Broadsheet

I kind of want to write about AI every day these days, but I’ve got to pace myself so you all don’t get overloaded. So here’s a roundup post with only one entry about AI. Just one, I promise!

Well, OK, there’s also a podcast episode about AI. I went on the truly excellent Justified Posteriors podcast to talk about the economics of AI with Andrey Fradkin and Seth Benzell. It was truly a joy to do a podcast with people who know economics at a deep level!

Justified Posteriors

Noah Smith on Blogging, AI Economics, and Elite Overproduction

We sit down with prominent blogger and economist Noah Smith to dig into the disconnect between AI hype and current macroeconomic reality. The central puzzle: if a “god machine” driving 20% annual GDP growth is truly imminent, why aren’t real interest rates skyrocketing as people borrow against a much wealthier future? Noah’s take is that markets are pri…

Listen now

3 days ago · 16 likes · Andrey Fradkin and Seth Benzell

Anyway, on to this week’s roundup.

1. Did AI cause a productivity boom in 2025? We don’t know.

Erik Brynjolfsson believes that AI caused a productivity boom last year:

Data released this week offers a striking corrective to the narrative that AI has yet to have an impact on the US economy as a whole…[N]ew figures reveal that total payroll growth [in 2025] was revised downward by approximately 403,000 jobs. Crucially, this downward revision occurred while real GDP remained robust, including a 3.7 per cent growth rate in the fourth quarter. This decoupling — maintaining high output with significantly lower labour input — is the hallmark of productivity growth…My own updated analysis suggests a US productivity increase of roughly 2.7 per cent for 2025. This is a near doubling from the sluggish 1.4 per cent annual average that characterised the past decade…
Micro-level evidence further supports this structural shift. In our work on the employment effects of AI last year, Bharat Chandar, Ruyu Chen and I identified a cooling in entry-level hiring within AI-exposed sectors, where recruitment for junior roles declined by roughly 16 per cent while those who used AI to augment skills saw growing employment. This suggests companies are beginning to use AI for some codified, entry-level tasks.

But Martha Gimbel says not so fast:

There are three reasons why what we are seeing may not actually be a real jump in productivity—or an irreconcilable gap between economic growth and job growth…
First, productivity is noisy data…We shouldn’t overreact to one or even two quarters of data. Looking over several quarters, we can see that productivity growth has averaged about 2.2%. That is strong, but not unusually so…
Second…for GDP growth in 2025, we’re still waiting for [revisions to come in]. Note that any comparison of jobs data and GDP data for 2025 is comparing revised jobs data to unrevised and incomplete GDP data…
Third…GDP data has been weird in 2025 partly because of policy and behavioral swings around trade. If you look at job growth relative to private-domestic final purchases…[job growth] is still low, but not as low as it is relative to the GDP data…
[E]ven if you trust the productivity data…there are other explanations besides AI…One reason job growth in 2025 was so low was because of changes in immigration policy. If the people being removed from the labor force were lower productivity workers, that will show up as an increase in productivity even though the productivity of the workers who remain behind has not changed…
Second, if you look at the productivity data, it appears that much of the boost is coming from capital utilization due to increased productive investment…[A]t this point it is people investing in AI not people becoming more productive by using AI.

Meanwhile, in January, Alex Imas had a very good post about AI and productivity:

Ghosts of Electricity

What is the impact of AI on productivity?

This post is intended as a living resource. I will update it periodically as new evidence accumulates. The current version reflects research available through January 2026…

a month ago · 125 likes · 23 comments · Alex Imas

Alex gathers a bunch of studies showing that AI improves productivity in most tasks. But in the real world, productivity improvements from new technology famously come with a lag, as companies retool their business models around the new tech. For a while, productivity actually falls, then starts to rise once the new business models start working. This is called the productivity J-curve. Brynjolfsson thinks we’ve hit the rising part of the J-curve, but Alex thinks we haven’t:

At the macro level, these [micro] gains [from AI] have not yet convincingly shown up in aggregate productivity statistics. While some studies show a slow down in hiring for AI-exposed jobs—which suggests that individual workers are either becoming more productive or tasks are being automated—the extent and timing of these dynamics are currently being debated. Other studies have found no changes in hours worked or wages earned based on AI use.

Also, Brynjolfsson thinks that job loss in AI-exposed occupations is a sign of growing productivity. But that may not be the case; new technologies can grow productivity while increasing hiring, by creating new tasks for humans to do. A new survey by Yotzov et al. finds that although corporate executives in the U.S., Australia, and Germany expect AI to cut employment, employees themselves expect it to provide new job opportunities:

We survey almost 6000 CFOs, CEOs and executives from stratified firm samples across the US, UK, Germany and Australia…[A]round 70% of firms actively use AI…[F]irms report little impact of AI over the last 3 years, with over 80% of firms reporting no impact on either employment or productivity…[F]irms predict sizable impacts over the next 3 years, forecasting AI will boost productivity by 1.4%, increase output by 0.8% and cut employment by 0.7%. We also survey individual employees who predict a 0.5% increase in employment in the next 3 years as a result of AI. This contrast implies a sizable gap in expectations, with senior executives predicting reductions in employment from AI and employees predicting net job creation.

And a new study by Aldasoro et al. finds that in Europe, AI adoption seems to be increasing employment at the companies that adopt it:

Our results reveal three key findings. First, AI adoption causally increases labour productivity levels by 4% on average in the EU. This effect is statistically robust and economically meaningful…[T]he 4% gain suggests that AI acts in the short term as a complementary input that enhances efficiency…
Second, and crucially, we find no evidence that AI reduces employment in the short run. While naïve comparisons suggest AI-adopting firms employ more workers, this relationship disappears once we account for selection effects through our instrumental variable approach. The absence of negative employment effects, combined with significant productivity gains, points to a specific mechanism: capital deepening. AI augments worker output – enabling employees to complete tasks faster and make better decisions – without displacing labour. [emphasis mine]

Everyone seems to just assume that AI is a human-remover, and in some cases it is. But overall, it might actually turn out to be complementary to humans, like previous waves of technology; we just don’t know yet. The lesson here is that we don’t really know how technology affects productivity, growth, employment, etc. until we try it and see. The economy is a complex machine that reallocates a lot of stuff in very surprising ways.

So stay tuned…

Update: Here is a good chart from the excellent Greg Ip of the Wall Street Journal:

Also, for what it’s worth, here’s Goldman Sachs:

2. Yuppie Fishtank Theory wins again

One of the most fun posts I’ve ever written was about how building high-end housing can reduce rents for lower-income people. I called it “Yuppie Fishtank Theory”:

The basic idea is very simple: If you build nice shiny new places for high earners (“yuppies”), they won’t go try to take over the existing lower-cost housing stock and muscle out the working class.

This is important because a lot of people believe the exact opposite. They think that if you build new market-rate (“luxury”) housing in an area, it’ll attract rich people, cause gentrification, and raise rents.

Over the years, my theory has been proven right — and the “gentrification” theory has been proven wrong — again and again. Here was a roundup I did of the evidence back in 2024:

Now Henry Grabar flags some new evidence that says — surprise, surprise — that Yuppie Fishtank Theory is still true:

A new study lays out exactly how a brand-new building can open up more housing in other, lower-income areas, creating the conditions that enable prices to fall…

In the paper, three researchers looked in extraordinary detail at the effects of a new 43-story condo project in Honolulu…What the researchers found was that the new housing freed up older, cheaper apartments, which, in turn, became occupied by people leaving behind still-cheaper homes elsewhere in the city, and so on…The paper estimates the tower’s 512 units created at least 557 vacancies across the city—with some units…creating as many as four vacancies around town…
To figure this out, the researchers…traced buyers arriving at the new apartments back to their previous homes and then, in some cases, they traced the new occupants of those homes back to prior addresses. The study found that the Central’s new residents left behind houses and apartments that were, on average, 38 percent cheaper, per square foot, than the apartments they moved into.

Yuppie Fishtanks win again!

Cities that are applying Yuppie Fishtank Theory are seeing their rents fall. Here’s a Bloomberg story from December:

Rents got cheaper in several major cities this past year, thanks to an influx of luxury apartment buildings opening their doors and luring tenants to vacate their old homes…New building openings are bringing rents down as wealthy tenants trade up, forcing landlords to drop prices for older apartments. Rents for older units have fallen as much as 11%, and some are now on offer at rates as low as homes that are usually designated as “affordable”…The changed dynamic in the rental market is challenging the idea that luxury housing doesn’t help the broader ecosystem.

Overall, cities that build more housing are seeing lower rents:

At this point, “building housing reduces rent” is as close to a scientific law of the housing market as we’re likely to find.

Build more housing!!

3. The “development is dead” people have a new reason for pessimism

Three years ago, David Oks and Henry Williams wrote a long post claiming that economic development was dead — that poor countries had done great in the post-WW2 decades when they sold raw materials to fast-growing rich countries, but that their growth in the 90s, 00s, and 10s was a bust. That was nonsense, and I wrote a lengthy rebuttal here:

Instead of rehashing that debate, I just want to link to Oks’ latest post, in which he expresses extreme pessimism about global poverty:

David Oks

The era of declining global poverty is over

A few days ago, Our World in Data published what I think might be the most important article written this year. It’s a short piece by the site’s founder and editor, Max Roser, and it has a rather ominous title: “The end of progress against extreme poverty…

3 months ago · 179 likes · 14 comments · David Oks

He cites a recent post by Max Roser of Our World in Data (the excellent site where I get many of the charts for this blog). Roser notes that extreme poverty — defined as the fraction of people living on less than $3 a day — has declined so much in South Asia, East Asia, and Latin America that it has basically vanished. This leaves Africa as the only region with an appreciable number of extremely poor people left (except for some parts of Central Asia). And since African poverty rates are not declining, and African population is growing much faster than population elsewhere, this means that the number of extremely poor people in the world is set to start rising again:

The first thing to note is that by using this chart, and by making this argument, David Oks directly contradicts his thesis from his 2023 article. In 2023, Oks argued that global development since 1990 had been disappointing; in his new post, Oks argues that poverty reduction in 1990-2024 everywhere outside of Africa was so incredibly successful that it basically went to completion and has nowhere left to go!

Oks’ old post was pessimistic about the entire developing world — South Asia, Latin America, Africa, and so on. In this new post, he retreats to pessimism about Africa alone. This is a significant retreat — it’s an implicit acknowledgement that development was very very real for the billions of poor people who lived outside Africa in 1990.

As for whether Oks is right about Africa, only time will tell. But note that the rising global poverty in the chart above is entirely a forecast. If African growth surprises on the upside — say, from solar power and AI — and African fertility falls faster than expected, then we could see Africa follow in the footsteps of the other regions.

Our goal should be to keep the pessimists embarrassed.

4. America is actually really really rich

On paper, the U.S. is a lot richer than most other rich countries — including Canada:

In terms of per capita GDP, Canada is poorer than Alabama, America’s poorest state. Canada is a little less unequal than America, so the difference in median incomes between the two countries is smaller — only about 18% higher as of 2021 (though the gap is growing). But that’s still a sizeable gap!

Europeans, Australians, and Canadians who visit America’s disorderly and crime-ridden city centers can sometimes balk at this fact. They instinctively start groping for some reason the numbers must be wrong. But reporters from Canada’s Globe and Mail traveled to Alabama, and discovered that the numbers don’t lie — America really is just a very, very rich place, even compared to other countries. Here are some excerpts from their article:

For eons, Canadians have viewed Alabama as a small state that, save for a few pockets, is dirt poor…For an ego check, The Globe and Mail travelled to the Deep South to understand how this happened. Immediately, it was obvious Alabama is misunderstood. In Huntsville, there are as many Subaru Outbacks as there are pickup trucks, and the geography in Alabama’s two largest metropolitan areas – Birmingham and Huntsville – looks nothing like the historical imagery…
Alabama is also home to five million people…and its economy is booming. The state’s unemployment rate is now just 2.7 per cent, versus 6.5 per cent in Canada, and its major employers include Airbus SE and giant defence contractor Northrop Grumman Corp. The state has also morphed into an auto manufacturing powerhouse with plants from Mercedes-Benz AG, Toyota Motor Corp., Hyundai Motor Co. and more. In 2024, Alabama made nearly as many vehicles as Ontario…
As for Birmingham itself, there’s the beauty of the rolling hills, which deliver stunning fall foliage. And the city’s becoming a foodie hub. A new restaurant, Bayonet, was named one of America’s 50 best restaurants by The New York Times last fall. And despite the bible thumping, Birmingham has a sizable LGBTQ+ community and scored the same as Boston on the Human Rights Campaign’s Municipal Equality Index.

The Globe and Mail article notes that Alabama has a higher poverty rate and lower life expectancy than Canada — and being a newspaper in a progressive country, it fails to mention the much higher crime rate. But the fact is, for most Alabamans, the material standard of living is more comfortable than what prevails in much of Canada.

People who believe America’s wealth is fake need to go there and see for themselves that it’s real.

5. Why friends don’t let friends cite George Borjas

In general, economists find that immigration’s economic effect on the native born is either positive or zero. But one famous economist, George Borjas, consistently finds negative effects. This makes Borjas beloved of the Trump administration and the nativist movement in general — it’s very common to hear MAGA people cite Borjas in debates.

It’s very odd that one economist keeps getting results about immigration that are so out of whack with what everyone else finds. Well, it turns out that if you look closely at George Borjas’ methodologies, you find a lot of dodgy stuff. I wrote about this several times back during the first Trump administration, when I worked for Bloomberg. Here’s what I wrote in 2015:

[I]n 2015, George Borjas…came out with a shocking claim -- the celebrated [David] Card result [about the Mariel Boatlift not harming American workers], he declared, was completely wrong. Borjas chose a different set of comparison [cities]…He also focused on a very specific subset of low-skilled Miami workers. Unlike Card, Borjas found that the Mariel boatlift immigration surge had a big negative effect on native wages for this vulnerable subgroup.
Now, in relatively short order, Borjas’ startling claim has been effectively debunked. Giovanni Peri and Vasil Yasenov, in a new National Bureau of Economic Research working paper…find that Borjas only got the result that he did by choosing a very narrow, specific set of Miami workers. Borjas ignores young workers and non-Cuban Hispanics -- two groups of workers who should have been among the most affected by competition from the Mariel immigrants. When these workers are added back in, the negative impact that Borjas finds disappears.
But it gets worse. Borjas was so careful in choosing his arbitrary comparison group that his sample of Miami workers was extremely tiny -- only 17 to 25 workers in total. That is way too small of a sample size to draw reliable conclusions. Peri and Yasenov find that when the sample is expanded from this tiny group, the supposed negative effect of immigration vanishes.
All of this leaves Borjas’ result looking very fishy.

And here was a follow-up in 2017:

Recently, Michael Clemens of the Center for Global Development and Jennifer Hunt of Rutgers University found an even bigger problem with Borjas’ study. Clemens and Hunt noted that in 1980, the same year as the Mariel boatlift, the U.S. Census Bureau changed its methods for counting black men with low levels of education. The workers that Borjas finds were hurt by the Mariel immigration include these black men. But because these workers generally have lower wages than those the Census had counted before, Borjas’ finding of a wage drop among this group, the authors claim, was almost certainly a result of the change in measurement.

And here’s what I wrote in 2016:

Borjas has written a book…called “Immigration Economics.”…However, University of California-Berkeley professor David Card and University of California-Davis’ Peri have written a paper critiquing the methods in Borjas’ book. It turns out that the way Borjas and the economists he cites do immigration economics is very, very different from the way other researchers do it.
One big difference is how economists measure the number of immigrants coming into a particular labor market…[I]nstead of using the change in the number of immigrants, Borjas just uses the number of immigrants itself…This creates a number of problems.
Let’s think about a simple example. Suppose there are 90 native-born landscapers in the city of Cleveland, and 10 immigrant landscapers. Suppose that demand for landscapers goes up, because people in Cleveland start buying houses with bigger lawns. That pushes up the wages of landscapers, which will draws 100 more native-born Clevelanders into the landscaping business. But the supply of immigrants is relatively fixed. So the percent of immigrants in the Cleveland landscaping business has gone down, from 10 percent to only 5 percent, even though the number of immigrants in the business has stayed the same.
Borjas will find that the percent of immigrants in the business goes down just as wages go up. But to conclude that native workers’ wages went up because immigration went down would be totally incorrect, because immigration didn’t actually fall! In fact, Borjas’ method is vulnerable to reaching exactly this sort of erroneous conclusion. Card and Peri point out that if you use the more sensible measure, there’s not much correlation between immigrant inflows and native-born workers’ wages and income mobility.

In other words, there’s a clear pattern of Borjas using strange and seemingly inferior methods, and arriving at conclusions that diverge radically from his peers. So I was not exactly surprised when Jiaxin He and Adam Ozimek looked at Borjas’ recent work on H-1B workers also contained some very dodgy methodology:

Borjas’s February 2026 working paper attempted to answer whether H-1B workers earn less than comparable native-born workers by combining data on actual H-1B earnings with American Community Survey data on native workers. The conclusions are negative, with H-1B holders earning 16 percent less. But these findings result from substantial data errors.
…The most significant mistake is a crucial temporal mismatch between his H-1B and native-born samples: the H-1B applications span 2020-2023, while the ACS data covers just 2023.
Nowhere did the paper mention controlling for inflation or wage growth. Given 15.1 percent inflation and an 18.7 percent wage increase for software occupations alonefrom 2020 to 2023, comparing wages of H-1B workers from 2020 to 2023 to… native-born wages from 2023 only produces negatively biased results that overstates the wage gap…A simple approach is to directly compare the 2023 H-1B observations (FY 2024) to 2023 ACS data. Alternatively, we can use all years but adjust for inflation and convert all years to real 2023 dollars. Both approaches cut the wage gap roughly in half…
The second error stems from controlling for geographic wage drivers using each worker’s PUMA (public use microdata area)…The problem is that Dr. Borjas uses the PUMA where visa holders work alongside the PUMA where native workers live. Consider a native-born software developer working at Google in Mountain View who resides in a cheaper area like Fremont. If residential areas have lower average wages than business districts, this mismatch systematically inflates the apparent native wage and negatively biases the H-1B wage gap.

Another Borjas paper with serious methodological errors, and an anti-immigration conclusion that disappears when you correct the errors? Shocking!

By this point, it should be clear that whether these mistakes are intentional or not, Borjas’ anti-immigration conclusions tend to vanish when the mistakes are corrected. Borjas is not a good source of information on immigration topics; every time someone cites him in a debate, you know they haven’t looked seriously at the literature.

Subscribe now

Photo by Derek Bridges via Wikimedia Commons

I’ve been wanting to write this post for a while, actually. What triggered it was seeing this tweet:

Extreme tolerance of public disorder, and downplaying the importance of crime, is a hallmark of modern progressive American culture. There are plenty of Democrats who care about crime — Joe Biden recently tried to increase the number of police in America by a substantial amount — but there is constant pressure from the left against such measures. On social media, calls for greater public order are instantly met with accusations of racism and classism:

(And this was far from the most radical post on the topic.)

Nor is this attitude confined to anonymous radicals on social media. When Biden announced his Safer America Plan, the ACLU warned that putting more cops on the streets and punishing drug dealers would exacerbate racial disparities:

[I]n this moment of fear and concern, the president must not repeat yesterday’s mistakes today. He calls for hiring 100,000 additional state and local police officers – the same increase in officers as the 1994 crime bill. This failed strategy did not make America safer, instead it resulted in massive over-policing and rampant rights violations in our communities…And while it is important that the president’s plan commits to fixing the racist sentencing disparity between crack and powder cocaine, it regrettably also perpetuates the war on drugs by calling for harsh new penalties for fentanyl offenses.
“While we are pleased with the president’s commitment to investing in communities, we strongly urge him not to repeat the grave errors of the 1990s — policies that exacerbated racial disparities, contributed to widespread police abuses, and created our current crisis of mass incarceration.

The ACLU is very wrong about policing and crime — there’s very solid evidence that having more cops around reduces the amount of crime, both by deterring criminals and by getting them off the streets.

In fact, the idea that tough-on-crime policies are racist is a pillar of progressive thought. It’s the thesis of Michelle Alexander’s influential 2012 book The New Jim Crow: Mass Incarceration in the Age of Colorblindness, which argues that mass incarceration is a form of racial segregation. Ta-Nehisi Coates, perhaps the most important progressive thinker of the 2010s, relentlessly attacked the “carceral state”.

A major progressive policy initiative, meanwhile, has been the election or appointment of district attorneys who take a more tolerant approach toward criminals. These “progressive prosecutors” really do prosecute crime less, although evidence of their impact on actual crime rates is mixed.

I am not going to claim that progressive attitudes are the reason America’s crime rate is much higher than crime rates in other countries. The U.S. has probably been more violent than countries in Asia and Europe throughout most of its history, and the divergence certainly long predates the rise of progressive ideology. It’s possible that the progressive prosecutor movement, the decarceration movement, and the depolicing movement exacerbated America’s crime problem a bit, but they didn’t create it.

What those progressive attitudes do do, I think, is to prevent us from talking about how important the crime problem is for the United States, and from coming up with serious efforts to solve it.

Why crime is more uniquely American than other problems

The thesis of this post is that when you compare America to other countries, what stands out as America’s most unique weakness is its very high crime rate — not just violent crime, but also public chaos and disorder. That statement might come as a shock to people who are used to hearing about very different American weaknesses.

For example, it’s common to hear people say that Europeans and Asians “have health care”, and that Americans don’t. That’s just fantasy. Around 92% of Americans, and 95% of American children, have health insurance, and those numbers keep going up.

Yes, U.S. health care is too expensive — we spend half again or double the fraction of GDP on health as many other countries, while achieving similarly good outcomes. That’s a real problem, and we should try to bring costs down. But this is tempered by the fact that Americans spend a lower percent of their health care costs out-of-pocket compared to people in most other rich countries:

And if you took health spending entirely out of the equation, Americans would still be richer than people in almost any other country. So our high health costs are more of a nuisance than a big difference in quality of life.

If not health care, what about health itself? America’s life expectancy has started to rise again, but it’s still 2 to 4 years less than other rich countries. The size of this gap tends to be overhyped — Germany’s life expectancy advantage over America is smaller than Japan’s advantage over Germany. And the difference is mostly due to America’s greater rates of obesity and drug/alcohol overdose — diseases of wealth and irresponsibility, rather than failures of policy.1 This stuff usually doesn’t affect quality of life unless you let it — if you don’t overeat, drink too much, do fentanyl, or kill yourself, your life expectancy in America is going to be similar to, or better than, people in other rich countries.

What about inequality and poverty? It’s true that America is more unequal than most other rich countries. About a quarter of Americans earn less than 60% of the median income, compared to around one-sixth or one-fifth in most other rich nations. But this is not because America is a uniquely stingy country where conservatives have managed to block government redistribution. In fact, the U.S. fiscal system — taxes and spending — is more progressive (i.e., more redistributionary) than that of most other rich countries, and we spend about as much of our GDP on social welfare as Canada, the Netherlands, or Australia. In fact, America’s system has become continuously more progressive over time.

How about housing? You may have read the “Housing Theory of Everything”, which blames housing shortages for a variety of social and economic problems. It’s true that housing is very important, and that America doesn’t build enough of it. It’s also true that housing is a bit more expensive in America than elsewhere — according to the OECD, house prices relative to incomes are about 12% higher than in the average rich country. But U.S. houses are also much bigger than houses in most other countries, so it’s natural that they’d cost a little bit more. And America has actually been above average in terms of housing production in recent years, after lagging in the 2010s:

So it’s more accurate to say that housing is a big problem, but it’s a big problem all over the globe, not something that’s special to America.

How about transit and urbanism? Here, America is certainly an exception. The U.S. has the least developed train system in the developed world, and worse than many poor countries as well. America is famous for its far-flung car-centric suburbs, with their punishing commutes and paucity of walkable mixed-use areas. Only a few rich countries are more suburbanized than America, and those countries tend to have very good commuter rail service.

This is a real difference, though whether it’s good or bad depends on your point of view. Lots of people in America and elsewhere love suburbs and love cars. But I’m going to argue that to the extent that America’s urban development pattern is more suburbanized and more car-centric than people would like, it’s mainly due to crime.

So in almost all cases, the difference between America’s problems and other rich countries’ problems is minor. But when it comes to crime, the difference between the U.S. and other countries is like night and day.

The best way to compare crime rates across countries is to look at murder rates. Other crimes are a lot harder to compare, because A) reporting rates are very different, and B) definitions of crimes can differ across countries. But essentially every murder gets reported, and the definition is pretty universal and unambiguous. And although murder isn’t a perfect proxy for crime in general — you could have a country with a lot of theft but very few murders — it’s probably the crime that people are most afraid of.

So when we look at the murder rate, we see that among rich countries,2 the United States stands out pretty starkly:

This is an astonishingly huge difference. America’s murder rate is between five and ten times as high as that of most rich countries.

Many progressives will protest that violent crime has gone down in America since 2022. And in fact, murder really has gone down a lot.3 Here’s the CDC’s count of homicides:

But even after this decline, the U.S. homicide rate is still five to ten times higher than other rich countries! The recent improvement is welcome, but it hasn’t yet changed the basic situation.

Anyway, while murder is the most important crime, public order also makes a big difference. Here were some replies to the tweet about tolerating destructive behavior on American trains:

The tragic and disturbing scenes of mentally compromised people shouting, peeing, pooping, defacing property, and acting menacing in public — so familiar to residents of cities like San Francisco — are not entirely unique to America. I have been to a place in Vancouver that has similar scenes, and twenty years ago I even walked through a dirty and dangerous-seeming homeless camp in Japan. But overall, the differences between the countries are like night and day, and other countries seem to have made a concerted effort to bring order to their streets in recent years. The U.S., on the other hand, has seen a huge rise in the number of unsheltered homeless people in recent years:

Source: National Alliance to End Homelessness

And although America’s overall homelessness rate doesn’t stand out, it has a much higher unsheltered (“living rough”) population:

Obviously, unsheltered homelessness and public disorder aren’t the same thing — you can have lots of violent or threatening people on the streets who do have homes, and most homeless people are harmless. But homeless people do commit violent crime at much higher rates than other people, so when people walk down the street and see a bunch of seemingly homeless people, they’re not wrong to be scared.4

The ever-present threat of crime in U.S. cities has devastated American urbanism. In the mid 20th century, there was a huge exodus of population from the inner cities to the suburbs; this is often characterized as “white flight”, but middle-class black people fled the cities as well. Cullen and Levitt (1999) look at the effects of changes in the criminal justice system, and find that crime has been a big factor in Americans’ preference for suburban living:

Across a wide range of specifications and data sets, each reported city crime is associated with approximately a one-person decline in city residents. Almost all of the impact of crime on falling city population is due to increased out-migration…Households with high levels of education or with children present are most responsive to changes in crime rates…Instrumenting using measures of criminal justice system severity yields larger estimates than OLS, which suggests that rising city crime rates are causally linked to city depopulation.

It’s no surprise that America’s short-lived and minor urban revival in the late 1990s and 2000s followed a big decline in crime. But crime rates are still very high in the U.S., and Americans are still trying to move from the cities out to the suburbs and the far-flung exurbs.

Meanwhile, crime damages American urbanism in other ways. NIMBYs use the threat of crime to block affordable housing projects; this reduces housing supply, driving up prices everywhere, and making it difficult to build the multifamily apartment buildings that enable the kind of dense, mixed-use urbanism that prevails in Europe and Asia. The “housing theory of everything” is partially a story about crime.

Crime also makes it a lot harder to build good transit systems. Trains are a public space, and when there are violent, destructive, or menacing people on the train, it deters people from wanting to ride the train. There’s research showing this, but I also thought that a recent post by the blogger Cartoons Hate Her was especially vivid in explaining how the fear of disorder keeps women and parents away from transit:

When my daughter was a little over a year old, we were walking down the street in broad daylight (she was strapped to my chest and facing outward) when we heard a man about twenty feet away shout “I’M GOING TO FUCKING KILL YOU!”…[A]t least we had an easy safe option to escape…But if we had been on a subway, we would have had no easy choice. We could have waited for the train to stop and then switched cars—but what if he saw us leave and took that as a message, prompting the threat to move from “vaguely directed at my delusions” to “at the next person who triggers me?” What if we couldn’t get to the door in time? What if he followed us? What if he escalated before the train stopped?…
I’ve been told many times that people who are uncomfortable with this type of behavior need to just stay put, don’t make noise, and “avoid eye contact.” After all, asking someone to turn down their music could get you stabbed. You just need to keep your head down and you’ll be fine. That’s apparently all it takes, right? Except for Iryna Zarutska, who quietly sat down in front of a visibly deranged, pacing man on the bus, only to be stabbed to death shortly after. Or the young woman in the Chicago subway who was randomly lit on fire by a severely mentally ill subway rider? Or Michelle Go, the woman who was pushed in front of a subway to her death in New York City by a total stranger?…
Since 2009, assaults on public transit in New York City have tripled…Subway assaults also often involve strangers. When the attack is sexual, the victim is almost always a woman—and New York City alone accounts for around 4,000 sex crimes on public transit every year. These cases are likely underreported and limited to more severe crimes. Many women experience flashing, sexual harassment, groping, and public masturbation, and then never report it, assuming nothing would come of the report. (And honestly? They’re correct.)

In fact, we have evidence that this fear is very rational. When BART installed ticket gates at their train stations that prevented people from riding for free — over the loud objections of progressives — crime on the train went down by 54%, and the amount of disorder and bad behavior on the train absolutely collapsed:

Fear of crime — often rational fear — also stops people from allowing train stations and bus stops in their neighborhood in the first place. There are a number of studies linking train stations and bus stops to increased crime, both in the immediate area and at areas linked to the same transit line. Criminals ride the bus and the train, so in a high-crime country like America, people don’t want trains and buses in their neighborhood. This is probably a big reason why almost no U.S. city has a good train system.

In other words, while car-centric suburbanization is partially about people wanting lots of cheap land and big houses and peace and quiet, part of it is a defense-in-depth against America’s persistently high crime rates.

As an American, when you go to a European city or an Asian city — or even to Mexico City — and you see pretty buildings and peaceful clean streets and there are nice trains and buses everywhere, what you are seeing is a lack of crime. The lack of crime is why people in those countries ride the train, and encourage train stations to be built in their neighborhoods instead of blocking them. The lack of crime is why people in those countries embrace dense living arrangements, which in turn enables the walkable mixed-use urbanism that you can enjoy only on vacation.

In other words, this tweet is right:

Of course, urbanism is not the only thing that benefits from low crime rates — health costs are lower, families are more stable, and of course fewer people die. But the big differences that Americans notice between the quality of life in their own cities and the seemingly better quality of life in other countries that are less rich on paper are primarily due to the fact that those other countries have gotten crime largely under control, while the U.S. has not.

As for the root causes of American crime, and what policies might bring it down to a more civilized level, that’s the subject for another post. The point of today’s post is simply to say that we can’t ignore our country’s sky-high crime rates just because we’ve lived with them our whole lives. Nor should we comfort ourselves with the fact that crime is down from the recent highs of 2021. We are still living in a country that has been devastated by violence and public disorder, and which has never really recovered from that. Someday soon we should think about getting around to fixing it.

Update: As if on cue, here’s a paper by Bencsik and Giles showing that electing a Republican prosecutor reduces crime and mortality rates:

This paper investigates the causal relationship between approaches taken by local criminal prosecutors—also called district attorneys—and community-level mortality rates. We leverage plausibly exogenous variation in prosecutorial approaches generated by closely contested partisan prosecutor elections, a context in which Republican prosecutorial candidates are commonly characterized as “tougher on crime.” Using data from hundreds of closely contested partisan elections from 2010 to 2019…we find that narrow election of a Republican prosecutor reduces all-cause mortality rates among young men ages 20 to 29 by 6.6%. This decline is driven predominantly by reductions in firearm-related deaths, including a large reduction in firearm homicide among Black men and a smaller reduction in firearm suicides and accidents primarily among White men. Mechanism analyses indicate that increased prison-based incapacitation explains about one third of the effect among Black men and none of the effect among White men. Instead, the primary channel appears to be substantial increases in criminal conviction rates across racial groups and crime types, which then reduce firearm access through legal restrictions on gun ownership for the convicted.

On one hand, progressives have to reckon with the fact that their prosecutors’ soft-on-crime approach is getting a bunch of Black men needlessly killed. On the other hand, conservatives need to reckon with the fact that the most important mechanism seems to be preventing people from owning guns. More about both of those things in the follow-up post.

Subscribe now

The remaining difference is almost entirely due to traffic accidents, suicide, and violent crime.

I excluded a few small Caribbean nations like Trinidad and Tobago, Bahamas, and Guyana.

At this point, someone in the comments will ask me about Dobson (2002), who claimed that medical advances that prevent gunshot victims from dying have masked a big increase in attempted homicides. But we have tons of recent survey data on rates of violent crime victimization, and there was definitely a huge decline in assaults, gun violence, and so on in the 1990s. As for the difference between today and the 1930s, a more likely explanation is that many attempted murders went unreported or unprosecuted back then.

Note that progressives tend to staunchly oppose getting homeless people off the streets. When Zohran Mamdani reinstated homeless sweeps after realizing that pausing them would lead homeless people to die en masse from exposure to the elements, progressive activists were outraged.