US Election 2016: Corrections Corporation of America's stock surges after Trump win

WION New Delhi, Delhi, India Nov 09, 2016, 07.42 PM(IST)

Representative image:Jail cells in Alcatraz prison, San Francisco. Photograph:( Others )

The morning after Donald Trump was elected to be the next president of the United States, the stock of the country's largest for-profit jail company, Corrections Corporations of America, shot up in value. It soared to a high of over 60 per cent, but settled down at just about 34 per cent. 


America has a for-profit prison system, in which the government contracts a third-party to incarcerate those the court condemns guilty. Critics argue this incentivises and encourages the legal system to lock people up, since the government and the contractor make money the more inmates are fed into the for-profit prison system. 

This 2014 study concluded that for-profit prisons in America incarcerate minorities at an even larger rate than public prisons do. The study also concluded that inmates are disproportionately "low cost" prisoners, who are young and healthy enough to not need costly health care. Since the goal of these institutions is profit, not reforming the inmate so they can be safely reintegrated into society, they are often accused of taking cost-cutting measures that threaten the inmates, like reducing training for staff, or outrightly reducing staff and even lessening food rations. Often these jails, in an effort to squeeze more value out of their existing space, lead to dangerous overcrowding, and inmates lives are in danger.


The context of the second graph is important: the value of Corrections Corporation of America tanked after the American Department of Justice announced this summer it would no longer use for-profit prisons, and this was expected to continue under Clinton. 

While Trump never talked specifically about this issue, the stock price's sharp surge at the news of a Trump presidency must be seen as a real indicator that the market suspects this industry will grow now. In other words, the market senses profits because it believes Trump will jail more people.

Over the course of the campaign, Trump praised waterboarding, which has been condemned as an illegal form of torture and also practically useless as a form of gaining reliable intelligence. In the third and final Presidential debate, Trump said to Hillary Clinton that if he was president, "you'd be in jail".