Just when you thought Goldman Sachs couldn't be any worse
Tough narrowing this down to four paragraphs. Essentially what you have is GS and other investment firms using something called 'social impact bonds" to gamble with the public good - everything from Head Start to Rikers Island. Again, I can't do justice to this with only four paragraphs; really recommend you read it all. It's not long or difficult.
http://www.alternet.org/print/economy/goldman-sachs-outrageous-scheme-profit-jailed-young-offenders
Goldman Sachs' Outrageous Scheme to Profit Off Jailed Young Offenders
In 2012, Mayor Michael Bloomberg announced [3] that New York City would be the site of a new experiment very dear to his billionaire’s heart. He declared that Wall Street megabank Goldman Sachs would provide a loan of nearly $10 million to pay for a program intended to reduce the rate at which adolescent men incarcerated at Rikers Island reoffend after their release (currently almost half reoffended within a year). The city government was short of money, so Goldman Sachs would step in to do what anemic public investment could not accomplish on its own: keep young men out of jail.
If the program succeeded, the giant bank would profit. The more recidivism dropped, the more taxpayers would have to pay Goldman Sachs. On the other hand, if recidivism didn’t drop significantly, Goldman would lose its investment.
So far, it’s too early to tell whether or not the program, which focuses on cognitive behavioral therapy, will meet its goals, but according to reports [4] from the Department of Corrections, fighting has already been reduced at Rikers, so Goldman may just cash in.
The Rikers experiment is an example of a new trend in what are called “social impact bonds.” Burning questions about who profits and who loses in these schemes have become the subject of debate asl the trend catches hold. Let’s explore.
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