Homicidal Homeless Unemployed Housewives: Why Crime No Longer Correlates With Economic Decline

Submitted by Tyler Durden

With demographics playing an ever more important role in economic outlooks and debate, one of the topics that (luckily) has not had need of much mention, is the role of crime in society, and especially in a society gripped by the worst recession in 70 years. The logical expectation would be that crime would have surged in a replica of what happened to New York (and the broader country) in the mid-70s. Oddly enough, and perhaps a main reason why this is not discussed as much, is because this particular recession has not seen the traditional pick up in the crime rate (doubly curious, considering that unlike Wall Street, police departments, and their staffing levels, are usually among the first to get the funding axe). As BNY's Nicholas Colas points out: "Given the severity of the recession, you might be rightfully inclined to think there’s been a least a slight uptick in crime, but surprisingly enough, you’d be wrong. With national crime statistics from the FBI now available through 2009 – which includes the worst of the recession so far – we point out that not only has crime not gotten worse, but it’s actually continued improve quite nicely (in most states, at least). Moreover, those surprisingly positive trends are part of an overall structural decrease in crime that began in the early 1990s.The structural decline in crime that began in the early 1990s explains why the crime spike during the aftermath of the dot-com bubble and 9/11 was less pronounced than previous recessions, but it’s quite surprising that even given the severity of the financial crisis, crime rates expanded on previous declines. Yes, there are many theories (outlined below) that partially explain this, but the results are as puzzling as they are welcome. Not even theft and burglary, which have historically increased during recessions (see Charts 2 and 3) showed the slightest uptick." Yet with those behind bars not counted in the unemployment rate equation, is a violent (pardon the pun) surge in crime precisely what the administration is hoping for?...

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