The private prison industry, which has faced tough government scrutiny, a declining inmate population, and a drawdown of federal contracts under the Obama administration, is seeing a reversal of fortune under Donald Trump, the Wall Street Journal reports. Private prisons were found to be more dangerous than government-run facilities in a report by the inspector general of the Justice Department, prompting the agency to announce it would begin phasing out those contracts. Stock prices plunged for the two biggest contractors, GEO Group and Corrections Corporation of America (now CoreCivic). Trump’s election is reshaping the public debate over crime and punishment. Private prison companies’ stocks have continued to rise as industry analysts expect Trump to throw out the order withdrawing from the private prison sector. They also anticipate a swelling prison population under an administration that has cast the Obama presidency as coddling criminals.
“It’s a fascinating turn of events from when there was a lot of doom-and-gloom in the prison industry because it thought (Hillary) Clinton was going to win and continue all of Obama’s policies,” said Pete Cohn of Height Securities, an investment research firm. In a memo to investors, Canaccord Genuity Inc., a financial-services firm, recently called the private prison business “a compelling investment opportunity.”