Tag: City Journal

An Update on America’s Homicide Surge

Mary Pat Campbell

Link: https://www.city-journal.org/update-on-americas-homicide-surge

Graphic:

Excerpt:

Last year, Christos Makridis and I used homicide data from the Centers for Disease Control to break down the 2020 homicide spike by geography and demographics. With another year’s worth of numbers now finalized—plus “provisional” numbers stretching into 2022—it’s time for a brief update. The CDC’s data, compiled from death certificates, are especially crucial in a year when the FBI completely failed to collect murder data from many of the nation’s police departments.

The good news is that, after spiking in 2020 and rising a little further in 2021, homicides seem to be falling again. The bad news is that this has been an extremely slow process, with recent numbers still well above pre-2020 levels, even if violence remains far from the sky-high levels of the early 1990s.

The CDC puts the national homicide rate at 7.8 per 100,000 for 2021, versus 7.5 for 2020 and 5.8 for 2019. Here are the month-by-month totals since 2018, including provisional data for the first half of 2022:

Author(s): Robert VerBruggen

Publication Date: 25 Jan 2023

Publication Site: City Journal

The Fed Goes Underwater

Mary Pat Campbell

Link: https://www.city-journal.org/fed-goes-underwater

Excerpt:

Before new trillion-dollar federal spending bonanzas became a regular occurrence, the Federal Reserve’s announcement that it lost over $700 billion might have garnered a few headlines. Yet the loss met with silence. Few Americans have noticed the huge increase in both the scale and the scope of the central bank or the dangers that it poses to the American economy. As Fed-driven inflation becomes the Number One political issue in America, that will change.

The Fed’s losses owe to a shift in the way it does business. Before the 2008 financial meltdown, the central bank tried to control interest rates by buying and selling U.S. bonds. A few billion in purchases or sales could move the whole economy, and this meant that the Fed, which operates much like a normal bank, could keep a relatively small balance sheet of under $1 trillion.

Since the financial crisis, the Federal Reserve, like other developed-world central banks, has used a different playbook. It provides enough funds to satiate the entire banking world, and it seeks to adjust the economy by paying banks more or less interest to hold those funds. These payments keep private-sector interest rates from dropping too low. When it first undertook this “floor” experiment, the Fed’s balance sheet exploded to more than $4 trillion. After the Covid pandemic, it approached $9 trillion.

A larger balance sheet means greater risks. And the Fed has added to that risk by purchasing longer-duration assets. Pre–financial crisis, the Fed bought mainly short-term federal debt. Only about 10 percent of all the U.S. bonds owned by the central bank lasted longer than ten years. Now, that figure has risen to 25 percent.

Author(s): Judge Glock

Publication Date: Winter 2023

Publication Site: City Journal

The Biden Bucks Blowout

Mary Pat Campbell

Link: https://www.city-journal.org/the-biden-bucks-blowout

Excerpt:

Not to worry: the Biden administration is coming to the rescue. The town of Palm Beach Gardens is using $2 million in federal money from President Biden’s $1.9 trillion American Rescue Plan Act (ARPA) to build a $16 million public course, with a two-story clubhouse and driving range that should help at least partially slake the new thirst for golf. The city’s project, one of several golf-course investments that the Biden legislation is funding, is entirely within the spirit of the “rescue” act, which devotes only about 9 percent of its money to public-health causes that fight the virus but allocates hundreds of billions of dollars to local governments and schools for the vague task of providing “support for a recovery” and funding “investments in infrastructure.” As one wag at a South Florida newspaper observed, “If this keeps up much longer, Palm Beach Gardens may get an equestrian center from it.”

Showering local governments with unprecedented federal dollars, ARPA is the last of several emergency packages, totaling more than $5 trillion, to come from Washington in response to the pandemic. Though termed a “rescue bill” to enhance its appeal, the Biden legislation was more of a stimulus, designed to stoke spending by the country’s tens of thousands of local governments to boost economic activity. Signed by the president in March 2021, even as the economy was recovering and tax revenues were rebounding far faster than most analysts had predicted, ARPA allows for wide discretion in how to spend “Biden Bucks.”

The federal money has turned pols into the proverbial kids in the candy shop. They’re using it to restart parades, fund street performers, upgrade high school weight rooms and sports fields, and build bike paths, golf courses, pickleball courts, and other “essential” infrastructure. Billions of dollars are going to illegal aliens. Cities are testing efforts to give low-income residents guaranteed money that supporters say will end poverty. Municipalities are moving to construct their own broadband networks, in competition with the private sector. It’s all part of a program whipped up so quickly that it included billions of dollars for municipal governments that don’t even exist.

To many local officials, ARPA’s allocations seem like free money. But it comes at a cost to the United States. The act’s funds haven’t been generated by taxes or other federal revenues. Instead, they’re financed by “printing” new money (something done mostly via electronic keystrokes these days)—massively expanding the dollars in circulation and thus intensifying our current inflation, the highest in decades. Aside from the pain that the upward spiral of costs is causing ordinary Americans, inflation is also raising the price that governments pay for essential services like police and fire protection, even as politicians rush to spend their one-time Biden Bucks on ephemeral projects and untested programs. With a Federal Reserve–induced recession, sparked by high interest rates to curb inflation, now a distinct possibility, Biden Bucks may soon be remembered as the spending blowout that preceded a local government budget bust-up.

Author(s): Steve Malanga

Publication Date: Autumn 2022

Publication Site: City Journal

A Woke Panic on Maternal Mortality

Mary Pat Campbell

Link: https://www.city-journal.org/a-woke-panic-on-black-maternal-mortality

Excerpt:

The Centers for Disease Control and Prevention has created the public concern about black maternal mortality. In February, the CDC released data showing that the maternal mortality rate for black women is 2.9 times higher than the rate for white women. It’s a worrisome statistic, yet the CDC’s own data, as well as a study from the CDC Foundation, provide crucial (and generally unreported) context.

To be clear, even a single death of a pregnant woman is one too many. But the overwhelming majority of women survive motherhood: in 2020, according to the CDC, 861 women in the United States died related to pregnancy, out of a total of about 3.6 million births—a rate of 0.02 percent. Just over 350 were white, while just under 300 were black. Scientifically speaking, it’s hard to draw society-wide conclusions from such a small sample. It’s even harder when you recognize that the CDC statistics include deaths that occurred up to a year after delivery, as well as those caused by underlying and preexisting medical conditions that pregnancy may have aggravated. And the CDC admits that the systems for identifying mortality rates are prone to error.

….

The panel found that less than about a third of the preventable deaths, across all races, were attributable to individual providers. It did not cite racial bias as the reason. Yet the academic and media narrative leads to the assumption that black mothers are dying because doctors and nurses are racist. This leads to a corresponding claim that black mothers would die less often if they saw black doctors, which some call “racial concordance.” These are strange assertions, since Hispanic maternal mortality is lower than the rate for whites, which wouldn’t be true if medical professionals were racist. Yet these claims are still being used to justify discriminatory and dangerous policies across health care.

Author(s): Stanley Goldfarb, Benita Cotton-Orr

Publication Date: 18 Nov 2022

Publication Site:

A State Tax War

Mary Pat Campbell

Link: https://www.city-journal.org/remote-work-and-the-state-tax-war

Excerpt:

The Supreme Court’s unwillingness to intervene in a fight among states over taxing income from remote work may spark a jurisdictional revenue war. In August, the Court refused to take up a lawsuit by New Hampshire against Massachusetts’ practice of levying income taxes on Granite State residents employed by Bay State companies but working from home during the Covid lockdowns. Now New Jersey officials, who filed an amicus brief in the case because the state’s telecommuting residents are similarly taxed by New York, have proposed a law that would let the state tax telecommuters, including possibly tens of thousands of Empire State residents now working from home but employed by Garden State companies. The in-your-face legislation also provides incentives for Jersey residents to challenge New York’s law in tax court—one of the only venues left to residents after the Supreme Court decision. Given that several hundred thousand New Yorkers once commuted to other states to work and may now be staying home to telecommute, Albany risks losing revenues. 

Beginning in March 2020, Covid restrictions brought a sharp rise in telecommuting, or working remotely from home. Studies have suggested that, during the pandemic’s initial phases, up to 36 percent of all private-sector employees, or about 43 million people, worked at home at least one day a week, and 15 percent, or about 18 million, telecommuted full-time. Census data before the pandemic found that as many as 6 million workers regularly cross state lines to go to their jobs. So it’s likely that several million current telecommuters have jobs with firms in another state. In New Hampshire, about 15 percent of residents with jobs—some 84,000 workers—commuted to Massachusetts pre-pandemic.

Author(s): Steven Malanga

Publication Date: 26 Sept 2022

Publication Site: City Journal

Crash Curse: In New York City, traffic deaths are up as enforcement is down.

Mary Pat Campbell

Link: https://www.city-journal.org/nyc-traffic-deaths-up-as-enforcement-is-down

Graphic:

Excerpt:

Since the Covid pandemic hit New York City in March 2020, traffic deaths have skyrocketed, just as they have across the country. Locally and nationally, these deaths have paralleled the same double-digit trajectory upward as homicides and drug-overdose deaths. In 2019, 220 New Yorkers died on city streets, near the record low of 206, set the year before. In 2021, 273 people died, a nearly one-quarter increase in two years. In 2022, as of late May, 93 people have died, down slightly from last year, but 12 percent above pre-Covid levels.

….

s in many areas of public safety and public health, New York City started the pandemic with an advantage. In 2019, the city’s 220 traffic deaths—whether people in cars, or pedestrians, or cyclists—represented a per-capita rate of about 2.6 per 100,000 residents, just a small fraction of the 11.1 per 100,000 killed nationwide. Among large, urbanized areas, New York stood out for safety, as well. In Miami-Dade County in 2019, for example, the rate was 11 per 100,000; metro Atlanta’s rate was similar. Even among denser northeastern and mid-Atlantic cities, which have long had lower traffic-death rates than the sprawling south and west, New York performed slightly better than Boston, with its 2.8 traffic deaths per 100,000, and much better than Philadelphia, with its 5.7 deaths per 100,000.

Pre-pandemic, New York’s falling traffic deaths made it a national outlier. Between 2011, when traffic deaths hit a modern low nationwide, and 2019, such fatalities across the country rose by 11.9 percent, to 36,355 annually. In Gotham over this period, by contrast, they fell 12 percent. The difference in pedestrian casualties was especially striking. Nationwide, pedestrian deaths began rising in 2010, after having fallen, reasonably steadily, for at least three decades. By 2019, annual pedestrian deaths had risen from their 2009 low by more than half. But in New York, pedestrian deaths fell by 21.5 percent over the same near-decade.

Author(s): Nicole Gelinas

Publication Date: Summer 2022

Publication Site: City Journal

Inflation: Return of a Plague

Mary Pat Campbell

Link: https://www.city-journal.org/inflation-return-of-a-plague

Excerpt:

Experience has once again verified Friedman’s and Lucas’s theories, reducing to nothing the naïve propositions of Modern Monetary Theory, a recent delusion of the American Left. According to this unscientific, ahistorical theory, legislatures can control the production of money and distribute it in a way that satisfies all needs, with no destructive consequences from expanding the money supply. The question of reimbursing a gigantic public debt is not supposed to arise, because no one can force the government to pay what it owes. But this magical solution, adopted in part by Joe Biden, ignores the fact that public debt produces inflation and that a debt that is not repaid, as in the case of Argentina, eventually ruins the currency. All this was well known, at least by economists, so it is surprising that governments in America and Europe had not taken it into account of late. They have short memories. From the 1980s until recently, inflation had been constrained thanks to public policies inspired by Friedman—but policymakers had forgotten its threatening presence, as if it belonged only to the past. We can liken inflation with pathogens: smallpox has disappeared, but vaccination is what made it disappear; stop vaccinating, and the evil can return. In the 1980s, central banks helmed by Friedman’s disciples, such as Paul Volcker in the United States or Jean-Claude Trichet in Europe, raised interest rates and defeated inflation by reducing the money supply. Today, economic policymakers will need to apply the same remedy as in 1980. Central banks are working on this, but their conversion comes late; they have waited for inflation to establish itself before responding, a delay that will make the remedy more painful.

Author(s): Guy Sorman

Publication Date: 14 Jun 2022

Publication Site: City Journal

The Empire of Fees

Mary Pat Campbell

Link: https://www.city-journal.org/how-charges-and-fines-drive-government-growth

Excerpt:

hen I wake up in the morning at my home in Austin, Texas, I turn on the lights, and thereby provide a few cents to the city government’s electric company. I flush the toilet, owing a few more to Austin’s sewer service. When I pour myself a glass of water, the city water department gets a piece. After I get dressed and step outside, I watch the city take my trash, my recycling, and my compost—each pickup costs a few dollars. Sometimes, I discover a $25 ticket for parking my car in the wrong spot. Then I swallow my anger and drive down the MoPac highway, where I pay a toll to the Central Texas Regional Mobility Authority. I park in a garage downtown owned by the Austin Transportation Department, pay them a few bucks, and walk to my office. If I need to take a trip out of town, I pay $1.25 for a Capital Metro District bus to the city-owned Austin-Bergstrom International Airport, where, along with the price of my plane ticket, I pay a $5.60 fee for the benefit of being patted down by a TSA agent, a Passenger Facility Charge, and a small part in any rents the city charges restaurants and retailers. Only when I’m in the air does the drain to the government stop.

In one typical morning, I handed over money to several government bodies. But I didn’t pay any taxes—only fees, charges, and fines. These are the future of government in the United States.

The idea that government operates just by taxing and spending money is anachronistic. A growing share of its revenue comes from charges that the government imposes in exchange for its services or as a penalty for breaking its rules. In 1950, about 1 percent of Americans’ income went to charges from state and local governments. Today, that number is 4 percent. Include federal fees and charges, themselves the fastest-growing part of federal revenue, and that number rises to over 5.5 percent. Though largely hidden from the public, fees and charges account for most of the growth in government over the past 70 years and have become the top source of revenue for state and local governments.

Author(s): Judge Glock

Publication Date: Spring 2022

Publication Site: City Journal

No Ordinary Panic – Bank Run in Russia

Mary Pat Campbell

Link: https://www.city-journal.org/russian-bank-run-is-no-ordinary-panic

Excerpt:

The war in Ukraine and subsequent international sanctions have triggered a bank run in Russia. But this is no ordinary run—it may become a run on the central bank itself, one that holds important lessons for introducing central bank digital currencies.

Reports show Russians lining up at ATMs to withdraw their cash. For now, the run is largely driven by fears of withdrawal limits and the anticipation that credit cards and electronic means of payments will cease to function. If that happens, cash at hand is the better alternative. For that scenario, central banks know what to do: provide solvent banks with plenty of liquidity against good collateral, as Walter Bagehot recommended.

But will that be all? As Western countries freeze the Russian central bank’s reserves and limit the ability of banks to transact internationally, the exchange rate of the ruble has collapsed, falling by more than 40 percent. Prices for ordinary goods may begin to rise, perhaps dramatically so. If that happens, then rubles would no longer be a good store of value. Russians may seek to convert them into foreign currency, but that’s hard to do with the current sanctions. Consequently, they may start to hoard goods instead, dumping their cash as they go along. The situation would no longer be a run on specific goods, but a run away from fiat money and toward goods—a run, in other words, on the central bank.

Author(s): Linda Schilling, Jesús Fernández-Villaverde, Harald Uhlig

Publication Date: 7 Mar 2022

Publication Site: City Journal

Understanding the Covid Odds

Mary Pat Campbell

Link:https://www.city-journal.org/understanding-the-covid-odds

Excerpt:

Those odds can be gauged from a study by researchers at the National Institutes of Health, published by the Centers for Disease Control. They tracked more than 1 million vaccinated adults in America over most of last year, including the period when the Delta variant was surging, and classified victims of Covid according to risk factors such as being over 65, being immunosuppressed, or suffering from diabetes or chronic diseases of the heart, kidney, lungs, liver or brain.

The researchers report that none of the healthy people under 65 had a severe case of Covid that required treatment in an intensive-care unit. Not a single one of these nearly 700,000 people died, and the risk was miniscule for most older people, too. Among vaccinated people over 65 without an underlying medical condition, only one person died. In all, there were 36 deaths, mostly among a small minority of older people with a multitude of comorbidities: the 3 percent of the sample that had at least four risk factors. Among everyone else, a group that included elderly people with one or two chronic conditions, there were just eight deaths among more than 1.2 million people, so their risk of dying was about 1 in 150,000.

Those are roughly the same odds that in the course of a year you will die in a fire, or that you’ll perish by falling down stairs. Going anywhere near automobiles is a bigger risk: you’re three times more likely during a given year to be killed while riding in a car, and also three times more likely to be a pedestrian casualty. The 150,000-to-1 odds of a Covid death are even longer than the odds over your lifetime of dying in an earthquake or being killed by lightning.

Author(s): John Tierney

Publication Date: 6 Feb 2022

Publication Site: City Journal

An Epidemic of Bad Budgeting

Mary Pat Campbell

Link: https://www.city-journal.org/covid-19-lockdowns-exposed-cities-deep-seated-financial-troubles

Graphic:

Excerpt:

The past year has been a fiscal nightmare for Nashville. Covid-19 helped punch a $332 million hole in the city’s $2.46 billion budget. Tennessee state comptroller Justin Wilson warned that, without drastic action, the state might take over management of Nashville’s affairs. In response, the city council raised property taxes 34 percent, spurring a citizen revolt in the form of a ballot initiative to overturn the tax hike. Without the extra revenue, however, Mayor John Cooper’s administration said that drastic cuts would be unavoidable: “Few corners of the Metro government, including emergency services and schools, would be spared significant reductions or eliminations.”

Nashville’s budget woes predate the pandemic: the city began borrowing money to cover deficits after the Great Recession of 2008–09. City leaders, at the same time, went into heavy debt to build new government-owned attractions, offered workers health retirement benefits that they haven’t funded, and deep-sixed pension reforms that saved the state billions of dollars. In fact, back in December 2019, the state comptroller issued a similar warning to Nashville about its shaky finances.

The Music City isn’t alone. The Covid health emergency and accompanying economic downturn caused budget crises for municipalities—cities, counties, and school districts—across America. A February letter from 400 mayors to President Biden said that the pandemic-inflicted strain on municipal budgets had “resulted in budget cuts, service reductions, and job losses” throughout local government. America’s largest city, New York, grappled with a nearly $10 billion budget deficit in the spring of 2020, while Chicago struggled with a $2 billion gap. Dozens of local governments used the crisis to justify budget maneuvers that fiscal experts generally frown upon, from borrowing money to close deficits to issuing bonds to fund employee pensions.

Author(s): Steven Malanga

Publication Date: Summer 2021

Publication Site: City Journal

Opioids and the Unattached Male

Mary Pat Campbell

Link: https://www.city-journal.org/opioids-and-the-unattached-male

Graphic:

Excerpt:

From 2010 to 2019, the drug-related death rate among never-married prime-age white men increased some 125 percent: from 52 deaths per 100,000 to 117 (including 2020 would show an even steeper rise, but the pandemic affected Census data collection). If single and divorced prime-age white men had seen opioid deaths rise by only the same rate as those deaths rose among their married counterparts, the U.S. would have seen 38,800 fewer deaths from drug-related causes over the past decade just among this demographic group.

A marriage certificate is no prophylactic against the scourge of drug overdoses, of course. Marital status is correlated with income, race, and age; while death certificates don’t report income, we know that married decedents are more likely to be white, older, and better-educated. Controlling for those factors still shows single men to be at greater risk of dying from drug-related causes than married ones.

Author(s): Patrick T. Brown

Publication Date: 14 Jan 2022

Publication Site: City Journal