One of my favorite mindless tasks after posting my thoughts about the coming recession and financial crisis (x2) is reading the mindless responses that go something like this: “The Trump economy is so good that unemployment is the lowest in decades. Americans are getting back to work and getting raises, and the economy is so hot that the Fed is having to raise interest rates. You’re crazy if you think we’re going to have another recession.”
Look, I’m not taking anything away from the Trump Bump. This is the kind of economic growth we should have had during the Obama administration following the Great Recession, but we all know why that didn’t happen. (Historically, some of our best growth years are post-recession.) The Trump Bump is great, it’s creating some breathing room, and it probably has a few more gallons in the tank, but the absolute most important thing to remember about our economy is that it works in cycles. We will absolutely have another recession and the only questions are when and how bad? (I cover my thoughts on that here and here.)
I spent part of last week researching some of the specific effects of the 2008 recession on business and society at the local level, and I came across an interesting report published by the Justice Department in 2011 entitled: “The Impact of the Economic Downturn on American Police Agencies”. There are some important lessons learned in this report. (I’ll put the PDF in the Library section for Intelligence and Training subscribers.) Here are a few things I learned.
Nationwide Statistics Overview
- Recessions notoriously cause budget crunches because of declines in revenue. States and municipalities have often laid off law enforcement officers as a last resort, but they more often enact furloughs, pay freezes, and hiring freezes to lower budgets.
- From 1986 to 2008, the number of civilian police employees grew by 91 percent, compared to a 41 percent growth in sworn officers. As of 2008, there were twice as many civilian police employees nationally as there were sworn officers. (We call that a “tooth to tail” ratio, as civilian employees provide administrative support to law enforcement operations.) A later report from the Bureau of Justice Statistics shows a decline in total law enforcement employees from 2009 to 2010, and then that number dips lower by 2012. The difference from 2009 to 2012 represents a 1.8 percent decrease in sworn officers nationwide. That may not seem like much, but keep in mind that it’s a national total. Some jurisdictions cut 50% or more of their police force some police forces disappeared entirely.
- According to one nationwide study, the average police budget cut from 2009 to 2010 was about seven percent. One quarter of those departments cut their budgets by 10 percent or more in 2010, which is on top of previous budget cuts in 2009. One study showed that 40 percent of law enforcement agencies said that budget cuts would post “serious or severe” problems to operations.
- One study estimated that between 12,000 and 15,000 sworn officers were laid off over the course of the recession. Another organization had a more conservative estimate at 10,000.
Effects of recession on law enforcement
- In 2011, Patterson (NJ) laid off 125 officers, or about 25 percent of their entire police force. The city had already experienced a 15 percent increase in violent crime from 2009 to 2010.
- From 2009 to 2011, Flint (MI) laid off a third of their police force. On any given Saturday night, the city of over 100,000 residents had six patrolmen on duty.
- In 2011, Camden (NJ) laid off nearly half of its police force, which represented the lowest level since 1949. Police officers stopped responding to some crimes and instead victims filed police reports over the phone.
- In 2010, Oakland (CA) police stopped responding to reports of burglaries after cutting its force by 11 percent.
- By 2011, the city of Sacramento (CA) had cut its narcotics and gang units and Sacramento police stopped responding to burglaries, unless they were in progress.
- According to one 2010 study, eight percent of police departments were no longer responding to motor vehicle thefts; nine percent of departments were no longer responding to burglar alarms; and 14 percent of departments were no longer responding to non-injury motor vehicle incidents.
- Another study in 2011 showed that 25 percent of departments experienced cuts to services: 17 percent reported they’d stopped responding to some 911 calls and 26 percent of departments reported a reduction to investigations involving property crimes, fugitives, and non-felony domestic assaults (among other crimes).
- 68 percent of respondents reported reduced or discontinued police training.
Community policing programs, utilizing civilian employees and volunteers who organized neighborhood watch groups, took reports that would have otherwise been taken by sworn officers, and served as ambassadors between police and the community, were reportedly very effective.
Moving on to crime, this is pretty straightforward. Conventional wisdom says that people who are out of work and in need will resort to extreme measures. But during the Great Depression, for instance, crime plummeted according to the data. That was a different age, right?
More recently, the Arab Spring only happened because high numbers of people were out of work — specifically young people. In fact, high youth unemployment is often a leading indicator of an increase in crime and civil unrest. But during the Great Recession, violent crimes and property crimes actually declined overall. (According to several studies and DOJ data, at least police-reported crime declined overall.) Those years were part of a larger period of decreasing crime, which may explain why crime continued to decrease from 2008 to 2010 and beyond. [source] 1) Crime was already falling, 2) more Americans were sitting at home with less cash, and 3) I think many believed that the government would be able to bail out enough vampire banks to prevent a total economic collapse. (I was in Iraq in 2008/2009, so that’s purely anecdotal and an opinion based from afar.) Maybe those reasons are why crime rates continued to fall, despite the worsening economic conditions.
Could this upcoming recession be different? Well, yes, it could for a few reasons.
1. Beginning in 2015, violent crimes in the U.S. were back on the rise, but that’s largely due to inner city crime. [source] Homicides increased by 11 percent between 2015 and 2016, and according to some DOJ numbers, decreased by one percent in 2017. But that inner city crime is likely to worsen during the next recession (due to youth unemployment), just as we saw with crime rates in urban areas during the last recession. But that doesn’t necessarily mean that crime will increase in rural and suburban areas. To be sure, there is no appropriate blanket statement on whether or not crime will increase in rural and suburban areas, but I think it largely hinges on two factors: proximity to “spill over” violence and criminality from the inner cities (out-of-area criminals, for instance), and how bad the next recession is. 2008 was bad and I believe that the next recession could be worse, for reasons I’ve covered in several other posts.
2. Today, the national opioid crisis is at epidemic levels. That’s a lot of drug use and drug overdose deaths that didn’t exist in 2008. This map from the Economist shows areas that could be greatly impacted.
3. Lastly, we have a sociopolitical climate far more toxic than we had in 2008. We already see politically-associated violence. There’s every reason to expect that political flames are fired up so that President Trump can get the blame for cyclical recessions and the Fed’s poor monetary policies prior to his election.
Those are three factors that could affect crime rates, and there are several other economic and financial factors that I didn’t mention. This is something I’m keeping an eye on and as we get closer to recession territory, we’ll be providing detailed updates in our National Intelligence Bulletins. If you’d like to follow along, you can subscribe here.
Always Out Front,