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.
