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In the City Journal, Heather Mac Donald reviews the success of conservative policies on crime and welfare.
…New York’s demolition of conventional thinking about crime was even more momentous. Since 1990, New York has experienced the largest and longest sustained drop in street crime of any big city in the developed world. In less than a generation, many major felonies have fallen 80 percent or more. New York did this by rejecting everything that the criminology and social-work professions counseled about crime. Police Chief William Bratton announced in 1994 that the police, not some big-government welfare program, would lower crime by 10 percent in just one year. He not only met his goal, he bested it—by ruthlessly holding precinct commanders accountable for the safety of their beats, by the rigorous analysis of crime data, and by empowering street cops to intervene in suspicious behavior before a crime actually happened.
Just as the liberal philosophy of exempting the poor from bourgeois standards of behavior set up a vicious cycle of fatherlessness, crime, and dependency, the conservative philosophy of universal standards set up a virtuous cycle of urban renovation. With crime in free fall across New York in the 1990s, the tourism and hospitality industries boomed, triggering demand for the low-skilled welfare mothers whom welfare reform was nudging into the workplace. Businesses moved back into formerly violence-plagued areas, creating more jobs. Neighborhoods were transformed.
…The national crime drop of 41 percent since 1991 is also the longest and largest national decline in modern history, one wholly unforeseen by criminologists. It was made possible by the increased incarceration rate, which achieved its maximum effect in the 1990s, and by the spread of New York–style data-driven policing. Most significant is that the national crime rate has fallen in each of the last three years, putting the final nail in the coffin of the liberal conceit that a bad economy drives otherwise law-abiding individuals into crime. …
In the Exchequer, Kevin Williamson comments on Texas’ projected budget deficit and how the adults in government there handled a similar situation in 2003.
…Texas doesn’t do shortfalls. Texas starts from scratch: Every year is basically Year Zero when it comes to the state budget — there is no assumption that next year’s funding will match or exceed this year’s, and the state’s constitution explicitly forbids any legislature to tie the hands of a subsequent legislature, financially or otherwise. When necessary, Texas implements zero-baseline budgets, in order to keep the state living within its means…
…In 2003, Governor Perry and Texas Republicans took the state’s budget baseline to zero, and told state agencies to write new budgets, based on what they actually needed to spend to accomplish their missions, rather than based on increasing by 3 percent or 4 percent or 30 percent or 40 percent what they spent last year. And the Republicans handled the politics pretty well: Instead of calling state agency chiefs down to the legislature to be dressed down by pompous elected types or denouncing them from the governor’s office, they had a bunch of what must have been drearily tedious private meetings with them, and helped them to sweat their budgets down in a rigorous but respectful way. It worked. Texas balanced the books, and the place does not look like Afghanistan.
…Texas’s low-B.S. approach has had some salubrious effects, as I’ve documented here and here. It also left Texas with surpluses that allowed the state to put about $10 billion in its rainy-day fund, which could come in handy now that the economy seems to be clouding up a little. Could, but probably won’t: Republicans plan to introduce a budget that comes in within current revenue without touching the rainy-day fund. Get your head around that: There’s a multibillion-dollar pot of cash sitting there in front of politicians who must be just slavering inside at the thought of it, and they aren’t going to touch it — even though they have a pretty good excuse. Imagine a Congress that could do that. …
In Forbes, Daniel Oliver believes inflation is coming.
…The inflation rate has fallen for the past three years, as it did between 1969 and 1972, but monetary policy has caused commodity prices to surge back to 2008 bubble highs despite rising unemployment. Anecdotal evidence of pricing turmoil for foreign producers of intermediate goods suggests that inflation is already lurking just offshore, preparing to crash into the economy. The higher costs will cause commerce to freeze, as it did in 2008, or else the inflation spiral will again begin in earnest. Either way, European-style protests will soon come to these shores as well.
…From 1969 to 1980 the dollar lost 96% of its value in terms of gold and 92% in terms of oil. The stock market was no safe haven: The Dow’s nominal value in 1980 was the same as in 1969, meaning it lost similar value against gold and oil.
In the current cycle, the dollar and the Dow began deflating in 1999. With gold at $1,400 and oil at $90, the dollar and the Dow have declined by nearly 80% against both. To match the 1970s, they would have to lose another 80% against gold and another 60% against oil, implying gold at $7,000 and oil over $200. Given that the current monetary abuse is far worse than in the 1960s and 1970s, these figures are conservative.
Bretton Woods II is collapsing. The seductive Keynesian policies that fiscal and monetary authorities have followed for decades will soon cause the end of dollar hegemony. The United States is entering its third consecutive year of deficits greater than $1 trillion coupled with continuing dramatic increases in the stock of money. Devaluation and economic chaos are guaranteed, just as they were in 1969. Fortunately, unlike in 1969, gold ownership is legal. Those who understand free markets can still preserve the capital that will be needed to restore American prosperity after the deluge.
David Goldman posts on the latest unemployment numbers.
…Half of the drop in the unemployment rate to 9.4% from 9.8% is due to a fall in the labor force participation rate, from 64.5% to 64.3%. Clearly the labor market has stabilized and some of the sectors (notably hospitality) which fired people most aggressively are rehiring a bit. But the establishment survey shows a continued decline in manufacturing employment and an insignificant upward blip in retail employment. The biggest contribution to employment growth (35,000 jobs) was, again, in health care, not surprising given the fact that the federal government is committed to spending more in the sector.
As I suspected, the huge ADP number probably reflected statistical catchup between the BLS and ADP series. What we have is not a reinvigorated economy but a mediocre, low-growth environment. …
Robin Harding looks at the unemployment numbers in greater depth, in the Financial Times.
…Yet the household survey, from which the unemployment rate is calculated, sent a completely different message. It showed an extra 297,000 people in jobs and 260,000 fewer people in the labour force. The combination of the two was enough to cause a drop in the unemployment rate from 9.8 to 9.4 per cent.
…Most analysts attribute the fall in labour force participation and therefore the fall in the unemployment rate, to the expiry of long-term unemployment benefits in December.
If you no longer receive unemployment benefits, the theory goes, then you no longer have any reason to tell a survey you are ac-tively looking for work. The number of “discouraged workers”, who say that they are no longer looking for a job because they do not think they can find one, was 1.3m in December.
Congress has since renewed long-term unemployment benefits. A likely consequence is that the size of the labour force will bounce back in January, reversing the fall in the unemployment rate. …
Douglas Holtz-Eakin also tackles the jobs report, in the Corner.
The December jobs report disappointed on payroll employment, but slashed the unemployment rate. What’s up?
The most important fact is that two different surveys are used, and often they give conflicting signals.
The jobs number is calculated by asking employers (“payroll survey”) how many workers they have.
The unemployment rate is calculated by asking households (“household survey”) if they are out of work.
…The bottom line: Taken as a whole, the December report looked like a continuation of trend — not surprising. However, the confusing and anomalous drop in the unemployment rate is likely to reverse in the near term.
In Discovery News, Emily Sohn talks with some scientists who report that bird die-offs are usually not witnessed by humans.
…”This is really not the unusual thing that people are trying to make it into,” said Robert Meese, an avian ecologist at the University of California, Davis. “A lot of this stuff happens without anyone documenting it.”
…Records kept by the United States Geological Survey list at least 16 die-offs of more than 1,000 blackbirds or starlings over the past 30 years, said Marisa Lubeck, a spokesperson for the USGS in Denver. But group deaths among animals have been going on for a lot longer than that.
…In Beebe…thousands of blackbirds had settled for the night in trees near people’s homes. After a series of fireworks blasts went off on New Year’s Eve, the birds were startled off their roosts. Because blackbirds can’t see at night, they ended up flying all over the place, mostly downward.
One bird made it into a house, when the homeowner opened the door to see what was causing the racket. Most landed on roofs and the ground, making loud clunking noises as they shattered themselves to death. Necropsies revealed internal hemorrhaging, with no sign of pesticides. …