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U.S. ‘Prison Economy’ Secretly Grows

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In writing The U.S. Prison-Cell Economy” five months ago, I was speaking at least somewhat in metaphorical terms. However, as Bloomberg reveals to us in a recent article, for more and more of Corporate America, a U.S. “prison economy” is already a very literal concept.

Before I delve further into the “great, new market” which Corporate America has discovered for itself; for those readers who didn’t peruse my original article let me briefly recap what inspired it. Every month, month after month, year after year; U.S. home-builders start construction on 50% to 100% more units than they sell. Yet (in totally perverse fashion) the propaganda machine claims that the inventories of U.S. new homes have been plummeting straight down – rather than shooting straight up (as directly implied by the starts and sales).

I then stated a simple/obvious conclusion. Either the official U.S. housing numbers were total fabrications; or, more than half of these “housing starts” were units which did not require a “sale” to an individual owner in order for the builder to be paid (since no builder can stay in business building twice as many units as they sell).


In attempting to come up with an answer to the question “how could millions of new U.S. housing units not require sale to an owner?”, I could only formulate one possibility. All of these phantom “housing starts” were in fact prison cells.

This conclusion should hardly be surprising to informed readers. The U.S. warehouses more of its own population in prisons than any other Western nation by a vast margin. Canada is a distant second, and then there is a further drop-off once we move past North American “incarceration mania”. Furthermore, the Corporate Media itself has been gushing over the fantastic growth curves of U.S. Private Prison Corporations (Dick Cheney’s favorite investment).

Nonetheless, it would undoubtedly be greatly disturbing to the vast majority of (under-informed) American Sheeple to learn that their own government, which already locks up its own citizens in grossly excessive numbers; is secretly and rapidly expanding the “maximum occupancy” of its entire, (increasingly private) prison system.

Want to “compete” with Chinese and Indian labour in the U.S.A.; but you can’t find workers willing to work for 1/10th their (previous) wages? Just lock ‘em up and force them to do that labour…for even less. What will be the secret to Corporate America’s “success” in the 21st century? Chain gangs.

Now we see apparent (corporate) confirmation of this new Prison Economy taking shape in the U.S. When one retailer moves into a particular market, we see that as “filling a niche.” However, when a plethora of retailers congregate in that same market, we see a “growth sector.”

The phony numbers produced on U.S. retail sales cannot hide the fact that month after month U.S. retailers are selling less and less goods (they simply cost more because of soaring inflation). This is due to the fact that (in real dollars) U.S. wages have fallen by more than 50% over the past 40 years – all the way back to (literally) Great Depression levels.

With costs also soaring (because of the aforementioned inflation); profit margins are collapsing. The U.S. retail sector is dying. Seeing “the writing on the wall”, more and more U.S. retailers are focusing on the only remaining “growth market” in U.S. retail which doesn’t involve exclusively servicing the rich: the ever-growing U.S. prison population.

Bloomberg was writing about only one segment of the prison-population market: music downloads (and players). It lamented that one of the problems for Corporate America as it tries to cash-in on this growing market is:

Corrections facilities generally forbid devices that can be turned into weapons, be used to communicate freely with the outside world, or conceal contraband.

Talk about cramping the ability of these capitalists to make a buck on this “captive market”!

More searching uncovered a much more general article about the “retail boom” in selling products to inmates. A NY Times writer named Pamela LiCalzi O’Connell, wrote a piece titled “New Economy; For consumer goods producers, it is not so bad to be behind bars”.

The writer’s own bias is clear when she notes callously about the millions of Americans being warehoused in prisons that, “To some these figures are a national embarrassment. To others, they represent a marketing opportunity.” Nonetheless, the article has several very interesting factoids within.

After obtaining information from a company called Koss, which markets prison headphones, the writer notes that:

it is one of the few companies willing to talk about how it markets to the segment. “This business is very quiet, very tight-lipped,” Mr. Koss said. “We sell through a group of closely held companies that specialize in getting merchandise into the prison stores. This is a lucrative business – both for the manufacturers and the distributors – so there is a reluctance to talk about it for fear of attracting competition.”

One of Koss’s distributors confirmed that assessment.

We don’t like exposure,” said Tom Thomas, president of Union Supply… [emphasis mine]

So we know that the U.S. Prison Economy is both very lucrative and very secretive. However, what makes this NY Times article especially fascinating (chilling?) is the date: May 14, 2001. That was six months before the U.S. changed forever, degenerating into a fascist enclave where “rights” are now always subordinate to “security”. As part of that security, information is now heavily suppressed in our “free and open societies.”

Try to find information on the total number of private prisons being constructed in the U.S., the total number already built, and the total population size that these mushrooming facilities will be able to warehouse. Remember that all the good folks at Homeland Security have to do is to wave their magic wand and call these facilities “detention centers”, and suddenly it’s verboten to even mention them – as part of “national security.”

When the NY Times article came out back in 2001, it noted that:

During the 12-month period ended June 30, 1999 [the most recent data available at that time], the Federal prison population rose 9.9 percent, the largest yearly gain ever reported. The incarceration rate has tripled since 1980.

Note that what the Times writes about was before the explosion in private prison/detention center construction in the U.S. even began. Trying to get accurate current numbers on the U.S. prison population is becoming increasingly difficult.

The Times reported, “More than 1.3 million inmates under the jurisdiction of state and Federal prison authorities in 1999, according to the Justice Department.” The U.S. Bureau of Justice Statistics notes only 1.6 million inmates under state/federal “jurisdiction” in 2010, but this conveniently omits 750,000 additional prisoners in the U.S. being warehoused in jails all across the country (also using 2010 data) – the “revolving door” which leads into the prison system.

Note that while the U.S. government claimed to only be holding 1.6 million prisoners as of 2010, that back in 2006 CNN stated “there are more than 2 million inmates serving time” in the U.S. – as part of its article on what was already a “$37 billion economy bulging with business opportunity.”

Even more alarming, it will no longer be possible to obtain precise numbers on the U.S.’s inmate population in the future. Thanks to the “indefinite detention” law enthusiastically supported by both halves of the Two-Party Dictatorship, habeas corpus is dead in the U.S.: the only independent means of verifying how many people (in total) are being incarcerated by the U.S. government.

The number of prison facilities in the U.S. (of one form or another) is exploding, but we have no idea by exactly how much. The U.S.’s mammoth incarceration population continues to grow, but we no longer know by how much. We do know that this is very, very “good for business” – but few of the Oligarchs want to talk about precisely how good it is.

In 2001, the NY Times told us that the U.S. Prison Economy was the “New Economy.” In 2012, it’s now the Growing Economy (and the only part of the U.S. economy still growing). How much longer before it’s simply the Only Economy?



[Readers are encouraged to join our Community for the lively discussions on our Forum]

Comments (7)Add Comment
Jeff Nielson
written by Jeff Nielson, August 28, 2012
A point that seems to be missed by a lot of people looking at prison industry: It is actually more advantageous to the manufacturer than slavery because the taxpayers foot the bill for housing, feeding, and guarding the laborers. On top of having many of the expenses covered, they pay less than a lot of overseas factories. When the collapse comes, the misery will be one-hundred-fold. All pretense of providing for prisoners will be abandoned.

As Jeff likes to say, "Greed is shortsighted". My only comfort when observing the blatant, over-the-top corruption going on worldwide is the knowledge that "that which is unsustainable will collapse". The market for their goods will collapse and the system will be dismantled eventually. But it's going to be a rough decade.

Yes, DayOwl, U.S. Slave Masters never had any intention of ELIMINATING slavery -- only in "improving" on it.

Let's not forget their REAL stroke of genius: "illegal aliens". You get the Slaves to pay their own transit into the U.S.; pay for their own room and board; then their REWARD for being Slaves is that the U.S. makes them SACAPEGOATS -- and blames all the nation's problems on them.

Now THAT is how to get the MOST out of a Slave... smilies/wink.gif
written by Becky Shelton, August 28, 2012
A point that seems to be missed by a lot of people looking at prison industry: It is actually more advantageous to the manufacturer than slavery because the taxpayers foot the bill for housing, feeding, and guarding the laborers. On top of having many of the expenses covered, they pay less than a lot of overseas factories. When the collapse comes, the misery will be one-hundred-fold. All pretense of providing for prisoners will be abandoned.

As Jeff likes to say, "Greed is shortsighted". My only comfort when observing the blatant, over-the-top corruption going on worldwide is the knowledge that "that which is unsustainable will collapse". The market for their goods will collapse and the system will be dismantled eventually. But it's going to be a rough decade.
Jeff Nielson
written by Jeff Nielson, August 26, 2012
It is becoming easier and easier to become a "guest of the state" here in the US.

With the government spying on it's citizens continuously in every imaginable way, it's becoming easier for them to charge you with something as well.
Hell, they don't even have to charge you with anything.
They don't even have to say you're under arrest.
There is no Bill of Rights, no habeous corpus, no protections at all.
The Police State is coming.
They simply need another "National Emergency" as an excuse.

Bobbbny this is where the great danger lies. People need to be able to "think outside the Box" in order to connect the dots and APPRECIATE what the deterioration in U.S. society/government represents.

Instead we have what I saw another commentator recently refer to as the "normalcy bias": the expectation that tomorrow will be like today. Unfortunately, at BEST most people are only able of conceiving of things as bad as other events they have read about (i.e. the Great Depression).

Trying to convince people that we have MANY reasons to believe that we are on the verge of something truly HORRIFIC is a very hard sell. All that writers such as myself can do is to keep pointing out these "reasons" -- and update them as further information emerges which reinforces these suspicions.
written by robert berg, August 26, 2012
It is becoming easier and easier to become a "guest of the state" here in the US.

With the government spying on it's citizens continuously in every imaginable way, it's becoming easier for them to charge you with something as well.
Hell, they don't even have to charge you with anything.
They don't even have to say you're under arrest.
There is no Bill of Rights, no habeous corpus, no protections at all.
The Police State is coming.
They simply need another "National Emergency" as an excuse.
Jeff Nielson
written by Jeff Nielson, August 26, 2012
Apberusdisvet, when it comes to "moving to Canada"; here I have to admit to doing a little bit of "talking out of both sides of my mouth" too (lol!).

While I tell American readers that they would likely be better off moving NORTH of the Border; at the same time I'm looking more and more seriously at my OWN "new home" -- in case the political (and economic) climate in Canada continues to deteriorate as well.

Nicholas, you are probably at least close to being right. With a population approaching 3 million in total, and an economy approaching if not exceeding $50 BILLION per year; that would very likely make Prison America above the mid-point among nations in total GDP.

A pretty disturbing observation!

P.S. Bobbbny is planning on starting a new thread on our Forum dedicated to answering the question: WHERE is better than HERE...???
written by Nicholas Wind, August 26, 2012
That makes the U.S. prison economy possibly larger than most countries in the world I would think.
Like most of your posts very thought provoking.
written by Andy Bergeron, August 26, 2012
Welcome to the 4th Reich. If I was younger, I'd move to Chile, one of the few remaining free market bastions. BTW Jeff; do you have a spare bedroom? Just kidding.

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