On matters financial, basics are basics, and we get into trouble – as in our current housing market – when we talk ourselves into the idea that fiscal wizardry can solve our problems. Consider this a cautionary note as state leaders in Idaho, one of the nation’s top lock-em-up prison states, confronts the question of cost.

Prison costs are rising in Idaho (as they are most everywhere, to some extent) and the fiscal conservatives in Idaho government aren’t pleased at the idea of spending the money. A Spokane Spokesman-Review article on the subject, noting that hundreds of Idaho prisoners already are locked up out of state and possibly 5,500 more beds will be needed in the next decade, outlines the strategy being developed by Governor C.L. “Butch” Otter: Outsource it. It quotes Corrections Director Bent Reinke as saying, “There’s a desire by both the board of correction and the governor’s office to have Idaho’s next prison be privatized.” (The idea would be that, as in Texas, it would hold out of state as well as in-state prisoners.)

Otter: “It’s really a question of capital . . . We just simply, without absolutely busting the budget, we can’t make that kind of capital available as we need it.” Private enterprise, he said, “can go out in the marketplace and kind of work their magic.”

The red flag should be the phrase “work their magic,” because in the end there’s no magic to be worked.

Stop and think for a moment about this sentence from the chair of the corrections board: “The fact is, it saves the taxpayers between $250 million and $350 million in capital outlay, because whether we build the prison or we lease the prison, we’re still paying X-number of dollars a day to feed the prisoners and house the prisoners.” Let’s parse that. Of course she is right that the state will have to pay to feed and house the prisoners. But if the state – ultimately – isn’t paying for construction of a new prison, then who would? Would a business, or its investors, simply eat that capital cost? Of course not: As with any overhead any business (retailer or manufacturer or any other) incurs, it will have to be passed on to the customer. And that’s the state. And there’s an additional cost any private provider would have that the state doesn’t: It would be obliged to make profit for its investors.

So how, exactly, is it that state would save money?

In the case of at least some Texas prisons, we know the answer: At least some private providers cut their expenses to the point that prisoners sicken and die, and any efforts at rehabilitation of prisoners – most of whom will eventually be back on Idaho’s streets – are completely ignored. These places are factories for production of hard-core cases, making an already bad situation much worse. And so we can expect that either the state will pay more for its private prison contracts (similar to public costs plus profit) or else will continue to see gruesome stories about the results of underfunding (as we already have begun to see).

We’ve argued for some years that private prisons, a 19th century idea, should have stayed in that century. An overview a few years back from a report in Mother Jones magazine:

Not since slavery has an entire American industry derived its profits exclusively from depriving human beings of their freedom — not, at least, until a handful of corporations and Wall Street investors realized they could make millions from what some critics call “dungeons for dollars.” Since the 1980s, when privatization became the rage for many government services, companies like CCA and its rival, Wackenhut Corporation, have been luring elected officials with a worry-free solution to prison overcrowding. Claiming they can lock people up cheaper than government can, the companies build cells on speculation, then peddle the beds to whatever local or state government needs a quick fix for its growing criminal population. . . .

Over the past decade, private prisons have boomed. Corporations now control 122,900 beds for U.S. inmates, up at least eightfold since 1990. The reason is simple: With anti-drug laws and stiffer mandatory sentences pushing the prison population above two million, and governments strapped for capital to build new cells, for-profit prisons seem to offer plenty of cells at below- market prices. “If it could not be done cheaper than the government does it, then we wouldn’t be in business now,” says Brian Gardner, warden of the CCA prison in Youngstown. “We believe in giving the taxpayer the best deal.”

In fact, research indicates that governments save little or no money by contracting out their prison business. In 1996, the U.S. General Accounting Office reviewed five studies of private prisons and found no “substantial evidence” that for-profit institutions save taxpayer dollars. A more recent report commissioned by the U.S. attorney general notes that private prisons attempt to save money by cutting back on staffing, security, and medical care.

Magic? There’s no magic here. In the end, Harry Potter isn’t going to create any money, or new prisons.