Profit Prisons Die In Recessions - Editorial

The Gazette

The economic drain of for-profit cages

September 21, 2009 6:04 PM

The taxpayer subsidy of Colorado’s for-profit prisons will decline $19.9 million this fiscal year, and $25.3 million in 2010-11. This is great news, and an unintended gift of recession. The sooner private prisons die on the vine, the better off we’ll be.

As this column so frequently states, private enterprise usually performs better than government. Most private schools and colleges out-perform their government peers, because competition for revenue drives high performance. Most private restaurants far exceed the quality of the government cafeterias found in courthouses, hospitals and schools. Private health insurance is better than Medicare, Medicaid, or Tricare. Private transportation is more convenient and flexible than public transportation.

Rarely does this column suggest the private sector avoid a service in order to leave it all for government. Government, however, is the best provider of a few societal needs. While the country’s taxpayer-funded nuclear arsenal resulted from tremendous participation by the private sector, control of taxpayer-owned weapons of mass destruction should be a government function.

Prisons, like national defense, should be the responsibility of government. Prisons are necessary evils, posing pure expense to society. A prison is like the broken window described by the late economist Frederic Bastiat, who explained that some mistake a broken window for economic development. A broken window requires replacement, after all, which puts money into the hands of a glazier. The broken window, however, causes nothing more than redistribution of cash. The owner of the window had to spend money just to end up where he had been, with an intact window. If the window had remained whole, he could have spent the money on a new suit. The broken window caused no net gain in wealth; the new suit, sans the broken window, caused a net gain in wealth. If the glazier’s benefit were a benefit to society, it would behoove those interested in economic growth to spend their days breaking windows, rather than improving lives with constructive endeavors. Because broken windows are liabilities, we punish vandals who break glass.

A prison, like a broken window, is pure liability. It houses persons, at great expense to society. If these prisoners were functional and law-abiding citizens, they would produce wealth for society rather than burdening the productive class. Societies should enact all measures imaginable to minimize prison populations, just as we minimize broken glass, without endangering the public. Minimizing prison populations means viewing prisoners realistically for what they are: societal liabilities and nothing more.

The prisoner is to a private prison corporation what a broken window is to a glazier: a source of cash. What’s good for the glazier is not good for society. What’s good for the Corrections Corporation of America, the largest prison business in the country, is not good for society.

Anyone involved in the criminal justice system should be in the business of reducing crime, and thus the prison population. We must reward government employees for finding ways to reduce recidivism by reforming those prisoners capable of reform.

Private prison investors, however, receive no reward unless crime and recidivism flourish. Prudential Securities acknowledged this in a report to investors in the 1990s, when Corrections Corporation of America was growing aggressively: “It takes time to bring inmate population levels up to where they cover costs,” the report sated. “Low occupancy is a drag on profits... company earnings would be strong if CCA succeeded in ramping up population levels in its new facilities at an acceptable rate.”

The private prison industry wants to eliminate crime like the seller of auto glass wants to eliminate gravel trucks.

State officials have embarked upon cutting millions from Colorado’s corrections budget, which spells the early release of qualifying prisoners who are within six months of completing their sentences. The prisoners who get early release are making room for state officials to begin taking prisoners from the businesses run by CCA, which diverts money from Colorado to its headquarters in Tennessee.

CCA houses more than 4,300 Colorado prisoners in three Colorado profit prisons. The company operates a fourth profit prison in Colorado to house only convicts from Arizona.

Prisoners are not assets. They are societal liabilities, and a responsibility of government. Only those on the receiving end of a government redistribution scheme view prisoners as profit potential. As Colorado government adjusts its budget in response to severe recession, let’s hope the for-profit prison racket finally ends.