The private-prison industry is in trouble. For close
to a decade, its business boomed and its stock prices soared because state
legislators across the country thought they could look both tough on crime and
fiscally conservative if they contracted with private companies to handle the
growing multitudes being sent to prison under the new, more severe sentencing
laws. But then reality set in: accumulating press reports about gross deficiencies
and abuses at private prisons; lawsuits; million-dollar fines. By last year, not a
single state was soliciting new private-prison contracts. Many existing contracts
were rolled back or even rescinded. The companies' stock prices went through the
floor.