STAFF NEWS & ANALYSIS
Private Prisons May Be Profitable, but Still Despicable
By Daily Bell Staff - July 05, 2016

Canaccord Thinks Private Prison Equities Could Break Out … The first private prison emerged in 1984, and the industry has grown ever since. America continues to have the highest incarceration rates in the world.  One financial services company sees significant upside in the private prison sector.  – Benzinga.com

In this article we can see how private prison equity is being treated like any other investment from a profit-loss standpoint.

In fact, investing in private prisons may be a good idea. But that doesn’t make it a morally correct decision.

Plenty of people invest in “defense” stocks, too. Yet the products of various defense stocks have killed or injured millions of women and children.

Accusations are that private prison companies have incentives to cut costs far beyond what would be considered humane. Thus investing in them amounts to supporting cruel and unusual practices.

To be fair, this Benzinga article actually mentions the controversy regarding private prisons:

“While the analysts acknowledged some headline risk given the political climate surrounding prison and sentencing reform and the presidential race, they called these concerns unwarranted.”

This statement could have been a lot stronger.

The US has over six millions at any given time involved in the penitentiary system, about 25 percent of the world’s imprisoned population.

To have public prisons run by private entities creates a formula for a kind of slavery.

Nonetheless, the efficiencies created by these private prisons may make them good investments.

A Canaccord research note informs potential investors the industry exhibits, “unique blend of defensive fundamentals with significant and accretive external growth potential.”

Two companies mentioned are Corrections Corp Of America  CXW  and The GEO Group Inc.

The trouble with treating private prisons as normal investments is that they support US government actions that are at least question and often unjustifiable.

Here, from the Latin Post:

New Study Finds ICE ‘Guaranteeting Minimums’ to Keep Private Detention Centers Filled With Mothers and Children

A new Center for Constitutional Rights and Detention Watch Network report finds Immigration and Customs Enforcement (ICE) officials have made assurances to private prison companies guaranteeing that a quota of detainees largely made up of mothers and their children will forever be offered up for lock up.

The so-called “guaranteed minimums” assure that a specific number of detainees will be held in captivity at all times at the for-profit ran institutions.

Guaranteeing minimum quotas of women and children to private prison vendors turns them into human products to ensure that the system remains profitable.

The human toll is real:

Among the most persistent complaints … are cries of no legal representation, allegations of being forced to drink contaminated water and screams of female prisoners being sexually assaulted by prison guards.

The guaranteed minimums are obviously benefiting the companies that run them. The article states that “profits are soaring” at CEO Group and that revenues are rising as well.

Conclusion: Treating the private prison system as an investment opportunity rather than as a human rights issue, blurs what is actually going on. It selectively focuses one’s attention on certain aspects of the narrative while ignoring others. That certainly doesn’t make it right, or even tolerable.

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Posted in STAFF NEWS & ANALYSIS
  • NAPpy

    I’d prefer not to call these prisons private. Private means voluntary exchange. These prisons represent public-private partnerships, where the public part (taxes) distorts incentives and creates the problems this article highlights.

  • Amen to this essay

  • FreeOregon

    Public prisons are despicable too.

    The use of force and threats of violence is mental bankruptcy.

    What if we were to consider non-violent alternatives?

  • Praetor

    Well, over time you could say the U.S. will be a prison. Lawlessness will be on the rampage, because the highest office maybe held by a criminal. And the rest of the world will have to quarantine the U.S. to keep the infection contained!!!

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