links for 2008-02-28

• U.S. Economy and Monetary Policy - FRB - Kohn
• Are Chimps More Rational than Humans? - Scientific American
• The Importance of Economic Education and Financial Literacy - FRB - Mishkin
• Semiannual Monetary Policy Report to the Congress - FRB - Bernanke
• Does McCain’s Canal Zone Birth Rule Him Out? - New York Times
• Risk attitudes and unemployment - Stumbling and Mumbling
• Poverty line grossly underestimates needs of California's seniors - EurekAlert
• How Bob Ball Dominated Social Security Debate - Gene Sperling
• I’m Not Running for President, but ... - New York Times
• Federal Reserve Fuels Fire Without the Kindling - Caroline Baum
• Bush Vows to Veto a Mortgage Relief Bill - New York Times
• McCain in A Glass House - George F. Will
• Dollar hits new low as Fed signals rate cut - FT
• Banning Genetic Discrimination - J Street Blog

Comments

[anne]

http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article3419840.ece?print=yes

February 25, 2008

The Three Trillion Dollar War
By Joseph Stiglitz and Linda Bilmes

The Bush Administration was wrong about the benefits of the war and it was wrong about the costs of the war. The president and his advisers expected a quick, inexpensive conflict. Instead, we have a war that is costing more than anyone could have imagined.

The cost of direct US military operations -- not even including long-term costs such as taking care of wounded veterans -- already exceeds the cost of the 12-year war in Vietnam and is more than double the cost of the Korean War.

And, even in the best case scenario, these costs are projected to be almost ten times the cost of the first Gulf War, almost a third more than the cost of the Vietnam War, and twice that of the First World War. The only war in our history which cost more was the Second World War, when 16.3 million U.S. troops fought in a campaign lasting four years, at a total cost (in 2007 dollars, after adjusting for inflation) of about $5 trillion. With virtually the entire armed forces committed to fighting the Germans and Japanese, the cost per troop (in today's dollars) was less than $100,000 in 2007 dollars. By contrast, the Iraq war is costing upward of $400,000 per troop.

Most Americans have yet to feel these costs. The price in blood has been paid by our voluntary military and by hired contractors. The price in treasure has, in a sense, been financed entirely by borrowing. Taxes have not been raised to pay for it -- in fact, taxes on the rich have actually fallen. Deficit spending gives the illusion that the laws of economics can be repealed, that we can have both guns and butter. But of course the laws are not repealed. The costs of the war are real even if they have been deferred, possibly to another generation.

On the eve of war, there were discussions of the likely costs. Larry Lindsey, President Bush's economic adviser and head of the National Economic Council, suggested that they might reach $200 billion. But this estimate was dismissed as "baloney" by the Defense Secretary, Donald Rumsfeld. His deputy, Paul Wolfowitz, suggested that postwar reconstruction could pay for itself through increased oil revenues. Mitch Daniels, the Office of Management and Budget director, and Secretary Rumsfeld estimated the costs in the range of $50 to $60 billion, a portion of which they believed would be financed by other countries. (Adjusting for inflation, in 2007 dollars, they were projecting costs of between $57 and $69 billion.) The tone of the entire administration was cavalier, as if the sums involved were minimal.

Even Lindsey, after noting that the war could cost $200 billion, went on to say: "The successful prosecution of the war would be good for the economy." In retrospect, Lindsey grossly underestimated both the costs of the war itself and the costs to the economy. Assuming that Congress approves the rest of the $200 billion war supplemental requested for fiscal year 2008, as this book goes to press Congress will have appropriated a total of over $845 billion for military operations, reconstruction, embassy costs, enhanced security at US bases, and foreign aid programs in Iraq and Afghanistan.

As the fifth year of the war draws to a close, operating costs (spending on the war itself, what you might call "running expenses") for 2008 are projected to exceed $12.5 billion a month for Iraq alone, up from $4.4 billion in 2003, and with Afghanistan the total is $16 billion a month. Sixteen billion dollars is equal to the annual budget of the United Nations, or of all but 13 of the US states. Even so, it does not include the $500 billion we already spend per year on the regular expenses of the Defense Department. Nor does it include other hidden expenditures, such as intelligence gathering, or funds mixed in with the budgets of other departments....

[Holly W.]

This potential argument about McCain's birthplace is pretty silly. I've always assumed "natural born" meant a person had been a US citizen all his/her life, as opposed to having been a citizen of some other country first and requiring naturalization, a la Governor Schwarzenegger. If McCain were actually disqualified from the presidency for this reason, it would be ridiculous.

[reason]

Holly W.
You could argue of course that it rules out caesarians.-) A la McBeth.

[reason]

Well actually McDuff. Maybe the founders knew their Shakespeare.

[Holly W.]

Good point; I forgot about that! Time to reread Macbeth, I guess.

[anne]

http://www.nytimes.com/2008/02/28/opinion/28cohen.html

February 28, 2008

The Long Haul in Afghanistan
By ROGER COHEN

If troops are to stay until 2013, as the NATO secretary general suggests, the alliance will need re-branding.

[Forever warring....]

[anne]

http://shakespeare.mit.edu/Tragedy/macbeth/macbeth.4.1.html

1605

The Tragedy of Macbeth
By William Shakespeare

Act IV. Scene I.

A cavern. In the middle, a boiling cauldron.

MACBETH

How now, you secret, black, and midnight hags!
What is't you do?

ALL

A deed without a name.

MACBETH

I conjure you, by that which you profess,
Howe'er you come to know it, answer me:
Though you untie the winds and let them fight
Against the churches; though the yesty waves
Confound and swallow navigation up;
Though bladed corn be lodged and trees blown down;
Though castles topple on their warders' heads;
Though palaces and pyramids do slope
Their heads to their foundations; though the treasure
Of nature's germens tumble all together,
Even till destruction sicken; answer me
To what I ask you.

First Witch

Speak.

Second Witch

Demand.

Third Witch

We'll answer.

First Witch

Say, if thou'dst rather hear it from our mouths,
Or from our masters?

MACBETH

Call 'em; let me see 'em.

First Witch

Pour in sow's blood, that hath eaten
Her nine farrow; grease that's sweaten
From the murderer's gibbet throw
Into the flame.

ALL

Come, high or low;
Thyself and office deftly show!

Thunder. First Apparition: an armed Head

MACBETH

Tell me, thou unknown power,--

First Witch

He knows thy thought:
Hear his speech, but say thou nought.

First Apparition

Macbeth! Macbeth! Macbeth! beware Macduff;
Beware the thane of Fife. Dismiss me. Enough.

Descends

MACBETH

Whate'er thou art, for thy good caution, thanks;
Thou hast harp'd my fear aright: but one
word more,--

First Witch

He will not be commanded: here's another,
More potent than the first.

Thunder. Second Apparition: A bloody Child

Second Apparition

Macbeth! Macbeth! Macbeth!

MACBETH

Had I three ears, I'ld hear thee.

Second Apparition

Be bloody, bold, and resolute; laugh to scorn
The power of man, for none of woman born
Shall harm Macbeth.

Descends

MACBETH

Then live, Macduff: what need I fear of thee?
But yet I'll make assurance double sure,
And take a bond of fate: thou shalt not live;
That I may tell pale-hearted fear it lies,
And sleep in spite of thunder.

Thunder. Third Apparition: a Child crowned, with a tree in his hand

What is this
That rises like the issue of a king,
And wears upon his baby-brow the round
And top of sovereignty?

ALL

Listen, but speak not to't.

Third Apparition

Be lion-mettled, proud; and take no care
Who chafes, who frets, or where conspirers are:
Macbeth shall never vanquish'd be until
Great Birnam wood to high Dunsinane hill
Shall come against him.

Descends

MACBETH

That will never be
Who can impress the forest, bid the tree
Unfix his earth-bound root? Sweet bodements! good!
Rebellion's head, rise never till the wood
Of Birnam rise, and our high-placed Macbeth
Shall live the lease of nature, pay his breath
To time and mortal custom. Yet my heart
Throbs to know one thing: tell me, if your art
Can tell so much: shall Banquo's issue ever
Reign in this kingdom?

ALL

Seek to know no more.

[anne]

Being unfortunate enough to have set the name of a terrible global warming denier into Google, I find not only a series of purposely deceiving reports on global temperature, but the deceiving reports have been spread everywhere and spread with a vehemence through the conservative press. There is simply no concern for truth from a significant by of the press, which allows for favored frauds to gain a fearsome following.

Nonetheless, 2007 was another year showing clearly the more frightening reality of global warming. The year was the second warmest since 1880, which is more impressive in that conditions were not favorable for such a recording.

[anne]

Even in the New York Times, the shameful John Tierney could not wait to report that contrary to predictions by a group of British scientists 2007, was not the hottest year ever recorded. Never bothering to write on how comparatively hot the year had obviously been when writing on January 1, 2008 nor how precisely hot the year had been when the data became fully available and why finding the year was the second hottest should have been a surprise.

Scientists at the University of Washington are now arguing that the arctic ice sheets have reached the point at which they will indeed disappear.

[anne]

http://www.guardian.co.uk/world/2008/feb/28/iraq.afghanistan/print

February 28 2008

The True Cost of War: In 2005, a Nobel prize-winning economist began the painstaking process of calculating the true cost of the Iraq war. In his new book, he reveals how short-sighted budget decisions, cover-ups and a war fought in bad faith will affect us all for decades to come.
By Aida Edemariam - Guardian

Fitful spring sunshine is warming the neo-gothic limestone of the Houses of Parliament, and the knots of tourists wandering round them, but in a basement cafe on Millbank it is dark, and quiet, and Joseph Stiglitz is looking as though he hasn't had quite enough sleep. For two days non-stop he has been talking - at the LSE, at Chatham House, to television crews - and then he is flying to Washington to testify before Congress on the subject of his new book. Whatever their reservations - and there will be a few - representatives will have to listen, because not many authors with the authority of Stiglitz, a Nobel prize-winner in economics, an academic tempered by four years on Bill Clinton's Council of Economic Advisers and another three as chief economist at the World Bank (during which time he developed an influential critique of globalisation), will have written a book that so urgently redefines the terms in which to view an ongoing conflict. The Three Trillion Dollar War reveals the extent to which its effects have been, and will be, felt by everyone, from Wall Street to the British high street, from Iraqi civilians to African small traders, for years to come.

Some time in 2005, Stiglitz and Linda Bilmes, who also served as an economic adviser under Clinton, noted that the official Congressional Budget Office estimate for the cost of the war so far was of the order of $500bn. The figure was so low, they didn't believe it, and decided to investigate. The paper they wrote together, and published in January 2006, revised the figure sharply upwards, to between $1 and $2 trillion. Even that, Stiglitz says now, was deliberately conservative: "We didn't want to sound outlandish."

So what did the Republicans say? "They had two reactions," Stiglitz says wearily. "One was Bush saying, 'We don't go to war on the calculations of green eye-shaded accountants or economists.' And our response was, 'No, you don't decide to fight a response to Pearl Harbour on the basis of that, but when there's a war of choice, you at least use it to make sure your timing is right, that you've done the preparation. And you really ought to do the calculations to see if there are alternative ways that are more effective at getting your objectives. The second criticism - which we admit - was that we only look at the costs, not the benefits. Now, we couldn't see any benefits. From our point of view we weren't sure what those were."

Appetites whetted, Stiglitz and Bilmes dug deeper, and what they have discovered, after months of chasing often deliberately obscured accounts, is that in fact Bush's Iraqi adventure will cost America - just America - a conservatively estimated $3 trillion. The rest of the world, including Britain, will probably account for about the same amount again. And in doing so they have achieved something much greater than arriving at an unimaginable figure: by describing the process, by detailing individual costs, by soberly listing the consequences of short-sighted budget decisions, they have produced a picture of comprehensive obfuscation and bad faith whose power comes from its roots in bald fact. Some of their discoveries we have heard before, others we may have had a hunch about, but others are completely new - and together, placed in context, their impact is staggering. There will be few who do not think that whatever the reasons for going to war, its progression has been morally disquieting; following the money turns out to be a brilliant way of getting at exactly why that is.

Next month America will have been in Iraq for five years - longer than it spent in either world war. Daily military operations (not counting, for example, future care of wounded) have already cost more than 12 years in Vietnam, and twice as much as the Korean war. America is spending $16bn a month on running costs alone (ie on top of the regular expenses of the Department of Defence) in Iraq and Afghanistan; that is the entire annual budget of the UN. Large amounts of cash go missing - the well-publicised $8.8bn Development Fund for Iraq under the Coalition Provisional Authority, for example; and the less-publicised millions that fall between the cracks at the Department of Defence, which has failed every official audit of the past 10 years. The defence department's finances, based on an accounting system inaccurate for anything larger than a grocery store, are so inadequate, in fact, that often it is impossible to know exactly how much is being spent, or on what.

This is on top of misleading information: in January 2007 the administration estimated that the much-vaunted surge would cost $5.6bn. But this was only for combat troops, for four months - they didn't mention the 15,000-28,000 support troops who would also have to be paid for. Neither do official numbers count the cost of death payments, or caring for the wounded - even though the current ratio of wounded to dead, seven to one, is the highest in US history. Again, the Department of Defence is being secretive and misleading: official casualty records list only those wounded in combat. There is, note Stiglitz and Bilmes in their book, "a separate, hard-to-find tally of troops wounded during 'non-combat' operations" - helicopter crashes, training accidents, anyone who succumbs to disease (two-thirds of medical evacuees are victims of disease); those who aren't airlifted, ie are treated on the battlefield, simply aren't included. Stiglitz and Bilmes found this partial list accidentally; veterans' organisations had to use the Freedom of Information Act in order to get full figures (at which point the ratio of injuries to fatalities rises to 15 to one). The Department of Veterans Affairs, responsible for caring for these wounded, was operating, for the first few years of the war, on prewar budgets, and is ruinously overstretched; it is still clearing a backlog of claims from the Vietnam war. Many veterans have been forced to look for private care; even when the government pays for treatment and benefits, the burden of proof for eligibility is on the soldier, not on the government. The figure of $3 trillion includes what it will cost to pay death benefits, and to care for some of the worst-injured soldiers that army surgeons have ever seen, for the next 50 years.

By way of context, Stiglitz and Bilmes list what even one of these trillions could have paid for: 8 million housing units, or 15 million public school teachers, or healthcare for 530 million children for a year, or scholarships to university for 43 million students. Three trillion could have fixed America's social security problem for half a century. America, says Stiglitz, is currently spending $5bn a year in Africa, and worrying about being outflanked by China there: "Five billion is roughly 10 days' fighting, so you get a new metric of thinking about everything."

I ask what discoveries Stiglitz found the most disturbing. He laughs, somewhat mirthlessly. "There were actually so many things - some of it we suspected, but there were a few things I couldn't believe." The fact that a contractor working as a security guard gets about $400,000 a year, for example, as opposed to a soldier, who might get about $40,000. That there is a discrepancy we might have guessed - but not its sheer scale, or the fact that, because it is so hard to get insurance for working in Iraq, the government pays the premiums; or the fact that, if these contractors are injured or killed, the government pays both death and injury benefits on top. Understandably, this has forced a rise in sign-up bonuses (as has the fact that the army is so desperate for recruits that it is signing up convicted felons). "So we create a competition for ourselves. Nobody in their right mind would have done that. The Bush administration did that ... that I couldn't believe. And that's not included in the cost the government talks about."

Then there was the discovery that sign-up bonuses come with conditions: a soldier injured in the first month, for example, has to pay it back. Or the fact that "the troops, for understandable reasons, are made responsible for their equipment. You lose your helmet, you have to pay. If you get blown up and you lose your helmet, they still bill you." One soldier was sued for $12,000 even though he had suffered massive brain damage. Some families have had to buy their children body armour, saving the government costs in the short term; those too poor to afford it sustain injuries that the government then has to pay for. Then there's the fact that it was not until 2006, when Robert Gates replaced Donald Rumsfeld as secretary of defence, that the DOD agreed to replace Humvees with mine-resistant ambush-protected (MRAP) armoured vehicles, which are much more able to repel roadside bombs; until that time, IEDs killed 1,500 Americans. "This kind of penny-wise, pound-poor behaviour was just unbelievable."

Yet on another level, Stiglitz is unsurprised, because such decisions are of a piece with the thoroughgoing intellectual inconsistency of the Bush administration. The general approach, he says, has been a "pastiche of corporate bail-outs, corporate welfare, and free-market economics that is not based on any consistent set of ideas. And this particular kind of pastiche actually contributed to the failures in Iraq." There are the well-rehearsed reasons: ignoring international democratic processes while advocating democracy; pushing forward liberalisation before Iraq was ready. Stiglitz's twist on this was the emails he was receiving from the United States Agency for International Development, complaining about the Treasury being obstructive. "They were saying, 'Can you help us? Because we're trying to get businesses to work, but the US Treasury is trying to tighten credit, so there's no money in this country.' "

Then, of course, there is the administration's insistence on "sole-source bidding" - awarding vast, multi-year contracts to Halliburton, for example, instead of putting them out to tender. "An academic might say, 'How can you be a free market, yet demand single-source contracting?'" asks Stiglitz now, mildly - but this is not the way the current administration operates. We know quite a lot now about contractors' excesses, but it is their economic effect that Stiglitz and Bilmes are interested in, and this seems often to have been malign. Free market ideals had, of course, to apply to Iraq, if not to Halliburton (which received at least $19.3bn in single-source contracts), so Paul Bremer, head of the Coalition Provisional Authority, abolished many tariffs on imports, and capped corporate and income tax. Predictably, this led to general asset-stripping, and exposed Iraqi firms to free competition - meaning that many closed down, putting yet more people out of work. ("The benefits of privatisation and free markets in transition economies are debatable, of course," write Stiglitz and Bilmes in their book; a model of understatement, given that Stiglitz is famous for spelling out the harm sustained by poor countries in his book Globalisation and its Discontents (2002), and lost his job at the World Bank for outspokenly making the argument in the first place.) Many reconstruction jobs, in alignment with US procurement law, went to expensive American firms rather than cheaper Iraqi ones - a further waste of resources (one painting job, for example, cost $25m instead of $5m); these American firms, looking to keep their own costs down and profit margins high, imported cheap labour from such countries as Nepal - even though, at this point, one in two Iraqi men was out of work.

This is not, then, pure neocon ideology at work, says Stiglitz: "Ideology of convenience is a better description." It is an ideology illustrated even more clearly in another fact that Stiglitz can't believe - that Bush put through tax cuts while going to war. In Stiglitz and Bilmes's reading, this was downright underhand. Raising taxes, and resorting to the rhetoric of shared sacrifice used in the world wars, for example, would have made Americans more aware of exactly what the war was costing them, and would have provoked opposition sooner. The solution was to borrow the money, at interest of couple of hundred billion dollars a year, which, by 2017, will add up to another trillion dollars or so. This government will be gone in nine months; subsequent administrations, and generations, will have to pay it off.

At the same time, Stiglitz and Bilmes argue, the Federal Reserve colluded in this obfuscation, because it "kept interest rates lower than they otherwise might have been, and looked the other way as lending standards were lowered, thereby encouraging households to borrow more - and spend more." Alan Greenspan, by this account, encouraged people to take on variable-rate mortgages, even as household savings rates went negative for the first time since the Depression. Individuals were taking on unprecedented debt at the same time as a long housing bubble made them feel wealthy (and less concerned with derring-do abroad) - a scenario echoed on this side of the Atlantic.

As we now know, this couldn't continue - in part because of yet another effect of the war. Whatever the much argued reasons for bombing Baghdad, cheap oil has not been the result. In fact, the price of oil has climbed from $25 a barrel to $100 in the past five years - great for oil companies, and oil-producing countries, who, along with the contractors, are the only beneficiaries of this war, but not for anyone else....

[anne]

http://delong.typepad.com/sdj/2008/02/todays-must-rea.html

February 28, 2008

Today's Must Read: Nir Rosen, "The Myth of the Surge"
By Brad DeLong

"Hoping to turn enemies into allies, U.S. forces are arming Iraqis who fought with the insurgents. But it's already starting to backfire. A report from the front lines of the new Iraq..."

[anne]

http://www.rollingstone.com/politics/story/18722376/the_myth_of_the_surge/print

March 6, 2008

The Myth of the Surge
By NIR ROSEN

It's a cold, gray day in December, and I'm walking down Sixtieth Street in the Dora district of Baghdad, one of the most violent and fearsome of the city's no-go zones. Devastated by five years of clashes between American forces, Shiite militias, Sunni resistance groups and Al Qaeda, much of Dora is now a ghost town. This is what "victory" looks like in a once upscale neighborhood of Iraq: Lakes of mud and sewage fill the streets. Mountains of trash stagnate in the pungent liquid. Most of the windows in the sand-colored homes are broken, and the wind blows through them, whistling eerily. House after house is deserted, bullet holes pockmarking their walls, their doors open and unguarded, many emptied of furniture. What few furnishings remain are covered by a thick layer of the fine dust that invades every space in Iraq. Looming over the homes are twelve-foot-high security walls built by the Americans to separate warring factions and confine people to their own neighborhood. Emptied and destroyed by civil war, walled off by President Bush's much-heralded "surge," Dora feels more like a desolate, post-apocalyptic maze of concrete tunnels than a living, inhabited neighborhood. Apart from our footsteps, there is complete silence.

My guide, a thirty-one-year-old named Osama who grew up in Dora, points to shops he used to go to, now abandoned or destroyed: a barbershop, a hardware store. Since the U.S. occupation began, Osama has watched civil war turn the streets where he grew up into an ethnic killing field. After the fall of Saddam, the Americans allowed looters and gangs to take over the streets, and Iraqi security forces were stripped of their jobs. The Mahdi Army, the powerful Shiite paramilitary force led by the anti-American cleric Muqtada al-Sadr, took advantage of the power shift to retaliate in areas such as Dora, where Shiites had been driven from their homes. Shiite forces tried to cleanse the district of Sunni families like Osama's, burning or confiscating their homes and torturing or killing those who refused to leave.

"The Mahdi Army was killing people here," Osama says, pointing to a now-destroyed Shiite mosque that in earlier times had been a cafe and before that an office for Saddam's Baath Party. Later, driving in the nearby district of Baya, Osama shows me a gas station. "They killed my uncle here. He didn't accept to leave. Twenty guys came to his house, the women were screaming. He ran to the back, but they caught him, tortured him and killed him." Under siege by Shiite militias and the U.S. military, who viewed Sunnis as Saddam supporters, and largely cut out of the Shiite-dominated government, many Sunnis joined the resistance. Others turned to Al Qaeda and other jihadists for protection.

Now, in the midst of the surge, the Bush administration has done an about-face. Having lost the civil war, many Sunnis were suddenly desperate to switch sides — and Gen. David Petraeus was eager to oblige. The U.S. has not only added 30,000 more troops in Iraq — it has essentially bribed the opposition, arming the very Sunni militants who only months ago were waging deadly assaults on American forces. To engineer a fragile peace, the U.S. military has created and backed dozens of new Sunni militias, which now operate beyond the control of Iraq's central government. The Americans call the units by a variety of euphemisms: Iraqi Security Volunteers (ISVs), neighborhood watch groups, Concerned Local Citizens, Critical Infrastructure Security. The militias prefer a simpler and more dramatic name: They call themselves Sahwa, or "the Awakening."

At least 80,000 men across Iraq are now employed by the Americans as ISVs. Nearly all are Sunnis, with the exception of a few thousand Shiites. Operating as a contractor, Osama runs 300 of these new militiamen, former resistance fighters whom the U.S. now counts as allies because they are cashing our checks. The Americans pay Osama once a month; he in turn provides his men with uniforms and pays them ten dollars a day to man checkpoints in the Dora district — a paltry sum even by Iraqi standards. A former contractor for KBR, Osama is now running an armed network on behalf of the United States government. "We use our own guns," he tells me, expressing regret that his units have not been able to obtain the heavy-caliber machine guns brandished by other Sunni militias.

The American forces responsible for overseeing "volunteer" militias like Osama's have no illusions about their loyalty....

[The Baron]

Not to take away from anne's continuing news coverage, but lets not forget the tragedy at home:

Report: 1 In Every 99 Americans Now Behind Bars

For the first time in history, more than one in every 100 American adults is in jail or prison, according to a new report tracking the surge in inmate population.

The report, released Thursday by the Pew Center on the States, said the 50 states spent more than $49 billion on corrections last year, up from less than $11 billion 20 years earlier. The rate of increase for prison costs was six times greater than for higher education spending, the report said.

Using updated state-by-state data, the report said 2,319,258 adults were held in U.S. prisons or jails at the start of 2008 -- one out of every 99.1 adults, and more than any other country in the world.

By contrast, in mid 2002 the ratio was 1 in 142, with the prison population surpassing 2 million for the first time.

[anne]

Surely important.

[anne]

http://www.bostonreview.net/BR32.4/loury.html

July, 2007

Why Are So Many Americans in Prison? Race and the transformation of criminal justice
By Glenn C. Loury

The early 1990s were the age of drive-by shootings, drug deals gone bad, crack cocaine, and gangsta rap. Between 1960 and 1990, the annual number of murders in New Haven rose from six to 31, the number of rapes from four to 168, the number of robberies from 16 to 1,784—all this while the city's population declined by 14 percent. Crime was concentrated in central cities: in 1990, two fifths of Pennsylvania's violent crimes were committed in Philadelphia, home to one seventh of the state's population. The subject of crime dominated American domestic-policy debates.

Most observers at the time expected things to get worse. Consulting demographic tables and extrapolating trends, scholars and pundits warned the public to prepare for an onslaught, and for a new kind of criminal—the anomic, vicious, irreligious, amoral juvenile "super-predator." In 1996, one academic commentator predicted a "bloodbath" of juvenile homicides in 2005.

And so we prepared. Stoked by fear and political opportunism, but also by the need to address a very real social problem, we threw lots of people in jail, and when the old prisons were filled we built new ones.

But the onslaught never came. Crime rates peaked in 1992 and have dropped sharply since. Even as crime rates fell, however, imprisonment rates remained high and continued their upward march. The result, the current American prison system, is a leviathan unmatched in human history....