Showing posts with label crime. Show all posts
Showing posts with label crime. Show all posts
Thursday, December 11, 2014
Monday, November 10, 2014
The Haiku of Finance for 11/10/14
Approaching audit
Criminals shred documents
Hiding what they stole
Criminals shred documents
Hiding what they stole
Tuesday, August 19, 2014
The Cost-Benefit Framework for Police Militarization in America
Police militarization is on many Americans' minds after the recent unrest in Ferguson, Missouri. One very important aspect of this discussion is hard to find but deserves a public airing. The cost of police militarization is hidden deep in budget lines at all levels of government. Taxpayers bear this cost and should ask what benefits they receive in return.
The Defense Logistics Agency (DLA) Law Enforcement Support Office (LESO) administers the DOD 1033 Program, which provides free materiel to local law enforcement agencies that request it. The LESO notes that it transferred over $449M worth of materiel in 2013. That's about $1.43 per capita, assuming the entire cost was funded with current year appropriations. The program began with the NDAA for FY1997, so any comparison with results should start at that year.
The materiel in question includes armored vehicles, body armor, night vision equipment, surveillance devices, and other implements intended for use in high-threat tactical situations. It is appropriate to consider whether situations requiring such equipment have occurred with more or less frequency since 1997. It is also appropriate to consider the cost of crime as an opportunity cost that more robust policing should mitigate. Slate notes that intermittent efforts to calculate the costs of various crimes have periodically filled our knowledge gaps. I did not see statistics in that article for the cost of high-threat tactical situations. Mark Cohen's landmark 1998 study "The Monetary Value of Saving a High-Risk Youth" is focused on the cost-benefit relationship in crime prevention, not high-threat tactical situations.
Let's consider other tools. The RAND Corporation's Cost of Crime Calculator allows citizens to compare the costs of crime in their neighborhoods. RAND's "Hidden in Plain Sight" study concludes that investing in police personnel (i.e., the number and quality of the humans in the force) has a favorable cost-benefit result. It does not specifically cover high-threat tactical situations or use of materiel, but it points the way to understanding how to frame them. "Hidden in Plain Sight" compares the annual cost of crime in a locality to that area's gross municipal product (GMP), aka gross metropolitan product. Analysts can thus isolate the cost of a singular high-threat tactical situation, such as arson damages from a riot or sales lost due to store closures during a protest, and compare it to GMP. We can then compare that financial loss to the cost of DOD 1033 Program materiel used to mitigate said situation to determine a cost-benefit relationship.
Analysts have national data standards on crime costs. The FBI's Uniform Crime Reports aggregate crime data for all US municipalities, now updated with the UCR Data Tool for searches. The NIH study "The Cost of Crime to Society" outlines standards for sensitivity analysis and endogenizes intangible costs that will likely follow most violent criminal events. Analysis of high-threat tactical situations should adjust the NIH's base cases for the cost of DOD 1033 Program materiel committed to violent crime incidents.
This framework is only the beginning of a cost-benefit analysis. Every municipality should run the numbers for DOD 1033 Program materiel deployed in response to local violent incidents. High-threat tactical situations such as riots, bomb threats, and active shooter hostage situations are infrequent but dramatic. Anecdotal reporting suggests that police forces are inclined to use military-grade gear to perform routine functions, with little regard for utility, fuel cost, or maintenance needs. Serving a search warrant is obviously cheaper on foot than in an armored personnel carrier. Municipal police forces should ask themselves whether their community's criminal statistics justify requests for heavy gear that they may never need. Citizens in a free society have a right to ask whether a gas-gazzling surplus MRAP has a better cost-benefit result than a standard police cruiser.
The Defense Logistics Agency (DLA) Law Enforcement Support Office (LESO) administers the DOD 1033 Program, which provides free materiel to local law enforcement agencies that request it. The LESO notes that it transferred over $449M worth of materiel in 2013. That's about $1.43 per capita, assuming the entire cost was funded with current year appropriations. The program began with the NDAA for FY1997, so any comparison with results should start at that year.
The materiel in question includes armored vehicles, body armor, night vision equipment, surveillance devices, and other implements intended for use in high-threat tactical situations. It is appropriate to consider whether situations requiring such equipment have occurred with more or less frequency since 1997. It is also appropriate to consider the cost of crime as an opportunity cost that more robust policing should mitigate. Slate notes that intermittent efforts to calculate the costs of various crimes have periodically filled our knowledge gaps. I did not see statistics in that article for the cost of high-threat tactical situations. Mark Cohen's landmark 1998 study "The Monetary Value of Saving a High-Risk Youth" is focused on the cost-benefit relationship in crime prevention, not high-threat tactical situations.
Let's consider other tools. The RAND Corporation's Cost of Crime Calculator allows citizens to compare the costs of crime in their neighborhoods. RAND's "Hidden in Plain Sight" study concludes that investing in police personnel (i.e., the number and quality of the humans in the force) has a favorable cost-benefit result. It does not specifically cover high-threat tactical situations or use of materiel, but it points the way to understanding how to frame them. "Hidden in Plain Sight" compares the annual cost of crime in a locality to that area's gross municipal product (GMP), aka gross metropolitan product. Analysts can thus isolate the cost of a singular high-threat tactical situation, such as arson damages from a riot or sales lost due to store closures during a protest, and compare it to GMP. We can then compare that financial loss to the cost of DOD 1033 Program materiel used to mitigate said situation to determine a cost-benefit relationship.
Analysts have national data standards on crime costs. The FBI's Uniform Crime Reports aggregate crime data for all US municipalities, now updated with the UCR Data Tool for searches. The NIH study "The Cost of Crime to Society" outlines standards for sensitivity analysis and endogenizes intangible costs that will likely follow most violent criminal events. Analysis of high-threat tactical situations should adjust the NIH's base cases for the cost of DOD 1033 Program materiel committed to violent crime incidents.
This framework is only the beginning of a cost-benefit analysis. Every municipality should run the numbers for DOD 1033 Program materiel deployed in response to local violent incidents. High-threat tactical situations such as riots, bomb threats, and active shooter hostage situations are infrequent but dramatic. Anecdotal reporting suggests that police forces are inclined to use military-grade gear to perform routine functions, with little regard for utility, fuel cost, or maintenance needs. Serving a search warrant is obviously cheaper on foot than in an armored personnel carrier. Municipal police forces should ask themselves whether their community's criminal statistics justify requests for heavy gear that they may never need. Citizens in a free society have a right to ask whether a gas-gazzling surplus MRAP has a better cost-benefit result than a standard police cruiser.
Friday, June 27, 2014
Thursday, October 11, 2012
Wednesday, July 25, 2012
Why There Will Be No Serious Prosecution Of Libor Fraud
The latest brew-ha-ha in the news is the revelation that hot shots at TBTF banks colluded to suppress published rates for Libor. The nonsense you may hear about prosecutions is much ado about nothing. There will be no serious prosecutions of anyone above mid-level supervisor on a handful of trading desks. Those trading desks that are targeted will be those that are not central to the government's funding needs; i.e., Goldman Sachs and JPMorgan Chase are certainly exempt. Those few low-level traders that are indicted will be thrown under the bus by colleagues because they are not members of pedigreed families and did not join the proper social clubs at Ivy League schools. No senior bank executive will ever face jail time for collusion, price fixing, restraint of trade, or any other flavor of securities-related criminality.
You may be wondering how I can make this claim. It's simple. Read today's news that the Secretary of the Treasury knew of Barclays' participation in Libor fixing while he ran the New York Fed. Building a case for widespread, top-level collusion would require law enforcement agencies to subpoena the sitting Treasury Secretary (and perhaps his predecessor) and force him to testify against his peers in banking. That is not going to happen. No one with intimate ties to the Fed can be prosecuted for financial wrongdoing in plutocratic America. That would strike at the heart of the Fed's credibility, and the Fed is the one bedrock institution whose credibility cannot be in question as the U.S. economy heads into the second inning of Great Depression 2.0. It will need every ounce of trust it can finagle out of the markets to execute QE3 within the short window of opportunity presented by a severe equity market crash and foreign run on the dollar. I can question the Fed because I don't matter to our ruling elite.
Fed and Treasury officials have the equivalent of get-out-of-jail-free cards as long as the TBTF insolvency crisis goes without resolution. The same goes for senior executives at those banks; they are part of our country's ruling class and are therefore irreplaceable. After all, who would take their places in the local country club dining rooms if they could no longer attend caviar tastings due to incarceration? It certainly won't be you, dear reader.
You may be wondering how I can make this claim. It's simple. Read today's news that the Secretary of the Treasury knew of Barclays' participation in Libor fixing while he ran the New York Fed. Building a case for widespread, top-level collusion would require law enforcement agencies to subpoena the sitting Treasury Secretary (and perhaps his predecessor) and force him to testify against his peers in banking. That is not going to happen. No one with intimate ties to the Fed can be prosecuted for financial wrongdoing in plutocratic America. That would strike at the heart of the Fed's credibility, and the Fed is the one bedrock institution whose credibility cannot be in question as the U.S. economy heads into the second inning of Great Depression 2.0. It will need every ounce of trust it can finagle out of the markets to execute QE3 within the short window of opportunity presented by a severe equity market crash and foreign run on the dollar. I can question the Fed because I don't matter to our ruling elite.
Fed and Treasury officials have the equivalent of get-out-of-jail-free cards as long as the TBTF insolvency crisis goes without resolution. The same goes for senior executives at those banks; they are part of our country's ruling class and are therefore irreplaceable. After all, who would take their places in the local country club dining rooms if they could no longer attend caviar tastings due to incarceration? It certainly won't be you, dear reader.
Monday, May 21, 2012
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