Normative Narratives


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Criminal Justice Deformed

In past blogs I wrote about the “Prison Paradox“–the idea that incarceration in America has gotten so out of control that it may actually increase crime by creating a poverty trap and perpetuating prison culture.

I wrote about the topic from the vantage point of an enlightened society that was seemingly moving in the right direction on the issue. While this is still the case at the state level, a recent Justice Department directive by Attorney General Jeff Session threatens to undo recent progress:

In an eight-paragraph memo, Mr. Sessions returned to the guidance of President George W. Bush’s administration by calling for more uniform punishments — including mandatory minimum sentences — and instructing prosecutors to pursue the harshest possible charges. Mr. Sessions’s policy is broader than that of the Bush administration, however, and how it is carried out will depend more heavily on the judgments of United States attorneys and assistant attorneys general as they bring charges.

The policy signaled a return to “enforcing the laws that Congress has passed,” Mr. Sessions said Friday at the Justice Department, characterizing his memo as unique for the leeway it afforded prosecutors.

“They deserve to be un-handcuffed and not micromanaged from Washington,” he said. “It means we are going to meet our responsibility to enforce the law with judgment and fairness.”

Mr. Sessions’s memo replaced the orders of former Attorney General Eric H. Holder Jr., who in 2013 took aim at drug sentencing rules. He encouraged prosecutors to consider the individual circumstances of a case and to exercise discretion in charging drug crimes. In cases of nonviolent defendants with insignificant criminal histories and no connections to criminal organizations, Mr. Holder instructed prosecutors to omit details about drug quantities from charging documents so as not to trigger automatically harsh penalties.

People of all races use drugs at roughly same rate, but minorities are disproportionately imprisoned for drug related offenses. Meanwhile, “White America” is currently experiencing the well documented “opioid epidemic”. Drug abuse, treatment, and incarceration should be issues that transcend racial barriers.

On the micro level, drug related criminal justice reform that prioritizes treatment over prison can keep families together. It can keep people in the labor force and in productive society, instead of exposing them to hardened criminals in prison (potentially turning minor offenders into career criminals). Even when prison doesn’t “harden” someone, difficulties finding employment can lead to recidivism (re-incarceration) among ex-cons.

On the macro level it saves money on incarceration and welfare programs. As the “War on Drugs” is no longer achieving its goal–reducing crime–what these funds are spent on is largely irrelevant. Liberals would probably like to see more social programs and public goods. Conservatives would probably like to see more defense spending or a reduction in government debt. This debate can be had once the savings are realized and the socially damaging policies are reversed.

Attorney General Session’s directive claims to give judges more freedom, but it does the opposite. All Holder’s directive did was allow judges to consider the facts of the case before delivering a sentence. It did not prevent them from doling out severe sentences when the situation dictated it. Session’s directive takes this freedom away from judges.

There is no significant public support for this stricter rule. 14 States Attorneys General have written a letter asking Sessions to rescind the rule. Rand Paul has reintroduced bipartisan legislation to ease mandatory minimum sentences, which would override the Session ruling. Unfortunately, based on the current political climate, I wouldn’t count on such legislation getting passed anytime soon.


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Understanding Conservative Ideology on Economic Opportunity–“I Didn’t Need It” & “I Didn’t Get It”

I was blessed with an incredibly supportive family, in both emotional and financial terms–I was and still am very lucky. Still I faced many obstacles growing up, so I can only imagine the difficulties faced by others. To err is human, particularly for young people without positive role models. Those less fortunate have much less margin for error, meaning one screw-up (of which I had many) can derail their lives.

Both political parties claim they want to promote economic opportunity. Where the parties diverge, and understandably so considering how open the concept is to interpretation, is how to achieve “equality of opportunity”.

To progressive liberals, there can never be enough investment in economic opportunity. The lifecycle approach to human development stipulates that for one to reach their full potential, investments need to be made at every stage of life: nutritional food early in life to support physical and cognitive development, universal pre-K and good public schooling through high school, affordable college options and job (re)training programs into adulthood. All the while, affordable healthcare is needed to guard against the unforeseen and get people back on their feet.

All else equal, I think most people would agree these things are important–they certainly were in my life. Look at any well-to-do family and regardless of their political leanings, you will see parents making these investments to ensure their kids have the best shot at succeeding in life (nepotism aside).

Where many conservatives claim they draw the line is how these programs will be paid for. But it is not only in the name of fiscal responsibility that conservatives balk at such programs. If that was the case, they would not have elected a President whose policies are expected to increase government debt by trillions of dollars over the next decade.

Some conservatives may actually fear more competition, and therefore actively resist policies that promote equality of opportunity. But such people, I think, represent a small minority of conservatives.

Many conservatives I know are good, hard working people. They believe they are promoting the best interests of the poor, and that liberal policies are creating a sort of poverty trap by encouraging laziness and discouraging hard work. All the aforementioned investments in young people are nice to have, so long as people have worked hard and are able to afford them. But how can we demand that something that is outside a child’s control–their parent’s economic situation–determine their access to the tools to success?

My understanding of conservative ideology on economic opportunity, beyond the veneer of fiscal responsibility, has been forming for some time. But it truly crystallized when I read about Dr. Ben Carson’s Secretary of HUD confirmation hearing:

…if confirmed by the Senate, he would enter public service with a background like few other cabinet officials in history, shaped profoundly by a childhood when public assistance meant survival and public housing was all around him.

Rather than embrace the programs that once sustained his family and the families around him, he has resolutely rejected them, adopting standard Republican beliefs that welfare fosters dependency.

The idea that social safety net programs foster dependency can be broken down into two arguments–“I didn’t need it” and “I didn’t get it”.

“I Didn’t Need It”

With a population well over 300 million people, America has people all along the “capacity to overcome hardship” spectrum.

At one extreme there are people who have resigned themselves to a life of antisocial behavior, and no amount of intervention can change that. Liberals have to come to terms with the fact that even well developed, well intended government programs have their limitations. It is also unreasonable to expect the taxpayer to pay for the raft of programs needed to replicate the safety net my family provided me.

At the other extreme there are people like Dr. Carson, who can overcome any obstacle and reach extraordinary heights (often conveniently forgetting the role government programs played in their success). It is, however, unrealistic to expect everyone to have Ben Carson’s intellectual capacity and resilience. Conservatives must place the bar at a realistic level, or else the “equality” in “equality of opportunity” will never become a reality.

The extremes at either end of the spectrum represent a small portion of the population–think normal distribution on a bell curve (see below). The policies that promote equality of opportunity should not be tailored to either of these extremes, but rather towards a hypothetical “reasonable” person–one who wants to succeed, is receptive to and grateful for help, and can progress through life with minimal setbacks (keeping in mind that no one is perfect).

normadist

It is also important to understand that inadequate investment is not necessarily money saved. There are costs associated with underinvestment, mainly:

  • Lower future earnings.According to one [UNICEF] study conducted over a 20-year period, disadvantaged children who participated in quality early development programmes as toddlers later went on to make up to 25 per cent more as adults than their peers who did not receive the same support.” This also means less tax revenue and higher spending on welfare programs in the future.
  • Higher future spending on our criminal justice system. In other words, higher crime and a less safe country for all Americans. While I am in no way condoning a life of crime in the face of poverty, that does not stop it from being the life some lead.

These negative consequences should factor into how much we, as a country, are willing to invest in promoting equality of opportunity. Isn’t a dollar spent enabling one to realize their potential better than a dollar spent dealing with the negative consequences of systematic underinvestment?

Social immobility in America shows that more work remains to be done. Recognizing that anecdotal stories of rags-to-riches does not mean that we have achieved “equality of opportunity” is a good starting point. After all, accepting there is a problem is the first step towards finding a solution.

“I Didn’t Get It”

This is, in my opinion, a less defensible position. At least those in the “I didn’t need it” camp can claim that further investment is not needed. The “I didn’t get it” camp is just bitter; instead of asking themselves “would this be a good program?”, they are just sour because it didn’t exist for them.

But shaming these people does no good, it only drives them further into their intransigence. Therefore, it is up to progressive politicians to sell programs that promote equality of opportunity as something that benefits everyone, not just direct recipients.

People must be made to understand that proposed policies will help people of all races who have fallen behind in the modern economy. To this end policies and programs that promote opportunity should be race-blind and socioeconomic based, to counter the “us versus them” mentality behind much conservative opposition.

Progressive politicians must also learn to bridge generational divides. One way to do this is to frame adequate investments in today’s youth as a means of paying for the Social Security and Medicare benefits that many upcoming retirees are depending on.

Understanding as an Avenue Towards Progress

It is frustratingly difficult to prioritize between programs that promote opportunity at different stages of life. On one hand it is more politically viable and cost-effective to invest in programs that target young children. On the other hand it takes longer for these investments to pay off, and politics is inherently shortsighted. While investments should probably be skewed towards early-life interventions, they cannot fully substitute for programs targeting older groups (such as affordable college and job retraining).

There are elements of truth in both liberal and conservative ideologies. Hopefully through greater understanding we can stop talking past each other, and start talking to and working with one another. I know this may sound sound like hippy-dippy kumbaya bullshit, but it is really an appeal to pragmatism and foresight. Over the past 8 years hyperpartisanship has led to ineffective governance. As the government failed to respond to people’s needs, people lost faith in the government. This paved the way for a regressive and ineffectual demagogue to take power, which ultimately benefits no one.

I understand that one party–the G.O.P–was a much larger culprit in creating this hyperpartisan environment. As the new minority party the Democrats have to decide whether they will continue driving our government down this dangerous path, or try rise above it. The G.O.P. went low, will the Democrats go high? Do they even want to? I sure hope they do; politics should be a means to an end, not an end in itself.

I leave you with this Franklin Delano Roosevelt quote from a speech delivered in 1932, whose words still ring as true today as the day they were spoken:

The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something. The millions who are in want will not stand by silently forever while the things to satisfy their needs are within easy reach.

This is not to say the Democratic party should be anti-intellectual, or willfully ignore historic experience and scientific consensus. It does not mean it should not stick to its principles and have red-lines. If Trump’s first week in office is any indication, there will be plenty to oppose without being blindly obstructionist. By carefully picking its battles, the Democratic party will have more political capital and public support when there is a core issue it really must fight for.


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Economic Outlook: The High Cost(S) of Being Poor

I have previously written about different poverty traps in America, including our outdated criminal justice system (the “prisoner paradox”) and the developmental impacts of stress passed from mother to child. If these poverty traps seemed a bit abstract, consider a more traditional poverty trap–poor people shut out of traditional credit markets and relying on “payday” loans:

The Consumer Financial Protection Bureau, the agency created at President Obama’s urging in the aftermath of the financial crisis, took its most aggressive step yet on behalf of consumers on Thursday, proposing regulations to rein in short-term payday loans that often have interest rates of 400 percent or more.

“We are taking an important step toward ending the debt traps that are so pervasive in both the short-term and longer-term credit markets,” Richard Cordray, the director of the Consumer Financial Protection Bureau, said in a statement on Thursday.

The borrowing patterns speak to a stark reality underpinning the roughly $46 billion payday loan industry: The working poor in America, a group with virtually no savings and little access to traditional bank loans, borrow to cover basic expenses.

In drafting the rules, according to interviews with people briefed on the matter, the Consumer Financial Protection Bureau, and its director, Mr. Cordray, wrestled with how to protect some of the most vulnerable consumers, without choking off credit entirely.

Driving the proposal was an analysis of 15 million payday loans by the consumer bureau that found that few people who have tapped short-term loans can repay them. Borrowers took out a median of 10 loans during a 12-month span, the bureau said. More than 80 percent of loans were rolled over or renewed within a two-week period.

Nearly 70 percent of borrowers use the loans, tied to their next paycheck, to pay for basic expenses, not one-time emergencies — as some within the payday lending industry have claimed.

Until now, payday lending has largely been regulated by the states. The Consumer Financial Protection Bureau’s foray into the regulation has incited concerns among consumer advocates and some state regulators who fear that payday lenders will seize on the federal rules to water down tougher state restrictions. Fifteen states including New York, where the loans are capped at 16 percent, effectively ban the loans.

Martin Wegbreit, a legal aid lawyer in Virginia, called payday loans “toxic,” noting that “they are the leading cause of bankruptcy right behind medical and credit card debt.”

The current economic model of low minimum wages and high payday loan fees drives people into poverty, triggering welfare payments. The U.S. government is basically transferring welfare funds to the payday loan industry.

Proposed CFPB regulations don’t go far enough, a maximum cap on loan repayments is needed. There is room for generous profit margins to compensate for the risk of lending to low income individuals without creating a “debt-trap”.

The stress and time dedicated to satisfying debt collectors amplifies the cost of being poor. Surely it would be more effective to provide access to credit, instead of wringing societies least financially secure through the payday loan system. Perhaps more money would be spent on its intended purposes, instead of paying off predatory loans.

Part of the solution could be using Post Offices as low cost banks for the poor. Sure there would be costs associated with effectively providing financial services, but the physical infrastructure and a trustworthy brand already exist. Furthermore, such a plan would provide renewed social value to an American Institution constantly under budgetary scrutiny.

Postal Banks would inject competition into the credit market, leading to better services at more competitive rates. Even if Post Office banks operated at a loss (say, giving preferential rates to low income borrowers for certain purposes), this loss may be more than offset by reduced spending on entitlement programs. More research on the cross-section between welfare recipients and payday loan borrowers is needed.

It is not a question of which of these poverty traps exists–they all exist and for some people are mutually reinforcing. This is one of the reasons social mobility is such a difficult  issue to address. Countering these different reinforcing poverty traps require the right mix of regulation, fiscal policy (progressive taxation, adequate spending on welfare programs and public services), and livable minimum wages.

In the end, lower income Americans need to overcome negative perceptions of government and vote in large numbers. Again the time crunch associated with poverty rears its ugly head; voting isn’t just a decision to go to the polls, it is also a time commitment that many cannot afford.


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Transparency Report: Stress–America’s Inter-Generational Poverty Trap

The High Costs of Being Poor in America: Stress, Pain, and Worry:

Reported stress levels are higher on average in the U.S. than in Latin America. Importantly, the gap between the levels of the rich and poor is also much greater, with the U.S. poor reporting the highest levels of stress of all cohorts.

Pain, worry, sadness, and anger (reported as experienced the day before or not) are also all significantly higher among low income cohorts than among wealthy ones, while reported satisfaction with life as a whole is significantly lower, according to our analysis of Gallup data:

The cost and pain of poverty in the U.S. less about basic goods like water and electricity than nonmaterial factors: insecurity, stress, lack of opportunity and discrimination.

Stress impacts cognitive ability. Not only do poorer people have less resources to invest in human capital, due to higher levels of stress they may benefit less from every dollar they do invest. This is the stress-based poverty trap.

Furthermore, evidence suggests that this stress-based poverty trap may be inter-generational:

Stressful experiences for expectant mothers can have detrimental effects on their unborn children:

  1. “Prenatal insults,” such as harassment and discrimination, to pregnant Californian women with Arabic names after 9/11 resulted in higher rates of low birth weight babies, according to research by epidemiologist Diane Lauderdale. Babies who gestated in the weeks after 9/11 and who were given distinctive, Arabic names experienced a two-fold increase in underweight births compared to those who gestated before. Babies born to mothers with non-Arabic names experienced no such effect.
  2. Children in utero during a 40-day ice storm crisis in Québec  had lower scores on tests of vocabulary and psychological measures at age 5.
  3. Using the timing of Ramadan as a natural experiment, economists Douglas Almond and Bhashkar Mazumder find persistent effects of prenatal fasting on disability outcomes as an adult.


Why? One strong possibility is that mothers send biological signals to their fetuses, providing information about the outside world and thereby helping prioritize different aspects of fetal development. Some scientists now believe this process actually alters which genes get “switched on” in newborns.


Are We All “Born Equal”?

Ideally, people would only have children when they are financially secure and emotionally ready. In reality this is not the case, and I for one cannot think of a way of achieving this ideal without grossly invading peoples privacy. Given this reality, how can we reduce stress levels in pregnant women?

One obvious past-due reform is legislating paid maternity leave. The U.S. is the only developed country in the world that does not mandate paid maternity leave. Considering the potential link between maternal and fetal stress levels, perhaps maternity leave should begin earlier in pregnancy. This is not only a women’s rights issue, it is a social mobility issue as well.

Other avenues for progress could be informational. Poorer women are less likely to use contraception or have abortions. Abortions are also less common among poorer women, reflecting both the cost and perhaps the percieved stigma surrounding the practice (a source of stress itself). In  “Freakonomics” Steve Dubner and Steve Levner attribute dropping crime rates in the 90s primarily to the legalization of abortions in the 70s (Roe v. Wade). While abortion may be controvertial, the effects of having unwanted children are far more costly to society.   

When considering intentional pregnancy, it is common knowledge that women take great care concerning what they ingest during pregnancy. However, notably less attention is paid to stress levels. Should doctors be informing women about the impact of stress on their unborn children? Should they be promoting stress reducing activities like prenatal yoga / meditation?

Promoting equality of opportunity and social mobility requires support at all points in life. Some people need support from birth throughout young-adulthood, others need retraining later in life, while others at certain intervals in-between. This is why we see so many different programs and proposals targeting different age cohorts: universal pre-K, subsidized meals / greater school choice in primary and secondary schools, free community college / Pell Grants / “student bill of rights“.

While it may be ideal to promote policies that reduce everyone’s insecurity, early intervention is less politically contentious. A growing body of evidence suggests the earlier the intervention, the greater the “return on investment”. Furthermore, one cannot reasonably appeal to the  “personal accountability” argument when opposing welfare programs targeting unborn / young children.

Promoting equality of opportunity and social mobility are undoubtedly difficult and expensive, but they are at the root of the American Dream. Furthermore, enabling everyone to realize their full potential spurs innovation and economic growth, and would save money later in life on welfare and criminal justice spending.

As the natural and social sciences advance and become more cooperative, insights such as this will continue to present themselves. As Americans, it is up to us to reject anti-intellectualism and false budgetary restraints, and elect leaders who will turn these insights into effective public policies.


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Transparency Report: Debt, Depression, and College Drop-Outs

The graphs in this blog come from a recent report co-authored by the Pell Institute and The University of Pennsylvania:

graduation rates

In addition to the direct (tuition, room and board, cost of living) and “opportunity cost” (foregone wages) of attending college, there is mounting evidence that suggests there is an emotional / psychological cost associated with taking out student loans.

Despite the intense interest in this issue among researchers, this is the first paper that attempts to understand the emotional cost of carrying student loan debt.  This question is, in fact, more fundamental than the others being posed in this genre of research, since it could help to explain the mechanism through which debt may be affecting other outcomes (i.e. emotional health, graduation rates).

Based on their analysis, the authors report, “cumulative student loans were significantly and inversely associated with better psychological functioning.”  In other words, individuals with more student debt reported lower levels of psychological health, when other things are held constant (including occupation, income, education and family wealth).  The effect is statistically significant, but it is quite small.  They also find that “the amount of yearly student loans borrowed was inversely associated with psychological functioning,” which implies that taking on debt is emotionally costly for students.

Unfortunately, this emotional / psychological “cost” seems to be affecting a greater number of incoming college students:

High numbers of students are beginning college having felt depressed and overwhelmed during the previous year, according to an annual survey released on Thursday, reinforcing some experts’ concern about the emotional health of college freshmen.

The survey of more than 150,000 students nationwide, “The American Freshman: National Norms Fall 2014,” found that 9.5 percent of respondents had frequently “felt depressed” during the past year, a significant rise over the 6.1 percent reported five years ago. Those who “felt overwhelmed” by schoolwork and other commitments rose to 34.6 percent from 27.1 percent.

Not coincidentally, the frequency and magnitude of student loan debt has increased greatly during this period of increasing student unease and depression, according to data released by the NY Fed:

More U.S. students continued to borrow larger sums for their college education last year, according to data from the Federal Reserve Bank of New York, while total student loan balances tripled over the last decade.

At 43 million, the number of student borrowers jumped 92 percent from 2004 to 2014, while their average balances climbed 74 percent, according to New York Fed researchers. The average balance was some $27,000.

Obviously correlation does not prove causation. But given the logical link between debt, depression, and dropping-out of school, these trends cannot be purely coincidental–more research on the subject is needed.

“It’s a public health issue,” said Dr. Anthony L. Rostain, a psychiatrist and co-chairman of a University of Pennsylvania task force on students’ emotional health. “We’re expecting more of students: There’s a sense of having to compete in a global economy, and they think they have to be on top of their game all the time. It’s no wonder they feel overwhelmed.”

While I cannot speak personally about the burden of student loan debt, I have experienced depression first hand, and understand how being depressed could make one more likely to drop out of school.

Depression is particularly difficult to battle in a college atmosphere. The pressure to maintain a social life, despite anxiety and financial issues, can reinforce negative feelings associated with depression. The abundance of drugs and alcohol certainly does not help the situation either.

The general pessimism which accompanies depression compromises a person’s ability to clearly assess long term goals, such as completing a degree. Depression also affects ones cognitive abilities, hampering academic outcomes.

I can only imagine the pressure on someone who is both depressed and has student loan debt to consider; some combination of the two surely accounts for more low-income drop-outs than is currently recognized.

I had to take a semester off to get myself back in the proper state of mind to complete my degree; not everyone has this luxury. However, everyone should have the support needed to realize their educational and emotional potential.

Due to my personal experiences and knowledge of economics, I vehemently support President Obama’s proposed Community College plan. Lower income students could learn if pursuing a bachelor’s degree is “for them” without taking out tens of thousands of dollars in loans, likely leading to better emotional, educational, and economic outcomes.

Furthermore, community colleges are more likely to have the the social counseling and financial advising services missing from for-profit universities, which predominantly attract low income students.

collegetypebyincome

The Obama administration is attempting break the vicious cycle of student debt, emotional suffering, and dropping-out of college. Dropping out of college with student loan debt in a competitive global economy is a poverty trap for low income individuals, and has become a drag on economic growth in the macro.

By expanding mental health parity through the ACA, getting treatment for depression is no longer a luxury reserved for the wealthy. If our lawmakers pass a free community college bill, the synergy between these two public policies would go a long way towards bringing equity to America’s higher education system and reinvigorating the American Dream.


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Economic Outlook: Free College Education For All (Including Prison Inmates)

Taking the above quote to the extreme, defending something because it is “how we currently do it” is an even more “dangerous” way of thinking.

America’s public college and prison systems are currently flawed. Prison reform has gained traction because it is a cost saving measure. Providing free public higher education, as we used to do in this country, has not gained similar traction, because it would require additional funding.

There is an area where these two issues–prison reform and free higher education–intersect; offering college degree programs to prison inmates (which, again, used to be a much more common practice):

IN February, Gov. Andrew M. Cuomo of New York announced plans to underwrite college classes in 10 state prisons, building on the success of privately funded and widely praised programs like the Bard Prison Initiative. Mr. Cuomo pointed out that inmates who got an education had a much better chance of finding a job and were much less likely to menace their neighbors after release. He noted that the cost — $5,000 per inmate per year — would be a bargain compared with the $60,000 it costs to incarcerate a prisoner for a year. 

The punch lines of the opposing politicians (mostly Republicans, but some Democrats) all struck the same theme: How dare the governor offer taxpayer money to educate convicted criminals when decent citizens skimp and borrow to send their kids to college? “It should be ‘do the crime, do the time,’ not ‘do the crime, earn a degree,’ ” said George D. Maziarz, a state senator from western New York. “It is simply beyond belief to give criminals a competitive edge in the job market over law-abiding New Yorkers who forgo college because of the high cost.” In other words, let criminals be criminals.

The bureaucracies that run prisons are called departments of “corrections” for a reason. This is at least as important as the first two purposes, because nearly 95 percent of the incarcerated are eventually released back into society.

Alas, nearly half of those released are returned to prison within three years for committing new crimes. Clearly we are not doing a good job of “correcting.”

This is not a bleeding-heart cause. Leading conservatives and red-state politicians have supported prison college programs as a matter of public safety and fiscal prudence. A RAND meta-analysis of 58 studies concluded that inmates who participated in these programs were 43 percent less likely to return to a life of crime; even assuming that the most redeemable inmates are the likeliest to sign up, this is an incredible return on a modest investment.

Experts who have studied the American way of crime and punishment far longer than I have tell me, to quote Michael P. Jacobson, a veteran corrections official who heads a public policy institute for the City University of New York, that they see “almost a complete disconnect between what we know and what we do.”

“The influence of high-profile crimes, fear of crime, issues of race, the acquisition of cheap political capital — all have had far more influence on criminal justice policy than what we know works, or what is fair or just,” Mr. Jacobson told me.

America has greatly reduced access to college and graduate degree programs for prison inmates. Coinciding with mass incarceration, this policy change has effectively turned prison into a uniquely American poverty-trap.

Free public education in America has become almost non-existent, and the results are not pretty. There is roughly $900B-$1T dollars in outstanding student loan debt in America. One reason for this is that college tuition increases have far outstripped inflation over the past few decades.

People correctly argue that law abiding citizens should not have to pay exorbitant college tuition rates, while prisoners receive a free college education. However, this argument misses the point; a free public college education should be available to everyone! 

Aside from the obvious socioeconomic benefits associated with greater access to higher education (both in and out of prison), such a policy would also help reign in increasing tuition costs at private Universities. Make these institutions compete with a free alternative, and the price of college tuition should drop for those who still desire a private education.

This “us vs. them” mentality is indicative of public policy discourse in America, and it is a shame. Instead of debating the costs and benefits of policy reforms, we are stuck in a circle of spite; “I didn’t have this benefit, why should someone else!”. 

This “argument” misses the point of policy reform–whether or not people believe they would have been better off with said reform (spiteful responses suggests that people do, on some level, believe that said reform would have helped them)? It precludes truly progressive policy reforms, such as providing everyone with access to free public higher education. Of course this would require a greater public investment (although it doesn’t necessarily have to increase the deficit); the questions are whether the benefits outweigh the costs, and how those costs will be financed.

American politics has become a class battle between those below the poverty line and those barely above it. All the while, inequality increases and the American Dream becomes just that, a dream.


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Transparency Report: Prison Paradox Redux

https://normativenarratives.files.wordpress.com/2013/07/fc669-750.jpg

A few months back, I blogged about what I termed the “Prison Paradox“:

“The number of Americans in state and federal prisons has quintupled since 1980, and a major reason is that prisoners serve longer terms than before”

The shift to tougher penal policies three decades ago was originally credited with helping people in poor neighborhoods by reducing crime. But now that America’s incarceration rate has risen to be the world’s highest, many social scientists find the social benefits to be far outweighed by the costs to those communities.”

“‘Raymond V. Liedka, of Oakland University in Michigan, and colleagues have found that the crime-fighting effects of prison disappear once the incarceration rate gets too high. “If the buildup goes beyond a tipping point, then additional incarceration is not going to gain our society any reduction in crime, and may lead to increased crime,’ Dr. Liedka said.”

“‘Prison has become the new poverty trap,’ said Bruce Western, a Harvard sociologist. ‘It has become a routine event for poor African-American men and their families, creating an enduring disadvantage at the very bottom of American society.’

Long-term lockup rates, and poor job prospects for ex-cons, great a “prison culture” in poor neighborhoods. Older ex-con’s believe a return to jail is inevitable, young children believe jail is inevitable (because of what they have witnessed growing up); this pessimism leads to poor decision making and ultimately creates a self-fulfilling cycle of poor prospects, poor decision making, and subsequent prison terms (and perpetuates the inter-generational aspect of the poverty trap).

As the federal and state governments look for areas to make spending cuts, it would be beneficial for policymakers to revisit reducing prison sentences for certain crimes. It seems that shorter prison sentences would save money today via a lower prison bill, and save us money in the future in the form of lower future entitlement spending. Less spending on long prison terms and greater spending on social programs (which enhance ones future prospects and thus makes crime a less attractive alternative) should combine to break the “prison poverty trap”.

Evidence of a drop in U.S. prison population suggests that law-makers are beginning to take a more pragmatic approach towards punishing criminal activity:

“The prison population in the United States dropped in 2012 for the third consecutive year, according to federal statistics released on Thursday, in what criminal justice experts said was the biggest decline in the nation’s recent history, signaling a shift away from an almost four-decade policy of mass imprisonment.”

“The number of inmates in state and federal prisons decreased by 1.7 percent, to an estimated 1,571,013 in 2012 from 1,598,783 in 2011, according to figures released by the Bureau of Justice Statistics, an arm of the Justice Department. Although the percentage decline appeared small, the fact that it followed decreases in 2011 and 2010 offers persuasive evidence of what some experts say is a “sea change” in America’s approach to criminal punishment.”

“In recent years, tightened state budgets, plummeting crime rates, changes in sentencing laws and shifts in public opinion have combined to reverse the trend. Experts on prison policy said that the continuing decline appears to be more than a random fluctuation.”

“Most observers agree that the recession has played a role in shrinking prison populations.”

“Though the trend may have begun out of a need for belt-tightening, it had grown into a national effort to rethink who should go to prison and for how long”

Changes in state and federal sentencing laws for lower-level offenses like those involving drugs have played a central role in the shift, he and others said, with many states setting up diversion programs for offenders as an alternative to prison. And some states have softened their policies on parole, no longer automatically sending people back to prison for parole violations.”

“Changing public attitudes are also a major driver behind the declining prison numbers. Dropping crime rates over the last 20 years have reduced public fears and diminished the interest of politicians in running tough-on-crime campaigns. And public polls consistently show that Americans are now more interested in spending money on education and health care than on building more prisons.”

“A year or even two years is a blip and we shouldn’t jump to conclusions, but three years starts to look like a trend,” said Marc Mauer, executive director of the Sentencing Project, a nonprofit research group based in Washington. But he said that the rate of inmates incarcerated in the United States continued to be “dramatically higher” than in other countries and that the changes so far were “relatively modest compared to the scale of the problem.”

It should be emphasized that this is only the tip of the iceberg. But progress must start somewhere, and both empirical evidence and public opinion appear to have shifted the way that law-makers address criminal punishment.

Less money spent on prisons opens up fiscal space for crime prevention and deterrence programs.

Crime prevention programs hit on the root causes of criminal behavior– a combination of socio-economic realities and a criminal / prison culture that often makes a life of crime a self-fulfilling and then self-perpetuating reality. By investing more in schools, healthcare (including mental healthcare, which is unquestionably linked to anti-social and criminal behavior), and other social programs that promote meritocracy and social mobility, disenfranchised youths will have more reason to be optimistic and make long-term investments in themselves that reflect that optimism. By having less parents in jail and more at home, parental income and guidance can act as a substitute for gang affiliation and money from criminal activities.

Part of non-jail punishment for minor criminal activities should be education on the detrimental effects of crime on youth and society, so that those who are given a fresh chance pass on these lessons to a younger generation which looks up to them.

Crime deterrence involves education on the detrimental effects of crime on oneself and society (overlapping with crime prevention), and increased spending on police officers. Having more officers on the street makes crime a less appealing alternative (especially in an environment where alternatives actually exist), while also providing security for hard working innocent people (who ultimately pay not only for both operating prisons and police officers via taxation).

People need to be held responsible for their actions, but the punishment must fit the crime. Making an example of individuals in an attempt to deter future crime does not work. What it does is impose an unfair burden on both the tax-payer and creates a vicious cycle of socio-economic degeneration that disproportionately affects poor people and minorities.

Violent criminals and multiple offenders must be kept off the streets. But imposing long jail sentences on first-time-non-violent offenders and parole violators can be counter-productive, turning misguided individuals into career criminals.

In assessing the impacts of a more restrained and pragmatic approach to prison sentencing, we must wait for significant reductions in incarceration rates as well as a “time lag”, as human development is a dynamic process. For now, we can be optimistic that after decades of misguided policy, we seem to have hit a turning point.

“This is the beginning of the end of mass incarceration,” said Natasha Frost, associate dean of Northeastern University’s school of criminology and criminal justice.


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Economic Outlook: “American Winter”`

Yesterday a friend of mine, Adam Blejer, pointed me towards an HBO documentary, “American Winter”. He thought, rightfully so, that the message conveyed in the documentary was one that I may be interested in and have some insight on. Always eager to learn from my followers and get them involved, I looked into the documentary.

I should say now that I was unable to actually watch the documentary, as I do not have HBO on demand. What I was able to do was read the summary of the documentary by the producer, which can be found here. This actually helped me analyze the documentary more clearly for two reasons. One, I have the meat and potatoes of the documentary spelled out in front of me, I did not have to watch and take notes or worry about missing anything, it is all there for me to go back and check on. Second, I was able to see the underlying argument without getting emotionally wrapped up in the struggles of the people in the documentary. This would have made an unbiased critique difficult if not impossible.

Without further ado, an analysis of the documentarian’s message:

The first thing I analyzed was any message conveyed based on economic indicators. In the first paragraph, I saw something that could not look right. “Yet 46% of this country is living in poverty, or near poverty, and today we have the highest number of poor since we began keeping records.” This is a slight of word, as the official U.S. poverty rate as of 2011 was 15%–31% of that 46% may be living “near poverty”, but are not actually living in poverty.

One has to be careful, as poverty rates are based on a benchmark rate; set that rate too high and everyone is in poverty, set that rate too low and some people who are truly struggling to survive will not be counted. The census bureau is very transparent about how they find their numbers; an explanation can be found here. I will leave it up to you to determine whether the numbers are too high or too low, but that 46% was an obvious shock value number—many of those 31% living “near poverty” have much much more than even the “wealthy” in less developed countries.

Which brings me to my next point, about inequality in the U.S.: “The Gini coefficient is commonly used as a measure of inequality of income or wealth and is accepted as a fair method to compare income inequality in different countries.  According to America’s Gini coefficient of 0.450, the U.S. ranks near the extreme end of the inequality scale, comparable with Cameroon, Madagascar, Rwanda, Uganda and Ecuador.  China is significantly more equal than the U.S. with a Gini coefficient of 0.415, and India is leagues ahead of the U.S. on income inequality, with a Gini coefficient 0.368.  Even Russia is less unequal than the U.S., at 0.422 Gini.”

The Gini coefficient ranges from 0-1; the closer to 0 the more equally a countries income is distributed.The .45 number checks out, although it is significant lower once you account for taxes and transfers. There are structural issues that have lead to this inequality; low investment in social programs, preferential tax rates on capital gains and other subsidies which disproportionately go to the wealthy, and the decline of union power are all common examples.

However, there are notorious shortcomings for comparing Gini coefficients between countries. For one thing, the same Gini coefficient for two countries can mean different things. Whenever you aggregate numbers, information gets lost in that aggregation. Also, in some countries such as China and India, the most impoverished experience “extreme poverty”. While relative poverty of course exists everywhere, extreme poverty exists only in the developing world. For these reasons, it is irresponsible to say “The Gini coefficient…is accepted as a fair method to compare income inequality in different countries.” This is far from a consensus amongst academics and policy makers.

Next I examined the ethical argument over the welfare state, the “makers vs. takers” argument if you will. Paul Krugman has done a great job of highlighting how transfer programs tend to amount to inter-generational consumption smoothing; you borrow when you’re young, work and contribute when you’re in the prime of your life, and then retire and take from the system again. This formula has underpinned political economy and tax philosophy for decades if not centuries, and it works. In fact, there is really no alternative that works remotely as well in creating the opportunity for social mobility.

Here’s the filmmakers take on the subject:

“How can nearly half of our country be in such dire circumstances and yet our politicians chose this time of the most need in 80 years to cut budgets and social services all across the country?  It’s because there are such pervasive myths and stereotypes about those families who need help—they are lazy, they are takers, they are incapable, they made bad decisions—so we don’t need to care about them.  But as we made American Winter we found a very different story.  The families who we followed for this film are struggling, yet they are just like our friends, neighbors and members of our own family.  They are hardworking, loving folks who have had a bit of bad luck, a job loss, a health issue, a death of a parent, a handicapped child.  These events have set them back and then life becomes an uphill battle to get back on their feet again.”

This is a problem I tend to have with documentaries, is that they cherry pick information. Certainly some people who need help actually need it temporarily to help them get back on their feet. But you can be equally certain that there are some lazy people who rely on handouts their whole lives, people who “game the system”. It is because people see the world as black and white that it is so hard to work on reforms that can strengthen the welfare state and make it work more effectively. This is why politicians talk past each other, instead of deliberating and debating in order to come to reasonable compromises that work for the American people.

Another issue the summary touches on is the inter-generational nature of poverty; what economists refer to as poverty traps:

“In making American Winter we saw firsthand how stressed and scared these parents are everyday by the prospect of losing their homes, and by the daily struggle to pay their bills.  However, the most overwhelming part was seeing the kids who have lost hope for their future.   These kids see their parents work extremely hard, and the kids say to themselves, “we’re barely getting by everyday, how am I going to make it when I grow up?”  And losing that sense of optimism and hope does not bode well for a child’s future.”

“Studies show that it is cheaper to help families before they become homeless.  And it is cheaper to help families before the kids are traumatized by living with food and housing insecurity, because those kids don’t do as well in school and they are more likely to wind up on drugs or in the prison system.  Those costs to society will affect all of us for ten, twenty, thirty years to come.  Yet even though it is cheaper to help families, to get them to a place where they are stable and productive, we seem to turn a blind eye and tell these families that they are on their own.

Every one of us needs help at some time in our lives.  But the idea that families who need social services are “takers” is one of the most destructive myths of all.  The perception is that our tax system and our government disproportionally helps the less affluent at the expense of the wealthy.  In fact, the U.S. government spends $400 billion a year on tax policies intended to help families save and invest.  In 2010, the wealthiest 5% of taxpayers averaged a net benefit of $95,000 each, while the bottom 60% received an average benefit of $5 each.”

I have written about poverty traps many times here at NN, just search poverty traps in the search bar and you will see in how many different contexts poverty traps exist. I fully agree that it is cheaper and more effective to attack the root causes of poverty before they become a problem. I do not know the methodology the filmmakers use to come to their conclusion, but it fits into a general philosophy I have on the subject; that any money saved in the short run by cutting social programs will be dwarfed by increased future spending in the welfare and penal systems.

So while some of the figures and concepts the documentary pronounces may be a bit stretched (as is common with documentaries, as they are meant to have shock value), the overall message is one that I cannot (and do not wish to( refute. Income inequality is too high in America, and it is this way due to structural flaws in our fiscal and tax policies. Sequestration and other short term budget cuts are like putting a Band-Aid on a gunshot wound, it may stop the bleeding for a little but in the long run the problem will be worse.

Capital gains taxes remain too low, even as they have risen from 15 to 20% following the “fiscal cliff” deal. Joseph Stiglitz explains quite eloquently how this perpetuates financial bubbles and takes talent away from more sustainable fields (such as medicine, teaching, manufacturing; basically anything not associated with capital gains).

Meanwhile, no meaningful financial reform has taken place since the financial crisis. The same concept of “securitization” is beginning to rear its ugly head again. We must learn as a country from our past failures, and demand our elected officials enact policies that our in our best interests as a nation (I have often said that the only special interest group Congress should be worried about is the American people).

It is the job of the American people to hold their elected officials accountable, and vote for the politicians that support the policies that we as a nation know are right (or at least vote against politicians who support policies that have been tried and failed).


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Transparency Thursday: The Prison Paradox

It would seem natural that longer prison sentences would reduce crime. Given a stronger punishment, the “costs” of performing a crime should outweigh the benefits, causing a would-be criminal to rethink his actions and possibly decide against committing a crime. But there is another explanation of criminal activity; that for whatever reason the would be criminal simply does not have other viable options, therefore he will undertake a crime regardless of the potential punishment. In line with this view, recent evidence suggests that longer prison sentences do not have the desired crime-reducing effect:

“The shift to tougher penal policies three decades ago was originally credited with helping people in poor neighborhoods by reducing crime. But now that America’s incarceration rate has risen to be the world’s highest, many social scientists find the social benefits to be far outweighed by the costs to those communities.”

By pushing families into “inter-generational poverty traps” keeping criminals in jail for longer causes more crime, not less. Having people in jails, typically black males (4.8% of black males in the U.S. are in prison, compared to 1.9% of Hispanic men and 0.7% of white men), leads to many one parent families. These one parent families are more likely to turn out criminals; without adequate parental guidance and financial security, crime is often the only solution for young minorities.

“‘Prison has become the new poverty trap,’ said Bruce Western, a Harvard sociologist. ‘It has become a routine event for poor African-American men and their families, creating an enduring disadvantage at the very bottom of American society.’

Among African-Americans who have grown up during the era of mass incarceration, one in four has had a parent locked up at some point during childhood. For black men in their 20s and early 30s without a high school diploma, the incarceration rate is so high — nearly 40 percent nationwide — that they’re more likely to be behind bars than to have a job.

No one denies that some people belong in prison. Mr. Harris, now 47, and his wife, 45, agree that in his early 20s he deserved to be there. But they don’t see what good was accomplished by keeping him there for two decades, and neither do most of the researchers who have been analyzing the prison boom.

The number of Americans in state and federal prisons has quintupled since 1980, and a major reason is that prisoners serve longer terms than before”

“Raymond V. Liedka, of Oakland University in Michigan, and colleagues have found that the crime-fighting effects of prison disappear once the incarceration rate gets too high. “If the buildup goes beyond a tipping point, then additional incarceration is not going to gain our society any reduction in crime, and may lead to increased crime,” Dr. Liedka said.

The benefits of incarceration are especially questionable for men serving long sentences into middle age. The likelihood of committing a crime drops steeply once a man enters his 30s. This was the case with Mr. Harris, who turned his life around shortly after hitting 30.”

Long-term lockup rates, and poor job prospects for ex-cons, great a “prison culture” in poor neighborhoods. Older ex-con’s believe a return to jail is inevitable, young children believe jail is inevitable (because of what they have witnessed growing up); this pessimism leads to poor decision making and ultimately creates a self-fulfilling cycle of poor prospects, poor decision making, and subsequent prison terms (and perpetuates the inter-generational aspect of the poverty trap).

The ensuing prison sentence and related poverty trap has real social effects, according to some estimates:

“‘The social deprivation and draining of capital from these communities may well be the greatest contribution our state makes to income inequality,’ Dr. Braman said. ‘There is no social institution I can think of that comes close to matching it.’

Drs. DeFina and Hannon, the Villanova sociologists, calculate that if the mass incarceration trend had not occurred in recent decades, the poverty rate would be 20 percent lower today, and that five million fewer people would have fallen below the poverty line.

This story makes me think back to “Freakonomics“, the popular behavioral economics book by Steve Dubner and Stephen Lewitt. In the introduction of this book, the authors examine the reason for a marked drop in U.S. crime rates nationwide in the 1980s and 90s. They go over the obvious potential causes, stronger laws and incarceration penalties (and based on the time period, probably the same policies previously referenced in this story). Ultimately, the reason they come to for the drop in crime rates was completely unrelated to legal/penal policy; the legality and increasing number of abortions.

The argument was that most poorer families did not get abortions even though they did not want their children. These unwanted children were neglected, and unsurprisingly tended to become criminals. Once parents were given more power to determine when they had children, these unwanted children were never born to the benefit of society.

This story highlights an important aspect of any policy analysis. There will probably be unforeseen consequences to policy actions, both positive and negative. Longer prison sentences were meant to reduce crime, but they have not. Abortion legalization was supposed to be a civil liberty / social issue, but it ended up having a remarkable effect on crime rates. Often times, these unforeseen consequences of policy have a more dominant effect than the expected consequence. It is therefore important for politicians to remain open minded and constantly revisit the real world effects of a policy, regardless of how well that policy works in theory.

As the federal government looks for areas to make spending cuts, it would be beneficial for policymakers to revisit reducing prison sentences for certain crimes. It seems that shorter prison sentences would save money today via a lower prison bill, and save us money in the future in the form of lower future entitlement spending. Less spending on long prison terms and greater spending on social programs (which enhance ones future prospects and thus makes crime a less attractive alternative) should combine to break the “prison poverty trap”.

People need to be held responsible for their actions, but the punishment must fit the crime. Making an example of individuals in an attempt to deter future crime does not work. What it does is impose an unfair burden on both the tax-payer as well as the  family (children) of the incarcerated.

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