Monday, August 1, 2011

A Subsidy You Might Not Realize

In his book, Free Lunch, David Cay Johnson features a number of everyday subsidies you might not realize that even exist. One of these concerns the industry of private burglar alarms.

According to Johnson, statistics show that crime has been going down since 1980. For example, property crimes have decreased by more than one-third. Over this same time period, more police have been hired (though our current budget woes are having an impact in this area). Yet despite less crime and more police, the industry that manufactures, installs and monitors home security systems is seeing an increased number of subscribers and, of course, greater profits.

The industry -- like so many others -- plays up the fear card. If you pay much attention to their ads, you would think that crime rates are going through the roof. Because of all this fear mongering, more and more people sign up for these services each week.

And what exactly is the service these companies provide? When an alarm goes off, they call the police! Who pays for the police? You and I with our tax dollars. In other words, these companies collect mucho bucks per month to make phone calls and the actual work of looking into the matter is borne by taxpayers.

Even worse, statistics bear out that the vast majority of these phone calls spurred by alarms are false alarms! So the police -- who we pay for -- spend inordinate amounts of time responding to all these false alarms and citizens who really might need their immediate assistance are put on hold.

It truly is a creative subsidized racket!! These companies make money hand-over-fist by providing a very meager service and citizens pick up the majority of the tab by paying for the police who serve as the company's chief workforce.

1 comment:

  1. Every year there's a home security system company that sends salesmen around my neighborhood. They play on the fear factor to try and sell you a system. I had a pushy guy this year. I was carrying in bags of groceries when he walked up and started his "crime is on the rise" spiel. When I said I'm not interested, and turned to take my stuff inside, he said in a firm, authoritative voice "You need to listen to this, ma'am!" "No!" I shot back at him, and went in. I could have pointed out that just recently I read in the paper how crime rates have dropped in my city, but he probably would have had a trained sales pitch answer to fling back at me. They also like to play the "keep up with the Jones'" game. "You know the Schlock family over on First Street? They bought a system because..." at which point I say I don't do what everyone else does and shut my door.

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