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Five Dumbest Things on Wall Street: Aug. 21

Michigan's Prisoners Dilemma

You know things are pretty bad in Michigan when a sorry state like California won't export its violent criminals there.

California rejected an offer by Michigan to house several thousand of its overflowing prisoners in its Standish maximum-security prison, according to Wednesday's Wall Street Journal. In a letter to the Michigan Department of Corrections this week, California Department of Corrections Secretary Matthew L. Cate said Michigan's offer was not cost-competitive with what the state is currently paying to incarcerate prisoners in other states.

The decision was particularly deflating to Michigan Gov. Jennifer Granholm who plans to raise revenue and save corrections jobs by importing prisoners to keep Standish open. Standish is one of eight state correctional facilities slated for closure as Michigan tries to cut $120 million from its $2 billion annual prison budget for the fiscal year starting in October.

Michigan's offer amounted to about $89 a day per prisoner, not including medical expenses, said the California Corrections Department, compared with an average of $63 a day, including medical costs, at other out-of-state facilities that house inmates under contract with California, according to the WSJ.

Despite the setback, Granholm maintained a brave face saying, "I believe we will find another use for that facility and keep all those jobs." One potential savior for Granholm and Standish are the Guantanamo detainees. An Obama administration official said Tuesday that no decision has been made on where Guantanamo detainees will be kept.

Jeez. Michigan used to export automobiles to the world, now they are bidding for the right to host Al Qaeda and Taliban soldiers.

Why not let Corrections Corp. of America (CXW) handle the job? We may not make cars here anymore, but we can still make a damn good penitentiary.

Dumb-o-meter score: 65 -- Talk about a real life version of cash for clunkers.

Before joining TheStreet.com, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.
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