Joel Klein led the Justice Department's attack on Microsoft for its alleged efforts to monopolize the software market. But Microsoft is a hotbed of competition compared to the organization Klein runs now. Klein is chancellor of New York City's public school system, a monopoly so heavily regulated that sometimes it's unable to fire even dangerous teachers.

The series of steps a principal must take to dismiss an instructor is Byzantine. "It's almost impossible," Klein complains.

The rules were well-intended. The union was worried that principals would play favorites, hiring friends and family members while firing good teachers. If public education were subject to the competition of the free market, those bureaucratic rules would be unnecessary, because parents would hold a bad principal accountable by sending their kids to a different school the next year. But government schools never go out of business, and parents' ability to change schools is sharply curtailed. So the education monopoly adopts paralyzing rules instead.

The regulations are so onerous that principals rarely even try to fire a teacher. Most just put the bad ones in pretend-work jobs, or sucker another school into taking them. (They call that the "dance of the lemons.") The city payrolls include hundreds of teachers who have been deemed incompetent, violent, or guilty of sexual misconduct. Since the schools are afraid to let them teach, they put them in so-called "rubber rooms" instead. There they read magazines, play cards, and chat, at a cost to New York taxpayers of $20 million a year.

Once, Klein reports, the school system discovered that a teacher was sending sexual e-mails to a 16-year-old student. "This was the most unbelievable case to me," he says, "because the e-mail was there, he admitted to it. It was so thoroughly offensive." Even with the teacher's confession, it took six years of expensive litigation before the school could fire him. He didn't teach during those six years, but he still got paid—more than $350,000 total.

What did it take to finally get rid of him? What does it take to get rid of any teacher whose offenses are so egregious that administrators are willing to tackle the red tape? Read on.