So stupid, Portland will probably try it
Let's let Goldman Sachs gamble on government programs like probation and welfare. What could go wrong?
The idea of social impact bonds is starting to catch on. Recently in New York City, Goldman Sachs invested $9.6 million over four years in a program designed to reduce re-incarceration rates among youth. The way it works is that if the re-incarceration rate among the youths involved in the program drops 10% at the end of four years, Goldman Sachs gets their money back. But if the re-incarceration rate drops even further, Goldman will make an even bigger profit. However, if the re-incarceration rate does not drop to 10%, then Goldman loses money. Make no mistake, Goldman Sachs isn’t investing in the program out of the goodness of their hearts, they’re investing because they believe in the quality of the program and believe they can make a profit off it. Imagine if Portland could create a model with reliable metrics for the structural long-term problems that ail us. We could not only solve a pressing problem, but we could make a serious investment into our future.
Real the whole hallucination, if you like, here.
| Posted at 11:46 AM | Permalink |
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Comments (12)
Looks like a great opportunity for the worst of business and government to get together. Probably not a good idea.
Posted by dg | August 27, 2012 12:01 PM
I'm sure they'd put Tom "Less Data, But More Accurate" Miller in charge of those metrics, too.
Posted by Dave J. | August 27, 2012 1:42 PM
How can you be against this? GS is a very good friend of our President. It MUST be good.
Posted by Sam L. | August 27, 2012 2:00 PM
I like the fact that it's not even clear whether the rate has to "drop 10%" or "drop to 10%". Let me guess, they get to write the contract too?
Posted by Caveat Emptor | August 27, 2012 3:31 PM
Insanity. Pure insanity. But, just like the sports stadium and convention center and hotel scams, you know they'll succeed in fluffing lots of local politicians into it. But, please, Lord, not here. This one is as bad as you could imagine, both because of the phony stats problem (queue Super Carole not knowing she had a gigantic graduation rate problem until the Oregonian told her) but we are talking about operations, not capital assets. That is the equivalent of putting your rent and utilities on plastic.
Posted by dyspeptic | August 27, 2012 3:50 PM
I guess I'm not seeing the problem. If G-S (or someone else) can take $1M of biz from the govt and save them $100K, why not give them $50K of it? Besides, if they screw up we can get rid of G-S as a contractor instead of getting them a new govt job with a 20% raise.
Anything has to be more efficient than govt running stuff. Heck, supposedly in places like Sweden they do about 80% of govt work by farming it out to the private sector.
Posted by Steve | August 27, 2012 4:28 PM
The Portland Business "Urinal" also ran a story about this.
Talk about snake oil...
Posted by Portland Native | August 27, 2012 4:48 PM
I've been trying to figure out why Wall Street banks keep loaning CoP all the money they seem to ask for, over and over again. I won't be surprised if some as-yet unannounced "miracle" public-private partnership hasn't already been signed to "save" us from the bad economy.
Posted by Mr. Grumpy | August 27, 2012 7:05 PM
The pressure to fudge the data on this has to be extreme. Insurmountable.
-Jo
Posted by Jo | August 27, 2012 7:51 PM
It would probably work just as well as letting the schools evaluate how effectively they are educating students ... which is to say, the figures would be fudged AGAIN !
Posted by ltjd | August 28, 2012 4:36 AM
There' no way that the Police nor the rest of the justice system could juke the stats in order to achieve the desired outcome.
See also: The Wire, seasons 1 through 5. Which in turn is based upon true events from every machine-politics city.
Posted by Downtown Denizen | August 28, 2012 10:20 PM
I've been trying to figure out why Wall Street banks keep loaning CoP all the money they seem to ask for, over and over again....
Could it be that we have something they would covet,
more precious than oil we hear,
our water?
Posted by clinamen | August 29, 2012 12:10 AM