by Andrew Smeja

Created on: November 08, 2009

The true cost of crime cannot be measured in dollars and cents, it can only be judged by looking in the faces of the least prominent members of the community. When a community becomes notorious for violent crimes, the most able citizens move out of that area, taking with them their income, businesses, and job opportunities related to them.

The entire community loses value. Whats left is the poorest members of the community, those who cannot afford to leave, and the criminals that are making it a violent community in the first place.

That is at least the cost of violent crime, white collar crime is another matter entirely. The cost of white collar crime cannot be measured, because often times how much money was stolen, or where it went remains a mystery. There is an on going financial crisis that started around 2007, and continues well on into 2009. A major cause of this financial crisis is a group of major companies including Bear Sterns and Lehman brothers.

Bear Sterns and Lehman brothers are companies that participate in the "shadow banking system". This is the practice of loaning large amounts of money, and investing it, but without the scrutiny that a bank has to go through. Because these companies aren't officially "banks" and hold no private persons money, they are able to make loans without a lot of the stringent standards that banks are held up to.

All of the money loaned/invested comes from investors, in truth these companies don't loan their own money, they are only intermediaries.

A few of these shadow banking institutions are a major cause of the current financial crisis. Your probably wondering what kind of crimes they comitted? They misrepresented the value of a number of investment vehicles. They promised large returns on investments that are extremely complicated, and for which there is currently no known method of calculating returns.

These companies were taking large amounts of other peoples money, and gambling them on complicated investments that most financial analysts would not recommend. As a result, they lost billions of dollars of other peoples money and after all of that, some of them were still bailed out by the Government.

When thinking about the cost of crime you have to look at the bigger picture. A kid that gets beat up on his way home from school will make his parents fear for him, and themselves that they live in an unsafe community. Financial managers who steal from their investors rob many families of their retirement savings, or even their childrens college education.

Drug dealers who physically hurt no one keep many weak, willed people addicted to dangerous substances. The affects of any crime can be far reaching, long past anything that can be measured in dollars and cents.

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