Incarceration alone will not solve North Carolina's crime crisis. We must also focus on preventing crime by addressing the conditions that give rise to it. That does not mean increasing government spending on jobs programs or social programs. There is no historical relationship between crime rates and either poverty, joblessness, or government social spending. Crime rates during the Great Depression were much lower than they are today. The real cause of crime is not a poverty of resources but a poverty of values. Research has clearly documented a relationship between out-of-wedlock births and the likelihood that those children will grow up to be criminals. That means that welfare reform and other measures to reduce government dependency and illegitimacy are irreplaceable elements of a successful crime prevention strategy. (from johnlocke.org)
By the same token, a bad economy doesnt always bring more crime. Crime rates fell about one third between 1934 and 1938 while the nation was struggling to emerge from the Great Depression and weathering another severe economic downturn in 1937 and 1938. Surely, if the economic theory held, crime should have been soaring.(heritage.org)
The United States has spent 5 trillion dollars on welfare since 1965. As welfare spending has increased 800%, the number of major felonies per capita has roughly tripled since 1960. Senator Phil Gramm once commented that "if social spending stopped crime, America would be the safest country in the world." Poverty is not the cause of crime. People as a whole were poorer in the past than today, but crime was not higher in the past. Poorer nations do not have higher crime rates than the United States. Crime rates dropped during the Great Depression and in the recession of 1982. (Data from Imprimis, October, 1995, vol. 24, no. 10)
Lastly, this graph: I'm not crazy about the source but if one can find a graph to refute it please do. Bear in mind that most experts agree that today's actual murder rate would be approximately 3 times the rate compared to the rate from 70 years ago due to medical improvements and emergency attention response time shrinkage. If one takes this into account then it signifies that our adjusted murder rate is over 3 times that as in the "poverty stricken" Great Depression. Note murder rate "cliff dive" during the early 30s to mid 40s