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TROUBLE IN THE MISERY MARKET

Last week, a broad-based coalition of religious and civil rights organizations, student activists and labor groups from across the country took to the streets of Nashville, Tenn., to protest one of the more disturbing and degrading social trends of the last decade: America's growing reliance on private prisons. The headquarters of Corrections Corp. of America is located in Nashville.

"The industry of warehousing people," said one of the protest's leaders, Harmon Wray of the United Methodist Church, "has presented a temptation to those who would profit from the punishment of human beings, leading to perhaps the most ominous illustration of the prison industrial complex at work."

The 1990s were a boom time for the business of crime and punishment - fueled by the incarceration of large numbers of nonviolent drug offenders. We now spend close to $35 billion a year maintaining this country's 2 million prisoners.

And riding the crest of this corrections boom was a handful of corporations - led by industry giant CCA and its chief rival, Wackenhut Corrections - that saw this growth in the criminal population not as a national tragedy but as a chance to make a quick buck. Or a few hundred million. Wall Street agreed, and the stocks of these private prison companies soared.

So did their share of the inmate market. The private sector now handles more than 120,000 beds, amounting to 6 percent of the U.S. prison population - an eightfold increase since 1990. Much of this growth was driven by old-time entrepreneurship - CCA would build prisons on spec and then market them to states and municipalities unable to accommodate burgeoning inmate populations. Think of it as a Field of Bad Dreams strategy: "Build it and they will come . . . in handcuffs and leg irons."

Left unasked was the question of what it says about a country when businesses and investors are gambling on the expectation - and hope? - that more and more Americans will run afoul of the law. It's the misery market - which has, until recently, been flying as high as all the other ones.

But there are unmistakable signs that this market may also be heading for a correction. Due to a combination of overbuilding, well-publicized abuses and the renewed ability of no-longer-cash-strapped governments to erect their own jails, private prisons across the country have been left with a surfeit of empty beds and a rapidly shrinking bottom line. The stocks of both CCA and Wackenhut have plummeted, with CCA barely avoiding going belly up this spring.

At the same time, government officials across the country are finally taking a closer look at the effectiveness of private prisons. And what they are finding is not a pretty sight: reports of rampant physical and sexual abuse of inmates; lax security leading to an unusually high number of escapes; high-profile murders of inmates and guards, and, above all, cost-cutting measures that one state audit said amounted to "borderline deliberate indifference."

Given such abuses, growing numbers of states - including California, Louisiana, Georgia and Texas - are reconsidering private correctional facilities. And North Carolina recently took over management of two facilities run by CCA, citing chronic "under-staffing and the inadequate provision of prison security and safety, education, medical and mental-health care, substance abuse and work programs."

In a sign of further trouble for the prisons-for-profit industry, student activists, so often in the forefront of movements for social justice, have begun protesting the connection between private prisons and the food served at their schools. It turns out that Sodexho Marriott Services, the food-service provider for more than 500 U.S. colleges, is a subsidiary of Sodexho Alliance - a big-time investor in CCA.

Active on more than 40 campuses, Not With Our Money is a national campaign that seeks to stem the flow of the more than $1.2 billion in annual revenue that students provide Sodexho Marriott by getting school officials to give Marriott the boot.

When the bottom line dominates all other concerns, it's the rest of us who pay the price. After all, would you really like to have to shop around and negotiate for the cheapest policeman to guard your block? It's time for the misery market to take a dive.

Los Angeles Times Syndicate

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