Overcriminalization of the 99%, Undercriminalization of the 1%

Hey! Remember that time we declared a War on Drugs, and threw 5% of the US population in jail, and then there were no more drugs?

Too bad, because I could really use a joint right now.

We’re doing prisons wrong.

We’re supposed to use prison as a threat to deter crime. We’re not supposed to actually do it to one in 20 people!

The threat of punishment is more powerful than actual punishment. That’s why the US has nuclear weapons to wave around, but doesn’t use them (except maybe on Japan).

Incarceration is an ineffective threat not because prison is too nice, but because it’s too uncertain. Here is a fun tool that calculates your expected prison sentence based on the crime committed. But let’s be honest here: Your prison sentence is entirely a function of how much you pay your lawyer and, unfortunately, the color of your skin.

Criminals have no reason to believe that crime leads to punishment. Just a vague chance of punishment.

To reduce crime, increase certainty. In California, repeat offenders are less likely to commit a third offense thanks to the 3-strikes rule, which automatically gives 3-time offenders a life sentence.

It doesn’t actually matter what the punishment is. Place the criminal in a pillory and pelt him with dead cats, whatever. If it’s scary enough and certain enough, people will behave to avoid it.

Confinement only makes sense if a criminal is so dangerous that he needs to be kept locked up, away from society. This is not preschool where we give bad kids a time-out so they can think about what they did.

We’re doing white-collar justice wrong.

You can’t throw a corporation in jail, but you can prosecute it in court.

Arthur Andersen LLP, the accounting firm that helped Enron destroy documents, was convicted of obstruction of justice in 2002. The SEC cannot accept audits from convicted felons, so the firm surrendered its right to practice and went out of business. That threw tens of thousands of people out of work, most of whom had nothing to do with Enron’s accounting.

A corporate indictment is like dropping an atomic bomb on Hiroshima. It gets the job done, but it mostly destroys innocent civilians. Corporate leaders effectively use their employee workforce as a human shield against prosecution.

But in the past year, most major banks earned criminal convictions. The Justice Department was worried about that for awhile. Lucky for them, the SEC negotiated waivers that meant banks can conduct all their business as usual, even being criminals and all. That sounds unfair, but the collateral consequences of JP Morgan Chase going out of business probably suck.

That’s why most corporate cases go straight to settlement. The corporation pays a fine and nobody goes to court. Government agencies prefer this because, let’s be honest: Fancy bank lawyers do better in court than taxpayer-funded lawyers.

Remember that time the SEC fined Goldman Sachs $550 million for contributing to the financial crisis and everyone was like whoaaa…? Michael Lewis was only half-joking when he said that at Goldman, accounting always rounds to the nearest $50 billion.

$550 million rounds to zer0. When the government bailed out AIG during the financial crisis, $12.9 billion went to Goldman Sachs. $12.9 billion also rounds to zero.

A settlement is annoying enough to want to avoid it, but it’s not a big deal unless you’re poor. It’s kind of like getting a speeding ticket. You know, if speeding tickets were paid for by your shareholders.

See Also:
1. In America, mass incarceration has caused more crime than it’s prevented –qz.com
2. Get Out of Jail Free: How prosecutors and courts collude to keep corrupt executives from doing prison time. –prospect.org

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