Sunday, December 4, 2016

Private Prison Resurgence

Like mold, you just can't get rid of these parasites:

As terrific as Donald J. Trump has been for the stock market, he has been absolutely spectacular for a troubled niche: companies that run for-profit prisons and immigration detention centers for states and the federal government.

In the market rally on the day after the election, the stock with the best performance was Corrections Corporation of America, the nation’s biggest prison company. It soared 43 percent that day. Shares of the GEO Group, its main competitor, rose 21 percent.

Mr. Trump’s surprise victory represented a radical change in fortunes for them — a boon for investors and a potential nightmare for critics. “It’s an extreme case of politics affecting the stock market,” said Ryan Meliker, a senior analyst with Canaccord Genuity. “Politics drove down the shares of the companies over the summer — and now the situation is reversed.”

These two companies, both real estate investment trusts, are not household names. In fact, on Nov. 10, Corrections Corporation of America changed its trading name to CoreCivic. According to Jonathan Burns, a company spokesman, the move was part of a long-planned rebranding that emphasizes diversification into areas like inmate transportation and residential re-entry programs for former inmates.

On its website, CoreCivic, which is based in Nashville, says it houses nearly 70,000 inmates, which makes it “the fifth-largest corrections system in the nation, behind only the federal government and three states.”
We were just laughing about this in class the other day, the re-branding of CCA into "CoreCivic," which sounds like AmeriCorp, or the Peace Corps, or some other social service, volunteer, do-gooder organization.

Except it's not.
A Justice Department memo concluded that privately operated prisons were inferior to those operated directly by the Federal Bureau of Prisons in three critical areas: They do not provide comparable services, do not save substantially on costs and do not maintain “the same level of safety and security.”

In July, there was a measles outbreak at an immigrant detention center in Arizona run by Corrections Corporation of America for Immigration and Customs Enforcement, a federal agency. State officials found fault with the way the institution handled it.
This is what happens when you attach the profit-motive to running a prison: skimping on food, inadequate health care, and poorly trained personnel. All to make a buck.
Oliver Hart, the Harvard professor who is one of this year’s Nobel laureates in economic science, has problems with for-profit prisons for other reasons. The difficulty is not just that the companies’ profit incentives don’t entirely align with civic interests, he said in an interview.

“There is a problem in contracts that we call residual control,” he said. While it’s relatively easy to shift a public service like garbage collection to private companies, he said, it’s not reasonable to do so for some government functions, like decision-making in foreign policy.

“You don’t want private contractors to have ultimate control over use of violence,” Professor Hart said.

“Prisons are somewhere in the middle” between garbage collecting and decision-making on war and peace, he added. “It’s generally better not to privatize prisons.”
In other words, duh. This is what most penologists have been arguing since the privatization resurgence began back in the late 80's, and always to deaf ears. The private sector of the correctional-industrial complex feeds at the public trough, to the tune of $5 billion annually in revenue. That's tax payer dollars going directly to share holders.

And privatization reaches beyond prisons, jails and concentration camps (er, detention centers), to now include privatized probation, bail/bond, re-entry, transportation, and medical care. 

Why is this controversial? Because the goal of corrections is to "correct," i.e. make sure you don't come back into the system. And the profit-motive stands in direct conflict with that: correcting means you eventually run out of "customers" and you go out of business. Very simple.

But we digress. For the foreseeable future, good times are ahead in the world of private dungeons.
The market has concluded that the business may have its best days ahead of it.

“The outlook for the companies really changed overnight with the election of Mr. Trump,” Mr. Dwyer of KDP Investment Advisors said.

The new administration’s policies are not clear, but Mr. Trump’s statements have been starkly different from those of President Obama — and Hillary Clinton and Bernie Sanders, who each called for the end of private prisons.

In March, for example, Mr. Trump called the bulk of the nation’s prisons “a disaster” but added: “I do think we can do a lot of privatizations and private prisons. It seems to work a lot better.” And in an interview with “60 Minutes,” he said that up to three million undocumented immigrants were “criminals”: “We are getting them out of our country or we are going to incarcerate.”

The claim that there are three million undocumented immigrants in America who have criminal records is not supported by the facts, Mr. Takei of the A.C.L.U. said.
Apparently, Mr. Takei didn't get the memo: facts are for losers. Especially in the world of privatization.

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