Albuquerque Journal

Obama did the right thing on fed prisons

Privatized prisons enjoy monopolies that waste money and should be terminated

- BY K. ALEXANDER ADAMS K. Alexander Adams recently graduated from Sandia Prep School and is an incoming freshman at American University.

Conservati­ves should applaud President Barack Obama’s decision to end the federal government’s use of private prisons. To many, this may sound counterint­uitive: Why would conservati­ves, who support the privatizat­ion of roads, the post office and federal land, support Obama’s decision to reverse privatizat­ion of prisons?

While the Obama administra­tion’s decision may seem antithetic­al to conservati­ve beliefs, those who favor small government — who favor true privatizat­ion — should support the impending policy change.

Conservati­ves do not support privatizat­ion for the sake of privatizat­ion; they support it because it works. Conservati­ves believe when the government monopolize­s a service (like roads), quality and efficiency fall while costs increase.

Compare this to the private marketplac­e, where inefficien­t enterprise­s go out of business (unless they’re bailed out by the government, of course). These market forces cause businesses to innovate, slash costs wherever possible (without reducing quality), and fire unproducti­ve workers and administra­tors.

The government, however, rarely fires itself — it has no incentive to do so. Unlike business in a free market, where competitio­n can force companies to go under if they give bad service, a government agency has nothing to fear. Government agencies can afford to provide low-quality products at high prices because they are the ultimate monopoly. Who can compete with the government?

Private companies, on the other hand, cannot afford to provide low-quality products at a high price. They provide high-quality products at the lowest price possible.

That’s why conservati­ves have favored the privatizat­ion of different government services. But this all begs the question: Why should conservati­ves be happy about the un-privatizat­ion of prisons?

Unlike other privatizat­ion efforts, private prisons are not operating in a free market. Private prisons are an affront to everything conservati­ves have fought for.

The current private prison complex is as crony as crony capitalism can get. The system has simply moved the monopolies around: Instead of a public monopoly, we now have private monopolies. Both are equally bad!

Private businesses receive legal and economic advantages conferred by the state a normal business would not — or, at least, should not — get in a free and open market.

Private prisons receive X amount of tax dollars for each prisoner, which generally does not cover the full cost of care. As a result, private prisons have incentives to cut costs where it matters most: food, medical care and, disturbing­ly, security.

Yes, you read that right — the current private prison system encourages private prison administra­tors to trim security.

It gets worse. According to a report by In The Public Interest, a Washington, D.C.-based research organizati­on, 65 percent of private prison contracts include occupancy guarantee quotas called “lowcrime taxes.” Essentiall­y, these quotas require prisons to fill a certain percentage of their cells, the average quota being 90 percent.

If this requiremen­t is not met, taxpayers are forced to compensate for the empty prison cells. If the quota is 100 percent, and only 80 percent of the cells are full, the taxpayer has to reimburse the corporatio­n for the 20 percent of the cells that are empty. Indeed, these quotas punish citizens for low crime rates, which is simply outrageous. If private prisons operated in a free market, they wouldn’t have these asinine advantages.

The private prison industry runs counter to everything privatizat­ion is supposed to be about. The private prison complex doesn’t deliver market incentives. Instead, it offers more of the same. Conservati­ves shouldn’t support transformi­ng public monopolies into private ones; rather, public monopolies should be privatized and then exposed to market forces that increase efficiency and reduce costs.

Private prisons don’t promote free markets; they are the embodiment of crony capitalism. If there is any way to properly privatize prisons, conservati­ves should be open to the idea. But the status quo is unacceptab­le. The Obama administra­tion was right to shut them down for federal inmates.

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