California is up against a judicial order to relieve overcrowding.
Vermont is so tiny that it’s “rates” count for nothing.
The private prisons are just housing prisoners who had their freedom and liberty taken away by the government. They didn’t take any freedoms away on their own.
You aren’t saying that the court system is privatized, are you?
Sorry, that was in direct reference to the probation companies not the jails/prisons.
It’s far fetched but if you want to consider the fact corporatism drives legislation, and in return funds the courts and police then it could be. The private prisons and jails I’m not sure if they just get tax breaks or actually receive tax dollars. I can see how someone could claim the court system is privatized, but it’s obviously not true.
How about Colorado or New Mexico?
It seems to be a phenomenon that’s pretty widespread outside of the PNW and New England. Sure, the South does seem to use privatized prisons a lot, but it’s not a localized thing by any stretch of the imagination.
Dont they both have GOP that control half the state Legislatures?
I have a theory that it might all be a government scam.
A lot of businesses thought private corrections was a good area to get into. So they built prisons and started running them. What they found was that the expected profits weren’t there. Private prisons found they didn’t have the major savings they expected. It turns out that despite conservative dogma, governments were running prisons about as efficiently as could be done. And governments weren’t going to pay private prisons more than they were paying for government prisons. So private prisons found they were running on a break even basis with no profits. The result was that companies started getting out of the private prison business.
Now if you’ve been running a private prison and you’ve decided to close down the business, what’s your biggest asset? The prison itself. You’re going to want to sell that. But there’s not much of a market for prisons. In fact, there’s only one customer who might want to buy your prison; the government. And being the only potential customer, it doesn’t have to offer you anything near full value.
So in the long term, what the government got out of the private prison boom was an opportunity to buy a bunch of prisons for less than it would have cost to build those same prisons.
Private prison companies have spent around $10m on political donations since 1989, and $25m on political lobbying.
These numbers “sound big”, but amount to about $385k/yr in donations and $961,000 in lobbying. Those numbers might also seem big–if you know essentially nothing about donations and lobbying in America. Lobbying expenditures total are like $3bn a year. Many single companies outspend the entire private prison industry by an order of magnitude each year.
Marco Rubio is listed as one of the biggest single-year recipients of private prison funding ever–at $41,000. GEO, the private prison company that made that contribution to him in 2014, represented the 9th largest single donor to Rubio. The largest was the Club for Growth at $362,000. Now, to put it in context, Rubio’s 2010 Senate campaign raised about $21m, his 2016 Presidential campaign raised $51m. The contributions by GEO would represent only 0.2% of his Senate campaign fundraising or about half that for his Presidential. The private prison industry is “only” a few billion dollar a year industry. Again, a number that only sounds big out of context. GE has divisions that have higher revenue than the entire private prison industry (and GE spends hundreds of millions a year in lobbying–and it’s one company.)
I think the simplest explanations for private prisons are a long and popular (at the state level) push for turning over public functions to corporations, justified by questionable cost saving claims, and a desire to convert pension and healthcare liabilities and bond liabilities to long term contracts w/vendors (because those contracts are basically less negatively impactful on a State’s economy because they have less of an effect on credit ratings since States can more easily get out of them and they’re usually much more flexible than bonds or pension obligations–which are sometimes constitutionally protected at the State level.)
This is my experience too. My state (WI) dabbled a bit in privatized healthcare for inmates in a few prisons in the early part of this century. But the private healthcare companies found that they couldn’t control costs as well as they thought, were losing money instead of making it, and bailed out on the business since the gummint wasn’t willing to give them more money for healthcare per capita than they were paying for their state-employee healthcare team to provide. So the state-employed physicians ended up doing that job too. And since then our costs have gone up slower than in the private sector AND compared to private prison healthcare companies too.
Such complex services really do need dedicated professionals who become experts in their jobs, take some pride and ownership of them, and get adequate fiscal reward for doing such a job, like decent pay, job security, pension and benefits. The private sector found it very hard to retain competent people in the prison setting.
IMO, some services really need to be provided by the public sector (which in theory is more answerable to the public, and acting first in the best interests of its citizens overall) and not by for-profit businesses. And I’ve worked 50% of my career in the private sector before switching over to the public sector, so I’ve seen both sides; both of which have parts that are good, bad, and really really ugly.
The theory of privatization is simple. The private company promises to do the job for $X, and the state can hold them to it… Unlike civil service where cost overruns are up to the state to pay.
But then, what’s the result? The private employer can generally save money by cutting corners; lower wages, cut costs on food and supplies. Should prison guard be a minimum wage job? You get what you pay for in terms of employee quality. Privatization generally turns out to be about screwing the bottom tier workers. What about things like libraries, education, or even basic sanitary supplies? It’s hard to provide the same quality of service for a much lower price and still have the money in surplus to buy the company owner a Lamborghini.
There’s this myth that the civil service is a collection of fat waiting to be trimmed, and the myth that private industry is incredibly efficient. Myth.
I find it hard to understand how guaranteeing a private prison a 90% population in its contract with the state wouldn’t adversely affect either justice or spending, if there’s a penalty for not fulfilling that percentage.
No state would ever write a contract guaranteeing a private prison their full prison population. Let’s say your state had 30,000 prisoners. You’re not going to sign a contract with a private business guaranteeing them 30,000 prisoners with an agreement you’ll pay for 30,000. That would be insane. What happened if next year, you only have 29,000 prisoners? You’ve already paid the bill for 30,000.
Instead what a state would do is guarantee some smaller amount of prisoners to the private business; say 10,000. That way, it gives the private prison the 10,000 regardless of what the overall total is. The rest of the prisoners go into government-run prisons, which are free to adjust their numbers. They can take 15,000 prisoners one year and 25,000 prisoners the next if need be.
How do inmate conditions (food, healthcare, etc.) compare between government and private prisons? I’ve wondered if one of the “advantages” of private prisons is that prisoner welfare can be cheapened without legislative oversight or government directly to blame.
Among other things, because the GOP likes to talk about “small Government” and they don’t count the subcontractors when counting “people who work for the Government”. I’ve seen the same headcounting gymnastics in private enterprises, for example when there were regulations they could avoid or assistance they could get by having a smaller headcount.
Not necessarily.
SERCO is a large public company listed on the London stock exchange and one of its skills is running private prisons. You can buy shares in SERCO and become an individual who has a part in the privatisation process.
Private prisons are generally less safe for the inmates and guards and the conditions are generally worse. Link
Errr… yes, but they also both have Democrats controlling half the state legislatures. Money isn’t partisan.
Heh. You guys must be pleased with the price action on CXW and GEO today. Both off in the vicinity of 40%:
Means I watch them to see if this is overdone and worth bottom fishing. I suspect not.
BTW, both of these are structured as REITs (Real Estate Investment Trusts), which makes sense. Take that into account if you look at their numbers. Neither of them even has the padding of an already scheduled dividend at their new yield of over 12%. Care to bet on the likelihood of cuts?
Of course, required “reading” for this topic is the last two seasons of “Orange Is The New Black”.
Required reading for the efficiency of large business in general is the last 25+ years of Dilbert, originally based on Adams’ experience working in PacBell, IIRC. (Where I worked, people always used to ask “Does that guy work for us?” By the time our management adopted the latest corporate trend-du-jour, it was already being lampooned in Dilbert.)
The concept of a fixed-fee service is tempting, but the problem is a failure to set and hold the provider to standards; so the part that has to give to maintain profit margin is any cost that is not essential to the service. And, all the companies are underbidding each other, so the company running the prison is the one who said they could be the cheapest.
Since wages make up 50%-plus of most business expenses, that is obviously the most flexible item in the corporate budget when trying to meet targets, the one with the most payback for reducing.
Oops, pardon me - CXW actually has a $0.54 dividend going ex on 9/29.