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Private Prison Stocks Just Tanked After Hillary Calls For End Of State Private Prisons

Private Prison Stocks Just Tanked After Hillary Calls For End Of State Private Prisons

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One of the most important positions outlined by Hillary Clinton at Monday night’s debate was her plan to further dismantle the for-profit prison industry.

“I’m glad we’re ending private prisons in the federal system,” she said, adding that she wants “to see them ended in the state system. You shouldn’t have a profit motivation to fill prison cells with young Americans.”

Her proposal comes on the heels of a surprise memo circulated by the Department of Justice last month stating that it intended to “substantially reduce” and “ultimately end” the use of federal private prisons.

That announcement has generated important momentum for the movement to end for-profit prisons but fails to take into account the almost 90% of inmates who are held in state or local facilities. Mrs. Clinton has now made it clear that as president she would work to end their plight.

In the wake of Clinton’s call Monday night, the stocks of the two leading publicly-traded private prison corporations tanked.

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Corrections Corporation of America (CCA) saw its stock drop nearly 8% on Tuesday while that of GEO Group fell almost 4%. Yesterday’s declines are only the latest in a series of financial setbacks for the private prison industry.

In the days following the Justice Department’s announcement last month the stock of both CCA and GEO fell by nearly 40%, Moody’s downgraded both companies’ credit ratings, and analysts severely cut earnings estimates for the two corporations.

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The effect of Clinton’s proposal at the debate, though relatively modest, demonstrates that something as simple as a conscientious politician taking a stand can effect real change.

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Activists and observers have long argued that private prisons are less safe and less effective than government-run facilities, and the evidence supports their claims.

Moreover, by creating a profit motive for increasing incarceration private prisons serve to perpetuate the failed racial drug war and the creation of a largely African-American and Latino underclass scared by the criminal justice system.

While the Justice Department’s announcement last month applies to only 13 prisons and 22,000 inmates, many saw it as the beginning of the end of the private prison industry, an anachronism that should never have been allowed to develop in the first place.

Clinton’s proposal on the debate stage and the attendant drop in private prison stocks is just the latest step on the road to the inevitable dismantling of an inherently oppressive system.

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James DeVinne
James DeVinne is a student at American University in Washington, DC majoring in International Service with a focus on the Middle East and South Asia. He is a founding member of Occupy Baltimore and interns at the Tahrir Institute for Middle East Policy.

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