U.S. Recession Breeds Escalating Violent Crime

By: Janet_Tavakoli

The Wall Street Journal reported that violent crime is down in the big cities in the U.S., saying this breaks the pattern between economic downturns and an increase in crime. Supposedly this is because policing has advanced, not because human nature has changed. I do not believe the article is plausible.

If Chicago is any indication, it is much more likely the statistics are being doctored and that the public is being lied to in a profound way. Many cities and states are strapped for cash and the public doesn't want to hear that crime is up while police budgets are being cut.

Chicago wasn't mentioned in the article, but violent crime is way up, and the police force has been cut. I believe this increased violence is related to the economy, and it is not mere crime, it is civil unrest. The city of Chicago is being wrecked, and tourist attractions like Navy Pier are unsafe and lack police support.

Last Summer Was Bad, This Summer Will Be Much Worse

Last summer gang violence ruled the night at Leland and Sheridan, a neighborhood in the process of gentrifying.

In the upscale Lincoln Park area, just a little further south of this unrest, men alone at night were accosted by groups of three to six men and severely beaten, robbed, and hospitalized. Seven muggings occurred in a five-day period from July 30 to August 4, 2009.

This kind of activity was unusual for these areas of Chicago until last summer.

Current Escalating Violent Crime and Chicago's Prime Lakefront Areas

Shootings are way up in Chicago, and ordinary citizens -- along with shorthanded police -- are angry. Chicago has a gun ban, yet on Wednesday, May 19, Thomas Wortham IV, a Chicago police officer and Iraq War veteran, was shot when four gang members attempted to steal the new motorcycle the officer had brought to show his father, a retired police officer. Shots were fired, and his father saw the skirmish, ran for his gun, and managed to get off a few rounds. Two gang members were shot while two sped away dragging his fallen son's body some distance in the process.

Nine people were shot on Sunday night (May 24), and Chicago is currently in the grips of a massive crime wave that has overwhelmed our under funded police force.

Gangland violence and shootings now occur up and down Chicago's lakefront. An anonymous Chicago policeman reports what most of the mainstream media fails to report at secondcitycop.blogspot.com. The comments under the section titled "Lakefront Problems" are particularly illuminating.

I don't believe that Chicago is alone in having a recession-related escalating crime problem. High unemployment combined with under-funded shorthanded police forces make for a toxic brew. No matter how "advanced" the police force, men cannot outrun bullets.

During a recession, the police force requires a larger budget, not budget cuts. Since the money has been spent, I suspect the public will be fed cooked statistics instead of being given the facts.

Coming Soon to a City Near You: Additional Comments added May 26, 2010:

Violence in Chicago public schools and minority neighborhoods has been well-publicized in recent years. After the September 2009 beating death of Derrion Albert, a 16-year-old Chicago honor student, rapper Nas's Open Letter to Chicago's Young Warriors was posted at CNN, MSNBC and media sites. Nas, who is from Queensbridge, New York, stepped up for Chicago.

The problem has festered and recently spread due to what appears to be a lack of resources. ("Chicago Violence: Is the National Guard the Solution?" CNN - April 26, 2010)

Previously relatively crime-free minority neighborhoods like Chatam, where police officer Thomas Wortham IV was killed, have experienced new recession era violence. Moreover, violence has recently spread to Chicago's prime lakefront and tourist areas.

This escalation and geographical spread of violence is new, and I believe it is related to our Great Recession and budget issues. I don't believe that Chicago is alone in its budget problems. If new patterns in Recession-related-violence have not yet affected other major cities in the U.S. the way they have affected Chicago, they may affect them soon. It is also likely that crime is being underreported as crime-fighting budgets are cut.

By Janet Tavakoli

web site: www.tavakolistructuredfinance.com

Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct associate professor of derivatives at the University of Chicago's Graduate School of Business. Author of: Credit Derivatives & Synthetic Structures (1998, 2001), Collateralized Debt Obligations & Structured Finance (2003), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, September 2008). Tavakoli’s book on the causes of the global financial meltdown and how to fix it is: Dear Mr. Buffett: What an Investor Learns 1,269 Miles from Wall Street (Wiley, 2009).

© 2010 Copyright Janet Tavakoli- All Rights Reserved
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