The Savings and Loan Debacle of the 1980s: White-Collar Crime or Risky Business?*

This paper examines the role of white-collar crime in the savings and loan crisis. Noting economists' assertions that crime was only a minor ingredient in the crisis, we compare the explanatory power of this “minimal fraud” model to that of its “material fraud” alternative. Bringing together evidence from every major study of thrifts in the 1980s, we argue that only the material fraud hypothesis can make sense of these data. This study demonstrates the utility of deductive reasoning in distinguishing between white-collar crime and ordinary business transactions, thereby potentially contributing to prosecutorial efforts, and helping resolve long-standing methodological dilemmas confronting white-collar criminologists.     

Modeling psychiatric patients' treatment decision making

Decision-making processes of psychiatric inpatients were assessed at admission and prior to discharge, and compared to hospital staff members using a paired comparison paradigm in which subjects chose between hypothetical antipsychotic medications. Multidimensional analyses of binary choice matrices revealed that all subjects based decisions on the risks and benefits of medication, and weighted risks and benefits in roughly equal proportions. Hospital staff demonstrated greater internal consistency in their decisions than the inpatient sample at both time points. For newly admitted inpatients, severity of psychiatric symptoms and nonverbal intelligence were related to internal consistency of decision making, and behavioral indices of medication compliance predicted relative weighting of risks and benefits. For predischarge and comparison samples, verbal intelligence and treatment preferences predicted both outcome measures. Reliance on verbal reports of decision making may be misleading when assessing competence in acutely impaired psychiatric patients.     

Using similarity judgments to conduct a mugshot album search

Mugshot searches fail because the witness must be shown too many photos. Current methods to reduce the number rely too heavily on verbal reports of individual features. This research reports three tests of a new system that augments the presently used tools by having the witness choose photos that are subjectively similar to the target. Each photo thus chosen increases the ranking of every photo in the album that is similar to it, as determined by a similarity network in which the album photos are embedded. Because the ranking of the target itself is usually thus increased, it is soon displayed. The tests used familiar targets, an incidental one, and unfamiliar videoed ones. From 76% to 84% of the “witnesses” reached the target, having viewed 2.4 to 8.5 times fewer photos than they would have had they simply leafed through photos as is traditionally done.     

The Unintended Effects of Social Policy Measures

The unintended effects of social policy measures are frequently important, controversial, difficult to ascertain and even more difficult to quantify. Some selected aspects of four types of unintended effects are discussed in this article. First, effects due to redistribution of income as well as life chances and opportunities as determined by market forces and attitudes (sexism, ageism, racism) favor some at the expense of others. Even redistribution which increases gross domestic product (GDP) often disadvantages certain groups. Second, contingency-related benefits tend to favor population groups differently. Third, free and subsidized health services, in certain conditions, increase both the supply and demand for services—the moral hazard problem. Fourth, contingency benefits in cash and kind tend to increase the incidence of such contingencies and, if income-related, tend to result in poverty and unemployment traps. Cross-national comparative studies may be a useful device in ascertaining effects or the absence of effects.