Archive for the ‘Finance’ Category

Prisons for Profit

Sunday, August 9th, 2009

Today a friend of mine posted a link about the increase of enforcement of crimes that particularly affect poor people. There was a discussion about this on Facebook and the conversation turned towards private prisons (prisons for profit).

My opinion (and that of my friends) is that private prisons do not make sense overall. There are, of course, pros and cons to this argument. Here are the various points that I could find:

Pro Arguments

Profit motive encourages prisons to be run more efficiently. Prisons get a speific amount of money from the government to work with and have to make sure that their facility is safe and performing to government standards. They would also be safer as there are penalties for escapes. The prisoners themselves would be better treated (not quite sure how this works) and would also be healthier (also not quite sure how this works).

Against Arguments

Profit motive encourages longer sentences as prisons are generally paid per-prisoner-day i.e. they get an allowance for each prisoner they have in custody on each day. This incentive discourages rehabilitation as it’s more profitable to keep someone in custody longer so that more money can be gotten from the government (that is the tax payers which are you and me). Why send someone to drug rehab for 90 days when you can incarcerate them for 5 years instead and make a shitload more money off of them.

I found this study which is a reasonable starting point. It doesn’t claim a particular point of view. It only presents what others have learned.

Personally I think the whole prisons-for-profit idea stinks. Here’s my reasoning:

1. Prisons are expensive. It makes sense not to spend taxpayer money on them unless absolutely necessary.

2. Prisons-for-profit have a motive to increase the population of prisoners because each prisoner in custody represents a certain amount of profit each day. The more prisoners in custody the more profit they receive.

3. Point #3 directly conflicts with point #2 which is to keep total costs down. The fewer prisoners in custody the less it costs taxpayers.

4. Rehabilitation programs cost less than prison and are generally more effective. Yes, there are some people who can’t be rehabilitated and will need to be held in prison instead. But does it make sense to lock up a marajuana user who has never committed a crime other than smoking pot? Wouldn’t it make more sense to spend money on rehab instead? (as a side note: I personally believe that marajuana should be legalized, but that’s a different subject and I won’t go into it here)

The U.S. has more people in prison both per capita and overall (yes, even more than China which has about 4 times the population of the U.S.) than any country in the world. Why is this?

I believe it’s because we’ve put out our prisons for profit. If there’s money to be made doing something you can be certain that the people making money from it will be motivated to increase market share. That’s capitalism. So if there’s money to be made locking people up, why wouldn’t those people making money at it be encouraged to have more people locked up?

I ask any free market person out there to explain why prisons-for-profit is good for society and also why the corporations running the prisons would not be encouraging stricter laws and longer prison sentences in order to increase their business.

How Is This Related?

Saturday, June 13th, 2009

I got a notice today that my auto insurance will be increasing by $97.60 per year. Normally I’d just blow that off to inflation or increased accidents in the state or something else. But the company told me why they raised my rates – because of recent inquiries on my credit history. If you’re thinking “what the fuck?” then your thoughts are similar to mine.

I know my credit score – it’s 804. And I know the source of the inquiry – I refinanced my mortgage. So here I am with an excellent credit score and doing my best to improve my financial situation and my auto insurance company penalizes me for it.

Now I suppose it’s entirely possible that their actuarial department has come up with some statistical measurement that says if someone has looked at their credit report in the last 12 months then they’re at a higher risk for an accident. But to increase my rates by 7% because I’m trying to fiscally responsible is ridiculous!