Hey, guess what? Debtors' prison is back! Not the fetid and dreary kind from Dickens novels, of course, but a shiny, impersonal, high-volume, 21st century variety. It all revolves around something called "in personam" debt collection, which has two stages: discovery and collection. Mike Konczal explains:

The court orders the debtor to disclose information about his property, location of his assets, etc. to help creditors track down those assets. Then the court orders certain payments to be made, which allows for collection. This court order is enforced through the court’s authority to hold debtors in contempt, which in turn is enforced through threats of imprisonment.

....So how does this go wrong? The most obvious way is that this in personam debt collection method — which should be reserved for “extraordinary” situations — is used regularly by today’s collectors. Given that a debtor’s liberty is at stake, it seems very important that there are strict rules for this practice and that these actions are used only when appropriate. But as Shepard finds, “in personam remedies are often initiated and executed on a high-volume basis and with a striking degree of informality.”

....In many jurisdictions, bail posted to get out of being jailed for contempt of the discovery process is used to pay creditors. Besides being a great deal for creditors — as noted above, people often pay a huge economic penalty to get out of jail — it functions as a de facto debtors’ prison. As law professor Alan White described this process, “If, in effect, people are being incarcerated until they pay bail, and bail is being used to pay their debts, then they’re being incarcerated to pay their debts.”

You will be unsurprised to learn that the targets of this practice seldom have lawyers, seldom know their rights, and get no help from judges. Creditors, needless to say, suffer from none of these handicaps. Read the whole thing for more.

From Craig Bergman, the now-former Iowa director for Newt Gingrich's campaign:

A lot of the evangelicals believe God would give us four more years of Obama just for the opportunity to expose the cult of Mormon. There’s a thousand pastors ready to do that.

Gingrich may have fired Bergman, but that doesn't change the truth of what he said. The antipathy of evangelicals toward the Mormon church is widely known and of long standing, and it's a real problem for Romney even if it doesn't get talked about much. If you don't believe me, check out "Mitt Romney's Evangelical Problem," from the September 2005 issue of the Washington Monthly. Nothing much has changed in six years.

One of the ways in which a financial crisis in Europe can affect America is via credit channels. As I wrote a few weeks ago, European banks provide quite a bit of credit to the U.S. market these days, so if they're forced to tighten lending that could cause a credit contraction here too.

As the chart on the right shows, it looks like this has already started to happen. But how bad could it get? And what would it mean for the American economy? Via Joe Weisenthal, Jan Hatzius of Goldman Sachs provides some rough numbers:

If [European banks] decided to shrink at the same pace as in the period from 2008Q1 to 2009Q1 — the fastest decline during the global financial crisis — this would imply a decline of just under 25%. If so, the direct hit to US credit growth would be about 0.8 percentage point (that is, 3.3% multiplied by 25%)....How much could a 0.8% drop in credit supply shave off of US GDP growth? [A bit of explanation follows....] This would imply that a retrenchment by Euro area banks could result in a hit of 0.4 percentage point to US growth.

On the bright side, this is a worst case scenario. On the not-so-bright side, this is only one of the channels by which a European recession could affect us. We might not catch pneumonia just because Europe does, but we're still likely to get a pretty bad cold.

The NTSB today recommended a total ban on cellphone use while driving. That would include both handset use and hands-free use. Here's the Washington Post:

Distracted driving, some of it due to cellphone use, contributed to an estimated 3,092 deaths in highway crashes last year, according to the National Highway Traffic Safety Administration.

…Some drivers acknowledged Tuesday that distractions have become a problem, but they were not ready to endorse a total ban either. It’s not as if the NTSB is proposing banning talking to passengers or eating, said Arlington County resident Peter Hogan, who thinks hands-free devices should be allowed. "It's distracting, but almost everything you do can be distracting," he said.

There's really no reason to say that "some" fraction of 3,092 highway deaths is due to cellphone use. You can just go to the FARS database and look up the numbers. If you do, you'll find that cellphones were implicated in 223 highway fatalities in 2010. Eating and drinking were implicated in 36 deaths and the "other occupant" category was implicated in 211 deaths.

(These are highway fatalities only. The figures approximately double if you include all roads.)

This is the kind of data you need to know if you want to decide how you feel about a cellphone ban. On the one hand, knowing the actual numbers might make you feel that a ban is unwarranted. Maybe you don't think that 223 deaths is enough to justify the heavy hand of a nationwide ban. On the other hand, you also can't just wave your hands and pretend that it's no worse than eating or drinking. As it turns out, cellphones are implicated in six times more deaths.

There are plenty of other things you might want to know. How does the number of chatty drivers compare to the number of hungry drivers? How reliable is the reporting of these crash statistics? How do our figures compare to other countries? Still, if you're going to report about this stuff, you should at least provide the basic raw numbers.

A group of Democratic senators has written a letter to HHS secretary Kathleen Sebelius asking for the "specific rationale and the scientific data" she relied on when she overturned last week's FDA recommendation to make the Plan B contraceptive available over the counter. Greg Sargent posts a copy of the letter at his site and then comments:

This letter — which is signed by Patty Murray, Barbara Boxer, Kirsten Gillibrand, Maria Cantwell and 10 male senators — is strongly worded stuff, particularly when directed at a Democratic president. It stops just short of accusing the Obama administration of deliberately ignoring science in making this decision. It also puts the administration in an awkward spot. Either it produces a scientific rationale that’s acceptable to these Senators, which will will be extremely difficult at best, or it will face more criticism for failing to justify its policy, reinforcing the sense that this Democratic administration abandoned science and put politics first.

The first best option obviously would have been to follow the FDA recommendation and simply allow OTC sales of Plan B. However, the second best option would have been to fess up. This is what happened in 1998 when the Clinton administration decided not to endorse needle-exchange programs. Chris Mooney provides the play-by-play:

In 1998, Health and Human Services Secretary Donna Shalala fully acknowledged the science up front. "We have concluded that needle-exchange programs...will decrease the transmission of HIV and will not encourage the use of illegal drugs," she stated, even as she went on to explain, awkwardly, that the programs would not be supported: "We had to make a choice. It was a decision. It was a decision to leave it to local communities."

In contrast, the Bush administration simply twisted the science. In an extraordinary February 2005 editorial, the Washington Post revealed that to justify the decision to oppose needle-exchange programs (which are especially disliked by religious conservatives), a Bush official directed the paper "to a number of researchers who have allegedly cast doubt on the pro-exchange consensus."

In this case, the Bush administration deliberately tried to mislead the Post about the scientific evidence on needle-exchange programs. The Clinton administration simply admitted that it was making a policy decision.

The Obama administration ought to do the same here. There's a perfectly reasonable case to be made that even if Plan B is safe, the Obama administration doesn't believe it's appropriate to make it available to young children without their parents' knowledge. That's a policy decision, and everyone accepts that policy doesn't have to be dictated solely by science.

Sebelius would be well advised to give up on trying to twist the science and simply admit that there were other considerations at work. It might not make Plan B fans any happier, but at least it would be more honest.

The BBC, in an apparent effort to compete with Britain's well-known fondness for tabloid sensationalism, offers up this today:

Top economists reveal their graphs of 2011

Be still, my beating heart! Unsurprisingly, it turns out that most of the top faves are related to the euro crisis, and to be honest, even by my standards they aren't all that super interesting. Still, it's worth a quick stroll. To whet your appetite, here's a chart from Carl Emmerson, deputy director of the the Institute for Fiscal Studies. His explanation:

This shows the Bank of England's estimate of what the market thinks is the likelihood of sovereign defaults in selected countries in the next five years. Prior to the crisis the market did not see any sizeable difference between these countries despite very different levels of public and private sector debt. The estimated chance of a default increased sharply for many in the aftermath of Lehman's demise in late 2008 but these increases have been dwarfed by those since early 2010.

If the Bank of England is to be believed, Greece, Portugal, and Ireland all have about a 50% or greater chance of defaulting by 2016.

From the mailbag:

As part of the Obama Administration’s Campaign to Cut Waste, Vice President Biden today announced the U.S. Mint would suspend the production of Presidential dollar coins for circulation. Today, nearly 1.4 billion surplus dollar coins are sitting in Federal Reserve vaults due to lack of demand for the coins. By halting this unnecessary production, the Administration will save taxpayers at least $50 million per year in production and storage costs....More than 40 percent of the $1 coins that the United States Mint has issued have been returned to the Federal Reserve, because nobody wants to use them....As a result, nearly 1.4 billion excess dollar coins are already sitting unused in Federal Reserve Bank vaults — enough to meet demand for more than a decade. But until today, the Mint was on pace to produce an additional 1.6 billion dollar coins through 2016. 

Okey dokey. Chester Alan Arthur is the unfortunate target of this ruthless attempt to pare back government. However, James Garfield, who was released on November 17, should be in plentiful supply for years to come.

Ezra Klein writes that Republicans are in the "odd" position of opposing a temporary middle-class payroll tax cut that would cost a hundred billion dollars or so while enthusiastically endorsing plans that would permanently slash taxes on the rich at a cost of trillions of dollars. Paul Krugman has the right response:

But it’s not odd at all, once you realize that the GOP is not now, and never has been (at least not since the 1970s) concerned about the deficit. All the fiscal posturing of the last couple of years has been about using the deficit as a club to smash the welfare state, with the secondary goal of frustrating any efforts on the part of the Obama administration to help the struggling economy.

The entire debate has been fake. If you don’t understand that, or can’t bring yourself to admit it, you’re missing the whole story.

Yep. Tax cuts for the rich, spending cuts for everyone else. The deficit is just a character actor in this little melodrama.

Matt Yglesias, who's unhappy with our "unfortunate bias against the food service industry," says that we make too much fuss over the difference between manufacturing and services:

To understand this problem, you need to start with the fact that if I build a factory where people take fresh peas and put them in cans that's a "manufacturing" facility full of manufacturing jobs and people who "make things." But if I build a facility where people take fresh peas, mix them with some basil and a touch of mint, plus olive oil, parmigiano reggiano, and pine nuts then purée them to serve you a delicious pea pesto that's a lowly service sector employment cite that couldn't possibly generate good jobs....It's really a gap between putting things in boxes and not putting them in boxes.

....None of this is to say that we should be complacent about the state of the American labor market! Wages for working class men have been stagnating forever, and over the past decade women and college graduates have been getting squeezed too. The employment:population ratio is pathetic. We have huge problems. But the problem is not, as such, that we need more boxes of dried pasta and cans of peas and fewer restaurants.

Actually, in a broad sense, that's exactly our problem. There really are some good reasons to care about manufacturing jobs. Here are three:

  • The manufacturing sector is generally more capital intensive than the service sector. Because of this, a pea canning factory can afford to pay higher wages for unskilled and semi-skilled labor than a restaurant can.
  • On a related note, manufacturing facilities are generally more scalable and more amenable to technological improvements. This improves productivity, and improved productivity is key to improved wages. By contrast, the restaurant business doesn't have a lot of scope for automation or productivity improvements.
  • Manufacturing is part of the tradable sector, while service industries generally aren't (though there are exceptions). A pea canning factory can ship its products overseas and help maintain our balance of payments. A restaurant can't.

There are good reasons that the food prep industry isn't held in high esteem, economically speaking. It's labor intensive, not especially productive, and not tradable. No country will ever get rich by employing armies of workers to flip burgers for each other. This doesn't mean that we have to have a huge manufacturing sector per se, but we certainly need industries that have a lot of the same qualities. Sectors that are capital intensive, scalable, and tradable are the future of any healthy economy.

Via Matt Yglesias, I see that the Tax Policy Center has completed a preliminary analysis of Newt Gingrich's tax plan. You will be entirely non-shocked to learn that it's pretty much the same as every other Republican tax plan: it offers only modest cuts for poor and middle-class taxpayers but gigantic cuts for the well-off and the rich. In order to make sure that not a single person would even theoretically pay higher taxes under his plan, Newt uses the dodge pioneered by Rick Perry that allows taxpayers to choose between the current tax code and the Gingrich plan. However, he goes Perry one better by being even more brazenly pro-millionaire with an effective rate of 11.2% for anyone earning more than a million dollars per year.1 Take that, cowboy!

According to TPC, the Gingrich plan would lower federal tax revenue by $1.28 trillion in 2015 compared with current law, roughly a 35 percent cut in total projected revenue. I assume that Gingrich's plan to make up for this loss involves some handwaving about economic growth, but I don't have the energy to try and find the official explanation.

1The "current rate" numbers are based on the assumption that the Bush tax cuts expire as scheduled. They look a little different if you assume that the Bush cuts are extended. But as I said about the Perry Plan, why would anyone bother to extend the Bush tax cuts if you're going to pass a shiny new plan that just replaces the current code anyway?