Impact of Foreclosures on Crime

[Sergeant T]

The Impact of Single-Family Mortgage Foreclosures on Neighborhood Crime.

Link shamlessly copied from John Robb's site, who seems to always go all Forth Turning with every new data set. The paper is limited but worth a quick read. Having sat through the classes and worked the street, I think it's a 'chicken & egg' arguement. Criminals have all the time and numbers to shape their environment into whatever they want within governement tolerances. I also tend to get queasy when someone offers up an equation in a study to help explain the problem, but I know economists can't help themselves when it comes to equations.

[davidbfpo]

My experience in the UK, in an urban area blighted by the collapse of its manufacturing sector was that unemployment rose (approx. 30% for adult males and higher for youth). Private home ownership was relatively low, local authority and private landlords dominated.

Violent crime did not rise, nor anti-social behaviour, but dishonesty in all fields did. Instead of stolen goods being sold to handlers or "fences", goods could be sold in door to door sales and orders even taken before the theft. Local stores, especially those selling alcohol, tobacco, chemists, electrical goods and clothes were hit repeatedly. As the local barricades, crime prevention measures went up organised raiding went further afield. Oh yes vehicle crime went up.

"Sink" estates, not always publically owned, detiorated.

Today the same area has adult unemployment less than 5% (although the definition has changed so much it is meaningless) and youth unemployment or not in training is a staggering 38%. Massive public spending on housing improvements, smaller amounts on education and training. Some manufacturing has survived, but there has not been a single private sector investment.

Violent crime is up, often attributed to drug dealing; anti-social behaviour is persistent in the "sink" estates, dishonesty has shrunk and local shops can survive.

Anyway just a viewpoint from over the Atlantic and I'm not an economist.

davidbfpo

[Jedburgh]

Geography & Public Safety, Oct 08: Foreclosures and Crime: A Geographical Perspective

This third issue of Geography and Public Safety examines how the nationwide home foreclosure crisis has affected crime, police practice, and public policy. Articles show that geographic information systems can assess how foreclosures influence crime trends and improve city cleanup of graffiti and blight. Additionally, the issue describes the tenets of the broken windows policing theory, and how this theory explains why police and public planners must react quickly, before crime has a chance to escalate

[slapout9]

Outstanding...Thanks for posting.

[Bill Moore]

Interesting post, and I suspect this is the tip of the iceberg of bad things to come if we don't stabilize our economy. While I agree with the parallels to the broken glass theory, I think there is more to it. First, the social-economic-political system that these folks bought into failed them, so they are vulnerable to being recruited by gangs and other criminal elements. Far fetched? You may recall that several senior citizens have been (and may still be) involved in transporting illegal drugs due to personal economic duress, and this was before the current crisis. You now have a vulnerable and angry population that can be mobilized by an equally angry politician (a Hitler double). It is more than broken glass equaling an increase in punks on the streets, it is the failure of a system and folks looking for viable alternatives. I see many parallels to insurgency issues.

[slapout9]

Interesting post, and I suspect this is the tip of the iceberg of bad things to come if we don't stabilize our economy. While I agree with the parallels to the broken glass theory, I think there is more to it. First, the social-economic-political system that these folks bought into failed them, so they are vulnerable to being recruited by gangs and other criminal elements. Far fetched? You may recall that several senior citizens have been (and may still be) involved in transporting illegal drugs due to personal economic duress, and this was before the current crisis. You now have a vulnerable and angry population that can be mobilized by an equally angry politician (a Hitler double). It is more than broken glass equaling an increase in punks on the streets, it is the failure of a system and folks looking for viable alternatives. I see many parallels to insurgency issues.

Bill, I don't think that is far fetched at all. Nobody is talking much about the criminal effects a recession/depression will/would have. But they will soon if things don't straighten up.

[jmm99]

Hi folks,

Currently, there are at least three recents threads here (SWC) on the "financial crisis", including this one. The other two are:

http://council.smallwarsjournal.com/...ead.php?t=6089

http://council.smallwarsjournal.com/...ead.php?t=4283

By now, almost everyone realizes we have a problem - and governments worldwide are reacting. The problem is that reactive tactics may end up being more deadly than the problem itself. E.g., how do you react to an ambush ? We have had no training for this kind of ambush.

By way of general background, a source to linked articles, by those who have been predicting this mess, can be found here "The Depression Reader":

http://www.lewrockwell.com/orig9/recession-reader.html

Kind of telling that the title refers to a "depression" and the url refers to a "recession". Truth is, at present, we simply do not know.

The particular problem here (in this thread) is a dangerous one because we do not know how our population will react today - as opposed to in the 1930's. IIRC, while foreclosures were a problem then (various foreclosure moratoria acts were passed), the overall crime rate did not increase that much - Bonny and Clyde aside. Slap, you may have some stats on that which are more precise; and I will not be bothered that my recollection is wrong.

My point is that the US people in the 1930's were not used to government "safety nets" and, frankly, were used to a lot more privation than my generation which grew up in the 1950's. Just about a mile from here is Quincy Hill (a mining location, which shut down in the 1930's). The people up there had their backs to the wall. So, what did they do (help from Welfare and WPA was not enough) ? They got together and shared their resources (a pig from one, veggies from others, and shine from them with stills). Not a very sophisticated bunch, those folks from Quincy Hill; but they survived.

Whether it will get that bad, I do not know. If it does, we will be into John Robb territory, where he has just posted:

Monday, 13 October 2008
GG RADAR: Early October 2008
Interesting mind food:
.....
Defensive strategies for communities: slow foreclosures/evictions. Chicago has a watered down version of this. Phili is in the lead. The key factor: drive as deep a wedge between the dysfunctional global economy and your community as possible. Keep people in their homes as long as possible. If you don't, you risk hollowing out your community. ....

http://globalguerrillas.typepad.com/

This ties in with Robb's theory of "resilient communities" as an answer to many problems.

There is another "foreclosure" that is of larger concern - and that is the amount of US government paper that is out there. That ranges from a dollar bill (a Federal Reserve Note), through the range of various Treasury instruments up to 30-year bonds. Now, some of my friends at LewRockwell call this "fiat money" (not backed by gold, etc.); but it is really not. In practical effect, it is backed by the present and future income stream and the present and future assets of the US (not only those owned by the government, but those owned by you and me). That is another, less tangible danger.

Besides the one trillion or so that the US will inject into the system, France and Germany will inject another trillion or so; UK has already moved in that direction; and Iceland is bankrupt - that from the AM news before I got here. So, there will be lots of government paper hanging out there.

PS - Slap. Lew Rockwell and the Mises Institute have offices in Auburn, Alabama. Should that affect my judgment of them ?

[slapout9]

PS - Slap. Lew Rockwell and the Mises Institute have offices in Auburn, Alabama. Should that affect my judgment of them ?

All things from Alabama are good, but anything from Auburn is suspect Von Mises put me to sleep.
John Robb has been very accurate in his forcast on the economy. Except for me,us,(SWC) he is the only one talking about the security issues with mass foreclosures. Could get really nasty out there. Hate to say it but Bill Lind has written about the Insurgency coming home to America...he might be right

[120mm]

Hi folks,

By now, almost everyone realizes we have a problem - and governments worldwide are reacting. The problem is that reactive tactics may end up being more deadly than the problem itself. E.g., how do you react to an ambush ? We have had no training for this kind of ambush.

Exactly. I think the US government has come to the point where they will do everything, up to and including permanently ruining our economy, in order to prevent even a slight economic downturn.

The Clinton/Greenspan micro-management and illusion that they could command the economy has developed into a continuum when the same incompetent hacks, like "Hank" Paulson who created the conditions for this mess are now in charge of dictating how we are to clean it up, "if we know what's good for us".

Words cannot express the loathing I feel for these hacks....

[davidbfpo]

A few weeks ago a (UK) Home Office report suggested that some in UK government considered an economic downturn would lead to a crime wave: http://ukpress.google.com/article/AL...iSky2diQPeF__w

The Home Office and the UK government landed in the mire over this.

davidbfpo

[Ken White]

but every economic downturn brings a rise in the crime rate; just that simple. Can't change that by not mentioning it. Better in fact to remind people it will occur and prepare everyone for reality.

[reed11b]

Seems like that is the message the despised "liberal intellectual elite" have been trying to spread for years. I would add that bolstering the middle-class has greater economic gains then enriching the rich.
Reed

P.S. I am a firm believer in the broken window theory, and believe it has a great deal of relevance in COIN.
Reed

[jmm99]

Just to keep things straight about broken windows.

1. There is the broken window policing strategy - deterring broken windows prevents other more serious crimes.

2. There is the broken window economic fallacy - wow, look at all of the work that is created when the broken window is replaced. The fallacy is that capital has to be put into the replacement window work, and you only end up with the same window. The capital could have been used for innovation, etc.

Interestingly enough, the two situations are somewhat linked if you think about it. Prevent broken windows and you have more capital for other things. That is assuming that the added cost of policing is less than the cost of replacing the broken window - Slap has to be a relatively cheap date.

[slapout9]

jmm99, that was cold man really cold.

According to SBW doctrine the government should buy up a bunch of houses that are being foreclosed on and GIVE them to Wounded Veterans and let them form a neighborhood watch group (give them a police radio set). Want be anymore crime in that community.

[Ron Humphrey]

jmm99, that was cold man really cold.

According to SBW doctrine the government should buy up a bunch of houses that are being foreclosed on and GIVE them to Wounded Veterans and let them form a neighborhood watch group (give them a police radio set). Want be anymore crime in that community.

Worked for the Romans

At least for a while

[jmm99]

Since the OP's article has a couple of articles from NC, here is a NC view.

Crime & Punishment

Incarceration alone will not solve North Carolina's crime crisis. We must also focus on preventing crime by addressing the conditions that give rise to it. That does not mean increasing government spending on jobs programs or social programs. There is no historical relationship between crime rates and either poverty, joblessness, or government social spending. Crime rates during the Great Depression were much lower than they are today.

http://www.johnlocke.org/agenda2004/crimepunisment.html

The article adds (in bold): "The real cause of crime is not a poverty of resources but a poverty of values." That statement is arguable (IMO), since I believe there is an interplay between the two:

poverty of resources <> poverty of values

As an example, take a trip through 25th and Locust in Milwaukee (as it existed about 15 years ago, when I last drove through it) - basic ghetto environment and one of Milwaukee's high crime areas, with over-crowded housing owned by slumlords living in Tosa or further west.

Anyway, the article does have a good graph (attached) which shows that general prosperity does not mean lower crime rates. Of course, correlation does not necessarily prove causation.

As to prosperity and crime, we have this from the inventor of the broken windows policing theory:

JAMES Q. WILSON: Between 1963 and the early 1970s, the rate of violent crime more or less tripled in the United States. By violent crime, I mean murder, manslaughter and robbery. So we had a tripling of the crime rate at a time when the country was, by and large, prosperous, in which the unemployment rates even among African-American adolescents was quite low.

http://www.pbs.org/fmc/segments/progseg13.htm

On the other hand, we have this (from a more "progressive" website):

The Second Great Experiment

Reliable statistics on incarceration in federal and state prisons in the United States date back to 1925—at the time Debs was writing Walls and Bars. These statistics show that the incarceration rate (persons imprisoned in federal and state prisons per 100,000 in total population) has been higher in periods of economic stagnation (when the unemployment rate, and hence the reserve army of labor, is much higher). In the Great Depression the incarceration rate for federal and state prisons peaked at 137 per 100,000 in 1939, after which it rapidly dropped with the coming of the Second World War. (See Figure 1, which shows the trends at five year intervals. Note: the peak year of 1939 does not appear in the chart.) The decline in the rate of incarceration in the war years was not simply the result of millions entering the military. Jobs were plentiful—jobs where one learned skills along with the opportunity to use the skills in better paying positions. Lots of overtime and weekend work boosted incomes despite the low wage rates.

http://www.monthlyreview.org/0701editr.htm

The chart (prisoners from 1925 to 2000 - contrary to quote above there is a peak just before 1940) is here.

http://www.monthlyreview.org/docs/0701fig1.pdf

Perhaps, the most honest statement is this:

Published: Sunday, January 23, 2000
Crime rate falls in U.S., and no one is sure why
MICHAEL FLETCHER WASHINGTON POST
Why is crime down in America?
.....
Much of the evidence offered to support these theories is, in the end, contradicted by history or otherwise unraveled. Yes, the economy is better. But it also boomed during the 1960s, when crime began its steep upward march. And in the past, crime has waned during economic downturns, most notably during the Great Depression.
.....
It may well be that there is no way to know what will happen with America's crime rates because the factors that influence them are too complex.

In his new book, ``Butterfly Economics: A New General Theory of Social and Economic Behavior,'' British economist Paul Ormerod argues that human behavior is essentially unpredictable, in large part because individuals are as likely to be influenced by one another as by objective factors such as poverty or the police.

Will crime rise or fall in the next generation? You can ask the same thing about hemlines with as much chance of accurately predicting the answer, he maintains.

http://www.d.umn.edu/~bmork/2306/New...erates.J00.htm

My conclusion is that working from very generalized data sets is not helpful. Here (this thread) we have a specific problem (deserted houses and buildings)which do lead to an increase in crime - regardless of why any individual turns to crime. Thus, that problem is finite and can be solved. The larger, general problem is "messy", "wicked".

[Jedburgh]

but every economic downturn brings a rise in the crime rate; just that simple. Can't change that by not mentioning it. Better in fact to remind people it will occur and prepare everyone for reality.

Observing current discussions among crime analysts on a variety of forums illustrates that:

1. LE across the spectrum is well aware of the potential problem.
2. It is already happening, with burglaries on a significant upward trend, and the number of "new" thieves with no fingerprints on record are an indicators of the nature of the problem. Another indicator is the trend in shoplifts being more towards "needs" (food, diapers, sanitary products) than luxury items.
3. The trends noted above are local. There are significant differences within different areas of major cities, between cities, and between states as to the degree of impact. Despite the massive alarmist media coverage, and the deeply personal real impacts in many areas, there remain substantive parts of the country that are little affected.

[Ken White]

I'd add that all the great data provided by jmm99 essentially corroborates it with the amplifier that the 'cultural revolution' of the 1960s skewed the picture due to a foolish desire then and since to let a lot of perpetrators walk and be rehabilitated instead of tossing 'em in the slammer. Social engineering; they meant well but actually encouraged crime as it became low or no cost...

As you point out -- with local variations; then and now. As any street Cop can tell you, even minor swings in the economic cycle have their effect, slight though it may be.

Note that jmm99's offerings show an anomaly -- one article says that crime rates were low during the Depression, another shows the incarceration rate during that period climbed significantly. That is and indication of the beginnings of crime reporting and data gathering getting off to a rocky start and a no-nonsense attitude toward any potential lawbreaker. Different time.

[reed11b]

I'd add that all the great data provided by jmm99 essentially corroborates it with the amplifier that the 'cultural revolution' of the 1960s skewed the picture due to a foolish desire then and since to let a lot of perpetrators walk and be rehabilitated instead of tossing 'em in the slammer. Social engineering; they meant well but actually encouraged crime as it became low or no cost...

As you point out -- with local variations; then and now. As any street Cop can tell you, even minor swings in the economic cycle have their effect, slight though it may be.

Note that jmm99's offerings show an anomaly -- one article says that crime rates were low during the Depression, another shows the incarceration rate during that period climbed significantly. That is and indication of the beginnings of crime reporting and data gathering getting off to a rocky start and a no-nonsense attitude toward any potential lawbreaker. Different time.

There was also shorter sentences and less post incarceration stigma and still a lower percentage of the population incarcerated then now. I am going to have to agree to disagree with you on this one Ken
Reed

[Ken White]

Check the pot and drug sentences then and now...