By Salvador Solorio
Donald Trump’s presidential victory has breathed new life into the for-profit prison industry. After the Department of Justice announced phasing out privately run jails in August, shares in CoreCivic, formerly known as Corrections Corporation of America (CCA), and GEO Group dropped, but the day after the election CoreCivic traded as much as 60 percent higher before settling to 34 percent, and GEO traded 18 percent higher, reported Bloomberg News.
Analysts at Height Securities LLC wrote a note the day after the election, “Private prisons would likely be a clear winner under Trump, as his administration will likely rescind the DOJ’s contract phase-out, and Immigration and Customs Enforcement (ICE) capacity to house detainees will come under further stress.”
Mass deportation of illegal immigrants would likely run into legal obstacles, “further necessitating a sizable contract detention population,” the analysts said.
Former history teacher K.J. McElrath commented two days after the election that Trump’s victory “will be putting the agenda of privatization of our public institutions — including the corrections system — on steroids.”
According to McElrath, private prison facilities aren’t exactly new. “They were even used in England in the wake of the American Revolution. … San Francisco Bay’s infamous San Quentin Prison started out as a private prison, built by inmates on a prison ship in the early 1850s. During the Reconstruction Era that followed the American Civil War, Southern plantation owners, who had been deprived of slaves, began contracting for services of convicts. That system continued well into the 1900s.”
The Reagan administration’s “War on Drugs” policy resulted in increasing prison populations. After being awarded a contract to operate a jail in Hamilton County, Tenn., CCA offered to take over the Volunteer State’s entire correctional system for a bargain price of $200 million — and a new industry was born.”
According to McElrath, “By 2011, the private prison industry had grown into a $5 billion a year industry. This has not been lost on Wall Street, which has invested heavily in private prisons. In only 13 years, the price for CCA stock went from $1 to over $34 per share. Journalist Chris Hedges calls it a ‘lucrative (and hugely profitable)’ industry.”