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Sat Aug 4, 2012, 05:58 AM

 

More bankster crap: betting on prison inmate recidivism: don't you want some of that action?

Mike Bloomberg, still the mayor of New York after all these years, has announced a new four-year program to keep prisoners from reoffending after their sentences, funded by $9.6m from Goldman Sachs...It may sound like a nice philanthropic gesture, but that $9.6m sum isn't a donation; it's a loan...

Goldman is being incentivized to produce results if recidivism drops by 10%, Goldman gets the money back, and if it drops further then the GS boys will turn a small profit...

New York's foray into cash-for-results social services is part of the voguish infatuation with "social impact bonds", in which a private investor invests in a public service and makes a positive return only if things improve. They are currently all the rage in Britain, whose coalition government espouses a hazy ideology called "the big society" to obscure a much clearer ideology of across-the-board cuts. And they've begun to seduce US policymakers. The Goldman-Rikers deal is the first social impact bond in America, though governments from Massachusetts to Ohio are preparing to jump on board...

If this goes well, the Bloomberg team has said, it'll be the model for all sorts of for-profit social initiatives. Corporations could make money if an adoption agency finds a home for a child, or if you survive a heart attack, or if your kid's reading scores on one of his five thousand exams increase by such and such percent...

We already know this song. In any situation where the private sector and government are both involved, there's an implicit guarantee: when it all goes wrong, the corporation can bail and the state has no option but to pick up the slack...

In such a system the private sector may make money, but ultimately we're the ones who shoulder all the risk a situation that the bankers at Goldman will find very familiar...

http://www.guardian.co.uk/commentisfree/2012/aug/02/goldman-sachs-new-york-prison-deal

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