Tuesday, July 30, 2019

Candidate Joe Biden on Criminal Justice -- An incomplete strategy

               In advance of the next debate round of Democratic candidates for President, former Vice President Joseph Biden unveiled his criminal justice plan. As a “criminal justice plan” for the U.S. government, in many respects, it is quite shockingly inadequate. Generally, the analyses I’ve seen of his plan frames it as a mea culpa for his years of leading crack down policy-making, and naturally, and as a riposte in his battle against other candidates for president. German Lopez at Vox explains its virtues well, noting these highlights:.

The plan includes many ambitious goals: decriminalize marijuana, eliminate mandatory minimum sentences for nonviolent crimes, end the death penalty, abolish private prisons, get rid of cash bail, and discourage the incarceration of children. All of it is aimed at reducing incarceration and fixing “the racial, gender, and income-based disparities in the system,” according to Biden’s campaign.
Certainly it is commendable as a crime prevention strategy and as a justice reform strategy.  Those are good ideas, but as a comprehensive criminal justice strategy for the U.S. Department of Justice and federal investigative agencies it is utterly incomplete.

             What is most striking to me, and I think is most important, is that there is no agenda for how to properly use the U.S. Justice Department to fight crime. There appears to be nothing that should be a priority assignment for the thousands of federal prosecutors around the country, or the tens of thousands of federal investigators.

            * There is no strategy or agenda for mass shootings or gun violence. He promises to issue something, “in the months ahead.” Developing a meaningful response to mass shootings is actually quite challenging, but surely the man who had been the leader of Senate Democrats on the Judiciary Committee for 20 years can put something on the table regarding background checks, interstate trafficking in firearms, or fencing stolen firearms.

            * There is nothing about antitrust violations, banking or securities regulatory violations and fraud, tax fraud and evasion, credit card fraud, consumer protection, telemarketing fraud, identity fraud, or fraud in general.

              *  There is nothing about addressing cyber attacks, terrorism, organized crime or illegal pollution and environmental crimes. (Biden says “he’ll require states to fix environmental health problems in prisons, such as a lack of clean water and clean air.”) 

              *  There is nothing about the role of the Department of Justice in investigating public corruption. 

                All of these are extremely important criminal justice responsibilities of the U.S. Department of Justice. It takes criminal referrals from the regulatory agencies -- these need to be encouraged. The nation cannot rely on state enforcement agencies for this work.

            Sadly these serious and uniquely federal crimes have frequently been downplayed by the U.S. Department of Justice that for decades has wrongly favored drug enforcement, and crimes that could be prosecuted by state authorities. Biden’s plan, so far, maintains a status quo that ignores “crime in the suites.”

            Americans are being attacked by fraud hourly. According to the Federal Trade Commission, in 2017, 1.1 million Americans reported that they were targeted by a fraudulent scheme, and suffered losses of over $905 million. If you are like me, multiple times a day our telephones ring with a crook trying to get us to give them our credit card numbers. They pretend to be calling from Microsoft to “fix your broken computer,” from IRS or the Justice Department warning that we are about to be arrested, our cousin or dear friend lost a wallet and desperately need money or is jailed and needs bail money, or some other scam. We are being inundated with attempts to defraud us if we have a fax number, an email address or a telephone. The 1.1 million is surely is an undercount as that is only the number of those who reported these attempts to the FTC. Fighting this climate of fraud is something an honest President of the United State should direct the Department of Justice to work on. Why, even the banks estimate they lost $2.2 billion in fraud in 2016.

            * There is nothing about prosecution of criminal violations of civil rights. Prosecution of actual instances of police misconduct – such as the killing of Eric Garner – the kinds of prosecution that happened in Los Angeles after the beating of Rodney King, are not part of this Biden criminal justice agenda

            Biden promises investigations of systemic patterns of police misconduct in order to obtain consent decrees to reorganize the management of police departments. That is a good thing, but there were 992 persons fatally shot by the police in 2018, according to The Washington Post. Investigating those shootings (and the countless incidents that are not fatal shootings) is the kind of job the U.S. Department of Justice has the resources and independence to carry out.

            Again, the agenda is a very wise statement of what to do about preventing crime, and how prisoners should be properly treated while in custody. The philosophy is the right philosophy. But as a plan for managing and governing the criminal justice establishment, it’s an incomplete.

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Wednesday, July 24, 2019

Marijuana Opportunity Reinvestment and Expungement (MORE) Act won't deliver

The Marijuana Opportunity Reinvestment and Expungement (MORE) Act, introduced July 23, 2019 simultaneously by House Judiciary Committee Chairman Jerold Nadler (D-NY) and U.S. Senator Kamala Harris (D-CA), is a major step toward a just and logical marijuana policy in the United States. A central feature of the legislation is the creation of a Community Investment Grant Program to benefit those communities and individuals who have been hurt by marijuana prohibition.

Specifically, the Community Investment Grant Program would provide "eligible entities with funds to administer services for individuals most adversely impacted by the War on Drugs, including—
     (1) job training;  
     (2) reentry services;
     (3) legal aid for civil and criminal cases, including expungement of cannabis convictions;
     (4) literacy programs;
     (5) youth recreation or mentoring programs; and
     (6) health education programs."

This is good stuff, but the grant program is funded by an "Opportunity Trust Fund" that is funded by a tax on all legal cannabis products (except for medical cannabis). The tax is set at 5 percent of the price of the cannabis product is sold.

Taxing is important and hard. Mark Kleiman wrote an excellent analysis of the issues involved in drug taxation in his 1992 treatise, Against Excess, pp. 69-80. Taxes are designed primarily for revenue, but influence behavior. Taxes can reduce unwanted behaviors, but can lead to evasion. If a tax is hard to collect and easily evaded that is counterproductive. Excessively high taxes, such as the infamous 1937 tax of $100 per ounce of marijuana if transferred to a person who was not registered as a physician, etc. was intended as a prohibition. (For comparison, a new Ford sedan cost $850.)

Taxing the price seems stupid to me, completely aside from the question of whether this percentage is the right amount.

First, we have seen that in the states, such as Washington and Colorado, that have first legalized retail sales of marijuana, that the retail price has been steadily dropping. Once this law takes effect, it is likely that the source of funds for the program is going to start shrinking. If we believe that the Community Investment Grant program is a good idea and needs to be funded, relying on a tax that is going to produce less revenue over time is not a good idea. Relying on the price of marijuana that is going to be declining means that the remedial effects of this program will shrink, not grow. 

Second, we need to think about the impact of the taxation on behavior, i.e., on the consumption of THC and how high people are getting. As a public health matter, using the tax to reduce the amount of intoxication is a good idea.  For the millions of recreational users -- once a week or so -- the amount of the tax will be negligible. But for those who use many times a day, the taxation becomes a more serious way to influence behavior by both depressing use or encouraging entry into treatment if use is problematic. Taxing the volume of THC being sold is the best public health approach.

Of course higher taxes are not "free." A tax that is easily and widely evaded is a problem, and collection can be challenging.  If there is wide disparity in the state tax rates on cannabis products, interstate smuggling of cannabis will become like the interstate smuggling of low-taxed cigarettes.

Thus, third, the tax should be imposed at the point of production, not at the retail level, where evasion is easy.

There is extensive evasion of high state and city taxes. In Chicago, according to a 2010 paper, as much as 3/4 of the cigarettes consumed in Chicago were obtained outside the city to avoid paying a $2.68 per pack tax. 

In New York City, the current combined city and state tax on a package of 20 cigarettes is $5.85. Last year, the Mackinac Center for Public Policy estimated that 56% of the cigarettes consumed in New York State were smuggled and the state lost $1.5 billion in tax revenue.

And, as we saw with Eric Garner, who was killed by New York police officer Daniel Pantaleo on the suspicion of selling "loosies" (single, untaxed cigarettes), the enforcement of these taxes can range from erratic to catastrophic.

Taxing at the retail level is counterproductive and potentially dangerous.

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