THE BLOG

Laissez Isn't Fair

The FBI released statistics this week highlighting the most significant increase in violent crime in the United States since 1993. Murder rates jumped 4.8 percent over the last 5 years, with robberies also showing some dramatic gains in communities large and small. "Another feather in the cap of the Bush administration," as Joe Sudbay of AMERICAblog.com put it.

But where's the FBI category on economic crime? Where's the data not on street crime but "suite crime"? Doesn't exist.

It should because Bush & Co. are philosophically and authentically uneager to crack down on their corporate cash base. Apparently when they told president-elect Bush that he had to take a constitutional oath "to faithfully execute the laws," he took it literally. So as president he's tried to kill off the consumer laws, labor laws, environmental laws, securities laws -- because the first MBA president hears far more from complaining regulated businesses than consumer victims of white-collar crime.

The recent prosecution and conviction of Enron dons Ken Lay and Jeff Skilling are exceptional, but who knows what the outcome would have been if scandalous newspaper headlines hadn't forced the trial to proceed towards a swift, and just, conclusion. Far more often, prosecutors have real barriers -- of funding, of judges coming from white shoe law firms, of a corporate structure where "those who call the shots don't bear the risks" of getting caught according to one criminologist -- which prevent them from investigating and prosecuting a lot of economic illegality. Apologists for this brand of criminality try to explain away its existence by noting that the public cares more about the "quality of life" crimes discussed in the FBI report. The Wall Street Journal has editorialized that "it isn't very helpful to suggest that white collar crime is a more serious threat to the social order than predatory street crime, which inspires fear across the board." True, being held at gunpoint worries soccer moms and urban professionals more than, say, milk price-fixing.

Yet the accumulated economic costs of white-collar crime subtract exponentially more from our economic "social order" than violent crime ever possibly could. That's no small thing, especially to a middle class straining not to slip into working poverty. Presumably the twenty-one thousand employees of Enron who saw their pensions disappear -- or the thousands who suffered disease and death from Vioxx and Celebrex -- would confirm the costs of so-called "non-violent" crime.

Just because there's no corpse or complaining victim when it comes to most corporate crime -- it could take years to figure out that secretive price-fixing bloated the cost of constructing millions of homes by 20 percent or that your daughter's illness traces to mercury released by a nearby plant -- doesn't mean our quality of life isn't significantly damaged. According to the EPA, proposals to strengthen Clean Air Act protections alone would save between $51 billion and $112 billion each year in reduced medical care, sick days, and lost productivity. Twenty years ago I gathered the best econometric studies around to estimate the cost of corporate "waste, fraud, and abuse" -- it then totaled 20 percent of the GDP -- which today would mean two trillion dollars buying nothing of value (like Tyco CEO Dennis Kozlowski's $2 million expense account birthday party for his wife).

As Woody Guthrie sang, "Through this world I've rambled, I've met lots of funny men. Some rob you with a six-gun and some with a fountain pen."