n October, when California Governor Jerry Brown signed a new contract with Corrections Corporation of America, a Nashville-based private prison behemoth, onlookers might’ve wondered if he’d been following the news.

The same could be asked of Wall Street in general. Over the last five years, CCA’s stock price has increased by more than 200 percent and earlier this month Jim Cramer’s investment website The Street praised the company’s ‘strengths” on Wall Street, enthusiastically rating its stock a ‘buy.”

As inmate populations have soared over the last 30 years, private prisons have emerged as an appealing solution to cash-starved states. Privately run prisons are cheaper and can be set up much faster than those run by the government. Nearly a tenth of all U.S. prisoners are housed in private prisons, as are almost two-thirds of immigrants in detention centers-and the companies that run them have cashed in. CCA, the oldest and largest modern private prison company, took over its first facility in 1983. Now it’s a Wall Street darling with a market cap of nearly $3.8 billion. Similarly, GEO Group, the second largest private-prison operator, last week reported $1.52 billion in revenue for 2013, its most ever and more than a hundredfold increase […]