Real Reason Why Crime Rates Keep Dropping Even with Higher Unemployment and Recession

According to the Wall Street Journal  in 2009 crime rates continued to decline in the United States even in the face of higher unemployment rates and a recession and that is because the real reason why crime rates rise was not present in 2009. In Washington, New York, San Francisco, Los Angeles, Chicago, Boston and Dallas violent crime rates dramatically dropped in 2009 despite the fact that each of these cities experienced a surge in unemployment levels over the same time frame.

On a very base level one would think that while unemployment surges crime rates would also increase. But if we look for the one true root cause of higher crime rates we can easily see the true root cause was not present in 2009. What is the one true root cause of higher crime rates?

As I pointed out in an article published in January of 2009 – Why Crime Rates Rise and Fall – the overriding determining factor for crime rates is Inflation. During times of high inflation high crime rates will always occur and during times of low inflation crime rates will decline and remain low. Why is this so?

Inflation destroys the value of money. We work for money so in effect money represents our labor. When the money we work for is destroyed through no fault of our own all the work or labor we put forth to earn the money is also destroyed. When inflation occurs people are being robbed of their labor and feel that a wrong has been committed against them. Under such circumstances people are much more likely to commit wrongs against other people which causes crime rates to rise.

The first fundamental rule or pillar of a civilized society must always be No Inflation. When individuals go to work each day they are paid with money. The money is used to survive and buy food, cars, homes and all the necessities of life. When money loses value through inflation it makes it much harder for individuals to survive and the work they put into earning the money is abused and destroyed. Inflation is an uncivil act since it destroys the work or labor of citizens. A main side effect of inflation is that it causes citizens to act uncivilly towards each other causing higher crime rates.

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In his massive work entitled The History of the Decline and Fall of the Roman Empire Edward Gibbon concludes that Rome fell mainly due to the loss of civic virtue among its citizens. What Gibbon did not say and clearly did not understand was that the loss of civic virtue or civility in Rome was due to the continual inflating of the money supply by Rome which caused inflation throughout the Roman Empire. My copy of Gibbon’s book is some 1,500 pages long containing millions of words and all he needed was one word to explain why Rome fell – Inflation (do not believe Gibbon mentions the word once in his book).

According to the Bureau of Labor in 2009 the Consumer Price Index (CPI) declined in 8 out of the 12 months and was zero in January in the United States. Inflation was not present in 2009 in the United States.

In 2009 the unemployment rate surged higher in the United States especially in the inner cities. Despite the massive layoffs crime rates continued to decline in the United States including in the inner cities because the overriding factor that determines crime rates – Inflation – was not present in 2009. (Whether inflation will be present in 2010 or into the future is an open question and not the subject of this article nor should any inferences or conclusions about inflation be taken from this article – you got that Ben and FOMC?)