TLP: Sometimes, the Lowest Bidder is Low For a Reason
by ilene - August 20th, 2010 5:44 pm
TLP: Sometimes, the Lowest Bidder is Low For a Reason
Courtesy of Jr. Deputy Accountant
Privatization of government services has it place. Trash pickup? Sure. IT? Makes sense. State prisons? Eh, maybe not so much.
Early this month, three convicted murderers escaped from a prison in Kingman, a small town along Route 66 in northwest Arizona. According to reports, the inmates had broken free from the facility by using a pair of wire cutters. They’d escaped from a medium-security facility operated by Utah-based Management & Training Corp, a private corrections company.
The incident set off a political furor, not over the fact that the three violent criminals were being held in a medium-security prison, but over the security of the facility itself, and, ultimately, over Arizona’s widespread use of private correctional facilities.
Arizona’s attorney general, Terry Goddard, a Democrat running for governor against incumbent Republican Janice Brewer, took the opportunity to indict the state’s infatuation with privatization.
"I believe a big part of our problem is that the very violent inmates, like the three that escaped, ended up getting reclassified [as a lower risk] quickly and sent to private prisons that were just not up to the job," Goddard told a local TV news station.
In recent years, the trend toward privatization, both among state governments and at the federal level has been part of an attempt to address serious budget troubles and crisis-level prison overcrowding by outsourcing more and more corrections operations to private companies.
The move has translated into big business for industry leaders like Corrections Corporation of America (CXW), The Geo Group (GEO) and Cornell Companies, Inc. (CRN) (just last week, The Geo Group and Cornell finalized a merger valued at $730 million).
According to research firm IBISWorld USA, private corrections is a $22.7 billion industry with an annual growth rate in the last half-decade of 4.7%. While growth slowed from 2009 to 2010, projections for the industry remain largely optimistic.
"The prison population continues to grow regardless of what the economic conditions are," says George Van Horn, senior analyst at IBISWorld.
According to the Bureau of Justice Statistics, the number of federal inmates housed in private facilities jumped nearly 14% between 2000 and 2007, and nearly 6% between 2007 and 2008.
Of course, there are ways government can deal with this problem. Make an…
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Schwarzenegger’s Budget Addresses Few Structural Issues
by ilene - May 15th, 2010 10:32 am
Schwarzenegger’s Budget Addresses Few Structural Issues
Courtesy of Mish
Tonight, with much fanfare, Schwarzenegger released his proposal to fix California’s $19 billion budget deficit. It was a huge disappointment.
Schwarzenegger had a golden opportunity to propose radical changes like privatizing the prison system, privatizing work in general, sending illegal aliens home, or getting rid of defined benefit plans. Instead, Schwarzenegger wimped out on many key issues.
Budget at a Glance
Please consider some highlights from Schwarzenegger’s revised state budget at a glance
Close the $19.1 Billion Deficit Through:
- $12.4 billion in spending cuts.
- $3.4 billion in federal money.
- $3.3 billion in other measures, primarily through borrowing from other state funds.
Spending Cuts Breakdown
- $1.1 billion through the elimination of CalWORKS, the state’s primary welfare program, which serves 1.4 million people, two-thirds of them children.
- $750 million in unspecified cuts to the state’s in-home supportive services program for the disabled, achieved through reductions in wages and services.
- Cuts $532 million from Medi-Cal, the state’s medical program for the poor, by reducing eligibility, limiting doctor’s visits to 10 per year, reducing funding for hearing aids and other medical equipment, and increasing copays.
- $811 million reduction in prison health care expenses by making the system more efficient and reducing funding.
- About $360 million in savings by shifting nonviolent offenders out of state prisons and into county jails and by reducing the juvenile prison population and closing the facilities that house them.
State Employees
- Payroll reductions of 5 percent across all state departments, except for constitutional offices, which already achieved 5 percent reductions. The administration says much of the payroll reduction can be achieved by departments not filling current vacancies.
- A 5 percent pay cut for all state workers and a 5 percent increase in their pension contributions. The administration says this will save $1.6 billion.
Media Reporting
As soon as Schwarzenegger released the budget, the media was all over it. The LA Times headline says it all: Schwarzenegger’s budget deals blows to the poor.
Proposing a budget that would eliminate the state’s welfare-to-work program and most child care for the poor, Gov. Arnold Schwarzenegger on Friday outlined a stark vision of a California that would sharply limit aid to some of its poorest and neediest citizens.
His $83.4-billion plan would also freeze funding for local schools, further cut state
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The Economic Elite Vs. The People of the United States of America (I – III)
by ilene - April 24th, 2010 4:41 pm
Full Report: The Economic Elite Vs. The People of the United States of America (Parts I-III)
Courtesy of David DeGraw, AmpedStatus Report
This report was originally released as a six-part series. The first part was published on February 15, 2010. The last part was published on February 27, 2010.
- I: Casualties of Economic Terrorism, Surveying the Damage
- II: The Rise of the Economic Elite
- III: Exposing Our Enemy: Meet the Economic Elite
- IV: The Financial Coup d’Etat
- V: Overcoming the Divide and Conquer Strategy
- VI: How to Fight Back and Win: Common Ground Issues That Must Be Won
> Download full report with graphics and links.
> Download printer-friendly version.
but the success of its disappearing act depends on equally strenuous efforts
on the part of an American public anxious to believe in egalitarian fictions
and unwilling to see what is hidden in plain sight.”
– Michael Lind, To Have and to Have Not
It’s time for 99% of Americans to mobilize and aggressively move on common sense political reforms.
Yes, of course, we all have very strong differences of opinion on many issues. However, like our Founding Fathers before us, we must put aside our differences and unite to fight a common enemy.
It has now become evident to a…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site