Street Crime is Down - White Collar Crime is UP

The good news is that street crime is down. A recent study attributes the decrease in street crime to the fact that people carry less cash nowadays. According to the National Bureau of Economic Research (NBER) Working Paper: Less Cash, Less Crime: Evidence from the Electronic Benefit Transfer Program (No. 19996, 3/14) crimes have decreased since the 1990s due to welfare recipients using debit cards instead of receiving checks or paper food stamps. Cash benefits, child support payments, and food stamps are all automatically loaded onto an EBT card, no cash in the process. The abstract for that paper states:

"It has been long recognized that cash plays a critical role in fueling street crime due to its liquidity and transactional anonymity. In poor neighborhoods where street offenses are concentrated, a significant source of circulating cash stems from public assistance or welfare payments. In the 1990s, the Federal government mandated individual states to convert the delivery of their welfare benefits from paper checks to an Electronic Benefit Transfer (EBT) system, whereby recipients received and expended their funds through debit cards. In this paper, we examine whether the reduction in the circulation of cash on the streets associated with EBT implementation had an effect on crime."

Attributing the decline in crime to less cash, is a new perspective. Law enforcement and social scientists have explained the decrease in crime in a number of other ways.

One of the reasons often cited for the decline in crime is that we lock up so many people nowadays. According to the Prison Policy Initiative - "Looking at the big picture requires us to ask if it really makes sense to lock up 2.4 million people on any given day, giving us the dubious distinction of having the highest incarceration rate in the world."

Another piece of the puzzle is that we now have far more laws than in the past. People can break a law that they never new existed, and find themselves behind bars. The old saying, ignorance of the law is no excuse, no longer applies. Nobody knows all the laws. According to an article in The Economist:

"The number of federal laws has risen from 3,000 in the early 1980s to over 4,450 by 2008. Many of these have poor intent requirements, meaning people are being locked up not to keep the rest of society safe, but for technical violations of laws they may not have known existed."

If the pace of law creating has continued, then, now in 2014, we have double the number of laws as we did in the 1980s. And we are only counting federal laws. State and local law makers also have to justify their existence by continuing to create and pass more and more laws everyday.

More prisons and jails. Follow the money. The cheapest labor anywhere, even less than third world countries is found right here in America at the Gray Bar Hotel. There are now over 100 private prisons in the United States. Quoting an article about the prison industry in general:

"The prison industry complex is one of the fastest-growing industries in the United States and its investors are on Wall Street. “This multimillion-dollar industry has its own trade exhibitions, conventions, websites, and mail-order/Internet catalogs. It also has direct advertising campaigns, architecture companies, construction companies, investment houses on Wall Street, plumbing supply companies, food supply companies, armed security, and padded cells in a large variety of colors.”

According to the Left Business Observer, the federal prison industry produces 100% of all military helmets, ammunition belts, bullet-proof vests, ID tags, shirts, pants, tents, bags, and canteens. Along with war supplies, prison workers supply 98% of the entire market for equipment assembly services; 93% of paints and paintbrushes; 92% of stove assembly; 46% of body armor; 36% of home appliances; 30% of headphones/microphones/speakers; and 21% of office furniture. Airplane parts, medical supplies, and much more: prisoners are even raising seeing-eye dogs for blind people."

And THAT was the good news. The bad news is that although street crime, crime for cash is down. White collar crime is thriving. The stats presented below are not recent. However, the rate of increase seems to be similar or accelerated since the 1990s. This is an excerpt from a early 2000s article on the National White Collar Crime Center's website (NW3C):

"White collar crime is a term that is applied to nonviolent crimes committed in business situations by individuals, groups or corporations for the purpose of financial gain. Most white collar crimes are associated with some type of fraud, often involving a lending institution, such as a bank or insurance agency.

Examples of white collar crime include: antitrust fraud, bankruptcy fraud, bribery, computer fraud, credit card fraud, counterfeiting, embezzlement, identity fraud, insider trading, insurance fraud, kickbacks, money laundering, obstruction of justice, perjury and price fixing.

White collar crime is steadily on the rise, thanks to our technologically advancing society, which relies on the increased use of cellular phones and computers to access personal and financial information. The National White Collar Crime Center (NW3C), a nonprofit agency that supports state and local police in their efforts to prevent, investigate and prosecute economic and high-tech crime, reports that while arrests for violent crimes have decreased in recent years, arrests for white collar crimes - especially fraud and embezzlement - have increased.

The rise in white collar crime incidents has also contributed to a rise in cost to the nation. According to National Fraud Center statistics, the cost of economic crime has risen from $5 billion in 1970 to $100 billion in 1990, and is only expected to increase as occurrences become more frequent. ....

Statistics from NW3C also approximate that one in three households is the victim of white collar crime, yet of these, only 41 percent report the incident. Of the small number reported, only 21 percent are handled by a law enforcement or consumer protection agency."

Corporate crime inflicts far more damage on society than all street crime combined. Whether in bodies or injuries or dollars lost, corporate crime and violence wins by a landslide.

The FBI estimates, for example, that burglary and robbery -- street crimes -- costs the nation $3.8 billion a year.

The losses from a handful of major corporate frauds -- Tyco, Adelphia, Worldcom, Enron -- swamp the losses from all street robberies and burglaries combined.

Health care fraud alone costs Americans $100 billion to $400 billion a year. The savings and loan fraud -- which former Attorney General Dick Thornburgh called "the biggest white collar swindle in history" -- cost us anywhere from $300 billion to $500 billion.

Recent White Collar Crime Stats

The latest available data from the Justice Department show that during January 2014 the government reported 561 new white collar crime prosecutions. According to the case-by-case information analyzed by the Transactional Records Access Clearinghouse (TRAC), this number is up 0.5% over the previous month.

The largest number of prosecutions of these matters in January 2014 was for "Fraud-Financial Institution", accounting for 15 percent of prosecutions. Prosecutions were also filed for "Fraud-Other" (15%), "Fraud-Tax" (14.1%), " Fraud-Identity Theft-Aggravated" (13.2%), "Fraud-Federal Program" (9.6%), "Fraud-Identity Theft-Other" (7.8%), "Fraud-Health Care" (6.2%), "Fraud-Other Business" (3.6%), "Fraud-Computer" (2.7%), "Fraud-Telemarketing" (2.1%).

Remember, only a small percentage of white collar crime is even reported. And a scant 21% of the reported crimes are ever prosecuted.

In an article by Ben Steverman "Why Drug Lords and Criminals Are SoRisk-Averse" on Bloomberg.com, "convicted felon Sam E. Antar says stock-picking -- trusting in people and numbers you can’t directly verify -- sets you up as a mark for the unscrupulous. Antar was the chief financial officer of Crazy Eddie, Inc., an electronics chain led by Sam’s cousin, Eddie Antar. The chain collapsed under the weight of its fraud in 1989. “Investors live on hope and it’s the criminal’s job to take advantage of that hope,” Antar says:

'If I wanted to be a scam artist today, I could be very, very successful,” he says. “I’d probably have less risk of being prosecuted and far less risk of going to prison.'

So do you think that the worldwide mortgage crisis is the result of sloppy paperwork? Far more harm is done to consumers by a thief with a briefcase than by an army of purse snatchers.