I have never cared much for the stock market. I am usually more concerned with ERAs than IRAs, and Fox Sports than Fox Business. However, two things piqued my sudden interest in that otherwise dull subject: crooked lobbyist Ron Book lobbying for expanding private prisons in South Florida, and seeing billboards in Texas advertising for GEO Group.
What is GEO Group? GEO Group, once known as Wackenhut Corrections Corporation, is a private prison business. A for-profit industry. A private prison with stock you can buy. Amazingly enough, GEO Group's stock is actually on par or higher than many other high-profile companies that many of us actually use every day:
Stock Quotes as of April 29, 2011
GEO Group, Private Prison Industry -- 26.68
GE, Appliance and mechanics industry -- 20.45
Pfizer, Prescription drugs -- 20.97
Ford, car maker -- 15.47
Microsoft, computer software -- 25.92
Yahoo! Search engine -- 17.46
Kroger, grocery stores -- 24.31
(as an aside, GEO is beating Corrections Corporation of America, its larger rival -- 24.89)
Interestingly, GEO Group's stock jumped significantly from about 5.00 back in 2003, spiked over 30.00 in late 2007, dropped as low as 14.00 in 2009, and now it is nearly at 30.00 again as of writing this article.
What's the big deal about privatizing prisons? You ask? Think about that quote by Molly Ivins.
First off, in any industry, there are businesses available that compete for your money. Now, I admit economics is not my forte. However, I know that Wal-Mart has been given a reputation of being the big bully company that wipes out small town businesses and imposing a monopoly in many small towns across the USA. GEO Group is growing. It has acquired Correctional Service Corporation in 2005, Cornell Corrections in 2010, and Behavioral Interventions (an electronic monitoring company) in 2011.
Being the lowest bidder generally means cutting corners. GEO Group has amassed over half a million in fines alone while maintaining a severely understaffed facility and paying guards just a cut above minimum wage. There have been been numerous complaints of inmate abuse and poor conditions in the private prisons, but since they are "just prison inmates, who cares, right? Getting back to Ron Book's South Florida, when GEO Group was known as Wackenhut, the state was overcharged by millions, which all came out of taxpayer wallets. In fact, the former Florida head of Wackenhut was recently arrested for racketeering. Considering Ron Book's track record of corruption and controversy, it is no surprise he lobbies for such a group. What's next? Maybe he'll represent the Bad News Bengals next.
Who cares, right? Think about it. The US has the largest prison population in the world in terms of numbers and per capita rates. An astounding 3.1% of adults in the US have criminal records, and one out of every 99 US adults are incarcerated right now. It is little wonder why prison is a big industry; after in, in many states, spending on prisons compete or exceed the funding for education. Most of these people are going to get out only to be socially ostracized to the point where committing crimes become almost a necessary survival component. There is no incentive to rehabilitate the offender, because no repeat customers is bad for the industry. You merely make a prisoner a better criminal. That, my friends, is Capitalism at its finest.
Feel free to check out the following sites for more on the pitfalls of privatization of the prison system:
http://www.privateci.org/index.html
http://www.texasprisonbidness.org/
As an aside, I wonder why the USA only tends to rank high on the bad stats. We are getting beat in many positive areas by European nations. Norway's prisons are so much unlike America's prisons. I wonder why Norway's crime rate is so much lower than ours. Could it be tough on crime is backfiring?
