Thursday, August 1, 2013

Federal Prison Economics 101: Currency

No money coming in from the outside? FRP payment (restitution, fines, etc.) taking up all of your prison paycheck? There are other ways to make a living in prison. You just need to get yourself a hustle and put your full faith into the credit that backs the almighty postage stamp.

In Federal Prison, Stamps Are Money

When I was at FPC Duluth, the value of a 1st class "forever" stamp was pegged at 30 cents. You may have paid 45 cents for it at the commissary, but on the 'pound it was worth 30 cents. On occasion, if there was a shortage of stamps on the compound (i.e., demand exceeded supply), the price of stamps would creep up toward actual value.

Such inflationary periods only really affected stamps bought in "books" of 20. Sometimes, they actually were a book of stamps like the ones you might purchase at the post office (or in our case, the commissary). More often, a book was a cut-up collection of mismatched, well-worn stamps, often from different vintages, usually held together with tiny, black rubber bands that guys who wore braids would otherwise use to keep their hair tight. A store-bought -- or "flat" -- book, was even more valuable during inflationary periods than a regular book.

Stamp Inflation

On the FPC Duluth compound, and I'm sure the same is true at other facilities, stamps were in circulation like dollar bills circulate on the streets. A lot of them were older, many had been on the compound for years. New stamps were always being added by people who would buy them from the commissary or otherwise acquire them from the outside -- although sending in stamps through the mail or delivering them to inmates in any other way is against institution rules, they still came in illicitly. But, at the same time, stamps were removed from circulation on just as regular a basis.

Inmates mail letters, or send out art or crafts that they made. In some cases, the stamps in circulation were so old that they actually weren't "forever" stamps, and therefore valueless. Such stamps were usually passed off to new inmates before they got wise to their inability to use them and just held onto them until the next bus of eager-but-naive campers arrived on the compound. Occasionally, a more scrupulous inmate would come across a soft, faded 33¢ Purple Heart stamp and just throw it away.

 Regardless of how the stamps enter and exit circulation on the compound, there is a continual ebb and flow of supply. For the most part, this works. That is, until a more macro-level event comes along to mess up everything.

Inflationary Events

On the compound, several predictable, inflationary events occur throughout the year. Mind you, such events don't increase the purchasing power of stamps, just the cost of obtaining them if you actually need the physical stamps. During football season, stamps become scarce on the weekends as bookies and pool organizers hold onto bets and take the "stickers" out of circulation. So if you need to mail a letter or pay somebody that requires "cash" you should plan accordingly. Otherwise, you may be paying $8 for a flat book on Sunday that you could've had for $6 if you bought it on Wednesday.

Stamps are damn near impossible to come by in the days leading up to the Super Bowl. The NCAA Tournament also puts some inflationary pressure on the cost of stamps. As inconvenient as such times are, you can always plan ahead. Moreover, you know that by Monday or Tuesday, everyone will be paid out and you can go back to the normal pricing.

It's the unpredictable "market mover" events that cause more serious problems on the compound... we'll get to those in the next post.

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