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Friday, June 16, 2017

Politicians and the Court System Should Preach what They Practice

Ms. Biden's remedy seems much more just, efficient, and tax-friendly than what's preached.

This is from Rebecca Rosenberg’s “Joe Biden’s niece dodges jail after $100K credit card scam,” New York Post, June 9, 2017:

Using a borrowed credit card, the blonde Caroline Biden set up an unauthorized customer account at Bigelow Pharmacy on Sixth Avenue in Greenwich Village, and racked up the six-figure bill over the course of a year, according to a criminal complaint that does not name the victim card owner.

As part of a plea deal before Manhattan Supreme Court Justice Kevin McGrath, Biden, 29, pleaded guilty to one charge of grand larceny and another of petit larceny and agreed to make restitution of $110,810.04.

If she pays everything back and keeps her nose clean, she can return to court and enter a substitute plea to a lower, misdemeanor charge of petit [sic] larceny and be sentenced to two years probation.

But she’ll stay out of jail even if she fails to live up to the plea deal, instead getting sentenced on the felony larceny to five years probation.

When I read this, I was momentarily outraged. Caroline Biden should have gone to jail, I thought, as many less politically connected people would likely have done in her place.

But then I thought about it a minute and realized that she is, after all, required to compensate the victim, although it’s not clear whether she owes interest, which she should. And by not putting her in jail, the judge is saving money for us taxpayers and giving her the chance to make money to pay the victim. Isn’t that better than jail?

Ms. Biden’s remedy seems much more just, efficient, and tax-friendly than what’s preached.I still felt outraged, but realized that my outrage had shifted.

It’s not that Ms. Biden has been treated too leniently. Maybe a little too leniently. First, as noted, it’s possible that she’s not required to pay interest. Second, surely there was some hassle cost for the victim that should be compensated. Still, the remedy seems much closer to a just, and efficient, remedy than the one of charging hapless taxpayers for her room and board.

No, my outrage is over the fact that so few other people get this more efficient and more just treatment. Joe Biden has been an advocate of a lot of lock-em-up laws. I would bet – call it a hunch – that he is happy that his niece is not going to jail.

So what he practices – or, at least, what the court system practices – for his niece is a relatively just and efficient system. So let’s have the court system and politicians preach what they practice.

UPDATE: A friend pointed out on Facebook that I have ignored some of the literature on optimal penalties. It’s true. I wrote this too fast. My main point, though, which still stands, is that for such crimes, prison is probably not a good use of resources. We can get deterrence with restitution plus a large penalty; some of the penalty can be paid to the victim.

Republished from the Library of Economics and Liberty.

  • David Henderson is a research fellow with the Hoover Institution and an economics professor at the Graduate School of Business and Public Policy, Naval Postgraduate School, Monterey, California. He is editor of The Concise Encyclopedia of Economics (Liberty Fund) and blogs at