2 Prison Stocks That Could Collapse If Democrats Hit A Trifecta With Biden And The Senate

2 Prison Stocks That Could Collapse If Democrats Hit A Trifecta With Biden And The Senate

prison stocks
Razor wire is pictured at the Great Plains Correctional Facility in Hinton, Okla, July 10, 2017. Florida-based GEO Group, Inc. operates the private prison. (AP Photo/Sue Ogrocki)

Black people have been historically overrepresented in federal and state prison and county jails, but the racial disparities in private prisons are even worse, according to UC Berkeley African-American studies Ph.D. student Christopher Petrella.

A month after Donald Trump became president, he rescinded a Barack Obama directive from August 2016 to phase out federal use of private prisons.

After taking a 40-percent nosedive, stocks of two private prison company giants — CoreCivic Inc and GEO Group Inc — rebounded, Reuters reported.

Those two companies receive more than half of private prison industry contracts, according to the Center For American Progress policy institute.

A pro-Trump political action committee and the president’s inaugural committee benefited from the private prison industry’s financial contributions. The Trump family business also benefited from the industry’s patronage, CAP reported.

When 2020 presidential candidate Elizabeth Warren announced her plan to ban private prisons, their stocks tanked again. 

“There should be no place in America for profiting off putting more people behind bars or in detention,” Warren wrote in a Medium post. She promised to shut down the use of federal private detention facilities by ending all contracts that the Bureau of Prisons, the U.S. Marshals Service and U.S. Immigration and Customs Enforcement (ICE).

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Trump administration policies have increased the number of immigrants in detention, and private prisons are seeing record-high profits, American Progress reported. ICE has consistently exceeded its budget and DHS has diverted funds earmarked for other agency operations to ICE for four consecutive years in order to fund enforcement and detention.

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The morning after Trump was elected, stocks in CoreCivic increased by 34 percent and GEO Group stocks rose by 18 percent.

“CoreCivic and the GEO Group have depended on just three agencies charged with enforcement and detention operations for an average of about 48 percent of their revenues over the past two years. These two companies have a vested interest in the Trump administration …”

Center for American Progress

In Joe Biden’s plan for criminal justice, he promised to end the federal government’s use of private prisons, building off the Obama-Biden administration’s policy rescinded by MAGA.

“The federal government should not use private facilities for any detention,” Biden said. He also promised to crack down on private companies that extort incarcerated people and their families with outrageous fees to make calls.