Structure of the Federal Reserve System and Banks

Structure of the Federal Reserve System and Banks The structure and mission of the European Central Bank, The Bank of Japan and The People’s Bank of China. Do any of these central banks resemble the structure of the Federal Reserve System? If so in what ways? Abstract The central bank is the national currency issuers, is countrys bank, is banks bank. Different countries have different central bank structure and mission. Different structure and mission will influent the independence of the central bank.[documents] Therefore, this topic mainly around the ECB, FDS, PBOC and BOJ to compare their structure and mission. Specific analysis following aspects: capital structure, power structure, organization form, operation and supervision department, objective and monetary policy tools. Using these contains to analysis the influence of these aspects for central bank independence. It will mainly compare to the similar and difference between these four central bank. Our results indicate that power structure is the main factors influencing the independence of central bank. The capital structure has no great effect to its independence. Due to the nature of central bank, different central banks have similar missions. Their monetary tools are also very similar, mainly through open market operations and reserve requirements. Finally, we find that European central bank have highest independence in comprehensive view.The second highest independence is FRS. PBOC has lowest independence between these four central banks. The main reason is that PBOC is the only one directly belong to thethe State Council. It means PBOC is a government apartment. But there also have other influent factor about independence which analysis in the article. Introduction As the main implement institutions of monetary policy in a country, central bankshas a very important position for the countrys economic development. Meanwhile, it has a vital influence for the social employment security stability and price stability.Due to the different economic backgroundand organization structure in the different country, its structure and the mission of the central bank is not entirely same. Therefore, this report mainly compared the similarities and differences between four central banksthrough detailed analysis their structure and functions.At the same time, this article aims to discuss whether these differences will bring different level of central bank independence. Central bank independence is a significant problem. Lots of previous academic studies have shown that independence is an important factor to influence the national inflation rate. Additionally, the structure of this paper is as follows. Section 2 provides a literature review on the different aspect and effect of central bank structure and mission. Section 3 explains the specific aspect of structure and mission in our case study. It has 3 parts, capital structure, power structure, missions and independence of central bank. Section 4 is a summary of the papers findings.Previewing our results, we find that missions of central bank are similar because of the central bank nature.Asà £Ã¢â€š ¬Ã¢â€š ¬the same time, difference power structure will lead different independence, then affect monetary policy and the rate of inflation. 2. Background Literature According to the existing literature in central bank structure, as Schoenmaker (2013) points out, it can divided into several aspects: Banks capital structure and quantity, level of economic development, level of central bank independence. ButD. Schoenmaker (2013) mainly through the analysis of inflation index to evaluate independence, because the central bank’s common methods is through monetary policy to control inflation then keep the economic stability. First, about central bank capital aspect, animportant research results isCBFS modelwhich created byPosso and Tawadros (2013).It shows that central Banks capital strength and the rate of inflation is inversely related. But, in oppose, another view fromStella (1997)thinks that the central bank does not need a lot of capital because it is hard become bankrupt.However, in our opinions, enough capital can give central Banks greater ability to face risk. Therefore, based on this view, we will compare the capital structure between ECB, FED, PBOC and BOJ. After that, we reviewed power structure of central bank aspect. It is mainly around the external organizational form and branch institutions. Meanwhile, we consider different central bankstructureand task determines its independence. At present, we find that a lot of economics research thinks that independence and inflation rate is negative correlation. One of results fromArnone and Romelli (2012)has great guiding significance .Arnone and Romelli(2012) not only test the developed countries central banks, like FED,BOJ. Their panel data also included lots of central banks from developing countries. But, however, they do not compare the difference between developing country and developed country. So, our research will pay more attention to this problem. Thirdly, review the literature for central bank mission research, Schoenmaker (2013) was made research and analysis for this. He considers central Banks have two major objectives: monetary stability and financial stability in the traditional views.But we find that many countries have modified its development goalsmany timesin recent decades, especially the reform of PBOC in 2003.Because the development of economic. So, our research will use our four countries latest laws and regulations as a basis to comparison their mission. 3. Analysis 3.1 Capital Structure Capital funds of central bank offered from the state or private or both. The source of capital funds will affect central bank system. It can be separate to state-owned, half state-owned and private-owned.. The capital structure of PBOC is quite single. It is fully owned by the state.In Article 8 of the peoples bank of China act (2003) point out that all the capital of PBOC are invested by the state, it shall be owned by the state. Nowadays, PBOC’s reserves areUS$3.201trillion. Meanwhile, BOJ capital structure is half state-owned. Bank of Japan is capitalized at 100 million yen in accordance with the Act. About 55 percent of the capital is subscribed by the government. Banking Act from Japanregulated that the BOJ do not set shareholders meeting. Shareholders can not join BOJs operation.Shareholders rights is only to get dividends per year and highest do not exceed 5%. The FRS is private equity capital form. All capital provided by private shareholders investment, after authorized by the government, then to perform the function of central Banks.FRScapital funded by12member Banks of federal reserve bank. Thesemember bank subscribe shares, get dividend per year in accordance with the stake, the highest dividend do not exceed 6%. ECB isSimilar to FRS. Itis also has share subscription, but all of share hold by member states in European Union. The amount of capital contribution is decided according to each member’s GDP proportionand populationproportion in EU.The ECB’s capital amounts toâ‚ ¬5billion.Reserves are 526 euro in total now. It can be find that only PBOC capital provided by government. Other three central banks have stock subscription. ECB is most similar than FED, all of capitalare funded by member banks or national member banks. However, this part only compared capital structure and reserves between these four banks. It is unable to see that the capital structure influence on independence, so later will compare the power structure 3.2 Power Structure 3.21 External Organizational form and branch institutions These four central bank external organizational form can be spate to 3 kinds: unit central bank systemà ¯Ã‚ ¼Ã…’Dual central bank systemà ¯Ã‚ ¼Ã…’Multinational central bank system. PBOC and the BOJ are unit central bank system. It means that a country only to set up a unified central bank to exercise power and dutyof the central bank. Central bank itself is unified, its branch institutions generally direct managed by central bank. Most countries adopt the wayat present. Because this mode is conducive to national manage and macroeconomic control. As the same time, it is obviously to limit level of branch institutions independence at central bank. FRS power structure is different from Japan and China.It use dual central bank system, means that the central bank system is composed of two parts: central (the board of governors) and local (member of Federal Reserve Bank). These two parts are relatively independent. The board of governorsis the highest financial decision-making body. Local accept the supervision from central. But local has rights in the concrete implementation and daily operation. So, local have their own independence. The Federal Reserve System divid es 12 areas, each area to set up a federal reserve bank. These 12 banks have independence in their own area. Additionally, ECB is Multinational central bank system. ECB and 27 national central banks compose to ESCB. National bank has own independence. So, we can find that ECB has highest level of independence because it not control by any government or state. The local also have own independence to operate. Similarly, FRS also has high independence level. 3.22 Inside Financial manage and supervision Although central bank not operate for profit, but itstill hasoperating income. Among these four central banks, BOJ and FRS revenue will belong to their countrys ministry of finance after dividends payment. Dividends payment proportion has been given in Section 3.1. In addition, at internalsupervision aspect, they have own supervision department respectively. At external supervision, it mainlysupervised fromgovernment with legal methods. Seminally, PBOCs all profits also belong to the ministry of finance in China, same as Japan and US. But supervision aspect, China was explicitly stipulated in the law amendment in 2003(PBOCs Act): the PBOC as a department under the state council of China, belong to the government departments. So, PBOC isdirectly regulated and supervise fromgovernment. ECB is different than other three banks, it has own financial independence. Operate revenue control by itself. ECB can make own budget. In supervision aspect, it accepts European Union rules. ECB should take responsible to offer report to European Parliament, the European Commission, and the Council of the European Union. But ECB do not control byany country or government. So, obviously, ECB have more independence in financial aspect than others. 3.3. Missions As a non-profit financial institutions,the mission ofthese central banktrends to be consistent: play its functions effectively andachieve their core goal. The main way is through monetary policy, to keep price stability, to promote economic development. According to the ECB official website state, the European Central Bank and the national central banks together constitute the Euro system. The main objective of the Euro system is to maintain price stability: safeguarding the value of the euro. In Japan, the Act sets the BOJs objectives is ‘to issue banknotes and to carry out currency and monetary control’ and ‘BOJ shall be aimed at achieving price stability’ Similarly in China, the Act of PBOC (2003) points out that PBOC’s missions are: to formulate and implement monetary policy, to maintain price stability, to provide financial services. In the US, the Board of Governors of the FRS and the Federal Open Market Committee shall ‘maintain long run growth of the monetary and credit aggregates commensurate to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates. (1977 Federal Reserve Reform Act specified) Monetary policy tools To sum up, we could find that these central bank’s missions all around to keep price stability. It is determined by the central bank’s nature. But their also has some different. For instance, the US also clearly point out FRS should maximum employment and moderate long-term interest rates. Similarly, their monetary policy tools also trends to be consistent, all mainly to use two methods: open market operations and reserve requirements. 3.4 Independence As background literature described, independence is an important aspect to the central bank. This part is extended based on above analysis, to compare these several central bank independence. In the angle of structure, despite these four central banks has different capital structure, but it didnt have obvious effect to independence. Because shareholders do not to participate operations, only charge a small amount of dividends. In organizational form aspect, BOJ and PBOC independence is lowest. Americansdual central bank systemgives more independence between the central and local. In this aspect, ECB system is similarly with FRS. In financial aspect, the biggest independent central bank still is ECB. Becauseother three central bank’s revenues are belong to their national Treasury. About supervision, except PBOC is directly control by government, other three central banks have great independence. They have their own internal supervision mechanism and external legislative intervention by the government. 4. Conclusions On the whole, we find that ECB, BOJ, FRD and PBOC missions are consistent. It is mainly around to keep price stability. Through the contrast of central banks objective and monetary tools also reflects their similarity. With the research of central bank structure and independence, ECB has highest independence,resemble to FRS.It should be mention that the ECB does not public members vote process, so the independence has been questioned in recent years. However, it is no doubt that the worst independence of central bank is PBOC. It is mainly caused by nationalization of the structure. In addition, our study is based on theoretical angle, around power structure and missions’ analysis, to evaluate its independence. It has not using quantitive data.But reference toMasciandaro,ect.(2008)released specific quantitative rating of the independence of the central bank, (A total of 19 criteria are identified to assess the degree of supervisory independence, and 21 for accountability.) the data are consistent with our analysis. They measured thatPBOC independence index is 0.47 and BOJ is 0.34. ECB and FRS independence is significantly higher. Thus, it could prove our results correctness. References Arnone, M., Romelli, D. (2012). Dynamic central bank independence indices and inflation rate: a new empirical exploration.Paolo Baffi Centre Research Paper, (2012-118). Masciandaro, D., Quintyn, M., Taylor, M. W. (2008). Inside and outside the central bank: Independence and Accountability in Financial Supervision: Trends and Determinants.European Journal of Political Economy,24(4), 833-848. Posso, A., Tawadros, G. B. (2013). Does greater central bank independence really lead to lower inflation? Evidence from panel data. Economic Modelling,33, 244-247. Schoenmaker D. (2013),Chapter 28 -Central Banks RoleinFinancial Stability HandbookofSafeguarding Global Financial Stability,271-284 Stella, P. (1997).Do central banks need capital?. International Monetary Fund.

Evaluating Internet Resources :: Internet Research - Reliable Sources

The Internet has become a popular source for retrieving information on practically any subject. This information can generally be retrieved in a matter of seconds. With the popularity of the internet as a research tool it’s important that the information received is reliable and accurate. In general, when one uses a search engine to perform a search on the internet, the quantity of information returned is astronomical. â€Å"In a world of information overload, it is often extremely difficult to get a grip on the correctness, completeness and the legitimacy of the information and material available in the internet.† (Prins). If the user does not thoroughly research the information they receive from certain web sites they could receive misleading and invalid information. It is extremely important that the information received is reliable and accurate. For example, someone could be researching a medical condition on the internet and they believe that all the information they have received is true. The pickup on a site that recommends a treatment regiment that promises to eliminate the problem. They realize that their systems have worsened and the recommended treatment is not working. This incorrect information that the user received from the internet can be devastating for the user or even led to death. Anyone can post anything on the internet. â€Å"Unlike most traditional information media (books, magazines, organizational documents), no one has to approve the contents before is made public.† (Prins). Everyone who uses the internet need to be mindful, that because the information is on the web, doesn’t make it true. Many of us forget this fact because at one time most things that were in print were true. But today as it relates to the internet that is not a true statement. All the information that is retrieved should be verified for its accuracy. To verify the information retrieved is valid there are a few things the user can do. The user should verify the author. Here are a few ideas to verify the author and check objectivity; is the author knowledgeable; is the credentials and organizational affiliations listed; has the author written other material relating to the subject; is the author stating a fact or is it their opinion; is the information one sided or is more than one view point shared; is the information trying to sway the reader; is the information based on fact.

Robert Frost :: essays research papers

Robert Frost was born on March 26, 1874 in San Francisco. His father was William Frost, a Harvard graduate who was on his way westward when he stopped to teach at Bucknell Academy in Pennsylvania for extra money. His mother, Isabelle Moodie began teaching math at Bucknell while William was there, and they got married and moved to San Francisco. They were constantly changing houses, and William went from job to job as a journalist. About a year after moving to San Francisco, they had Robert. They named him Robert Lee Frost, after William's childhood hero, Robert E. Lee. Frost's father died from tuberculosis at age thirty-four, in 1885. Isabelle took Robert and his sister back east to Massachusetts. Soon they moved to Salem, New Hampshire, where there was a teaching opening. Robert began to go to school and sit in on his mother’s classes. He soon learned to love language, and eventually went to Lawrence High School, where he wrote the words to the school hymn, and graduated as c o-valedictorian. Frost read rabidly of Dickens, Tennyson, Longfellow, and many others. Frost was then sent to Dartmouth college by his controlling grandfather, who saw it as the proper place for him to train to become a businessman. Frost read even more in college, and learned that he loved poetry. His poetry had little success getting published, and he had to work various jobs to make a living, such as a shoemaker, a country schoolteacher, and a farmer. In 1912 Frost gave up his teaching job, sold his farm, and moved to England. He received aid from poets suck as Edward Thomas and Rupert Brooke, and published his first two volumes of poetry, A Boy's Will in 1913, and North of Boston in 1914. These works were well received not only in England, but also in America. Frost returned to America in 1915 and continued writing his poetry. He produced many volumes of poetry, among which are Mountain Interval (1916), West-Running Brook (1928), A Further Range (1936), A Masque of Reason (1945) , and In the Clearing (1962). Frost received the Pulitzer Prize for poetry four times (1924, 1931, 1937, 1943) and became the first poet to read a poem at the presidential inauguration of John F. Kennedy. His poetry was based mainly on life and scenery in rural New England, and reflected many values of American society.

A Marxist Philosophy of Life - Reading Mao’s Three Essays

From Mao’s three essays, namely In Memory of Norman Bethune, Serve the People, and The Foolish Old Man Who Removed the Mountains, we can see that the two defining themes of Mao’s rendition of Marxist philosophy towards life are altruism and pragmatism, both of which are in line with Marxist theories. However, considering the historical context of the three essays, Mao’s philosophy of life as shown in the aforementioned essays can be seen as propagandistic and does not necessarily reflect Mao’s true opinions on life. In Mao’s essays, the idea of pragmatism is shown mainly by Mao’s emphasis on the importance of practice. The word pragmatism comes from the Greek word pragma, which means "deed, act"; the latter, in turn, derives from the Greek word prassÃ… , which means "to practise, to achieve". Advocates for pragmatism argue that the value of an ideology or proposition lies in the fact whether it works satisfactorily in practice (McDermid). Such principle is evident in most of Mao’s works. For instance, In In Memory Of Norman Bethune, Mao commended the Canadian doctor for â€Å"putting this Leninist line into practice† (Mao, In Memory Of Norman Bethune). In Serve the People, Mao stressed again on the significance of practice. He argued that â€Å"Anyone †¦ if what he proposes will benefit the people, we will act upon it† (Mao, Serve the People). Here Mao suggests that an idea, as long as it is in line with the Communist Party’s goal of serving the p eople, should be put into practice, no matter of its origins. This has once again shown the stress Mao had laid on the importance of practice, which is in line with pragmatism principles. Altruism is another element in Mao’s philosophy of life shown in the three essays. Altruism is the tendency t... ... the two themes of Mao’s philosophy of life as is featured in the three essays, namely pragmatism and altruism, reflect Mao’s true opinions on life, they are in line with orthodox Marxist teachings and can be seen as a Marxist philosophy towards life. Works Cited Mao, Zedong. "In Memory Of Norman Bethune." 21 12 1939. Marxists Internet Archive. 2 12 2013 . —. "Serve the People." 8 9 1944. Marxists Internet Archive. 2 12 2013 . —. "The Foolish Old Man Who Removed the Mountains." 11 6 1945. Marxists Internet Archive. 2 12 2013 . McDermid, Douglas. Pragmatism. 15 12 2006. 5 12 2013 .

Lack of Connection between Educational Research and Practice Essay

Educational research is conducted on the premise that an expansion of knowledge in the area of classroom teaching should automatically lead to improvements in the classroom, not only with respect to teaching styles but also the academic progress of students. All the same, this enhancement of knowledge is not always welcomed by teachers (Kennedy, The Connection). According to Mary M.  Kennedy, the author of â€Å"The Connection between Research and Practice,† teachers may fail to apply new knowledge based on research for the following reasons: (1) The research is not authoritative or convincing enough to move teachers to alter their practices; (2) The teachers find it difficult to directly apply the new knowledge because they consider it irrelevant to their particular concerns or questions on the subject of teaching; (3) The research findings may not have been communicated in an understandable way; and (4) It is impossible for the educational system to accept the changes entailed by new research-based knowledge (Kennedy, The Connection). G.  Reid Lyon, the Chief of the Child Development and Behavior Branch of the National Institute of Child Health and Human Development, U. S. Department of Health and Human Services, expresses dismay at the lack of connection between educational research and practice: Scientific research can inform beginning reading instruction. We know from research that reading is a language-based activity. Reading does not develop naturally, and for many children, specific decoding, word recognition, and reading comprehension skills must be taught directly and systematically. We have also learned that preschool children benefit significantly from being read to. The evidence suggests strongly that educators can foster reading development by providing kindergarten children with instruction that develops print concepts, familiarity with the purposes of reading and writing, age-appropriate vocabulary and language comprehension skills, and familiarity with the language structure. †¦One hopes that scientific research informs beginning reading instruction, but it is not always so. Unfortunately, many teachers and administrators who could benefit from research to guide reading instructional practices do not yet trust the idea that research can inform their teaching (Lyon). The lack of connection between educational research and practice astounds many researchers. Even so, this lack of connection is sometimes approved by researchers. In the case of reading, for example, there are researchers who perceive that theories are â€Å"neither practical nor profitable† given that reading is â€Å"a complex phenomenon (Calfee and Drum 183). † These researchers even assume that â€Å"theoretical analysis is unnecessary, if not impossible† in this area (Calfee and Drum 183). Thus, there appears confusion with regards to applying educational research in the classroom. Seeing that the educational researchers do not always agree amongst themselves, it is unsurprising that teachers find it hard to understand new research-based knowledge before they can apply it. Teachers may not only disagree with educational researchers, but they also disagree with education reformers that base their ideals on current educational research after sifting through the disagreements among researchers (Kennedy, Reform Ideals). Research suggests that the teaching practice is strongly influenced by the values of the teachers themselves (Aguirre and Speer; Brickhouse). In other words, teachers may simply disagree with educational research that blatantly conflicts with their beliefs about their practice. According to Argyris and Schon, such is the difference between â€Å"espoused theories† and â€Å"theories in use. † Despite the advice of researchers as well as reformers, teachers may simply find it impossible to apply educational research in the classroom when their own beliefs conflict with the ideals of others. Kennedy has experienced the conflict between teacher practice and expectations while teaching in a different culture. Working in Thailand, without immediately appreciating the practice of teaching expected in the new culture, she was rather confused about the method of teaching that she was expected to adopt. She believed that she was right in her teaching style; however, the expectations of the Thai school administrators and students differed. â€Å"It took me a long time to adjust my practice to accommodate their expectations,† she wrote later (Kennedy, Learning to Teach). Of course, if she had failed to adjust, she would have found it difficult to succeed in the new culture as a teacher. Educational research is meant to influence teacher practice (Kennedy, Means and Ends). Nevertheless, resistance to change is a reality that must be confronted by all organizations, whether they are academic in nature or purely for profit. Teachers may believe that a certain educational finding is irrelevant to their concerns or questions about teaching. Still, the real reason why teachers do not always apply current educational research in the classroom is that they believe that their own practices are correct at any given time. In spite of Kennedy’s focus on the connection between educational research and practice, it took her a â€Å"long time to adjust† to a new culture of schooling. Given that educational research is growing by leaps and bounds nowadays, it is but natural for other teachers also to take a long time to adjust to new knowledge in the classroom. Change may sometimes be imposed upon the teachers, as in the case of new technologies that must be adopted in our times in a large number of schools around the globe (Bell, Codde and Bell). When change is not imposed upon the teachers, it is difficult for them to decide on the kinds of changes to adopt and disregard. According to a website on education: Educational research is potentially a great resource for supporting learner-centered practices, but there is a disjuncture between the worlds of the educational researcher and the practitioner (whether faculty member, instructional technologist, or learning designer). A few ears ago at the International Conference on Learning Sciences held in Ann Arbor, keynote speaker Linda Roberts commented on a 500+ page proceeding, saying â€Å"This is fabulous, relevant, and meaningful work†¦ the only problem is: no one who needs it is going to read it. † That is, there is not much of a bridge between research and practice (â€Å"Bridging Teaching and Learning Research and Practice†). Educational research has consistently focused on student-centered practices. Nonetheless, the constantly growing amount of research is expected to bewilder teachers about the appropriate teaching styles to adopt at any given time. The adoption of new technologies was considered necessary change. In cases where change is not considered urgent, however, there is bound to remain a wide gap between educational research and teacher practice. As mentioned previously, even educational researchers disagree about the kinds of changes that must be considered relevant or irrelevant. Hence, teachers are left with no choice but to take â€Å"a long time to adjust. † Teachers may additionally choose not to adjust to new knowledge. This is because the teacher’s values are imperative in the classroom. His or her belief system may not concede to a certain change in teaching style. Besides, change is often very difficult to adjust to. Hence, the lack of connection between educational research and practice is unavoidable in reality.

Appeasement Policy- Failure

Appeasement was the policy adopted by the British and French prime ministers in 1930s towards Germany. The aim of which was to settle international quarrels by satisfying Germany’s grievances, thereby avoid the resort to war which in other words, maintain peace. There are several reasons to why the appeasement policy was adopted. Such as, Britain and France were both suffering from economic depression and thus felt that they could not afford to spend a large expenditure on arms to combat Germany.Besides, there was a feeling that the treaty of Versailles was too harsh towards Germany and it was reasonable to reduce the policies. The appeasement policy was based on the idea that what Hitler wanted was reasonable and when his reasonable demands had been satisfied, he would stop. However it gave Hitler the confidence to demand more land, such as taking over Czechoslovakia, another step towards the Greater Germany. Later on Hitler demanded the Polish Corridor and Danzig in August 1 939, which eventually resulted in war.The appeasement policy fueled Hitler's actions to further devalue the Treaty of Versailles. Hitler broke the treaty of Versailles by sending troops to Rhineland, in addition to that Germany united with Austria which was originally banned in the Treaty of Versailles. At the same time, Germany gained time to build up their armed force and gain more military power. The policy aggravated Hitler’s ambitions and aggressions; he decided that Britain and France were unlikely ever to oppose him by force. Germany attacked Poland which at last led to WWII.If France and Britain had stood up to Germany then Hitler would not have been so bold in what he was doing. If they did not adopt the appeasement policy, they might be able to force him to back down without a fight or defeated Germany in a much shorter, less destructive war. Instead they kept giving Hitler what he wanted, hoping to appease him, which ended up Germany getting stronger and stronger u ntil defeating her required a catastrophic war. In conclusion, the appeasement policy was not effective in maintaining peace; instead it aggravated Hitler’s confidence and aggression which in the end led to WWII.

Relationship Between the Criminal Justice System and Mental Illness

With nearly 300,000 mentally ill individuals housed within local, state, and federal prison systems, issues of mental health care within the criminal justice system are at the forefront of debate. While steps such as increasing medications and providing at least marginal support for the mentally ill within state institutions are improving the situation, recidivism rates, homelessness, and violence against ill prison inmates is still a major problem in today's society. The product of deinstitutionalization, this problem of warehousing the ill within the criminal justice system must be attended to in order to create an atmosphere of care for the mentally ill. By altering legislation against involuntary assistance, increasing knowledge and awareness through the criminal justice system, and an increase in community care following release, the criminal justice system can create a cost effective solution to the problem of untreated mental illness within the system. The Relationship between the Criminal Justice System The relationship between mental illness and the criminal justice system has been one of intense scrutiny over the past several decades. Issues such as treatment options within state and federal prison systems, behavioral consequences of mental illness, and length of stay issues have all been deliberated intently by the psychiatric and legal community. These studies have indicated that severe problems exist within the system in terms of the care mentally ill individuals receive while incarcerated. This paper will focus on the issues of the mentally ill prison inmate, and will review current literature which suggests that although steps are being taken to solve some of these issues, more work must be undertaken to solve the problem of mental illness within the criminal justice system. In the correctional system today, there are nearly 300,000 mentally ill individuals, as compared to only 60,000 currently residing in state psychiatric hospitals (Faust, 2003). While only five percent of the population within the United States suffers from some form of mental illness, sixteen percent of individuals within the U.S. prison system suffer mental illness, clearly showing an over representation of these individuals within the system (Ditton, 1999). Some studies even suggest that the rate of incarceration of the mentally ill is four times that of the general population for males, and nearly six times that of the general population for females (Cox, 2001). The question, then, may be asked if the criminal justice system is ignoring the issues of mental illness, but studies suggest this is not the case. In the Los Angeles county jail system alone, over $10 million a year is spent on psychiatric medications for inmates (Faust, 2003). Another study showed that nearly half of all U.S. states have, in the last four years, established commissions or task forces specifically designed to look into the connection between the mental health system and the criminal system. Further legislation has been introduced in five states calling for such commissions (Souweine, 2004). In some states, such as Ohio, serious efforts have been put into place to assist the mentally ill. Ohio state prisons have quintupled the number of mental health professionals on staff, developed better mental health screening, provided more beds for the criminally insane, improved guard training, and improved funding for inmate mental health care (Kaufman, 1999). With all of these efforts in place, it is difficult to see why the problem of untreated mental illness exists. In order to understand the problem, it is essential to first understand the origins of the situation. In the mid-1950's through the 1970's, attempts were in force to dismantle the warehouses of the mentally ill through a process known as â€Å"deinstitutionalization†. At the time, mental institutions were simply holding areas for the insane, with sparse living conditions, harsh â€Å"treatment† procedures including electroshock therapy in unsafe conditions, and brutalization of patients (Treatment Advocacy Center, 1999). Following concerns about civil rights issues, cost issues, and a desire to move to a more â€Å"outpatient† approach, numerous legislations were enacted to â€Å"deinstitutionalize† the population of mental health hospitals. First in 1965, the federal government passed legislation that specifically excluded Medicaid payments for inmates housed in state psychiatric hospitals. As a result, the states were now required to provide care, and, looking to lower costs, many discharged hundreds or thousands of patients into society (Treatment Advocacy Center, 1999). In addition, legal reforms in the 1970's were passed that required an individual to be a danger to himself or to others in order for him or her to be treated involuntarily for their illness (Faust, 2003). The result was another mass release of patients into society. The results of deinstitutionalization are clear. Since 1960, nearly 90 percent of psychiatric beds in state hospitals have been removed. In 1955, nearly 600,000 individuals resided in state psychiatric hospitals; the number today is less than 70,000 individuals (Treatment Advocacy Center, 1999). Unfortunately, however, these numbers are misleading, in that they suggest a reduction in the number of mentally ill individuals, which is not the case. For many deinstitutionalized patients, the end result was simply a transinstitutionalization, or change of residence. While the Medicaid funds had been withdrawn for state psychiatric hospitals, those funds were still available for individuals with mental illness residing in nursing homes and general hospitals. As a result, many patients were simply transferred to these types of settings, where treatment options and care for the mentally insane were not nearly as advanced. By the mid 1980's, nearly 23 percent of nursing home residents had some form of mental illness (Treatment Advocacy Center, 1999). For other deinstitutionalized patients, the results were far more disastrous. According to recent studies, nearly 200,000 individuals with schizophrenia or manic-depression are homeless (Treatment Advocacy Center, 1999). Another 200,000 of the homeless population suffer from other forms of mental illness. As homeless individuals, many of these patients are unable to maintain any form of treatment or medications, and thus are unable to receive the care they desperately need in order to function in society (Faust, 2003). Unfortunately, for many of these individuals, criminal incarceration in the final result. In some cases, family members who are unable to force their relatives into treatment facilities due to the involuntary treatment laws have no choice but to wait until the illness causes harmful behaviors. At that junction, the police are contacted, and the individual is removed to a correctional facility (Faust, 2003). Since it is now common practice to give priority to mentally ill individuals awaiting court proceedings, many family members find this method the only option for obtaining assistance (Treatment Advocacy Center, 2000). The result, according to a 1992 study, is that over 29 percent of jails in the U.S. criminal justice system report holding mentally ill individuals with no charges against them. Certain states, such as Montana, Wyoming, and New Mexico, allow such situations if the individual is being held awaiting psychiatric evaluation, a psychiatric bed in a state hospital, or transportation to that hospital (Treatment Advocacy Center, 2000). Many of these individuals are held after arrest for misdemeanors, such as trespassing, disorderly conduct, or vagrancy (Treatment Advocacy Center, 2000). In fact, nearly half of the mentally ill inmates housed within the criminal justice system at any given time have been arrested for a non-violent crime (Ditton, 1999). Additionally, studies have shown that substance abuse is often involved with many mentally ill individuals (Teplin and Abram, 2000). As a result, these individuals are often arrested for alcohol and drug related offenses (Treatment Advocacy Center, 2000). In many of these arrests, police are attempting to protect these individuals from harm, such as robbery, beatings, and rape, and therefore perform â€Å"mercy bookings† or unnecessary arrests in order to house the mentally ill (Treatment Advocacy Center, 2000). While these methods certainly provide some form of housing for the mentally ill, the consequences of that housing are astronomical. First, the costs of mentally ill housing within the criminal justice system are staggering. According to the Department of Justice in 2000, American taxpayers pay $15 billion annually for individuals incarcerated in jails and prisons with mental illnesses (Bureau of Justice Statistics, 2001). Additionally, while these inmates do receive some form of psychiatric care, the costs of such care are much higher than that of community care centers, while the outcomes of such treatment is often much lower. According to the Department of Justice in 2000, one in every eight state prisoners were receiving some form of mental health therapy, and of the 1,558 state correctional facilities in the nation, 1,394 provided some form of mental health care. Nearly 70 percent screen inmates at admission for mental health issues, 65 percent conduct regular psychological assessment, half provide 24-hour psychological services, nearly 75 percent distribute psychotropic medications, and 66 percent assist released individuals with obtaining community mental health services (Bureau of Justice Statistics, 2001). However, even with the steps in place, the programs tend to not be as intensive nor as successful as those in a more clinical or community setting. Drug therapy, used in nearly 60 percent of the mentally ill housed within the correctional system, has been shown to be less effective than drug therapy combined with other forms of therapy (Bureau of Justice Statistics, 2001). Since nearly two-thirds of the mentally ill inmates are housed within units not specializing in mental health services, many are not receiving forms of treatment shown to be effective (Treatment Advocacy Center, 1999). In addition to the problems with mental health care in state institutions, local institutions fare even worse. A 1992 study of American jails functioning outside of the state or federal level showed that one in five systems had no access to mental health services whatsoever. Furthermore, 84 percent of these systems reported their staff to have received either no training or less than three hours of training in dealing with mentally ill inmates (Treatment Advocacy Center, 2000). Clearly, simply housing the mentally ill within the state and local criminal justice system institutions is not cost effective, nor effective in terms of treatment given. However, there are even more drastic consequences of using the criminal justice system as a holding area for the mentally ill. First and foremost, mentally ill patients have special needs outside of simple medicinal requirements. Patterns of illogical thinking, delusions, hallucinations, severe mood swings, and other symptoms of mental illness tend to occur even in medicated mentally ill individuals. In the prison system, these symptoms which lead to bizarre and unpredictable behavior are often misunderstood by personnel that have not been trained in these types of illnesses. As a result, non-ill inmates and the personnel themselves may react with violence and punishment that is detrimental to the already fragile mental health of the individual (Treatment Advocacy Center, 2000). Still further, rape, a commonly known occurrence in prison systems, is more likely to occur in individuals who are unable to defend themselves due to confusion and disorientation as a result of their mental illness (Hiday, et al, 1998). These patterns of behaviors also lead to longer prison sentences for mentally ill inmates. In one study, done in Riker's Island Prison, the average length of stay for an inmate was 42 days. In comparison, the average rate for a mentally ill inmate was 215 days, a length five times that of a non-ill inmate. In a similar study in Pennsylvania, only 16 percent of released prisoners had served their complete sentence. Of those, the mentally ill were three times as likely to serve their complete sentence as those who were not ill (Ditton, 1999). Perhaps one of the largest problems facing the mentally ill who are incarcerated is finding community resources for equal or greater care following their release. A study completed it 1992 showed that nearly 30 percent of mentally ill inmates released commit another act within four months of release (Treatment Advocacy Center, 1999). For many, this recidivism rate is due to a lack of medications necessary to maintain a stable mental health condition. In addition, many of these individuals find themselves homeless following release, which further limits their ability to receive further treatment (Ditton, 1999). It is clear that, although the current criminal justice system certainly attempts to care for the mentally ill, more needs to be done to ensure these individuals are continuously cared for. One such step, supported by the National Sheriff's Association, is to consider new laws altering the requirements for mental ill treatment. The NSA suggests laws which would allow treatment based on a â€Å"need for treatment†, rather than simply a show of â€Å"dangerousness†. The NSA also supports measures to allow a court order to assist in outpatient treatment of individuals in the community who need such treatment, but refuse it (Faust, 2003). Many studies have shown that mentally ill individuals often are not aware of their illness and thus, refuse treatment despite their clear need for such measures (Teplin and Abram, 2000). According to a long term study supported by the NSA, long term treatment combined with routine outpatient services reduced rearrest by nearly 74 percent ( Faust, 2003). Further, increasing the availability of community services following release has shown to be an effective measure in controlling the issue of mentally ill inmates upon their release. In Cook County, Illinois, case management for released inmates is provided by the Thresholds Jail Program. The individuals of Thresholds provide 7 day a week case management for as long as the member needs assistance, and even searches the streets for those individuals who are homeless at the time of release. This commitment has resulted in an 80 percent reduction in the need for hospitalization or incarceration of released inmates. Funded through the Illinois Office of Mental Health, the program costs $25 a day, in comparison to $70 a day for incarceration, or $500 a day for hospitalization (Thresholds, 2006). Additionally, ensuring mental health screening measures, improving personnel training, and providing qualified mental health staff in all criminal justice systems, including local jails, would also help to decrease the issues related to the mentally ill within the system. In Ohio, where such measures have been implemented, there has been a dramatic increase in the care of the mentally ill. Reports show less mentally ill prisoner abuse, smaller punishments for rule infractions, and an overall increase in inmate mental health. Even further, recidivism rates of the mentally ill in Ohio have fallen nearly 80 percent (Kaufman, 1999). Deinstitutionalization had drastic effects on the future of the mentally ill in America. Unfortunately, the criminal justice system has become a replacement warehouse for the mentally ill, providing basic housing and medication for these individuals only for the duration of confinement. Once released, and even in some smaller prison systems, the inmate is left without adequate mental health treatment or medication, resulting in an endless spiral of illness and incarceration that is costing billions of dollars a year, and the lives of many mentally ill individuals. By creating new laws which allow treatment based on need, utilizing existing community resources on release, and increasing the knowledge and awareness of such issues within the personnel of the criminal justice system, these individuals can become productive members of society at a far lower cost, creating a better situation for all involved.