Crime Wave 2021

 

In the June/July issue of the St. Croix Review, a Midwestern journal of opinion, editor Barry Mac Donald led off with a startling analysis of a crime wave that has swept over some of America’s cities in the past three  years.

 

His editorial, entitled, “The Plight of Black America,” referred to an essay by Heather MacDonald, a renowned Manhattan Institute scholar, that noted that police shootings accounted for only 3% of black homicides. He wrote,

 

“In 2019, according to Statista, there were 7,484 black homicides in America. Who is killing the other 97 percent of black Americans? Are white civilians intruding into black neighborhoods and killing such a huge percentage of blacks?”

 

He then provided a five-page listing of actual homicides derived from the essay by Heather MacDonald, “A Grim—and Ignored—Body Count, the Problem in the American Inner City Is Not Racism but Drive-by Shootings of Blacks by other Blacks,” that appeared in the City Journal on November 2, 2020.

 

Here is a sample of the listings.

 

“On October 13, a 35-year-old probation officer who was eight months pregnant was fatally shot in the back outside of her home on the far South side of Chicago.”

 

“On October 10, a 16-year-old boy turned Lake Shore Drive in Chicago into a ‘shooting gallery,’ according to the police, shooting out the eye of a 19-year-old girl in a nearby car.”

 

“On October 8, a 51-year-old bus driver in Baltimore reprimanded a couple for getting on his bus without paying. The female grabbed the driver’s backpack and ran off. The bus driver gave chase; the male opened fire and continued pumping bullets into the driver as he lay on the ground, killing him.”

 

“In Sacramento, a 9-year-old girl was killed on October 3 during a family gathering in a park. Her six-year-old cousin and aunt were also shot. Two hours later, a 17-year-old crashed into a pole after being fatally shot. Shortly thereafter, a 17-year-old girl was shot.”

 

As I said above there are five full pages listing these horrific killings that occurred in just a few months. So far this year the killings in black neighborhoods have increased to record new levels. Just as alarming is the fact that the great majority of the killers are still on the streets. Very few have been arrested, convicted, or sent to jail.

 

What is the cause of these killings? It can’t be racism, systemic or otherwise, since the killers are black men, who by definition cannot be accused of racism. It might be better to ask, “who are these killers?”

 

Although the great majority of blacks, like everyone else in this country, are decent law-abiding citizens, there is a criminal underclass, made up primarily of young black gang members, who have been terrorizing black neighborhoods for decades. 

 

Young male sociopaths are not unique to the black community. When the Irish and the Italians first came to this country, they also had their gangs that terrorized the members of their own communities and tarnished the image of decent immigrants. More recent immigrant groups have their own gangs that murderously compete for control of the drug trade.

 

Over a hundred years ago, a perceptive novelist described these criminals and their world.

 

You got a sinister impression of a world, sordid, tumultuous, in which these gangsters, dope traffickers, bookies and race-course touts lived their dark and hazardous lives. Dregs of the population of a great city, living on their wits, suspicious of one another, ready to betray their best friends if it could be of advantage to themselves, open-handed, sociable, gaily cynical, even good-humoured, they seemed to enjoy that existence, with all its dangers and vicissitudes, which kept you up to the mark and made you feel that you really were living. Each man’s hand was against his neighbours, but the alertness which this forced upon you was exhilarating. It was a world in which a man would shoot another for a trifle, but was just as ready to take flowers and fruit, bought at no small sacrifice, to a third who was sick in hospital.* 

 

He was writing about the underworld in all-white Paris in the 1930s. It is not the color of one’s skin that makes one a criminal but rather the development of a criminal mentality that starts at a very young age. Teachers in inner city schools notice it in the earliest grades. Even before they get to high school, these children have gone far beyond disrupting classrooms and petty theft. At high school age they join gangs and become heartless murderers.

 

Last year, they were among the vandals, looters, burners, and shooters who took over and trashed neighborhoods without any fear of the official justice system. They suffered no consequences. Some politicians and commentators even praised them. 

Because the victims of these shootings were not killed by a white policeman, their lives really don’t seem to matter to the protestors marching to reform, de-fund, or even eliminate the official criminal justice system. In a June 23 column in the Wall Street Journal, Jason L. Reilly argued that the protestors and their agenda are at variance with the needs and wishes of the black community.

"Current efforts to reduce resources for law enforcement in the name of "social justice" for blacks ignore that blacks have long complained about underpolicing of their communities. In a 1993 Gallup poll, 75% of black respondents said they wanted more cops on the streets, and 82% said that the court system goes too easy on offenders. Blacks today continue to express overwhelming support  for the presence of more police in their neighborhoods, which suggests that, unlike the progressive politicians and activists who claim to speak on their behalf, most blacks are more interested in safe communities than they are in the racial composition of the inmate population."

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*Somerset Maugham: Christmas Holiday. pp. 201-2.

 Quote of the day:

 

Churchill: The truth is incontrovertible. Panic may resent it, ignorance may deny it, malice may distort it, but there it is. 

Asset Inequality 2021

 

                                    

 

One of the funniest things I saw on my recent trip to California was a clip from a TV interview with Michelle Obama, the former First Lady. In the interview she claimed that she was afraid to go to the Department of Motor Vehicles (DMV). The young female interviewer seemed to nod in agreement and failed to follow up with any probing questions. Did she mean, for example, the DMV in Chicago, her home town, or was she referring to the one in toney Martha's Vineyard, where the Obamas have chosen to live since they left the White House? Also, when was the last time Mrs. Obama had been to any DMV and how was her experience?

How is it that well-to-do liberals who have all the comforts of life, who live in gated communities, snd who send their children to exclusive private schools, can still identify with the dangers faced by the urban poor?  Are they living in the real world, or have they accepted an all-consuming mythology?

The income inequality bemoaned by progressives in this country is a myth. Statistical studies that demonstrate an increasing amount of income inequality apparently leave out over a trillion dollars of government income transfers to those in lower income brackets. These studies also do not take into consideration the substantial impact of an effective progressive income tax code on the highest earners.  

Three years ago in a Wall street Journal op-ed, Bruce D. Meyer, a professor of public policy at the University of Chicago, and James X. Sullivan, a professor of economics at Notre Dame, claimed that “there is much less material deprivation than there was decades ago.” They cited a number of studies including the American Housing Survey that demonstrated the significant strides made in this country. They wrote,

"The poorest 20% of Americans live as the middle class did a generation ago as measured by the square footage of their homes, the number of rooms per person, and the presence of air conditioning, dishwashers, and other amenities."

Unfortunately, studies that claim that America has reached an unprecedented level of income equality are questioned by politicians and advocates on both extremes of the political spectrum. Right wingers claim that the enormous sums spent by government social programs or income transfers have largely been wasteful and ineffective. Left wingers claim that they have not gone far enough and continue to call for massive spending to finance free college education, health care, minimum wage increases and a host of other benefits. 

Left wing progressives also claim that studies that demonstrate rising income equality are a politically biased attempt to roll back or eliminate the social service safety net. As a last resort, even if they grudgingly admit some measure of income equality, progressives will then raise the issue of “asset” inequality. Even if the incomes of the poor are improving, the gap in asset ownership is greater than ever before in history and getting wider and wider.

I know that there are incredibly wealthy people in the country today. Jeff Bezos of Amazon is reputed to be the wealthiest person in the world with a fortune of $157 Billion in 2018. But my own experience leads me to believe that the gap between the very rich in this country and the rest of us is no wider than it has ever been, and that more Americans share in the benefits of the American economy than ever before.

When I started my career in the financial services industry as a mutual fund salesman in 1972, it quickly became clear to me that most Americans did not own a share in the American economy. The mutual fund business was in its infancy, and only a small percentage of the population owned shares of common stock. Moreover, there were no IRA or 401k plans with tax favored treatment of retirement savings. Many leading companies had pension plans but there was little in the way of profit sharing plans or employee stock ownership plans. There were, however, two tax-favored retirement accounts but they were only available to small businesses (Keogh plans), and school teachers (403b plans). The 403b plan was the granddaddy of these plans and it is still used to fund the retirement of most college and university professors today. 

In the past 50 years the growth of all of these plans has been phenomenal. More Americans now own tax favored retirement plans than ever before and most of them are invested in a broad cross section of the American economy. In addition to the tax advantages, most people could participate in these plans through payroll deduction, the best way to save. Incredibly, the huge amounts that Americans put into these tax favored retirement plans do not count in official government statistics as savings.

When I started in 1972 the Dow Jones Industrial Average (DJIA) was about 1000. Today it is over 34000. The baby boomers who began saving in the 1970s have become the richest generation in history. On a recent visit to Alameda California, across from San Francisco Bay, I discovered that the modest homes there could not be had for less than $1 Million largely due to its proximity to trendy San Francisco. Although San Francisco is the bluest city in the bluest state in the country, most ordinary people cannot afford to live there.

Closer to home, my wife and I enjoy sitting at the marina near Fairfield beach and watching the boats, both large and small, go in and out. It is a constant parade. Fairfield is a middle class town but a good number of its people enjoy messing around in boats, and can afford to do so. 

But what about the lower classes? Although people living on welfare have very few assets, their guaranteed welfare income and benefits makes them virtual millionaires. For example, if someone receives a monthly welfare check, subsidized medical care under Medicaid, and housing and food assistance, they could easily have the equivalent of an income of $2500 per month or $30000 per year. At 3% interest it takes a million dollars of assets to provide an income of $30000 per year. Moreover, any assistance that poorer Americans get ultimately come from the income and profits made by other Americans.

Despite protests from both the left and the right, it would appear that the social safety net is working in America. Other countries have emigration problems but America has an immigration problem. Despite all of its so-called flaws, people still want to come here. Isn't it incredible that thousands of refugees from Somalia have been able to settle in Minneapolis in the past few decades? It is even more incredible that one of them has been elected to Congress where all she does is complain about her adopted country.

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Los Angeles Lifeguards

  

For the past seven years my wife and I have spent a few weeks in California mainly to visit our daughter and her family. These visits never fail to provide material for The Weekly Bystander. 

 

On May 12,  I read an article in the Wall Street Journal on the incredible compensation of members of the lifeguard union in Los Angeles County. The article was apparently based on one that appeared in Forbes magazine in 2019 before the pandemic closed the beaches.

 

The base pay for lifeguards in LAC was $140000 per year but with overtime 82 made over $200000 in 2019. Thirty-one lifeguards took home between $50000 and $130000 in overtime. Seven had enough overtime  to make between $300000 and $392000. 

 

In 2019, one lifeguard captain enhanced his $140000 base pay with $130000 in overtime pay, $21760 in “other” pay, and a whopping $75000 worth of benefits. I suppose these benefits included contributions to his generous pension plan. 

 

At age 55 a lifeguard with 30 years of service can retire on 79% of his or her pay. It would not surprise me to find that the average pay used in pension calculations would include overtime. 79% of $300000 is a lot better than 79% of $140000.

 

I do not quibble with the base pay of these California beach lifeguards. They probably make much more than their counterparts in California pools because their work is more difficult and even potentially dangerous. The ocean guards have to be trained professionals with a variety of skills. But why do they get so much overtime?

 

It would appear that the Los Angeles County beaches have been under-staffed. I suspect that this understaffing benefits both the County and the union. The County does not have to hire additional employees and provide them with expensive benefits.

 

However, the union members must also like an arrangement that provides them with plenty of overtime, usually at double pay. In my experience many unions have deliberately restricted membership in order to keep existing members on the job and provide them with overtime.

 

For years unions have been in the forefront of the movement to reduce the work week. Rather than an altruistic plan to give workers relief from long hours, and back-breaking labor, the shorter work week is an effort to boost compensation with overtime pay. 

 

The LAC lifeguards are obviously not the down-trodden workers of 100 years ago. Like union members all over the country, they have become part of a new aristocracy with salaries, benefits, and pensions far exceeding the great majority of workers in the private sector. 

This is real but hidden income inequality. Who else can retire at age 55 on 79% of pay? Who else can double their income with overtime? Who else can get tax free benefits worth $75000 per year?

 

Nevertheless, despite 100 years of steady improvement in wages, benefits, and working conditions, union members are still portrayed in the movies and on TV as the wretched of the earth, oppressed by heartless, greedy capitalist bosses.

 

In many ways today’s Progressives are living in the past. The Communist revolutions of the past century have all failed but the propaganda they created has persisted throughout our culture. Our schools and media are full of it. Business is bad and public service is good. Profit making companies and enterprises are bad, but non-profits are good. Capitalism is bad but Socialism is good.

 

The Progressives have found a home in the Democratic party. Actually, Progressivism was a movement of 100 years ago. Most of the goals of that  earlier movement have been realized today. In particular the union movement has been successful to the point that union members now are a privileged class.

 

The Democratic party is in bed with these powerful unions, both in the private and public sector. Union political contributions are essential in any election campaign even though Democrats continually complain about the influence of money in elections.

 

Years ago, one of my clients was a union representative in a local school district. He told me that his goal in negotiations was not to increase salaries for his teachers but rather to increase their benefits. Salaries got reported in the newspapers, but benefits did not. Moreover, benefits were usually tax free. 

 

Today, instead of advising my grandchildren to go to college, I will seriously think of urging them to go West and become a Los Angeles county lifeguard. Of course, they will have to find a way to get into the union.

 

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