Tuesday, December 27, 2011

What the War on Crime can Teach us about Winning the War on Unemployment

Charles Lane has an interesting piece in the Washington Post about the decrease in crime rates in America in the last 20+ years. His general point is that we have yet to identity the reason for the precipitous drop and to the best of my knowledge, he's correct: there really is no consensus on just why crime is down. There are likely many reasons, and Lane mentions a few of the them, but I'd like to put forth three ideas -- one that Lane touches briefly upon and two others that he doesn't even mention -- as possible parts to a greater answer:

3.) Better Policing: When New York Police Commissioner Bill Bratton implemented the CompStat, police departments all over the country finally discovered a tool that could help them almost predict where and when crime was going to happen. That created a fundamental change in emphasis from ex post facto enforcement to prevention. Comparing this story to a Moneyball-esque shift in thinking is only out of line because life and death was actually at stake during the early days of CompStat.

Police departments all over the country have become more professionalize and trained in the last 20 years. Being a cop once was considered a blue-collar, working class job. It's now one that requires a college degree. This has led to less (or, at least, cyclical) corruption and a better working relationship with the people the police serve. The public's attitudes about cops have also changed. Some of this has to do with 9/11 when much of the country was vividly reminded just how heroic some of these guys have to be at times.

2.) Gentrification/Suburban Ennui: It took us most of the 20th century, but Americans only started learning how to care for our urban areas once we realized how painfully dull suburban life is. In the early and mid-1990s, most major cities in the country began to revitalize themselves -- renovating waterfront, building ballparks, turning warehouse space into loft apartments, etc. People, and younger ones in particular, had grown up in the suburbs and were so dead set against living there as adults that they were willing to spend money and risk some degree of their safety to not do so again. The fact that cities were beginning to clean themselves up made urban life seem all the more attractive.

1.) Globalization: Americans have literally outsourced our gang violence across the border to Mexico. The decrease in crime and violence in America cannot be seen as unrelated to the drastic upturn in violence in Mexico, where a war is being waged by various drug cartels over access to the American market. This is not unlike the gang crime we saw in urban areas in the 1980s, only now it's far more sophisticated, better funded and taking place in a country with far fewer law enforcement and economic resources to fight back.

All three of these reasons are inter-related, and perhaps it's unfair to rank them in order of importance, but I did so because they each represent essential ways of looking at the problem: #1 is the global or mega-economic outlook; #2 is the macro-economic outlook; and #3 is the micro-economic outlook, or how crime-fighting occurs street to street, house to house in America.

The great lesson to be learned here is that Americans tackled all three of these levels simultaneously beginning in the early 1990s: we changed the way we policed our cities, we changed the way we lived in our cities and we went after the supply with an aggressive counter-narcotics strategy that targeted the over-seas source. We now have less influence over level #1 then we did 20 years ago, but have made such huge strides with levels #2 and #3 that we've been able to mitigate this lack of control.

The War on Crime has largely been a success where two other domestic struggles -- the Wars on Drugs and Poverty -- have been failures. Given the current economic climate, it's probably time to look at the methods used during the War on Crime and see if they can be applied to the War on Poverty, or at least the War on Unemployment. If we look closely we can find a good deal of crossover.

There is already a great deal of intervention and activity by the state in levels #1 and #2, but it's important to recognize that level #3 is fairly under-served and this should be a problem because, according to every politician every, small business are the real job creators. Unfortunately, they are also responsible for most job losses, as well. Given that so much job loss and production occurs on the micro level, or the level of each individual small business, it's astonishing that there isn't more attention paid to it.

There's really no reason why we can't use statistical modeling to anticipate where unemployment will occur next. For example, if you're in a paper-making industry job in the state of Wisconsin, you're job isn't safe. Period. Now the last thing a struggling business in a dying industry wants to see is a government official stopping by and asking "So, how are you going to wind this down?" and this should in no way happen, but perhaps some kind of program can be created that slowly (and confidentially, so as not to frighten customers) transitions workers into new fields before jobs just suddenly evaporate.

These type of models have existed forever on Wall Street and investors use them all the time to evaluate industries and specific firms. "The Market" will always know who is dying well before the state, or anyone else for that matter, does. If we can "predict crime" then we should also be able to do the same with unemployment. I know there is a significant difference between the volume of data in each category, but I still think it can be done. If a mom and pop restaurant files three consecutive years worth of loses to the state DOR, it's probably not long for this world.

One of the ways police were able to curb murder rates in the 1990s was to anticipate retaliatory violence. They beefed up patrols in neighborhoods and even knocked on the doors of potential retaliators just to inform them they were being watched a little more carefully. (Some of the first criminological work into social networks helped develop this strategy). Civil libertarians blew a gasket from every quarter: everything from "racial profiling" on the left, to "big brother police state" on the right. Perhaps they were right, but those concerns are almost completely forgotten today. (Much of which had to do with the beat cops in rough neighborhoods spending years developing personal connections and goodwill in those communities. It was painstaking work that was literally conducted street by street, block by block and house by house.)

There will, of course, be fierce objections to this kind of anticipatory action. The civil libertarians of yesterday will be replaced by the economic libertarians of today, and this group has always enjoyed significantly more political power. These folks will cry "socialism" and worse. They also will have a point: when businesses fail, someone gains from the decrease in competition. It's important to understand that this is not a proposal to prop up failing businesses with state funds, but with help them wind down with "optional transitional support" to another line of work.

This is about moving people from one job to another before unemployment ever happens or an unemployment check is ever sent. One sentiment you'll hear often from the unemployed is that they don't need "job training" so much as they need "unemployment training," that is, instruction on how and where to look for work and fill down time productively. There are few things worse then looking for a job: it's a daunting, frightening and humiliating task, and when people are left to themselves they can easily be overwhelmed.

Again, this is going to require a sea change in how we view unemployment. Currently, the left sees the unemployed as victims of social and business circumstances, while the right sees them as either lazy or failures. Neither view is correct.

It's time we look at unemployment the same way we look at crime and to attack it like we attack crime. For this to work, any kind of municipal agency devoted to this task has to adopt the same principle police used in the roughest cities in America:
  • Developing close relationships with business owners in specific neighborhoods or communities so that they can understand their shifting employment needs, just as beat cops earned the trust of locals in rough neighborhoods.
  • Intervene at the early signs of trouble.
  • Demonstrate results professionally and consistently.
Essentially, what I'm recommending is the creation of a highly-trained force of economic "social workers" or better yet "agents" -- yes, in the Hollywood sense of the word -- for the unemployed. These would be people struggling business owners can turn to to help re-locate employees in the event of a closure with actual jobs. Think of these folks as Human Resources ninjas.

This wouldn't even necessarily have to be a government-run organization. It cold just as easily be a philanthropic organization in the same vein as, say, Teach for America. This organization could recruit from recent college graduates, drop them into cities and give them a plan to follow. A program like this would be almost ideal for future MBA students since the skill set required to be successful in this kind of occupation are immediately relevant to a future in business. (Plus, they would be observing, first hand, how businesses fail.) Ideally, this program would be a stepping stone to a much more lucrative job with one of the connections any given "agent" made in the private sector. This could create an incentive that will attract the best and brightest.

For centuries Americans viewed crime in almost strictly punitive terms: you do the crime, you get what's coming to you. Unfortunately, we've also viewed unemployment in similar terms. American started to tackle crime comprehensively in the 1990s. We threw the kitchen sink at the problem: We banned assault weapons and yet simultaneously passed concealed carry laws. We put 75,000 new cops on the streets (far more than was actually needed, but still 25% less than the 100,000 in the original plan). We started midnight basketball leagues and community watch organizations. We imprisoned scores of thousands of young people and yet finally started focusing on treatment for drug abusers.

Lane calls the drop in crime "the most important social trend of the past 20 years" in America. I actually think he's under-selling the accomplishment: it's nothing short of a contemporary Apollo project. Lane goes on to say:
Plunging crime rates also debunk conventional wisdom, left and right. Crime’s continued decline during the Great Recession undercuts the liberal myth that hard times force people into illegal activity — that, like the Jets in “West Side Story,” crooks are depraved on account of being deprived. Yet recent history also refutes conservatives who predicted in the early 1990s that minority teenage “superpredators” would unleash a new crime wave.

Government, through targeted social interventions and smarter policing, has helped bring down crime rates, confirming the liberal worldview. Yet solutions bubbled up from the states and municipalities, consistent with conservative theory. Contrary to liberal belief, incarcerating more criminals for longer periods probably helped reduce crime. Contrary to conservative doctrine, crime rates fell while Miranda warnings and other legal protections for defendants remained in place.

On the whole, though, what’s most striking about the crime decline is how little we know about its precise causes. Take the increase in state incarceration, which peaked at a national total of 1.4 million on Dec. 31, 2008. This phenomenon is probably a source of success in the war on crime — and its most troubling byproduct. But increased imprisonment cannot explain all, or most, of the decline: Crime rates kept going down the past two years, even as the prison population started to shrink. Crime fell in New York faster than in any other U.S. city over the past two decades — but New York locked up offenders at a below-average rate, according to Zimring’s new book, “The City That Became Safe.”
Looking for causes of the decline is, indeed, important, but I think the real take-away lesson is that we tried everything, regardless of ideological origin. This is not how we're attacking unemployment. We're neglecting the micro-economic level and it would not surprise me if we achieved the same decline in unemployment that we saw in crime if we adopted the same hands-on, house by house, person to person, go-to-the-unemployed-don't-wait-for-the-unemployed-to-come-to-you tactics.

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