Tuesday, September 1, 2020

The Donald’s Nixonian Betrayal Of Conservative Economics

Richard M. Nixon
By David Stockman

When all else fails, Fake Republicans like Richard Nixon back in the day and Donald Trump today turn to “Law & Order” demagoguery to incite the electorate in their direction. 

So doing, they conveniently abandon the real job of the Conservative Party in American democracy, which is to fight against the Government Party (usually the Dems) in behalf of free markets, fiscal rectitude, sound money, smaller government, federalism and maximum personal liberty. 
Thus, when America was plagued with the short-term outbreak of riots in dozens of major American cities in 1968—Detroit, Cleveland, Newark, Gary, Chicago, Philadelphia—Tricky Dick Nixon put himself over the top at the polls in November by running for National Sherriff rather than as the scourge of Lyndon Johnson’s drastic ballooning of the state in the form of “guns and butter” finance and the eruption of Great Society spending programs. 
As it happened, however, Nixon didn’t need an electoral mandate for Law and Order because the summer of 1968 eruptions in the urban ghettos quickly burned themselves out, while mainly harming the residents living therein. 

More importantly, policing the big cities is not the job of the Federal government or the President, anyway; and is, in fact, one of the principal functions implicitly reserved to the states and their sub-units by the 10th Amendment to the Constitution. 

Indeed, administration of local law and order is one of the main reasons we have 87,575 units of government separate from the Federal government, including the 50 states, 3,034 counties, 35,933 cities, towns, municipalities and townships and 48,558 other units including school districts and special purpose units of local government (e.g. police, fire, library districts etc).

Far more so than the giant Federal bureaucracies that have insinuated themselves into the law and order business, such as the FBI, DEA, BATF and the far-flung operations of the Homeland Security Department, the overwhelming share of these local government units are actually creatures of their respective electorates. If law and order breaks down or is wanting, therefore, the solution is to house clean at City Hall or the county courthouse, not import Federal money, laws, regulations and rhetorical posturing from Capitol Hill or the Oval Office. 
And if the local electorate fails to clean house, it will bear the brunt of the adverse consequences of too many homicides, robberies or destructive attacks on private property within the jurisdiction in question. After all, most serious crime—especially homicides and violent assaults on persons and property—are the work of local residents, not regional or national crime rings

Moreover, if the electorates of badly governed jurisdictions like Seattle, Portland, Minneapolis, Chicago, New York and Baltimore at the moment fail to remedy their own crime problems, the ultimate brilliance of Federalism comes powerfully into play: That is, on the margin residents and businesses vote with their feet, causing local economic decline and diminution of tax revenues, and thereby eventually generating electoral demands for corrective action. 

At the same time, presidential Law & Order demagoguery by GOP presidents readily becomes a cover for betrayal on Federal policy matters that actually count. Until the Donald came along, of course, Tricky Dick Nixon was the poster boy for this kind of doctrinal perf
Famously abandoned sound money when he slammed the gold window shut at Camp David in August 1971; 
Made a mockery of free markets when he imposed wage, price, rent and interest controls on the entire US economy shortly thereafter; 
Fecklessly fueled the growth of Big Government by putting Federal bureaucrats in charge of domestic energy industries and employing subsidies and import controls to pursue the folly of national energy autarky; 
Deeply wounded the cause of fiscal rectitude by adopting the specious Keynesian notion of “full employment budgeting”, which amounts to an excuse for chronic government deficits whenever an imaginary figure called “potential GDP” is not realized (most of the time); 
Attempted to vastly expand the Welfare State through a guaranteed annual income (Family Assistance Plan) and an incipient form of national health insurance (Family Insurance Program); 
Eroded Federalism through revenue sharing handouts from Washington and a vast expansion of federal grant-in-aid programs; and 
Fueled a 50-year assault on the social and economic stability of the nation’s declining urban centers via the abomination of the the War on Drugs. 

Needless to say, the latter betrayal gets us to the present moment. There is no more of a Law & Order crisis today that demands presidential attention and Washington intervention than there was in 1968. 
The overwhelming bulk of the American electorate is not in any danger owing to the antics and defaults of the clowns running Portland, Minneapolis, Chicago or even New York City. In due time, their electorates will select better leadership or the citizens will flee for better governed environs. 
But as we demonstrate below, there is an elevated and unnecessary level of friction between the police and citizens in the nation’s urban centers. The latter is overwhelmingly caused by and exacerbated by the War on Drugs and the criminalization of related social behaviors such as gambling, prostitution etc. that can be solved by repeal of bad laws, not costly and counter-productive efforts to get tough on crime; and most certainly not be sending Federal cops into cities which are wittingly or unwittingly abetting crime and riots and thereby bringing ruin upon themselves. 
So just as in Nixon’s time, by relentlessly obsessing about crime ridden Democrat cities the Donald is abandoning his real job. If there is a real crisis in America, it is the crushing burden of debt and speculation on the main street economy, not any serious or long-lasting outbreak of serious crime. 

Obviously, when it comes to crime, it doesn’t get more serious than homicide. Yet as shown below, the homicide rate per 100,000 in recent years has been barely half of what prevailed during the 1970-1995 period, and has continued to edge lower. 
The same is true of total violent crimes, which also includes rape, robbery and aggravated assault, as well as homicides. As shown below, the rate per 100,000 in the most recent year was about half the early 1990s level. 
Moreover, although not shown, preliminary FBI statistics indicate that neither the homicide rate nor the total violent crime rate appreciably changed in 2019. 
Violent Crime Per 100,000 

While the last full year for which FBI statistics are available is 2018, the preliminary data from the FBI for 2019 indicates that all four categories of violent crime were down versus prior year:

Homicide: -3.9%; 
Forcible rape: -7.3%; 
Robbery: -7.4%; 
Aggravated assault: -0.3%. 
To be sure, during 2020 to date there has been an upsurge of homicides in a handful of big cities owing to the BLM demonstrations and riots after the late May murder of George Floyd by the police in Minneapolis. 
Still, even in the 25 largest US cities shown below, total violent crimes in 2020 YTD are essentially flat with 2019 (up 0.4% during the first 7 months) and property crimes are actually down by -7.7% year-to-date. 
As to the surge in homicides, 80% of the 576 increase in cases over 2019 is attributable to just eight cities including Chicago (+173), NYC (+60), Philadelphia (+56), St. Louis (+42), Houston (+39), Atlanta (+30), Louisville (+27). and Los Angles (+25). By contrast, a nearly equal number of big cities, including Dallas, Newark, Baltimore, Miami, Las Vegas, Plano and Lincoln have experienced little change or even declines from 2019. 
In short, notwithstanding the cable TV tsunami of coverage of urban protests and riots and the Donald’s false characterization of Law & Order as a national crisis, there is no break-out of homicides and other violent crimes, even in the big cities. For the nation as a whole, the downward trend in crime rates which has been in effect for nearly 20 years remains in place. 

Needless to say, when it comes to the Donald’s real job as a Republican president, he has presided over what can only be described as a horror show. Owing to the total demise of fiscal rectitude and the last vestiges of sound money (the Fed’s belated, short-lived attempt at normalizing its balance sheet in 2017-2018) on his watch, the burden of total debt (public and private) grinding down the US economy has soared to $77.6 trillion. 
In terms of of annual rates of gain, the blue bars below show that borrowing is again off to the races, vastly exceeding the egregiously large gains that were recorded during the Obama years, and at a time at the top of the longest business cycle in US history when the nation’s bloated burdens of debt should have actually been paid down. 

The problem, of course, is that the Donald is not guided by anything which even remotely resembles policy or theosophical principles, let alone fundamentally conservative ones. For instance, he had a chance to appoint the majority of the Fed’s Board since taking office, but ended up putting Powell and other avid money-printers in the open Chairman’s role and other board seats.
Not surprisingly, the bloated, elephantine $4 trillion balance sheet the Donald inherited and which was supposed to be drastically retrenched after the financial crisis ended has now exploded to $7 trillion, and the Donald self-evidently wants to to grow to $10 trillion and beyond. 
That’s capitalism destroying financial fraud, yet it lies at the heart of the Trumpian economic program. 
Balance Sheet of the Federal Reserve: 

At the end of the day, the Donald simply views the Federal government as a larger-scale version of the Trump Organization; and that as its Maximum Leader-CEO, it is his prerogative to steer things in whatever direction promises (by the Donald’s lights) to redound to his greater glory (and presently, his re-election). 
At the present moment that means wasting a good crisis on the shrill partisanship of his blustery campaign against crime, riots, looting and plunder in the “Dem-controlled” big cities of America. 
In fact, however, there is a very particular and different crime problem in the big cities than the one the Donald excoriates owing to the misbegotten War on Drugs and the excessive criminalization of social life. 
To wit, unlike the declining homicide rate in the US overall (brown line), the murder rate for black citizens in the 50 largest cities in the US has been flat since the turn of the century and has actually turned upward in recent yeas (dark blue line). 

Needless to say, this unfortunate trend is not the result of systematic racism; it’s the consequence of bad laws and the resulting excessive friction between law enforcement officers and the urban neighborhoods where inappropriately criminalized activities are more prevalent owing to lack of jobs, the disaster of public education and the prevalence of broken homes, which now encompasses more than 70% of children born into black households. 

Rather than overt racism or even simmering racial animosity, the real evil is the relentless aggrandizement of state power. Among its many ills is the rise of the Nanny State—a conflation of too many laws, crimes, cops, arrests and thereby opportunities for frictions between the state and its citizenry and for abuse by the gendarmes vested with legal use of violence. 
The nation has now been enthrall for several months to an emotionally charged symptom of this rogue Nanny State—the unjustified murder of unarmed black citizens 
by the police. Among the most recent notorious cases, of course, are George Floyd for allegedly passing a counterfeit $20 bill, Eric Garner (NYC 2014) for selling un-taxed cigarettes, and Rayshard Brooks for falling asleep drunk in his car at a subsequently incinerated Wendy’s in Atlanta. 
Nor are these notorious cases aberrations. During the recent past there were 38 such police killings of unarmed black citizens in 2015, and then 19, 21, 17 and 9 during 2016 through 2019, respectively. That’s 104 black lives lost to the ultimate abuse of police powers. 
Of course, the number should be zero. There is no conceivable excuse for heavily armed cops—-usually working in pairs or groups—to murder lone, unarmed civilians, regardless of race or anything else. 
And the fact is, being non-black is no guarantee against the same unjust fate. During the same period, a total of127 unarmed white lives were wasted by the police, as well. That included 32 white killings in 2015 followed by 22, 31, 23 and 19 in 2016 through 2019, respectively. 
Overall, 302 unarmed citizens were killed by the police during the last five years, with the balance in the chart below accounted for by 71 deaths among Hispanic and other victims. That is, the real issue is illegal and excessive police violence, not racial victimization. 
Indeed, the fact that 34% of these police killings involved black citizens compared to their 12% share of the population is not primarily a sign of racism among police forces. It’s actually evidence that the Nanny State, and especially the misbegotten War on Drugs, is designed to unnecessarily ensnare a distinct demographic— young, poor, often unemployed urban citizens— in confrontations with the cops, too many of which become fatal. 
Alas, young black males are disproportionately represented among this particular in- harms’-way demographic, and that’s the reason they are “disproportionately” represented in the two charts below.

Stated differently, the Nanny State tends to be racist in effect, even if that is not necessarily the intent of the crusaders and zealots who have launched the state into anti-liberty wars on drugs, vice and victimless inequities and peccadillos. 

Then again, the above charts are only part of the story. As it happened, a total of 4,558 citizens were actually killed by police over that period, but according to the DOJ statistics, fully 93% or 4,256 of them were armed
So viewed in context, the unarmed/I can’t breathe victims account for only a small fraction of lethal violence between citizens and police, and there really isn’t much difference in the unarmed/armed ratio among racial groups. To wit, over the 2015-2019 period as a whole— 
1,164 black citizens were killed by police—of which 104 or just 8.9% were unarmed; 
2,151 white citizens were killed by police—of which 127 or just 5.9% were unarmed; 
1,243 Hispanic and other citizens were killed by police—of which 71 or just 5.7% were unarmed; 
But here’s the thing. This data does not really support either the Sean Hannity/Law & Order fulminations of the Foxified Right or the 400 years of racism and victimization mantra of the CNN/progressive Left. 
Contrary to the Left, 93.4% of the dead victims of police violence were themselves armed; and the 91.1% incidence among blacks is not meaningfully different than the 95% rate among whites and Hispanics. The chart below shows the inverse—the share of victims of police deaths who were not armed. 

At the same time, the above statistics do not prove that the cops were mostly right or justified, either, as per the Donald’s Law and Order Howling.
As we shall explore below, the real issue is did 4,558 citizens end-up on the losing end of police fire because they were hardened criminals and sociopathic threats to society or were they set-up by an overreaching legal system that puts too many citizens and police officers alike in harms’ way? 
But preliminary to that, it needs be said that the rightwing mantra about police as heroic victims of criminal violence doesn’t wash, either. They have the overwhelming firepower 
in these instances of police-on-citizen violence as attested to be the facts regarding felonious deaths of law enforcement officers during the same five year span.

It turns out that during 2015 through 2019 there occurred 256 police deaths in the line of fire, bringing the total of police and citizen deaths in these encounters to 4,814. That is to say, the cops won 95% of the time, as well they might given their overwhelming superiority in arms, training, back-up support and legal immunity from being too quick on the trigger finger. 
In this context, it should be noted that police deaths are sometimes reported at much higher levels—-a total of 492 over the last five years rather than the 256 indicated above. However, exactly half of that larger total is considered accidental or non-felonious and includes traffic cops stepping into the wrong lane and even heart attacks in the squad car resulting from too many stops at Dunkin’ Donuts. 
So the question recurs as to why there were 4,814 fatal encounters between police and citizens during the past five years. 
We think the answer starts with a staggering statistic. Namely, the fact that there were 10,310,960 arrests in the US during the most recent year (2018) excluding traffic violations.
That’s 3,153 arrests per 100,000 population including babies, grannies, toddlers, tweeners, the disabled, the infirm and religious leaders including nuns, priests, preachers, rabbis and imams. 
So when you talk about the subset of the population which actually get arrested with high frequency and accounts for most of these arrest totals–—young men between 16 and 35 years—the true arrest rate is far higher; it’s upwards of 15,000 per 100,000 population. 
Either way, these arrests rates are far out whacko. Americans are not nearly that lawless, even when you allow for the chronic rotten apples in the population and the anti-social propensities of some young men. 
And that hints at the real problem: We have way too many crimes and way too many cops who are way too heavily armed attempting to enforce laws that are not really the business of the state in the first place. In the most egregious kind of example, Eric Garner was apprehended and killed for selling “loosies”, or cigarettes one a time.

In fact, there are an estimated 300,000 Federal laws and regulations whose violation can lead to prison time; and when you throw in state and local jurisdictions, which historically have had an affinity for outlawing victimless crimes and the infinite forms of human vice, the total number of criminal offenses in America is surely well into the millions. 
That’s why a disaggregation of the FBI’s UCR (Uniform Crime Reports) arrest statistics for 2018 tell you all you need to know about why the nation’s police forces are way over- funded and why a huge amount of confrontation and friction—including violent encounters––between citizens of all races are unnecessary. 
In a word, some citizens sometimes can’t breathe their last breath because in far too many instances liberty can’t breath in today’s unhinged Nanny State, either. 
Self-evidently, the legitimate law enforcement function of the state is protection of the life and property of its citizens. But when you look at the FBI’s own national arrest data for 2018, it appears that only about one-quarter of arrests were clearly pursuant to those core functions, meaning that the overwhelming bulk of arrests–-7,621,232-–were for drugs, gambling, prostitution, disorderly conduct and the like. 
Among the core law enforcement functions, the 26% of all arrests broke out as follows: 
521,103 arrests for violent crimes against persons (5% of total); 
1,000,329 arrests for driving under the influence (DUI), a clear threat to the lives and property of other drivers (9.7%); 
1,167,296 arrests for crimes against property (11.3% of total) 

Even when you drill down in these categories, however, the reality of way too many cops is evident. There were just 11,970 arrests for murder and negligent manslaughter in 
2018 across the entire USA at all levels of law enforcement. Clearly, these are the most violent and heinous of violent crimes, yet they amounted to just 2.2% of all “violent crimes” reported via the UCR and a mere 0.1% of all arrests by the police. 
Next in order of severity were arrests for rape, armed robbery under threat of violence to persons and aggravated assault. There were 25,205, 88,128 and 395,800 arrests in these categories, respectively, amounting to 0.2%, 0.9% and 3.9% of all 10.3 million recorded arrests. 
Thus, these four categories are the core of violent crime arrests and totaled 521,103 arrests in 2018 or just5.0% of total arrests That compares to 850,000 sworn law enforcement officers in the USA, of which about 750,000 are employed by the 18,000 units of state and local government. 
To be sure, nearly 1.6 cops for every annual arrest in these four core functions sounds more than a bit lop-sided, but there are some additional arrests that add to the legitimate work loads of the police. These include the following crimes and their share of total arrests: 
burglary: 178,611 (1.7%); 
larceny-theft: 887,622 (8.6%); 
motor vehicle theft: 91,676 (0.8%); 
arson: 9,387 (0.09%). 
DUI: 1,167,296 (11.3%) 
Needless to say, these are all serious crimes that need to be enforced for the protection of life and property. But by their very nature, the vast bulk of the arrests in the above five categories do not ordinarily involve violent criminals, nor does their enforcement require combat-strength arms and tactics among police forces. 
DUI arrests, for example, overwhelmingly involve citizens engaging in socially reckless behavior, but not habitual criminal activity. A detailed study awhile back, for example, showed that 65% of arrests resulted in no correctional supervision at all and another 27% of cases consisted of individuals sentenced to probation or jail who had no prior arrest records for crimes other than DUI. By contrast just 8% of DUI arrestees had prior non-DUI criminal records, and even then most of them were for lesser offenses. 
Likewise, the FBI’s UCR system defines larceny-theft as follows:
The unlawful taking, carrying, leading, or riding away of property from the possession or constructive possession of another. Examples are thefts of bicycles, motor vehicle parts and accessories, shoplifting, pocket- picking, or the stealing of any property or article that is not taken by force and violence or by fraud
Nevertheless, larceny-theft accounts for 76% of all crimes against property reported in the UCR arrest data for 2018. 
So the question recurs. If the nation’s huge and heavily armed police forces are involved in the arrests of core criminal in just 5% of their apprehensions and are dealing with serious but mainly non-violent criminals in another 21% of arrests dealing mainly with burglaries, drunk drivers, car thieves and arsonists, what are they doing the rest of the time? 
Here is a spoiler alert. The single largest category of arrests in 2018 was for drug abuse violations, which totaled 1,654,282. 
In fact, while total arrests in 2018 were no higher than they were in 1977 despite a 100 million/50% growth in the US population, and had actually dropped from a peak of nearly 13 million in 2006, the opposite trend was extant in the case of War on Drugs arrests. 
As shown by the chart below, arrest in 2018 were nearly at peak levels and were up by more than 171% since 1977—the vast majority of which are made for drug possession generally, and marijuana possession most often. 
War on Drugs Arrests, 1980-2016

Not surprisingly, the next largest arrest category after drugs is one called “other assaults” for which 1,063,535 arrests were made in 2018. Yet the FBI’s own definitions raise considerable doubts as to why these are even a matter of law enforcement by the state:
Other assaults (simple)―Assaults and attempted assaults where no weapon was used or no serious or aggravated injury resulted to the victim. Stalking, intimidation, coercion, and hazing are included. 
Then, of course, we have all the victimless and vice crimes, including the following number of arrests:: 
Prostitution and commercialized vice: 31,147; 
Sex offenses excluding rape and prostitution: 46,937; 
Gambling: 3,323; 
Liquor law offenses: 173,152; 
Curfew and loitering law violations: 22,031; 
Vagrancy: 23,546; 
Public drunkenness: 328,772; 
Disorderly conduct: 329,152; 
Forgery and counterfeiting: 50,072; 
Weapons carrying and possession: 168,403; 
All other offenses: 3,231,700. 

The latter huge number tells you all you need to know. The UCR lists 27 enumerated categories of crime including all of those itemized above–plus the usual suspects like fraud and embezzlement for which there were about 135,000 arrests in 2018. Yet when the whole lists is exhausted, 32% of arrests occurred for crimes that are so minor even the FBI is embarrassed to enumerate them: 

All other offenses—All violations of state or local laws not specifically identified as Part I or Part II offenses. 

So, yes, we do think there is way, way too many crimes and cops, and that de- criminalizing and de-funding law enforcement are the only route to reducing police violence. 

Indeed, over the past four decades, the constant dollar cost of policing in the U.S. has almost tripled, from $42.3 billion in 1977 to $114.5 billion in 2017, according to an analysis of U.S. Census Bureau data conducted by the Urban Institute. Yet that 171% gain compares to only a 20% increase in violent crimes from 1.0 million in 1977 to 1.2 million in 2017. 
That is, real police spending per violent crime is up from $42,300 in 1977 to $95,400 in 2017. 

Better that police did not spend 90% of their time on matters other than protecting the life and property of the citizenry; and in the process turning the Nanny State into an instrument of violence against citizens, and especially the young, poor and minorities who become ensnared in its vast over-reach. 

Read more of Stockman's analysis here.

David Stockman was Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street.


  1. Articles like this remind me of the wisdom of the Cowperthwaite "rule." My understanding is that Cowperthwaite never let the Hong Kong bureaucrats compile data for fear they would use it to interfere with peoples activities. The data used by Stockman could just as easily be used to show the opposite of his conclusion. Namely that increased spending has reduced crime. There is no way to prove a cause and effect relationship, no way to know if the data reflect reality. And so it is useless in the argument in favor of reduced government or increased government. However, it can be used to lie and confuse people who have an unwarranted trust in data or the government officials who produce this data.

    Better to point out that humans are individuals with free will. Not members of a herd or a a demographic data set, or even an ethnic group. But individuals with the ability to reason. Reason is an individual's greatest weapon in dealing with the challenges of life. And reason is best encouraged one individual at a time with Individual Liberty. And that is why a reduction in initiatory government coercion makes sense.

  2. I do not disagree with Stockman that there are way too many petty laws and rules that make us all subject to criminality or at best fined for breaking an unknown rule. But the left has really painted themselves into a corner with the non stop violence and property destruction; few rational people want that in their communities. So Trump has the upper hand here on this one simply by default. And Trump is not a dictator as anyone thinks, so he can't single handedly abolish a lot of these laws causing problems.

    Speaking of blacks and slums, here is something I stumbled upon the other night. These people certainly live in poverty; no plumbing, no internet connection, no air conditioning, no refrigeration as far as material. But at least from this piece their community as large as it is seems orderly and functional in a perverse way from our perspective.


    American blacks have it the easiest anywhere in the world, but still they bitch and moan. They destroy their own communities and seem incapable of doing anything economically productive as opposed to those in a slum over the water in Nigeria.