Only An Idiot Would Rob a Bank: How Inflation Deflated the Stick Up

by Willy Staley

Opponents of inflationary monetary policy sometimes refer to it as a slow-motion bank robbery. The comparison is a bit extreme, considering that in a healthy economy, savers can usually find savings rates or investments that beat inflation. But now, with interest rates at near zero for the foreseeable future, and inflation at two percent, savers are getting hurt by our current monetary policy, ostensibly for the good of the economy as a whole.

By keeping rates low, the Federal Reserve hopes that borrowers will want to borrow more, and this will help kick-start the economy. But borrowers aren’t borrowing, and banks aren’t lending, and the economy isn’t bouncing back in the way Ben Bernanke would like it to. So, if you ignore how potentially disastrous it might be to raise rates right now, your savings are being robbed by the Fed and the banks. And if you’re getting robbed, it follows that it is at least slightly more justified to rob back. It says so in the Old Testament, or whatever.

But before you don your ski mask or pantyhose or lemon juice, we have a warning for you: It might not be worth it for the precise reason you’re angry. Inflation, by making cash store less value, also has the unintended consequence of making bank robberies less worthwhile a pursuit over time. Short of some Die Hard with a Vengeance sort of scheme*, bank robbers can only carry away so much money — whatever fits on their person, in their car, whatever. And because our currency inflates at a rate of about two percent per year, a bank robber’s haul decreases by that much in spending power every year, meaning that the burlap sack of loot clutched in John Dillinger’s palm was worth considerably more to him than the exact same assortment of bills would be in your hand, today.

This is an obvious point, but it warrants mentioning for the fact that bank robberies aren’t like every other crime — even other crimes involving money. Robbing someone on the street in an increasingly cashless society is unwise. You might get an iPhone for your troubles. Robbing liquor and convenience stores might yield a greater reward, but you never know what your local bodeguero has hidden behind the counter. A bank robbery, in our imagination, provides the robber with a one-off high-risk opportunity to become incredibly wealthy, in comparatively guilt-free fashion: No one but the corporation loses any money, so, what the fuck? That used to be the case, but due to inflation — as well as a host of other factors — it no longer is.

Consider this: In 1889, when Butch Cassidy robbed the San Miguel Valley Bank in Telluride, Colo. for $21,000, that cash could have weighed just a couple pounds**, and would have nearly 20 times that value today, as far as spending power is concerned. In today’s dollars, Cassidy’s take was worth about half a million dollars — nearly a quarter million per pound of cash. Nowadays, a pound of twenties has about $9,000 in spending power. You’d need 55 pounds of cash to meet Cassidy’s 1889 take.

As you move through the history of notable bank and armored car robberies, you can see the dollar’s value diminish before your eyes. Hey Paultards, check this out:

In 1933, John Dillinger’s gang robbed Central National Bank in Greencastle, Ind. for $76,000. That would be $1.2 million in today’s dollars, or approximately $152,000 per pound of cash. In 1950, on Boston’s North End, just down the street from Mitt Romney’s current campaign headquarters, a gang of thugs broke into a Brinks depot, and made off with $1.2 million in cash (and $1.5 million in checks and money orders), which might have weighed about 134 pounds, and would be worth nearly $11 million in today’s dollars — about $81,000 a pound. The Lufthansa heist of 1978, dramatized in Goodfellas, netted the Brooklyn mobsters $5 million in cash. That sum would be worth $16.5 million today — nearly $30,000 of spending power per pound. Fast forward to 1997, which was a strange year for the bank robbery world, when three armored car companies were robbed, and in each robbery, the culprits netted approximately $18 million — or just $12,000-ish a pound.

Pound for pound, the dollar just doesn’t go as far as it used to. For wage earners this isn’t so much of a problem as long as wages inflate as well (which, well, they haven’t) but for those who prefer to take physical cash by force, it’s a big problem. Every year that goes by, you need to take more and more cash to make a bank robbery a worthwhile endeavor. It goes without saying that the downside risks to accessing money in this fashion are massive, and as the upside diminishes by two percent year over year, it might start to look less attractive — or at least it needs to be more extravagant. Of course, this isn’t the only factor in play here.

“If somebody wants big money, they’re not gonna rob a bank,” said Robert McCrie, a professor of urban crime and standards security management at John Jay College of Criminal Justice. “They’re going to attack a bank electronically.”

Of electronic theft’s many advantages — its gunlessness, say — one that’s easy to overlook is that the money is entirely intangible, and needs to be carried nowhere. The real money is in money that doesn’t look like money, or more accurately, can’t be seen at all. Think Swordfish — no, not that part of Swordfish.

But some still won’t be deterred from walking into a bank and attempting to strike it rich by risking 20-odd years of their lives for a few hundred bucks.

“This is a kind of criminal who is not regarded well in prison when he gets there,” McCrie said.

They’re low on the totem pole for the fact that they’re incredibly unsophisticated. Meanwhile, since the 1980’s, banks have gotten far more sophisticated, introducing both technological and managerial innovations to create further financial and legal disincentives for bank robbers.

The technological side can mostly be summed up quickly: upgraded alarms, which cannot have a mimicked signal rerouted through them like you see in the movies; and devices like exploding dye capsules, which effectively destroy cash stolen by bank robbers if they actually manage to, say, get into the vault and take a lot of money.

According to McCrie, this happens less and less due to the managerial changes. As more bank robbers became “note-passers,” to use McCrie’s term for people who pass a note to a teller making a threat and demanding cash, banks have started to cooperate with them just to get them on camera, and then out of the door. Before you run out the door, however, you should know that banks have also cut back on the amount of cash that they keep up front. That so many people do their banking online, and use cash less frequently, has likely helped make this managerial shift easier to handle. Now, when criminals come in, notes and/or guns in hand, the teller simply gives them whatever cash is available to get them out the door, and let law enforcement do its job. While the sheer number of crimes has not fallen, the amount of money taken per crime has. And so has, of course, the spending power of each ill-gotten dollar.

Note-passers are “considered losers in the criminal community,” McCrie said. They don’t get much money, but they do typically get prison time. Not only that, but half of these note-passers are either on drugs or drunk when they commit these crimes. No Dillingers, Butch Cassidys, or Robin Hood-esque drama here.

“Flamboyant bank robberies are a thing of the past,” McCrie said. This brings with it some very good news: They’re a lot less violent, too.

Dumb bank robbers have even become something of a trope in modern American society, perhaps because of how low-stakes the crime has become. Whether they’re on their cellphones while they commit the crime, wearing their easily-identifiable work clothes while speaking in Australian accents, posting pictures to their Facebook page showing off their loot, writing their notes on the back of documents with their full name and address on them, or trying to use the city bus as a getaway car, bank robbers have a knack for landing themselves in the “offbeat” news bin.

In fact, one bank robber in particular was so dumb in his attempts at disguising himself that he helped a professor of psychology, David Dunning, think of a new line of research, which eventually culminated in the discovery of the Dunning-Kruger Effect — a cognitive bias that makes stupid people blind to their own stupidity. Dunning’s research backs up the rather intuitive assertion. Errol Morris, writing for the New York Times, describes the plight of McArthur Wheeler:

Wheeler had walked into two Pittsburgh banks and attempted to rob them in broad daylight. What made the case peculiar is that he made no visible attempt at disguise. The surveillance tapes were key to his arrest. There he is with a gun, standing in front of a teller demanding money. Yet, when arrested, Wheeler was completely disbelieving. “But I wore the juice,” he said. Apparently, he was under the deeply misguided impression that rubbing one’s face with lemon juice rendered it invisible to video cameras.

Dunning was so stunned by Wheeler’s confidence in his own cunning, despite his complete and utter lack of it, that it led him to think of the mental blind spots that might come with stupidity. Morris:

As Dunning read through the article, a thought washed over him, an epiphany. If Wheeler was too stupid to be a bank robber, perhaps he was also too stupid to know that he was too stupid to be a bank robber — that is, his stupidity protected him from an awareness of his own stupidity.

It’s possible that dumber people have gotten into the bank robbery business as more sophisticated criminals and criminal organizations have moved out of this hustle, because the rewards have shrunk compared to the risks. Furthermore, it’s now so easy to get some money out of a bank just by writing a note that anyone dumb enough to risk 20 years of federal prison for a few hundred bucks can do so quite easily — can you get drunk and write a note? Congratulations: you can rob a bank.

Between the banks effectively lowering the barriers to entry while the Federal Reserve lowered the rewards, the bank robber’s status has suffered as well. Gone are the folk heroes. They have been replaced with bumbling idiots who probably don’t understand how fiat currency works anyway. Well, neither do I, really, but surely you see the point.

Figures like John Dillinger could, in a narrow sense, right the wrongs perpetrated by the banks leading up to the Depression, and make a small fortune in the process. In the latter half of the 20th century, the smash-and-grab strategy proved less lucrative, due to inflation, so inside men became a necessity to pulling off bigger heists. Brooklyn mafioso types leveraged their contacts to pull off both the Lufthansa heist in 1978, and the 1998 World Trade Center Bank of America heist of 1998. That was likely the last impressive bank robbery to date here in the U.S.

Now that we find ourselves in another deep recession brought on in part by the banks, it would almost be nice to have a Dillinger, or a Bonnie and Clyde. But we don’t because we can’t. We have hackers from formerly communist nations that produce plenty of highly-educated engineers thanks to their legacy infrastructure, but not enough good jobs. A Bulgarian hacker might scan your debit card and handily rob you of your cash, which your bank, in turn, will be forced to replace. Cool, but there’s no comeuppance there, and it’s a real pain in the ass to deal with — if anything it only serves to humanize your bank by putting you on the phone with some Southern-accented call center girl, who probably hates her job. But no one but a fool would walk into a bank demanding cash: You’d need a goddamn dump truck full of it to make it worth the risk, and then where would you hide it? It’s practically impossible to swindle a bank now, unless you’re armed with complex financial instruments of your own — in which case, friend, you might be a bank.

*Note here that Hans Gruber stole bonds while his brother Peter “Simon” Gruber stole gold, providing the latter with protection from inflation and the former without. Moot point, however, as both met their fate at the hands of John McClane — quite literally in Hans’ case. Also note: How the hell did McClane not remember dropping Hans Gruber off the top of Nakatomi Plaza until halfway through his day doing battle with another German-accented pseudo-terrorist-slash-bank-robber who seems to know him, personally?

**Assuming, for simplicity’s sake, that each bill weighs a gram and we average the denominations out to all twenties.

Willy Staley writes about money and personal finance for MyBankTracker.com, and keeps a Tumblr.

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