I think the actual sequence of events is more like this: crime rates fell drastically all over the US starting in the very early nineties. It's not often in social science that a phenomenom cries out for a causal explanation with a single overriding cause, but this was one such.
The time-lag of the correlation provided enough evidence to bring the lead hypothesis out of the "epsilon probability" regime. That's straightfoward Bayesian reasoning -- verifying a consequence (i.e., prediction) of a hypothesis increases the plausibility of the hypothesis. Further predictions of the hypothesis were then verified -- things like prospective longitudinal studies showing the association of blood lead levels and violence on the individual level and natural experiments generated by the slightly different timings of various countries' and various US states' lead gasoline phase-outs.
A friend has been asking my views on the likelihood that there's anything to a correlation between changing levels of lead in paint (and automotive exhaust) and the levels of crime. He quoted from a Reason Blog:
I responded with the following:
He's apparently continued to pursue the question, and just forwarded these remarks from Steven Pinker that I thought were very illuminating, and probably deserve a place in this community's toolkit for skeptics. Pinker's main point is that the association between Lead and crime is a long tenuous chain of suppositions, and several of the intermediate points should be far easier to measure. Finding correlations at this distance is not very informative.
http://stevenpinker.com/files/pinker/files/pinker_comments_on_lead_removal_and_declining_crime.pdf
Does the phrase "long-chain correlation" stick in your head and make it easier to dismiss this kind of argument?