Yves here. Black reminds us how deeply embedded the narrative is that white-collar criminals do not commit crime. At most, they make “mistakes”.
A class action lawyer spoke to me about his work on mesothelioma cases. Not surprisingly, the opposition would drag out the cases, in the hope that the debilitated victims, who would make for sympathetic witnesses, would die before they got a court case. One of his clients was deposed for 10 hours a day in his hospital bed, when the cancer had grown so large that it was cracking his ribs, an incredibly painful process. He was certain the intensity of the depositions (which quickly became repetitive) was to speed his client’s demise. He managed to live long enough to testify. The attorney spoke with anger of the executives in this and other industries he had pursued, who went up in elevators and knowingly made decisions that would kill people in the name of profit. How is this any different from the history of the staffs who ran the Nazi concentration camps that disconcertingly found them to be stereotypically “good” people with happy families? True, the executives who are responsible for white-collar crimes are distant from their victims and legitimate what they are doing via depersonalization and rationalization, such as their supposed duty to shareholders. But these make for differences of degree, not kind.
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives
The New York Times published a book review entitled “Thin Blue Lines.” The two books reviewed were about street crimes. Based solely on reading the NYT book review, and wearing my criminology hat, neither book adds materially to the useful literature. The two books, and the book review, however, share a common characteristic that is worth analysis. All three conflate “street crime” with “crime” and “police” with “law enforcement.” The “blue lines,” of course, refer to police, rather than the FBI white-collar crime section that is supposed to investigate elite white-collar crime. If the American police represent “thin blue lines,” then in comparison the pittance of law enforcement personnel charged with investigating elite white-collar crime represent the sheerest tissue paper – so insubstantial that they must be described as diaphanous or gossamer.
We are living with the consequences of the three most devastating epidemics of elite financial frauds (liar’s loans, appraisal fraud, and the fraudulent resale of these fraudulently originated mortgages through fraudulent “reps and warranties”) in U.S. history. Not a single executive who led, and became exceptionally wealthy, by leading those epidemics has been imprisoned or even required to pay back the fraud proceeds. But none of this shows up in reported “crime rates” for a reason so basic and so outrageous that it reveals how little our political cronies care about crimes by their elite supporters. The FBI and the Department of Justice refuse to keep statistics on the most damaging white-collar crimes committed by elites.
The reviewer, Barry Friedman, is an academic whose principal areas of expertise are street crimes and policing. The authors of the two books that Friedman reviews are distinct. Malcolm Sparrow is a former police official in the UK and a U.S. academic. He is best known for his disastrous aid to Bill Clinton and Al Gore’s “reinventing government” (ReGo) movement. ReGo, exacerbated by George W. Bush’s “Wrecking Crew” (see Tom Frank’s devastating book by that title), created the intensely criminogenic environment that was critical to generating the three fraud epidemics that drove the financial crisis and the world’s largest cartels (Libor and FX).
The other book that Friedman reviewed is a travesty by someone who lacks expertise even in blue-collar crime. It is sad that the NYT would review it and that Friedman’s review draws a false equivalency between Sparrow (supposedly representing “the Left” though he is center-right on white-collar crime and regulation) and a wacko who supposedly represents “the Right.” Friedman spends most of his review on the wacko’s claims. (The wacko, in other diatribes, is also hostile to effective regulation and prosecution of elite white-collar criminals.) While he is critical of her assertions, which are not supported by the data, Friedman leaves the following assertion unrebutted.
Second, there is a “false narrative” of racial discrimination in policing. In truth, she asserts, blacks commit far more crime, and policing simply follows the crime.
If anything, Friedman seems to endorse her claim, for he also leaves the following claim unchallenged.
Take stop-and-frisk in New York. Those who challenged it proved that members of minorities were stopped with a frequency far in excess of their percentage of the city’s population. The Police Department responded that if you compared the frequency of stops with the rates at which minorities were reported to have committed crimes, they actually were not stopping people of color often enough.
Rather than taking the NYPD claim on, Friedman remarks that even if people of color commit far more crimes than whites, it still did not justify stopping millions of innocent people of color.
Notice that the wacko, like the NYPD, conflates “crime” with “reported crime.” The victims of elite white-collar crime, however, typically do not know that they are the victims of fraud. Elite white-collar frauds occurred in the three fraud epidemics millions of times annually. VW committed 11 million fraudulent sales. Takata sold tens of millions of airbags with defective designs, components, storage, and assembly. The people who committed those crimes were overwhelmingly and disproportionately not blacks and Latinos. None of these elite white-collar crimes, however, is “reported.” Any competent criminologist knows not to conflate “crime” and “reported crime” and not to conflate “crime” with “street crimes.” The VW and Takata examples also show that elite white-collar crimes can maim and kill. Had Friedman taken elite white-collar crime seriously he would never have allowed the racist memes of the wacko or the NYPD to go unrebutted.
Friedman’s discussion of reforms is also degraded by his failure to consider elite-white collar crime.
The sort of reform that Sparrow seeks won’t happen until we are candid about, and tackle, the politics of policing and crime.
But mostly what is needed is popular involvement in decision-making, what Sparrow calls “a two-sided deal: the police and public working together not only to achieve results, but also to set the agenda.” That’s exactly right. When the people are collaborating with the police on policy and practice, when there is joint ownership of what the police do, then — and very likely only then — will the debates about the legitimacy of policing evaporate.
Yes, we need to be “candid” about the politics of “law enforcement” and “crime.” Note that Sparrow and Friedman use “policing” rather than “law enforcement” (reflecting their exclusive consideration of street crime). Why is it that our police forces, which are massive, not “thin,” rarely investigate elite white-collar crime and refuse to even collect data on it? Why do Sparrow and Friedman conflate “street crime” with “crime” – implicitly excluding elite white-collar crime? A candid discussion would demonstrate two uncomfortable truths documented by criminologists. The criminal “justice” system is rigged in favor of elite white-collar criminals because of their political, economic, and cultural/class power. The same system is often rigged against disfavored minorities and poorer Americans.
Similarly, Friedman’s discussion of his own policy views would be far stronger if he broadened them to include elite white-collar crime and “law enforcement” rather than “policing.” Friedman says that “what is needed” is “joint ownership of what the police do” with the people.
Consider how our system of near absolute impunity for elite white-collar financial criminals would be transformed if the American people – instead of the industry – were allowed to take “joint ownership” with the regulators (the regulatory “cops on the beat”) and the law enforcement community to restore the rule of law to Wall Street. That is one of the central changes that Bernie Sanders has been fighting to bring to America. Hillary Clinton could, and should, embrace that restoration of the rule of law.