Part I focused on economics. Part II focused on politics. Part III applies these disciplines to explain how the preceding political economy of a dual economy affects government activities in the United States.
The Lewis model predicts that the FTE sector will not do anything to help members of the low-wage sector because its members want wages in the low-wage sector to remain low. Racecraft and white rage give rise to fears of revolt by minorities of different races and lead to active repression of black and brown members of the low-wage sector. The oxymoron “majority minority” expresses white people’s fear that they will become outnumbered in the United States. Everyone else is a minority by definition, since the founding fathers were white, even if by 2030 or so the minorities will be the majority.
These strands combine in a political plan to lower taxes, the prime aim of the very rich. The FTE sector as a whole does not want to increase wages and well-being in the low-wage sector. The result is to starve or even destroy the welfare state built up during the twentieth century. Only the very rich want to destroy the New Deal and its 1960s extensions; the FTE as a whole seems willing to keep these programs functioning at a low cost. The connection between race and incarceration rates has been noted by sociologists, but the connection of both to the worsening distribution of income often has not been drawn.
As this plan has developed, it has taken the form of reducing the resources allocated to various government welfare programs. These programs need to scrimp and save; the quality of their services goes down. Then the FTE sector argues that the programs are working badly and should be privatized. This is expressed in the oxymoron of “private public” schools, colleges, jails, and so on. Academics debate how well these private substitutes work, while the very rich see privatization as an end in itself.
The single government activity approved by the FTE sector is the military. The FTE sector is eager to enlarge military spending and they support militarization of government services that they cannot do without. Police in the United States have become paramilitary organizations. The Pentagon gives them surplus military equipment, and the police use the same equipment in the United States that the military used in Iraq.
This can be seen in the reaction to the tragic events in Ferguson, Missouri, when a policeman shot and killed Michael Brown, an unarmed black teenager who was about to start college, in the late summer of 2014. The community was outraged by this apparently random killing of a black teenager, and there were massive public demonstrations in the following evenings. The police showed up for one of the evening demonstrations in a fortified military personnel carrier. This was a dramatic sign that the police were at war with the black residents of Ferguson.1
Another sign was the killing of a sniper who shot at police officers in Dallas while they were protecting a peaceful protest in 2016. The police used a “bomb robot” to carry a bomb near the shooter and then detonated it. In doing so, they repurposed a remote-controlled bomb-disposal vehicle normally used to inspect dangerous crime scenes or pick up suspected explosive devices for detonation or dismantling. The decision to deliver a bomb by robot stunned some law-enforcement officials, who said they believed the new tactic blurred the line between policing and warfare. The objective in war is to kill your opponent; police should have a different and more nuanced function. But the further you reduce a police officer from the effects of using force, the easier it is for him or her to use it, and some officers said they would use a bomb in similar circumstances. Observers compared this military escalation with the armored personnel carrier used in Ferguson.2
The aftermath of the Ferguson shooting also is revealing. The local prosecutor presented evidence to a grand jury investigating the shooting and declined to indict the police officer. The federal government then investigated the Ferguson police department for violating equal-protection laws. They found that the police department violated these laws in several ways. The most prominent way was to finance itself by imposing fines on black residents of Ferguson for trivial events like traffic violations and failing to show up for legal procedures.
The city and the federal government reached agreement on a plan to reform the actions of the Ferguson police force in accordance with the law. When the city reneged on the agreement, the Department of Justice sued. The town needed to raise taxes to substitute for the revenue previously obtained from fines on black residents and avoid a court case. But voters rejected part of a tax package the city leaders had described as essential for carrying out the legal settlement with the Department of Justice. Voters approved an increase in the sales tax, and they rejected a proposed property tax increase.
This outcome illustrates how the Lewis model applies to the United States today. Blacks in Ferguson are almost entirely in the low-wage sector. The Ferguson negotiators with Washington agreed on taxes to replace the fines on black drivers and arrested men and women. The voters rejected an increase in property taxes because the FTE sector does not want to pay taxes to help the low-wage sector. Sales taxes were fine, in contrast, since they are mostly paid by members of the low-wage sector. The fate of legal policing in Ferguson is up in the air.3
The United States has a dual judicial system where the FTE sector pays taxes and occasionally fines, and the low-wage sector is subject to frequent fines and imprisonment for failure to pay fines. This pattern has been repeated in many other cities large and small, including police shooting of unarmed black youngsters, racist policing, taxation through police fines, and federal government attempts to deal with the resulting legal violations. The federal government is limited in its power to protect poor black communities. The resulting destruction of social capital often does not emerge clearly in the legal and economic problems of the militarized police and city administrations, but it is an important part of the dual economy in the United States.
Speed traps levied primarily on black drivers are a source of income in other governments around St. Louis, and lawsuits are pending in some of them. Chicago black residents also have been experiencing disproportionate traffic and street stops; they account for three-quarters of the four hundred people shot by the Chicago police between 2008 and 2015. Militarization and racism make a destructive and often lethal combination.4
Immigration similarly has become militarized. The immigration issue is reduced to border control, and the tensions between the businesses that want Latino workers and the white workers opposed to black and brown competition are not resolved. Militarization of the border can’t resolve this complex issue. Continuing debate focuses on military solutions, and Latino immigrants suffer and sometimes die as a result. They are at risk of winding up like Nelson Fernandez, the father of a United States citizen and a legal permanent resident for twenty-six years. He had been arrested and served probation in 1992 and is now facing deportation for that offense. He is incarcerated in a county jail where he cannot not get the medical care he needs.5
These programs are supported by the FTE sector’s efforts to repress anticipated opposition by African Americans and Latinos. Militarization in the form of incarceration brings this need in line with the aims of destroying the welfare state. The War on Drugs is the center of the push to destroy black and brown communities through mass incarceration. The unique American combination of race and class affects both the structure and operation of the government, and the effort to keep African Americans and their more recent Latino neighbors in their place imposes large costs on the great majority of Americans today.
Mass incarceration began in 1973, shortly after Nixon’s introduction of the War on Drugs. The economic disturbances of the 1970s were described in chapter 2; they led to an apparent rise in crime, although the reports may have only shown better crime measurement. Urbanization was increasing, the Great Migration had brought many African Americans into the North, and baby boomers born in the years after the Second World War were becoming young adults—the prime age to commit crimes.
The response to these economic and social disturbances was determined by Nixon’s New Federalism and Reagan’s reduction of funding for social programs. The alternative was to get tough with crime, to punish rather than prevent crime, to incriminate instead of educate. This approach was started in New York with the Rockefeller Drug Laws of 1973. It was followed by Nancy Reagan’s appeal to “Just say no” to drugs and by Clinton’s 1994 drug law that increased incarceration at the same time it gave funds for prevention. This toughness appeared justified in the face of the heroin, cocaine, and crack cocaine epidemics in succeeding decades of the late twentieth century. And it focused the anger of working whites at their economic troubles and social disruptions on African Americans in the form of white rage.6
African Americans are far more likely to be incarcerated than other population groups, and the New Jim Crow is an important part of the complex of measures designed to keep African Americans poor and politically marginalized in America. Bruce Western concluded from a careful analysis of the causes of mass incarceration that “law-and-order politics grew out of reaction to the gains of the civil rights movement and anxieties about rising crime rates among white voters.” Incarceration grew fastest in those states where jobless rates were highest. And while political parties were hardly identical, their actions were not so different that changing the results of some elections would have changed the outcome of mass incarceration very much.7
The costs of mass incarceration are not confined to the black community. It takes resources to process and house so many prisoners. States pay about $50 billion a year to support prisons. They pay about $75 billion for higher education. If the cost of prisons were cut in half, leaving the cost of incarceration still above the cost in almost all other countries, states could spend far more on state colleges and universities. Tuition costs are about $40 billion a year; they could be reduced by two-thirds. This change would sharply reduce the growth of student debt chronicled in chapter 4.8
The costs also are far higher than conventionally measured due to the need for several agencies of the government to spend money on prisoners. Prisoners held for bail in local jails probably cost half again as much as directly measured. A comparison of costs in two counties in Kansas and New Mexico found that the average cost per inmate was twice as expensive in one than in the other. The low-cost county had been reducing jail overcrowding for the last few years, providing substantial savings for taxpayers. The county pays less for out-of-county jail beds, and it is closing housing units with all their associated personnel costs. There are ways to reduce the cost of incarceration that do not pose significant dangers for the community.9
Massachusetts presents a strange picture in this regard. Regarded as a liberal state with many universities and lots of FTE activities, Massachusetts nevertheless spends as much on incarceration as it does for higher education. The apparent disconnect is explained by the Lewis model. The strong FTE sector is involved in its own activities and tacitly approves incarceration policies that affect the low-wage sector.
One aspect of Massachusetts incarceration practice that has been observed is for prisoners waiting for trial. Bail to ensure the accused shows up for trial should be set according to the probability of that person showing up for trial, but decisions whether to release an accused person with bail are influenced by factors unrelated to this risk. The rate of African Americans in jail awaiting trial varies widely among counties, suggesting the process is discriminatory, and bail amounts for African Americans on Cape Cod are four times as high as for whites. These practices suggest discrimination at work, although this suggestion has not been tested. It is clear, however that the use of bail to hold people for a trial imposes large costs on poor people who cannot raise even small bail and have to spend time in jail. Their incarceration frequently means losing a job and causing other hardships for friends and family.
This is particularly true when women are incarcerated. The number of women in jail awaiting trial has gone from 150,000 in 1970 to 750,000 in 2014. The increase is largest in small counties, where total incarceration has grown to exceed the rate in cities. The jailed women are largely poor and black or brown, and the effect on their families is large. Attorney General Loretta Lynch said, “Put simply, we know that when we incarcerate a woman we often are truly incarcerating a family, in terms of the far-reaching effect on her children, her community, and her entire family network.”10
If counties reduced pretrial confinement, they could save in many ways. Food and laundry expenses are reduced. Labor costs fall as fewer guards and other service people are needed. And even more savings accrue when housing units can be closed. Massachusetts could save large amounts of money by gathering a data bank to track pretrial prisoners and find out how best to deal with them. That would be easy for an interested FTE sector to do. A more complex plan would be to provide pretrial assessment of prisoners with the aid of professional nonprofit agencies. Some states have taken advantage of new possibilities, but many have an FTE sector that cannot be bothered.11
One in three black men can expect to go to jail in America today, as noted in chapter 3. As explained there, it is very hard for ex-convicts to enter the labor force on a par with others who have not been in jail. The effect on black incomes is strong. With one-third of black men out of the effective labor force, the other two-thirds of black workers would have to be more productive by one-half than white workers to make the incomes of blacks and whites the same. This imposes a huge cost on the African American community.
Comparison with the rate of Latino incarceration shows that this policy affects other minority groups as well. While one in three black men goes to jail, one in six Latino men also goes to jail. The rate for white males is one in seventeen, and the incarceration rate for Latino males is closer to the rate for black males than to the rate for white males. One in six is still high, and Latino communities suffer some of the same costs to their social structure as do blacks. The War on Drugs represses Latino communities, making it harder for Latinos to integrate completely into American society.12
Whites and blacks use drugs at the same rate, but blacks are far more likely to be charged and convicted on drug charges than whites. Blacks are more than three times as likely to be arrested for marijuana possession, although whites and black use marijuana at the same rate. Marijuana arrests increased during the decade before 2010 and now account for over half of all drug arrests. Given the number of blacks in the United States, blacks are a minority of people in prison today even though they are arrested more often. Blacks are about 15 percent of the national population and 40 percent of the total number of prison inmates, making blacks three times as likely as whites to end up in prison. As noted in chapter 3, whites in the low-wage sector have as low levels of social capital as blacks. They are the majority of inmates, and our judicial system keeps low-wage whites down as well as operating as a new form of Jim Crow.13
Three-quarters of today’s imprisoned drug offenders did not have any serious history of violence before their drug conviction. Half of them are in very low criminal history categories, but the average expected time served for drug offenses is close to ten years. Mandatory minimum jail stays markedly increase the length of sentences. And almost all drug offenders are held in state prisons, making it hard to reduce our bloated prison population by, say, cutting drug jail sentences in half. A bill to reduce mandatory minimum sentences with bipartisan backing failed in the Senate as 2016 election posturing got in the way.14
The United States now has far more of its population in jail than any other industrial country, and prisons cost a lot of money at a time when government resources are tight. The prison population has gone down slightly in recent years, but this has been accomplished by freeing inmates who have been in jail a long time rather than reducing the inflow into jails. To change arrest and conviction rates, a major change has to be made in laws and behavior. Since most incarceration happens at the state level, change would have to come there as well; it will be a long process even if it is eventually successful.
The United States treated insane people who acted badly as criminals early in our history. Many people became disenchanted with this process before the Civil War, arguing that ill people should not be subject to the same poor conditions and harsh prisons as criminals. Led by Dorothea Dix, reformers persuaded states to open insane asylums for these mentally ill people. By the 1950s, however, insane asylums had become bloated and inefficient. Reformers induced states to close asylums in favor of outpatient treatment. Lawmakers closed insane asylums, but they refused to fund outpatient clinics to help the patients take the newly introduced antipsychotic drugs. The Supreme Court ruled in 1975 that it was unconstitutional to hold anyone in jail who was not dangerous to others against his or her will.15
This decision changed the judicial question of insanity to a question of danger to others. Judges are hampered in trying to rule on this question by the failure of states to fund either outpatient mental-health clinics or other mental health diagnostic facilities. We have returned to the antebellum conditions of throwing insane people into prison with the mass of drug users and other criminals without much thought.
One sad result of these policies was the rape and murder of a young white woman in 2009 by a black man who had been in and out of the judicial system for many years and ended up incarcerated for the rest of his life. The financial and social costs of mass incarceration are apparent; this example reveals a painful and expensive human cost. The rape and murder were committed by Isaiah Kalebu, the son of an African immigrant and an African American woman, who grew up in a violent household where disputes and disagreements were expressed physically. Isaiah was bright and did well in school when he could focus on his studies, but he became steadily more distracted from his studies as he advanced and dropped out of college.
Isaiah spent the next few years living and fighting with his family, landing frequently in front of judges and sometimes in jail. The judges who let the young man go had limited time and information to make these decisions. His mother and sister, who had borne the brunt of dealing with him, obtained restraining orders to keep him away, and his aunt became the main caretaker. When it became too much for her, she also got a restraining order. Isaiah’s aunt died in a fire almost immediately, which may have been caused by the increasingly troubled young man. He was on the street without the support of his family—who clearly could not cope with him.
Shortly thereafter, Isaiah raped and murdered a young woman living in a poorer part of Seattle who was engaged to be married. He was tried for murder and sentenced to life imprisonment without parole. The total cost of his many contacts with the judicial system and his expected life in prison exceeds $3 million. This is far more than treatment of his problems would have cost if a suitable way to provide appropriate treatment had been operational. The long history of the criminal insane suggests that it is hard to construct and maintain such a system in our political structure.16
There are two ways to see this story. It can be seen as a rerun of the famous Willie Horton ad that was run in the 1988 presidential election and may have cost Michael Dukakis the presidency. This ad featured a black prisoner out of jail on a furlough program who raped a white woman and stoked the fears of white Americans against their presumed angry and dangerous black neighbors.17 Or it could be seen as a warning sign that our system of mass incarceration is blinding us to the real needs of society. We want dangerous people to be removed from harming us, but we lack a good method of distinguishing who is dangerous. Given the 1975 legal standard and inadequate funding for mental treatment in the United States, judges are likely to err on the side of leniency. Their decisions are good for many ill people, but increase the probability of dramatic and tragic stories like this one.
Public defenders are supposed to help the judicial system deal fairly with accused people, as indicated by the Supreme Court in 1963. But spending on indigent defense amounts to barely 1 percent of total government spending on criminal justice and has not risen in the past decade even though felony cases have risen by almost 50 percent Almost 90 percent of states require indigent defendants to pay a portion of their lawyers’ fees. The defendant can be acquitted of his or her drug offense only to be convicted for being unable to pay for the legal services the state is required to provide. Funding for public defenders in Louisiana is so low that the waiting list for an attorney is over two thousand people long—and in jail—and growing.18
At the other end of the income distribution, rich people in the FTE sector accused of crimes are asking judges to lock them up in gilded cages. Since the rich are separated from low-income travelers on cruises to keep them from being disturbed by the hoi polloi, they do not understand why their stay in jail should be any different from a luxurious cruise.19
The FTE sector is not interested in heeding this warning. It treats mental health and the judicial system the same way it treats education, as described in chapter 4 and the next chapter. Incarceration and education are complex and have long-term effects; they do not affect conditions in the short run. When states are short of money, these services are cut. Then we deal with the resulting problems by militarized means. And support for that sequence of events is increased by repeating alarmist stories, like the one about Willie Horton.
Scare stories are persuasive due to the view that can be traced back to Nixon—like so much in this book. According to this view, crime is a breakdown in social order best combatted by tough measures usually associated with wars. Criminals are not regarded as people who have done bad things, but rather as bad people. Just as racecraft condemns people with dark skins to punishment, the belief in criminal mentalities condemns people to jail and continued punishment after they are released. While the United States was vastly imprisoning more people after 1971, other advanced democracies were systematically reducing incarceration rates.20
Prison reform is made more difficult by the growing influence of private prisons as the majority minority oxymoron interacts with the private public oxymoron. The American government has turned to competition for incarceration to solve society’s problems without added cost to the government, just as for-profit colleges were approved to solve problems of higher education at low cost. Two prison firms dominate the expanding business of private prisons. Both firms were started in the 1980s, perhaps by entrepreneurs who realized that the decline in state revenues from the New Federalism and the rise in prison expenses from the War on Drugs would create an opening for privatization. The private prison firms have rapidly increased the penal population in their prisons, although they still account for only a small part of the county’s mass incarceration. Their interest is getting more—not fewer—people into prison.
The growth of private prisons illustrates many themes. It is a clear example of the private public oxymoron, with the problems just described. It also is an example of the willingness to support military action over cooperative efforts. Activities to rehabilitate prisoners for life outside prison and educate them for future jobs will not be found in these private prisons. Criminalization of ordinary activities has extended the militarization of police into a conception of prisons that are more like prisoner-of-war camps than what we hoped prisons could be. The shadowy trail of prisons for immigrants provides glimpses of what goes on in the varied jails and prisons around our country.21
The private prison firms communicate their interest in more prisoners to state legislators in various ways: by campaign contributions, personal relations, and lobbying. The Corrections Corporation of America has spent over $20 million on political campaigns and lobbying and is continuing these efforts today. They also lobby through the American Legislative Exchange Council (ALEC), the conservative, nonprofit organization founded and funded by the Koch brothers in 1973 and described in chapter 2. ALEC promoted model bills on mandatory minimum sentencing and three-strikes legislation that helped promote the growth of mass incarceration in the 1990s. The influence of the private prison firms and ALEC impedes efforts to reduce American incarceration. Lobbyists from the private prison industry actively campaigned for three-strikes laws.22
ALEC is one of the ways that the Koch brothers and their supporters affect political outcomes. Started soon after Powell’s secret memo of 1971, it is the only lasting national legislative organization, and it has enough money to treat state legislators in a princely manner. Its success shows that there are other ways to affect public policy than to elect favorable representatives and provides evidence in support of the Investment Theory of Politics.
For example, private enterprise has entered parts of the judicial system we do not ordinarily think are open to the private public oxymoron. When you dial 911, you typically get an outsourced answering service. Private equity firms, the “corporate raiders” of an earlier era, increasingly have taken over a wide array of civic and financial services that are central to American life since the 2008 financial crisis. Like private prisons, their interests do not align with the public programs for safety. Their aims are to cut costs, increase prices, lobby, and litigate to expand their reach. As might be expected, response times have grown, ambulance equipment often does not work, and people in need get short-changed. And if you are in prison and need to be transported elsewhere, chances are you will be moved by Prisoner Transportation Services of America, the nation’s largest for-profit extradition company. They pack prisoners in and pay so little attention to them that they did not discover a dead prisoner until after they had driven seventy miles after the prisoner died.23
Martha Minow, dean of the Harvard Law School, examined the pros and cons of public-private partnerships. One argument for involving private companies in incarceration and education is frustration with the low quality of government programs. Another argument is the presumed benefits of competition where dissatisfied critics can take their business elsewhere. But, says Minow, “If information that would allow for informed choice among options is not generated, or if people are not free or able to choose among options, the promised benefits are not likely to emerge.” Prisoners cannot choose their prisons or their transport mode, and legislators do not spend much time or energy comparing prisons or considering how such a comparison should be done. (The next chapter applies Minow’s insights to education.)
The problem is that prisons serve several functions for society. They remove dangerous people from general circulation, punish people who have done wrong, and may even reform misguided people who engage in criminal activity. To this list, keeping minorities from achieving their full potential recently has been added. The argument that competition increases prison efficiency is not clearly defined. And for handling emergency calls and prison transport, competitive choice is not appropriate.
There are many costs in performing all these aims, and reformers have presented ways to reduce costs, most obviously by limiting the number of people incarcerated. But private prisons have a different aim. They want to maximize profits, which are increased by having more prisoners. Private prisons may be more efficient at some of the aims society has for the prison system, but this efficiency is achieved at great cost. The various aims are collapsed into warehousing prisoners, rather like prisoners of war, instead of pursuing the other societal aims, and any gains from the presumed efficiency will be captured by the prison companies rather than society as a whole.
These are academic questions for members of the FTE sector, for they mostly do not know anyone in failing schools or prison. They may have divided views on the merits of privatization and the merits of competition in social services, but they can live with the choices that politicians make. To the extent that they think of these issues, they classify the people involved from the low-wage sector as blacks, immigrants, or veterans to whom a military career was the best option. Even though there are not enough of these “others” to populate the low-wage sector, poor whites only occasionally are visible in public discussions. And since many poor whites traditionally do not vote, they have had little effect on public policies. They voted in presidential primaries in 2016, but we do not know how long this new pattern will endure.24
There are a few bright spots in this picture of mass incarceration as enterprising local officials try to alleviate some of the pressures in this system, although the big picture remains bleak. The police chief in Gloucester, Massachusetts, a small seaside city north of Boston, shifted his department from incarceration to treatment as the way to deal with drug addicts. As he said, “Any addict who walks into the police station with the remainder of their drug equipment or drugs and asks for help will NOT be charged. Instead we will walk them through the system toward detox and recovery” and send them for treatment “on the spot.” Gloucester’s population is small, but its new approach is meeting with broad acceptance in the region. Perhaps the idea of treatment instead of incarceration will catch on, although there are strong forces against it.25
Most reforms being proposed today seek to help former inmates rather than to reduce mass incarceration. The governor of Virginia recently restored voting rights to felons, arousing strong opposition in the legislature. The United States barred federal agencies from asking job applicants if they had been convicted. A county in Western Massachusetts started a program to prepare inmates for jobs and help them find jobs to reduce recidivism. And Robert Rubin, formerly Secretary of the Treasury, proposed educating prisoners, removing barriers to employment (as the federal government has done), and admitting former prisoners to public housing and health care.26
These proposed reforms may have only limited effects if adopted due to the growth of legal financial obligations that rose rapidly in the 1990s and now condemn many former prisoners to a lifetime of payments that are neither payable—because the former prisoners lack the resources—nor able to be foregone—since they are not cleared by bankruptcy. We have, according to an assessment, “a two-tiered system of punishment: one for those with financial means and one for those who are poor.” Most felony defendants in state courts come from poor neighborhoods with high unemployment and failed schools; they cannot pay or escape their legal financial obligations even if they are released from prison. They cannot fully reenter society as long as their debts are outstanding and remain under court jurisdiction for payment of the principal and interest—always with a threat of reincarnation. The growth of legal financial obligations increases inequality and maintains poor people in a state of uncertainty that interferes with normal lives. In a cruel irony, the fines and obligations that were imposed initially to repay crime victims for their losses now barely serve to support the bureaucracies that collect the obligations.27
Sociologists have argued that incarceration is used in the United States to keep the poor quiet as politicians destroy the safety nets that used to help them. Their arguments are in sympathy with those presented here, but they do not go far enough. The middle class is vanishing at a rapid rate, as shown in figure 1, and increasing numbers of working people are living only slightly better than the poor shown in the bottom line of that figure. These workers are supporting themselves and not in need of direct assistance, but they want their children to get an education to live better than they do. But 40 percent of people living in households headed by females—resulting when men are locked away by mass incarceration—are in poverty. And they go to schools in poor areas as a result.28
Government policies make the transition from the low-wage to the FTE sector more difficult. It is not impossible, but fewer people can make this trip than in the decade after the Civil Rights legislation in the 1960s. Mass incarceration increased as school quality deteriorated. The two policies may not have been designed to complement each other, but they increasingly form parts of an integrated system. As exiting from the low-wage sector becomes harder, there is more reason for the FTE sector to support mechanisms of social control. And as more people go to prison, there is less pressure on the schools to try to retain and educate them.