The perceived inequity of that system — and especially the impact that the war on drugs has had on conviction rates for African-American men — is typically at the top of the list of critical issues facing black America. An entire generation of inner-city black youths has come to see prison as a rite of passage. And it’s an especially pernicious rite, leading directly to second-class citizenship, with former prisoners unable to vote, get a decent job, live in public housing or take advantage of other basic rights that most citizens take for granted.
For the financial-services industry, though, the prison-industrial complex is often considered a boon. The industry makes money helping states and cities float bonds that pay for prison construction and operating costs — guards’ salaries, food and the other expenses that make the per-prisoner cost of incarceration higher than the per-student cost of education.
Wall Street exists in part to make money. Its success in doing so is the source of its almost unlimited political influence. But if segments of black America and other disenfranchised communities can benefit from aspects of the corporate world’s self-interest, it could result in a firmer economic foothold for minorities in the American mainstream.
Of course, caveats are in order: The amount of the loan — almost $10 million — is not a lot of money for Goldman Sachs. The company earned more than $900 million just in the last quarter. Burnishing its beleaguered image is surely as big an incentive for the company as is the chance to earn a couple more million dollars. As the Libor scandal shows, the financial-services industry is not above outright cheating to obtain the results it wants.
Today, New York City’s new project is just an experiment. There is no guarantee that it will have a positive impact on the number of repeat incarcerations. But in an era when federal, state and local governments have run out of money to finance even the most effective social programs, perhaps we should be rooting for it to succeed.
Harold J. Logan is a business writer with a background as an Internet entrepreneur.