By Catherine Austin Fitts
In the 1990’s, the US intentionally grew the US prison population to a mind boggling per capita leadership globally. This effort had several goals. One was to disenfranchise minority voters. Another was to soak up manual laborers as manufacturing was shifted abroad. Another was to clear urban neighborhoods to engineer the housing bubble.
The costs were explosive. In 1996, the GAO estimated that the cost of one prisoner in the US system was $154,000, including capital costs, which meant that taxpayers were shifted into a financial prison as part of the boom. Private investors had a field day, cashing in on private prison companies as described in my story “Dillon Read & Co. Inc and the Aristocracy of Stock Profits”
Private prison companies were not the only one to cash in. DOJ, under the leadership of then Deputy Attorney General Jamie Gorelick and DC US Attorney General Eric Holder, cashed in by arranging contracts between prisons and government agencies to soak up the now-dedicated labor pool in the DOJ’s company Unicor, including making uniforms and other mundane chores for the Department of Defense. Meantime, the asset forfeiture fund at the DOJ was booking booming revenues, complimenting the civil money penalties growing over in the civil litigation departments.
Given that it was federal intelligence and enforcement agencies that were facilitating the import of drugs, guns and mortgage fraud into the minority communities where many of the arrests were happening, the reality of this prison boom was a more complex and expensive version of what Hitler did. Round people up. Put them in slave labor camps. Use the cheap labor for making provisions for the military. Fund the operation at other people’s expense.
So it is big news when now Attorney General Holder announces a change of rules to lower prison populations. Deficit reduction may be bringing sanity. Or, as the economy improves, we need more labor deflation to keep the slow burn going. Finally, with the housing market fully pumped and dumped and large investors having picked up large blocks of residential land and real estate, many ex-cons will add to the rental population.
Prison stocks down, US residential REITs up. The pump and dump of the US minority population continues, fronted by an African-American President and African-American Attorney General, who are worth every penny their backers invested.