Whither prison reform?

By Cate Long
August 22, 2011

I expect to see a lot more discussion about reform of the state and local prison and jail systems in the coming months. Some states are privatizing jails, and the U.S. Supreme Court has ordered California to release prisoners due to overcrowding. Here is an interesting paper published in the journal Criminology and Public Policy that talks about how unions can be an impediment to change. From the abstract:

An unintended consequence of mass imprisonment is the growth of prison officer unions. This article shows how successful corrections unions in states like California and New York obstruct efforts to implement sentencing reforms, shutter prisons, and slash corrections budgets. They impede downsizing-oriented reforms by generating or exacerbating fear among voters and politicians. Policy makers in key states must overcome resistance from prison officer unions to downscale prisons. Through a combination of accommodation and confrontation, policy makers can relax opposition from the officer organizations and undertake prison downsizing efforts without busting the unions.

There are no simple solutions to this problem and all angles need to be investigated.

Too low for retail

We are starting to see the classic dynamic in the bond market where bond yields go too low and then investors back away from buying. The reduced demand causes bond prices to fall and yields to rise. In this case retail investors are not finding short-term municipal bond yields appealing and are turning to other asset classes. Bloomberg reports:

The low interest rates discourage some individual investors from purchasing municipal debt, said John Hallacy, head of municipal research at Bank of America Merrill Lynch in New York.

“The nominal levels are so low that it’s getting harder to get retail investors excited about the shorter end of the curve,” Hallacy said. “And of course inflation is not the fixed-income investor’s friend so you really can’t recommend going out very long on the curve, at least from the retail perspective, although there may be some of that.”

This episode is only 10 months old

If you live on the east or west coasts of the United States you may not be aware of the exceptional drought conditions facing the lower Midwestern states. This is eerily similar to the conditions faced in the 1930s. From the OK Policy blog:

Climatologist Gary McManus says this summer’s heat and drought conditions are comparable to the 1930s Dust Bowl, however “it is important to remember that this episode is only 10 months old whereas those droughts lasted much longer. Imagine this drought and similar summer heat for another 10 years.”

A good resource to monitor national drought conditions is the US Drought Monitor maintained by the University of Nebraska, Lincoln. Here are the current conditions:


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+ Good links +

Calculated Risk: State Unemployment Rates: Current and Max for 2007 Recession

Bond Buyer: Market Post: Munis Slow Down After Record Day

Seeking Alpha: Wrong About Municipal Bonds

Thomson Reuters News and Insight: Municipal body urges pay-to-play rules for advisers

New York Times: Preaching a Healthy Diet in the Deep-Fried Delta

Illinois Statehouse News: GOP leaders renew opposition to borrowing

New York Times: Federal Officials Reject City’s Plan to Ban Food Stamps for Soda

Washington Post: Does banning use of food stamps for soda reduce obesity?

Tacoma Food Coop: Preferred Member Shares

Birmingham News: Jefferson County officials to meet with creditors in New York

Bloomberg: Alabama Local Borrowers Punished as Jefferson Faces Bankruptcy

New York Times: After Bruising Political Fights, 2 Governors Alter Their Tones

Columbus Dispatch: Merging systems may not cut costs for municipalities

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There is actual “prison reform” going on in California, Thanks to the U.S. Supreme Cpurt! And the resulting prisoner realignment is really great news for taxpayers. It’s entirely due to the U.S. Supreme Court order requiring the State to reduce the prison population by 32,000 inmates. It will reduce prison costs by about $1 billion annually. Realignment involves returning low-level offenders, in prison rather than jail only because of jail overcrowding, back to counties. The transfers from jail occurred between 1985 and 1993. Annual savings of $750 million will occur because a jail bed costs $25,000 less than a prison bed. An additional $250 million will be saved because the violation rate will drop from 35% to 20%. The rate is artificially high because of a decision to move violation hearings to prison rather than deal with violations at the parole unit level.

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