by Vince Beiser

About the author: Vince Beiser is a New York City–based journalist who writes frequently on prison issues.

Want a hot stock tip? Get into prisons. Privately operated, for-profit prisons are multiplying like mushrooms all across the United States. The companies that run them have become Wall Street darlings, and with good reason.

The first private prison opened for business in 1983, holding a mere 350 inmates. Today, almost 90,000 inmates languish in over 100 for-profit lockups in the United States and Puerto Rico. With an increasing number of states considering legislation to allow private prisons to operate, and thousands of projected prison beds already contracted out to private companies, the industry is set to sustain its dizzying expansion. Financial analysts predict that private prisons will house as many as 400,000 by 2006. “This growth would be considered phenomenal in any other...