Prison Profiteering in the Land of the Free

Ironically, the “Land of the Free” has the highest per capita incarceration rate in the world. Another bizarre consequence of the “small government” Republican reign of the last thirty years has been that they have told people that they are going to provide “law and order” by making stuff illegal and locking people up. So much so that the prison population has grown by 500% in the last thirty years. I consider this another example of the hypocrisy of the Republican Party; if you believe in a strong central government to fight terror abroad and ensure domestic order by locking people up in record numbers at home, then please say so and stop hiding behind the “we’ll get government out of your life” persona. 

As is typical in strong government arrangements that are sometimes called Facism and other times a free market economy with an aggressive state sponsor, private corporations will often form symbiotic relationships with the policy of state. Just as Halliburton is there to profit from our operations in Iraq, the Geogroup is a private corporation that runs prisons. Typically these types of symbiotic relationships are one of the major sources of corruption; corporations profit from government action and so have money to spend to elect people who will continue such actions. In the end, its an excellent opportunity for private corporations and public officials to make money off of the taxpayers. 

If that weren’t so bad, typically the government actions that engender profit are otherwise destructive to human lives: in order for Halliburton to get those juicy no-bid contracts, lots of people had to die. It’s the same with the Geogroup. In order for the Geogroup to make money, people have to be incarcerated. That means that laws have to be passed and people have to be put away.

This kind of government-private sector symbiosis is often mistaken by democrats as an example of the abuse of a free market system. Let me assure you that it is not. Free markets are about people being able to freely chose what they want without the government making the choice for them. The prison system and logistics support for our military operations are the ultimate examples of a forced choice on behalf of the government. A company driven to satisfy the consumer has a vested interest in keeping them happy, but in this case, the ultimate consumer are government politicians. As politicians are driven by campaign donations and stock ownership, the result are organizations that are non-responsive to the groups they are supposed to be serving. This results in tainted water being supplied to marines by Halliburton as described in the DVD documentary Iraq for Sale: The War Profiteers.

In regards to the GEO Group, Paul Wright of the Prison Legal News says that “They gain their contracts through lobbying and cronyism and political favoritism. They make their profits once they have the contracts through short staffing their facilities and underpaying their staff.” Who are two of the largest stock holders in the GEO Group? How about Alberto Gonzalez and Dick Cheney. All of this came to light for me because a regular on the Howard Stern Show, Kenneth Keith Kallenbach (who can be seen here in all his Stern show glory) died in prison custody. This single death caused an examination of the GEO Group by the Howard 100 News team that has found that an abnormally large number of prisoners died in GEO Group custody. 

Attempts to use the legal process to investigate this has been problematic as you can imagine. District Attonry Juan Angel Guerra said that prior grand jury investigations into the GEO Group had been broken up by police. He finally held the grand jury secretly and returned an indictment against Cheney and company, only to have a judge throw out his indictment and admonish the District Attorney. Mr. Guerra’s interest in the GEO Group may have also been the reason he was voted out of office in the most recent election. All in all, results that are not too unusual for corrupt Facist governments. 

Welcome to the Land of the Free.

Who’s Afraid of the Big, Bad Robber Barons

As I’ve discussed in this blog before, I am a fan of what’s viewed as “shock radio.” Specifically, I really enjoy both Howard Stern and Bubba the Love Sponge on Sirius Channel 101. I’ve been a Sirius subscriber since 2005 and I’ve really enjoyed it; I’m listening to Sirius Pops right now as I compose this blog. My only complaint with them is that they might not resign Bubba whose contract ends in December, and that would really annoy me. I’m hoping they won’t do that. If you’re looking for a good Christmas present this year, I do heartily recommend that you give the gift of Sirius

The reason I bring Bubba up is because he often discusses politics and “Spice Boy”, one of the shows cast members, lamented that the “Republicans just know how to work better.” Work in the parlance of that particular radio show meant that they knew how to lie well and present a convincing story for others to believe. This is just another way of restating the rather old joke, “No, I don’t belong to an organized political party. I’m a Democrat.”

Case in point, a right-wing friend of mine just sent me this story about how Barack Obama won’t let any gun owners be part of his administration. Well, at least that’s what the Illinois State Rifle Association says because apparently some questionnaire asks:

“Do you or any members of your immediate family own a gun? If so, provide complete ownership and registration information. Has the registration ever lapsed? Please also describe how and by whom it is used and whether it has been the cause of any personal injuries or property damage.”

Therefore, Barack hates gun owners. Therefore, he’s coming to confiscate everyone’s guns. Of course, these days the President of the United States is a rather powerful person; you know, “Leader of the Free World” and all of that jazz. So it stands to reason that there might be people out there who might try to do the President harm- hence the Secret Service and all.  And it does stand to reason that perhaps Barack’s security team might want to know about firearms an applicant has access to and whether they’ve ever caused any “personal injuries”. I don’t know. If I were going to be President (and I’m thankful I’m not ever going to be) I’d probably want to ask that question to. 

To me, what this story really sheds light on is the gullibility of the Republican base. They seem to get worked up by all kinds of stories about Barack’s radical Muslim heritage or his ties to black radicals that clearly mean that he hates America. Now I know that the Democrats have their fair share of ignorant voters as well, as the Howard Stern show’s Sal Governale recently showed. I’m sure that the Republican attack stories, which are mostly not true or grossly exaggerated, will continue to make the rounds, but the Republicans soundly lost the last election so I expect I will start hearing a lot more left wing lies than right wing for the next few years.

Case in point, I recently called the Randi Rhodes show. I used to listen to her on the now defunct Air America radio in Dallas back in 2003 and 2004. Yes, you heard me correctly. I so hated the Bush Administration and his legion of flag-waving minions that I was driven into the arms of the any who would have common cause with me, and in this case the arms happened to be Randi’s. Her show was a bit hard to take, even back then. She doesn’t seem to know when a bit has gone to long and she just beats her audience over the head with her parody elements and impersonations. That, and it seems like at least 40% of her on air time is devoted to commercials. 

Well, things didn’t work out to well for Randi. She got kicked off of Air America radio for calling Hillary Clinton a “whore”. Probably just as well, Air America went bankrupt. Well now Randi’s doing Podcast and a streaming radio show over the internet. Yesterday she was talking about AIG and the bank bailout and I thought I’d give her a call. Randi kept saying that the only way to prevent abuses in the banking industry was through regulation. In fact, she said that’s all a government could do. 

That seemed an absurd assertion. You can’t regulate away human greed. As I pointed out in my call to her, industries that are prone to greed and abuse will simply take control of the agencies that are supposed to be watchdogging them as the drug industry has done with the FDA. Truly, if she wants to end the reign of the few powerful organizations such as AIG, then what we need is not a bailout, but a liquidation. If allowed to fail, the big organizations would cease to exist. Their assets would be sold to the remaining companies who are hopefully more virtuous (or at least better funded) and life continues on. If instead, the government bails the industry out, then the big are not only allowed to grow bigger, but now they have the implied guarantee of future government bailouts the next time they get into trouble. Honestly, you Democrats, if big companies are what you fear, then you should become cheerleaders for liquidation, not advocates for endless bailouts!

Randi cut me off. She told such talk would lead back to the bad old days of the “Robber Barons.” That Barack Obama was someone who could regulate away the abuses of the system caused by greed because he had come without lobbyists and would therefore take Washington control away from the evil corporations and give it back to the people. She wouldn’t let me get a word in edgewise, then she went to commercial break… again.

I find two things vaguely humorous about this. The first is that Randi had just been saying that we need to keep our expectations of Barack down because “He’s only human.” Yet she then went on to tell me how he, free from lobbyist control, was going to liberate the Washington world from the greedy bankers. The second was the whole “Robber Baron” thing is a huge Democrat talking point. We can’t go back to the days before the Federal Reserve and the New Deal, and all those other wonderful government programs. Hell no! That’s back when the Robber Barons robbed us blind! Except they didn’t. The later half of the 1800s was one of the most prosperous times for us all as a people. The real wages of the average worker increased year after year despite the fact that there was no minimum wage laws. People were far more free to do as they pleased when it came to the wonderful vice laws of today’s society.  Really, when you look over the history of the time, I don’t see the part where the evil Robber Barons swoop in and take away everyone’s money- probably because it never happened. 

The Robber Barons are just an old Democratic chestnut. They are the equivalent as the Bogeyman: a shadowy figure who is up to no good and will get you when you least expect it. This is, of course, merely a lie put forth so that people will seek the protection of the government. The Robber Baron is the Democratic equivalent of the Islamic Terrorist; he is that figure who is so terrible that we must look to the government for protection. Here’s a question, who can name one? Come on, think hard. If they were so terrible, certainly we should be able to remember at least one.

Well here’s one for you, Jay Gould. As it turns out, he really wasn’t such a bad guy. Sure, he tried to take money from people, but not the working man. He didn’t have much worth taking. No, Mr. Gould was a Wall Street raider. He endeavored to take money from the other people that had it: the Rockefellers,  Morgans, and Vanderbilts. Don’t believe me, here, read it for yourself in Dark Genius of Wall Street: The Misunderstood Life of Jay Gould, King of the Robber Barons. Now I’m sure Mr. Gould would have loved to own a monopoly and rip off the average consumer, but that’s not what he did. Instead, that’s what the bankers did. 

The real mustache twirling villains in the tales of the late 1800s are not the Jay Goulds of the world, but rather the “money trust” of Rockefeller and Morgan. The banking families had huge wealth, but they wanted more. They wanted a lock on the power to create money and government protection in case their organizations were ever in danger. So they set about creating what G Edward Griffin called the The Creature from Jekyll Island.  And it is a monopoly far worse than anything Jay Gould or Bill Gates could put together. What’s worse, it had a mandate from our government that says it gets to basically do whatever it deems necessary to make sure that its member banks stay profitable. 

So really Randi, who’s afraid of the Robber Barons of the 1800s. Not me. I’m more afraid of the ones who are with us today… and have the power to print our money.

Everything I Need to Know I Learned from a Shock Jock

For those of you who don’t know, I listen to some pretty salty radio. Specifically, I listen to both Howard Stern and Bubba the Love Sponge on Sirius Satellite radio and, while I can’t specifically recommend shock radio for everyone, I can say that both shows have, in addition to a lot of material many would find objectionable, a healthy amount of intelligent dialogue. Both shock jocks have gotten increasingly more political over the last handful of years as both were targeted by George Bush’s FCC chairman Michael Powell with the largest fines in radio history. Having both found their home on sensor free satellite radio, they now both routinely comment on the absurdity of the “War on Terror” as well as favoring Barrack Obama in the Presidential race.

Having been so financially touched by the latest administration, politics has become personal issue for them. I find the politics of the Bubba show particularly interesting as he is not a traditional Democrat but rather someone like myself who has developed a Democratic sympathy out of utter dislike for the policies of the Republican party. Yesterday on the Bubba show, the topic of the housing crisis came up. Specifically they were discussing John McCain’s recent proposal that the government simply buy up all of the troubled mortgage’s and have the government renegotiate better terms with the home owners so as to keep everyone in their homes. Brent, the producer, pointed out that he had reread Ron Paul’s A Foreign Policy of Freedom and that the book had predicted both the housing crisis as well as the government’s bailout of it. Bubba then went on to say words to the effect that:

If they want to stabilize housing prices here’s what they need to do. Stop all this bailout <stuff> and just lower the price. Eventually, the price will get lower to those of us that have some spare change will go out and buy the house as an investment property and fix it up. Crisis solved.

This reinforced in my mind the utter simplicity of classical economic theory because Bubba, who did not even go to college, was doing a wonderful job as describing the effects of Say’s Law. Jean-Baptist Say (1767-1832) was a French economist who attacked the Mercantilist notion that recessions were caused by a shortage of money. Instead, Say argues that money is merely a medium of exchange and one can not actually buy anything without first supplying something else (i.e. a worker must first supply his labor in order to get its money’s worth to then buy goods) that it is not money that is in short supply but other goods. According to Say, a generalized over-production was simply not possible, while a specific overproduction of one given good certainly was. Thus Say’s solution was to allow the markets of goods and services to find their own clearing price and that that would quickly bring an economy back to stability and further help orient the markets production of goods and services towards what the society actually valued. 

Say’s law was attacked by Keynes who theorized that a generalized over-production was not only possible, but that it would tend to be persistent unless the government took action. It is Keynesian theory that lies behind John McCain’s plan, but Keynesians will quickly admit that if Say’s law is correct, that all of Keynes’s theories will fall apart. William Hutt’s A Rehabilitation of Say’s Law points out the how Keynes seemingly intentionally misstated Say’s Law in order that he might then attack it and how Keynes’s misstatement still seems to be accepted by most modern economists as the law itself when it, in fact, is not. 

Say’s law is obvious. So much so that it was unintentionally state by Bubba when describing the John McCain’s housing plan. To allow the economy to quickly realign itself with the actual wants and needs of society, we need to allow the value of housing, bank stocks, and collateralized debt obligations (CDOs) to find their own price rather than have the government move in to buy these products. Do not believe the argument that the “credit markets are frozen” and that no one will buy CDOs at any price. That is simple nonsense. I guarantee that if CDOs are allowed to fall enough in price, eventually they will find a market clearly price and the market will unfreeze itself. The problem is that this market clearing price is probably far below where the banks have it marked on their balance sheets. So you see, the problem is a political one, not a defect of the market itself. 

All in all, I think we would do well to follow the simple logic of Bubba and his crew. Allow the market to find it’s own market clearing price, and let the chips fall where they may.