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1984-watch: Coping with crunch by turning in crooks

Posted May 18th 2008 8:42AM by Peter Cohan
Filed under: Consumer experience, Economic data, Politics, Housing, Recession

The New York Times reports that more people are turning in criminals to pay their bills. Calls to tip lines are up as much as 44% since the first quarter of 2007. For example, calls are up 30% to the Southwest Florida Crime Stoppers hot line, up 44% to the San Antonio hot line, and up 25% or more to hotlines in Detroit, Omaha, and Beaufort County, N.C. Why? Tipsters tell operators they need the money for rent, light bills or baby formula. It sounds like 1984 to me.

What's the pay for a tip? It depends -- programs in most places pay $50 to $1,000 for tips that bring results. And in some counties there's a "gun bounty" if a weapon is recovered. In Sussex County, N.J., the average payment for a tip that results in an arrest is $400. With the median monthly income after tax of $838, this kind of money can make a big difference -- especially with gasoline prices up to $4 a gallon.

If you want to know where call volume is likely to increase the most, look to regions of the country with the highest foreclosure rates. That's where desperate tippers are eager for fast payment. For example, Lee County, Florida, offers quick payments -- within two weeks of the tip -- and it had the highest rate for home foreclosures in the U.S. in February and March. Its once-plentiful construction jobs have evaporated and people are calling in tips to make up for the lost income.

In Lee County, a man reporting drug activity got $450 for the tip -- his second call in a week. The Times quotes Trish Routte, the Crime Stoppers coordinator there who recognized the caller's voice: "He told me he really didn't want to call but he just had a new grandbaby and he needed the money. Cash crunches are good for her business. As she put it: "We're kind of banking on that, really. If it helps put dinner on the table for somebody, that's wonderful."

To me it sounds like something out of George Orwell's 1984. That was the book about a totalitarian state in which neighbors spied on neighbors and mothers were forced to turn in their sons or daughters.

And that's quite an economic legacy to leave for the next administration.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Tags: baby formula, BabyFormula, construction, economy, foreclosures, gasoline prices, inthenews, recession, rent

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