A Citizen's Guide to Indiana

Jon Murray, writing for the Indianapolis Star, has an article on debt collection in the courts. I’m not sure if journalists are instructed to go for objectivity these days, but the article opens with fairly charged language:

Creditors dump on the courts, they clog the court system, leaving people desperate on a conveyor belt system where their money and valuables go to collectors. Obviously I have a bias since I work for creditors. I would suggest that they see it differently. They struck a deal with individuals to provide goods and services; they held up their end of the deal but the individuals they are suing have not. And where there are money and valuables available, the unpaid creditors regard it as unfair for them to go unpaid while the individual pays other creditors or uses the money to obtain new goods and services before the old ones have been paid for. Sometimes the existing money is going to necessities like food and shelter, and I think most creditors understand that this is going to take priority; but they lose patience when the money is going to cable bills or cigarettes. And, without “dumping” on the courts and “clogging them up” with their apparently silly insistence that contracts be honored, frequently a letter or other request that the bill be paid has no persuasive effect on the manner in which the debtor chooses to allocate his or her limited resources.

On the second page of the online version of the article, we get a quote from Steven Lerch mentioning something that is (and I credit Mr. Murray for including it) often left out of these stories altogether:

“[The FTC report on consumer debt collection] overlooks the fact that, unfortunately, most of these debts are owed,” said Lerch, a partner in Wright & Lerch and president of the Indiana Collectors Bar Association. “The FTC approach doesn’t comport with reality.”

Yes, I agree that debtors are often at a disadvantage in these proceedings. But an enormous part of that disadvantage is often that they don’t have anything like a meritorious defense to the claims. I can’t speak for everybody’s clients, but I get the sense that, in a perfect world, mine would prefer not to have to pay me. They make an effort to collect these debts without using me and without using the court system. And that works with a lot of unpaid accounts. I get the ones where that route was not successful.

There are basically two steps in debt collection (and, really, any civil) litigation: 1) is the debt owed; and 2) are there assets or income available to satisfy the debt. The courts really aren’t supposed to address #2 until #1 has been resolved. Fortunately for me, most of the claims I handle have been relatively straight forward as to #1. I’ve seen credit card claims where the rules of late fee and interest calculation are byzantine, and that’s probably an area where debtors could use some protection. I have also heard of debt buyers who don’t have any real information on the account. That’s a problem as well. But, mostly, the system is a conveyor belt because the cases are pretty simple: “Did you receive the goods or services? Yes. Have you paid for them? No.” Then, it’s a matter of discovering income and assets. The rules for what can or cannot be attached and used to satisfy the debt against the will of the debtor are fairly cut & dry as well. So, it’s frequently a matter of having the court apply fairly straight forward law to a relatively simple set of facts.

It’s not often that people advocate for more cumbersome legal proceedings, but somehow when it comes to creditors attempting to enforce contracts, more time consuming legal proceedings are usually one of the recommendations.

Here is what debt collection looks like when the courts are unavailable (caution: swear words):

Leslie Kaufman has an article for the New York Times about how technology gives folks an unwarranted sense of security causing them to take risks in the National Parks. To some extent, the article has more than a whiff of the “kids these days are stupider and lazier” genre about it. But, there is some truth in it as well.

Folks go hiking with a cell phone but no water; or they call in emergency rescue when there really isn’t an emergency. I wonder how much of this has to do with technology making us stupider, and how much is simply related to the fact that our society has transformed to a state where we don’t have as much contact with nature as we did in the past.

In any case, I am reminded of and thankful for my Dad’s stern little speech one day before my friend Tom and I were headed into the mountains for maybe the first time on our own. My Dad is normally joking and not given to a lot of somber discussion. But he got dead serious and said something to the effect of, “you take those mountains seriously or they’ll kill you.” The National Parks are great resources, but I think we forget that they aren’t altogether tame and they aren’t amusement parks.

Will Bunch has a column about American fear of “The Other.” I agree with a lot of his points, but not that this iteration is somehow uniquely dangerous or unprecedented in American history; but, then, he has a book to sell on the topic, and I don’t.

He suggests, it’s not the “Mosque” or Obama in particular that have people riled up, but a fear of the other. I tend to agree. I think the tendency to divide the world into “in-groups” and “out-groups” is pretty well hard-wired into humans. The ability to define the group characteristics seems to be pretty flexible, however; and the wall between the groups becomes more rigid as the environment becomes more hostile.

I think, this time around, economic distress is probably the key factor in whipping up the frenzy against the “out-groups.” When the economy was booming in the 90s, I don’t recall all that much anti-immigrant sentiment, for example. I do recall more of it in the 80s and early 90s.

In college, I had a history course on British society in World War I and did a paper on attitudes toward people of German ancestry residing in the United Kingdom. As I recall, the attitudes that showed up in newspaper articles were fairly appalling, and there were even some internment camps. But the dynamic was fairly simple, the war created a distressed environment and people of German ancestry, whether loyal Englishmen or not, were part of the “out group.”

People are scared, and they’re lashing out at the unfamiliar.

I see that Maricopa County Arizona Sheriff Joe Arpaio has been in the news a couple of times recently. He is apparently under federal investigation for abusive law enforcement practices.

State Treasurer Richard Mourdock is having him around as a guest speaker for a Mourdock campaign fundraiser. I guess Arizona law enforcement and Indiana finances go together like fish and bicycles. I’m not sure what one has to to with the other, and if I were a candidate for something, I’d probably try to avoid guest speakers under federal investigation, but that’s just me. This is on Mourdock’s own dime, so I won’t take him to task like I did for his quixotic campaign against Chrysler.

As for Arpaio, I’m about as pro-Sheriff as a civil libertarian can get, but this guy seems like trouble. (Also see this from Jon Easter.)

The “Ground Zero” “Mosque” is as aptly named as “Joe” the “Plumber.” It’s not a mosque, and it’s not at ground zero. It’s an Islamic community center and it’s at like ground zero minus three blocks. But, it does seem to be shaping up as a pretty representative sample of our stupid political discourse. The narrative bears only a passing resemblance to the facts on the ground, then the cable news shows fill up with people shouting at each other about it, and the serious news people can’t be bothered to talk about right or wrong, or even who is telling the truth, but only the implications for this week’s poll numbers.

That bleeds over into a barely informed populace, too busy trying to keep their heads afloat in a marginal economy to keep informed of even the big things, let alone zoning decisions in Manhattan. They hear a little bit, assume other things, and then it’s off to the races. “EVIL MUSLIMS DEFILING HOLY GROUND!” Emotion and an opinion are a powerful cocktail – strong enough to keep viewers watching through the next commercial; sometimes strong enough to induce a vote or, even better, a candidate contribution.

Briefly, my opinion on the matter: a) not much of my business, it’s a local land use issue; b) it’s not on “hallowed ground” – it’s a couple blocks away, and they have bars, strip clubs, and off track betting in the immediate area; c) it’s not a mosque – it’s a community center that has an area for prayer; and d) trying to tag Muslims as a group for 9/11 is like trying to tag Christians for the acts of a few child molesting Catholic priests. As the Daily Show pointed out, opposing an Islamic Center based on 9/11 is like opposing construction of a church next to a playground based on those Catholic priests.

But, really, it is probably the subject of a lot of national discussion because it’s symbolic and has very little concrete impact on most people’s day-to-day lives. This makes it easy to talk about in the abstract. People seem to be better able to find common ground on issues with more grounding in their own everyday reality. Abstract issues seem more likely to make people belligerent.

Larry DeBoer, long known in these parts as “Everybody’s Favorite Economist” gets a little recognition from Maureen Hayden with CNHI.

He is a professor of agricultural economics at Purdue University, but he also works part time at the Indiana Legislative Services Agency and is a go-to guy for lawmakers and other groups who want to get a handle on the finer points of Indiana state and local government financing. His monthly Capital Comments column is definitely worth a read.

According to an article in the Indy Star by Heather Gillers, Sen. Miller is preparing to introduce legislation that would require criminal background checks as part of the nurse licensing process. Indiana is one of only a few states that do not require criminal background checks for nurses, and the Indy Star did a report on nurses who had been charged or convicted of crimes involving prescription drugs, alcohol and violence.

The Star published its investigation’s into nurse background checks Thursday as time was running out for the state to apply for the federal funding for background checks for workers in nursing homes, assisted living and other types of long-term care facilities.

The federal program included some measures not part of Miller’s proposal so far. For example, the state and employer would be immediately notified by police if any employees — not just nurses — committed a crime.

But the federal program would have governed only nursing home and other long-term-care nurses. Miller’s plan would require background checks and monitoring for all licensed nurses, no matter where they work.

The Daniels’ administration declined to pursue $3 million in federal funds because the State match of $1 million was too steep. Sen. Miller shares those concerns. The costs of her legislation would be designed to shift costs of implementation away from the State; and presumably on to nurses.

Just a brief note about the issue of grant money. This process where a unit of government is granted money from the feds or some other governmental or quasi-governmental organization in exchange for a match of some sort and being required to meet a set of guidelines is very, very common. I know it varies depending on units of government, but I wonder in general what percentage of various government spending is from grant money and what percentage of grant money is consumed by costs of administering the grant. It seems like a very inefficient process.

The Indiana Law Blog has flagged an opinion column on how public pensions are in trouble. It notes that Indiana is one of the places where public pensions are in trouble.

I haven’t seen numbers lately, but Indiana’s pension trouble is not a new problem. This train has been rolling for a long time. I remember about 12 years ago, when Indiana was running a surplus, some of the folks I worked with thought it was high time to devote a lot of that surplus to stabilizing the underfunded public pensions. (They were not exactly unbiased on the subject because they were folks who were devoting their careers to working for the State, in part, because of the promised pension.)

Ezra Klein has an interesting column (h/t Paul Roales) looking at where the Laffer Curve bends. The basic explanation of the Laffer Curve – and I am capable of no other – is that, on one end, taxes can be so high (e.g. 100%) that no one will bother working and tax revenues will be down and that, on the other end, taxes can be so low (e.g. 0%) that the government will capture very little tax money. Government wants to find the top of that curve – capture a lot of tax money without discouraging it’s citizens from being industrious. This is of some interest with the Bush-era tax cuts expiring and the Clinton-era tax structure reviving.

Klein interviewed a bunch of people and tried to get a sense of where the top of the curve might be. The tax experts and lefties he spoke to seemed to offer up a top marginal rate of 70% as the peak of the curve. The folks on the right he spoke with seemed more reluctant to offer a number but, where they did, seemed to fall in the 20-30% range. They also cautioned that, while short-term revenues might increase at higher levels, there was also a risk of limiting growth and, therefore, long term gains.

I can’t articulate it well and, may just be wrong, but my guess is that low rates are associated with an incentive to just move money around instead of doing different kinds of work that contribute more to productivity in the long term. About the best I can offer is that, if you can gamble, hit a jackpot, then walk away with enough money to quit the game, you might not bother with the harder work of creating a system that generates lesser, but steadier, gains year after year after year.