Yet another miserable growth industry. (Why some functions should just NOT be privatized.)
One of the points that Mitt Romney is making on the campaign trail is that it might be a good idea to make business experience a requisite for the presidency. (Not that he’s being self-serving there or anything. No, self-serving would be that running the Olympics should be a requirement. Or having great hair.) I don’t think you have to look any further back than George W. Bush or Jimmy Carter to figure out that, when it comes to running the government, business experience doesn’t necessarily translate into all that much good.
As an aside, if we do decide that there are requisites beyond being a natural born US citizen whose at least 35 years of age, I think that there are few that might be more relevant than business. Like having served in the military. Or supporting yourself for a while, à la Barbara Ehrenreich for her great book Nickeled and Dimed, at a minimum wage job. Or done a Black Like Me and walked a mile or two in the shoes of someone not of your own race. And how about a requirement that someone’s lived abroad?
Any of these, I suspect, would make for a better president than business experience.
But I digress.
The business experience thang came to mind when I was reading an article in The Economist (in turned based on a series that appeared in the New Orleans Time-Picayune) on what an important role the (totally abysmal) prison industry plays in the (generally abysmal) Louisiana economy.
Even by U.S. standards, Louisiana’s incarceration rate stands out:
The state imprisons 26% more people, on a per-capita basis, than the next-strictest state, Mississippi. Louisiana’s incarceration rate is almost six times Maine’s and seven times China’s.
Louisiana’s high incarceration rate reflects a confluence of factors: the state is poor; it has a high crime rate (duh!); it’s sentencing is more draconian that one might find in a more tree-hugging state, like Maine; and the state has outsourced imprisonment to local sheriffs and private “corrections” companies, both of which have an incentive to keep the prison population high, and the amount spent per capita on each prisoner, low.
In Louisiana, outsourcing the state prison function to local sheriffs and privateers came about after the Feds declared the state system woefully (and illegally) overcrowded. Rather than let any prisoners loose – apparently, even the relatively harmless, non-violent ones – they set off a growth spurt in parish (Louisiana-speak for county) and private cell construction. (I’m just as happy to live in a state that’s more focused on bio-cells than on jail cells, that’s for sure.) And, of course, once you get those cells built, they need to be occupied.
For the state, this outsourcing turned out to be a bargain. They pay local and private jailers, a mere $24.39 per diem for the care, feeding, and rehabilitation of prisoners.
That is less than half what Louisiana spends on inmates in state-run prisons, and it is barely a third of what even relatively poor states like West Virginia spend.
And even that paltry amount of money is not all spent on prisoner care. The only way Louisiana’s local sheriffs and private-prison operators can make a profit on the per-diem payment is to skimp on costs. This means bad food, limited supervision and no vocational programmes. For a sheriff, that money is more usefully spent on more deputies, higher salaries and better equipment. Tiny Richland Parish, in the north of the state, had 60 sheriff’s deputies before the prison gold rush. Today there are 160, not to mention new shotguns, cars and bulletproof gear.
If you’re imagining Boss Hogg, Cool Hand Luke, and The Heat of the Night, well, I am, too.
And, okay, okay. Outsourcing your prisoners to other governmental jurisdictions is not the same as privatizing.
But it does provide the same perverse incentive: keeping the prison population up to keep those per diems – however ‘paltry’ – rolling in.
It’s just good for bidness…
And prison businesses, of course, lobby through organizations like ALEC for harsher laws and more privatization. The scrim that rationalizes this is that a business approach to a social problem is going to be more likely to solve that problem (or at least do as good a job as the state). And, of course, will save money. (Which, by the way, doesn’t always happen.)
But when you need to make a profit, saving money is not necessarily gotten through “efficiencies” only. Something’s always got to give.
Yes, I’m quite sure that there are efficiencies that government can and should borrow from the private sector. Not that I’ve necessarily worked in businesses that had any particular approaches to efficiency that were worth borrowing. Let’s keep in mind that, even though businesses are nominally focused on profit making, an awful lot of them don’t make a profit and aren’t run particularly well.
But in the end, the purpose of business is not the same as the purpose of government. A failing business will go out of business. This may be a loss to those who work there, and to the community in which it’s located. But everyone can pretty much get over it. Find a new job, a new place to buy shoes…
A failing government still needs to provide at least a minimal amount of service in order for society to keep functioning safely and securely. And you can’t fire or lay-off sick people, old people, school kids, poor folks… Although you can ignore them and hope they die out or self-deport or whatever it is we’d like to see happen to those who are seen as too comfortably supping at the public trough.
It’s interesting, however, that when it comes to prisons, the privatizing solution is not to get better at providing big-house services that reduce recidivism. It’s aimed at increasing the prison population.
As I said, a rather perverse incentive.
Anyway, from where I stand, the belief that running government as if it were a business will miraculously improve government is based on one big fact myth.
When it comes to prisons, here’s what it will get you:
In 2012, CCA [Correctional Corporation of America] sent a letter to prison officials in 48 states, offering to buy prisons from these states in exchange for a 20-year management contract and a guaranteed occupancy rate of 90%. Community organizations have criticized the proposals, arguing that the contractual obligations of states to fill the prisons to 90% occupancy are poor public policy that could force communities into creating criminals, and that these contractual clauses end up costing taxpayers more than state-run prisons would. (Source: Wikipedia.)
Nope, there are just some parts of society that you don’t want to see turned into a growth industry.
Labels: bad business behavior