banned imports of gold, demand is so high as to have encouraged massive smuggling– India continues to be a huge global consumer of gold… which helps keep the price of gold high and the value of the Rupee low.
The opportunity is to put that gold to work…
…the process has begun. Gold loans, bonds, and deposit schemes are all steps in the right direction. In these schemes owners of gold earn interest by depositing it with banks, which in turn releases part of it in the market, thus reducing India’s demand for imported gold.
The bigger prize is to convince temples to do the right thing and deposit their vast gold stocks in banks and earn interest. Jamal Mecklai, the currency expert, had suggested earlier this year that if Tirupati temple were to deposit a third of its holdings at two per cent interest, it could earn Rs 3,000 crore a year. Tirupati did just that in May, beginning with a 2,250-kg deposit with the State Bank of India. This is a triumph! If major temples follow suit, gold will soon flood the domestic market, imports will stop, the global gold price will fall and the rupee will strengthen.
But this government is shy to go for an all out public campaign. It worries about people’s sentiments and of the opposition playing the religious card. Gold is, after all stridhana… But young Indians today are sensible and they will buy the idea that an inflation-proof gold linked certificate exchangeable for gold is the hip thing to receive at marriage rather than a bunch of clunky sets. So go for it, Reserve Bank. The road to India’s economic future may well be paved with gold.
November 1, 2013
A guest post from (Roughly) Daily…
Lake Providence lies in East Carroll Parish in the northeast corner of Louisiana…
It’s a place where the air is so soupy-hot your shins sweat; where bugs are such a looping, whirring presence that it can feel like you’re trapped in hell’s version of a snow globe; and where the level of income inequality, as persistent as the bugs and humidity, is higher than any other parish or county in America…
Since the late 1970s, the gap between rich and poor has widened to Grand Canyon proportions — pushing America toward a two-class society. People have a harder time getting ahead now than at any time since the Great Depression.
The nation is more economically split, according to the CIA, than Iran or Nigeria.
East Carroll Parish, population 7,500 and home to Lake Providence, is worse off still…
And of course, the difference makes a difference…
This is well documented in a book called “The Spirit Level” by epidemiologists Richard Wilkinson and Kate Pickett. Drawing on decades of work, the researchers found, essentially, that people who live in economically unequal places — such as Louisiana or the United States as a whole — tend to live harder lives.
Not just poor people. All people.
When the researchers plotted income inequality against an index of social problems that included infant mortality, mental health and others, they got the chart below, which shows that more unequal places tend to have more of these issues. The United States, the most unequal of the developed countries, for example, also has the world’s highest incarceration rate and a higher infant mortality rate than comparable nations. Sweden, meanwhile, has a low level of income inequality and fares much better on these social measures….
Read the whole story– it’s eminently worth reading the whole story– (with more and bigger, more-legible charts) at “The Most Unequal Place in America.“
As we mind the gap, we might recall that it was on this date in 1930, in Atlanta, that Jessie Daniel Ames founded the Association of Southern Women for the Prevention of Lynching.
July 29, 2013
Timothy Tyler was 25 when he was sentenced to life in prison… for selling LSD to an undercover cop. Tyler had two prior busts– both resulting in paroles– but because he was arrested in Connecticut, a “three strikes” state, he drew draconian time, joining the tens of thousands of prisoners, the majority of whom are in for “non-serious/non-violent” crimes (c.f., e.g., here for California), clogging the penitentiaries of the 24 U.S. states with “three strikes” laws.
The “three strikes” regime has been disastrous; still, authorities do their best to protect it even from revisions like the recent change in California. Three Strikes needs to change– that’s an altogether worthy crusade. But the issue I want to raise here is a different one…
As Mitt Romney famously insisted, corporations are people (c.f. here for a backgrounder on the legal history of the legal concept that a corporation may be recognized as an individual in the eyes of the law).
This chart, from the New York Times shows all too many second and third strikes– and it was compiled in 2011. There have been several convictions since then. But the sanctions have been fines– usually pretty paltry ones at that, in the context of the damage done and the earnings cadged… fines that come out of the hides of shareholders, leaving the salary-and-bonus-incented managements on the field effectively encouraged to strike again.
Why, commentators like Matt Taibbi have been asking, aren’t these companies closed? Why are their executives not in jail?
Why indeed. If corporations are people, why are we not prosecuting them as people?
February 25, 2013
Whitey Bulger and Aaron Swartz: Protecting the Guilty and Punishing the Innocent
Today’s Fresh Air is devoted to an interview with award-winning journalists Kevin Cullen and Shelley Murphy, whose new book, Whitey Bulger: America’s Most Wanted Gangster and the Manhunt That Brought Him to Justice, tells the extraordinary story of South Boston’s gangster king, Whitey Bulger.
It’s the story of a man captured in 2011 after 16 years on the run. By then, Bulger was wanted for 19 murders, extortion and loan sharking– crimes committed while leading a criminal enterprise in Boston from the 1970s until 1995… But the genuinely remarkable part of the tale is that through most of his criminal career, Bulger was being protected by the FBI, for whom he was acting as an informant. Intent on pursuing the prosecutions (of the major Cosa Nostra figures, “associates” of Bulger’s on whom he was ratting), the FBI shielded him from scrutiny and covered up his crimes– including multiple murders.
The FBI agents immediately involved in the Bulger case were disciplined (one, sent to prison for 10 years). The Bureau’s position is that they were “rogues,” a sad exception to the institution’s norm. But Cullen and Murphy aren’t buying it; as they explain, the scope of the cover-up(s) was such that it was simply inconceivable that two stray agents could have pulled it off. They are convinced that culpability goes much, much higher into the Department of Justice.
It’s a riveting– and alarming– tale of individual crime and institutional malfeasance that you can hear here.
Against that backdrop, I caught up with Techdirt‘s report on the progress of the Congressional investigation into the DoJ’s prosecution of Aaron Swartz– the title of which, says it all: ”DOJ Admits It Had To Put Aaron Swartz In Jail To Save Face Over The Arrest.”
As Techdirt and Huffington Post explain in their coverage, DOJ reps told Congressional staffers that part of the reason they went after Swartz with such zeal was his infamous Guerilla Open Access Manifesto, which argues:
We need to take information, wherever it is stored, make our copies and share them with the world. We need to take stuff that’s out of copyright and add it to the archive. We need to buy secret databases and put them on the Web. We need to download scientific journals and upload them to file sharing networks. We need to fight for Guerilla Open Access.
Note that Aaron was making, for the most part, a pretty uncontroversial argument, advocating perfectly legal (albeit unusual) action, not any kind of piracy: taking stuff that’s out of copyright and adding it to the archive; buying secret databases and putting them on the Web. It’s the scientific journal plea that’s at all controversial– though in context, it’s not all clear he was advocating any copyright violation… and indeed, as Techdirt suggests, we seem to be “moving to an age where more and more [of that scientific research to which Aaron spoke] is open access anyway.”
Still, as HuffPo reports, the government found it ground for action: ”The ‘Manifesto,’ Justice Department representatives told congressional staffers, demonstrated Swartz’s malicious intent in downloading documents on a massive scale.”
In the event, Aaron released nothing. It’s possible that he planned to release all of the JSTOR documents he downloaded; it’s also possible that he meant to release only those in the public domain. We’ll never know.
In any case, it seems clear that he was being prosecuted for (what the DoJ took to be) his “malicious intent”… That’s to say, for his opinion, as expressed above, on how information should be available.
The institutional rot that led the DoJ to cover up multiple murders in the Bulger case may or may not have been cleared away; the FBI and DoJ may no longer be protecting the guilty from punishment. In any event, the opposite now seems to be true: it seems clear that the capture of the Justice Department by the Intellectual Property establishment is pretty complete. (C.f. this piece from 1999; the packing of Justice with entertainment/media industry lawyers has continued apace.) The result is the “arrest [or take-down or confiscate] first, ask questions later” approach to “enforcement” with which we live today… It was once the pride of Americans’ that, while we may or may not agree with each others’ opinions, we zealously protected each other’s rights to have them and to express them. Today, those opinions are all too likely to be grounds– the sole grounds– for prosecutorial zeal.
September 9, 2012
A guest post from (Roughly) Daily…
Recently, The Economist took a look at the fines being levied against corporations found guilty of crimes. Their assessment was rather bleak:
The economics of crime prevention starts with a depressing assumption: executives simply weigh up all their options, including the illegal ones. Given a risk-free opportunity to mis-sell a product, or form a cartel, they will grab it. Most businesspeople are not this calculating, of course, but the assumption of harsh rationality is a useful way to work out how to deter rule-breakers.
In an influential 1968 paper on the economics of crime, Gary Becker of the University of Chicago set out a framework in which criminals weigh up the expected costs and benefits of breaking the law. The expected cost of lawless behaviour is the product of two things: the chance of being caught and the severity of the punishment if caught*…
The always-amazing David McCandliss at Information is Beautiful has put the issue into graphic perspective.
We’ve gathered and visualized the biggest corporate fines of the last seven years, not just as raw amounts, but also as a percentage of each company’s profits. That way you can see for yourself if the punishment was painful or puny…
*Becker had created the model as a framework for considering appropriately-discouraging penalties for malfeasance. He was horrified later to learn that it was being taught by business school colleagues as a decision aid.
As we contemplate crime and punishment, we might recall that it was on this date in 1950 that the first television show with a recorded “laugh track” (The Harry McCune Show) aired in the U.S.
CBS TV engineer Charlie Douglass, the “father of the laugh track”
August 26, 2012
Mirco Pagano and Moreno De Turco have created the likenesses of seven musicians– Jimi Hendrix (above), Jim Morrison, Michael Jackson, Bob Marley, James Brown, Freddie Mercury and Elvis, each caught on the floor as though the victim of a shooting– by carefully “spilling” their CDs. It’s an arresting feat.
But their work is part of Piracy, an ad campaign, film short and sculptural work by ad agency TBWA. The conceit is that these musicians were ultimately brought down by internet piracy– ridiculous, as most of these artists died before “piracy” even had a name, and all profited handsomely from their recorded work. To the extent that “piracy” is even an issue, in these cases the “endangered” aren’t the artists, but the record companies trying to milk their cash cows into eternity. As Visual News (to whom, TotH) observes, “what looks like passion becomes something far more sinister.”
More of the work here.
As we sigh, we might send electrifying birthday greetings to the man who made all of this “piracy” possible– not just in its current on-line form, but in its earlier (and also recording industry-feared) broadcast incarnations– Lee De Forest; he was born on this date in 1873. While he ultimately held 300 patents on a variety of inventions that abetted electronic communications, and co-founded the forerunner organization to the IEEE, De Forest is probably best remembered as the inventor of the Audion vacuum tube, which made possible live radio broadcasting and became the key component of all radio, telephone, radar, television, and computer systems before the invention of the transistor in 1947.
Unwittingly then had I discovered an Invisible Empire of the Air, intangible, yet solid as granite, whose structure shall persist while man inhabits the planet.
- Father of Radio: The Autobiography of Lee De Forest (1950), p. 4
November 1, 2011
A guest post from (Roughly) Daily…
THE KAUFFMAN FOUNDATION conducts a quarterly survey of economics bloggers (you can see the third quarter results here). It tends to focus on current economic conditions and policy questions, but the fourth-quarter questionnaire contained something a little different: a challenge to capture the state of the economy in haiku. The results are sublime…
Indeed. Consider the stylings of Reuters’ Felix Salmon:
No one has a job
And they’re not paid much
Or the musings of Professor Stephen Karlson:
Intermodal loadings increase
Trade conflict looms without cease
Occupy Wall Street
Or this, from Robert Cringely:
Econ guys, gentle souls
Think policies guide markets
Jail time is better
Or the only-too-culturally-appropriate contribution of Amol Agrawal:
When Japan fell in 1990s
They were lectured by the world economists
Time for Japanese to smile
… more at “The economy in haiku .”
As we think in seventeen syllables, we might recall that it was on this date in 1993 that the Maastricht Treaty came into effect, formally establishing the European Union (EU)… and laying the groundwork for the Eurozone– the European Monetary Union and the creation of the Euro– and thus for the painful pecuniary pageant that is playing out on the Continent today…