For a hint on which way the U.S. economy is likely to head in the event that Barack Obama wins the White House in November, we would do well to look at the state of Mississippi.  Over the past 30 years, Mississippi has been one of the poorest states in the union, while at the same time being "America's No. 1 judicial hell hole for jackpot jury verdicts," according to Mississippi Governor Haley Barbour.

One of the worst places, in term of frivolous lawsuits, was Jefferson County. It became renowned as the lawsuit capital of the country, with more plaintiffs than residents. This is the infamous county where one pharmacist was named in more than 1,000 lawsuits. In one legendary case against a pharmaceutical company that sold the diet pill Pondimin (part of the weight-loss combination known as fen-phen, which was later banned), a Jefferson County jury awarded $1 billion to the family of a woman who had taken the drug.

But four years ago, Mississippi transformed itself from judicial hell hole to job magnet, a story that is instructive for other states trying to attract jobs in turbulent economic times. The lessons here are especially timely, because the pro-growth tort reform trend that was once spreading across the country may soon reverse course.

Mississippi's tort reform dealt a blow to litigation business in that state, but that precipitated a stunning turn around for rest of the economy.

Almost overnight, the flow of lawsuits began to dry up and businesses started to trickle in. Federal Express invested $1 billion in a new facility in the state. Toyota chose Mississippi over about a dozen other states for a new $1.2 billion, 2,000-worker auto plant. The auto maker has stipulated that the company would pull up stakes if the tort reforms were overturned by the legislature or activist judges.

That hasn't happened. About 60,000 new jobs have arrived in four years – not a small number in a workforce of about 1.3 million – and a sharp improvement from the 30,000 jobs lost in the four years before Mr. Barbour took office. Since the law took effect, the number of medical malpractice lawsuits has fallen by nearly 90%, which in turn has cut malpractice insurance costs by 30% to 45%, depending on the county.

Unfortunately, Mississippi's gain is unlikely to be matched in many other states around the country, as trial lawyers are ramping up their political spending in a battle to make sure Mississippi style tort reform doesn't spread. 

Meanwhile, in other states, the trial bar is spending record amounts on 2008 campaigns to make sure that the political massacre plaintiff lawyers suffered in Mississippi isn't repeated. Next to the unions, trial lawyers are the biggest givers to Democrats. It is no secret they will want a payback if the Democrats have a big year on the state level. A big Democratic theme this year, starting with Barack Obama at the top of the ticket, is to roll back the well-heeled special interests. Trial lawyers – some of the richest people in the country – apparently don't count.

The trial lawyers perform a societal function dear to Democratic hearts -- wealth redistribution.  But, by taking from the rich to give to the injured, trial lawyers redistribute huge chunks of that wealth to themselves, and more importantly to Democrats, to Democratic party coffers.  Democrats and trial lawyers will look to keep that gravy train on its tracks and a President Barack Obama will undoubtedly help.  Based on Mississippi's recent history, we can expect this will take its toll on economic growth in the country as a whole.

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