Who would you rather have promoted, a lousy long time employee or a hard working new hire?

Hard working new hire...since will reach the desired experience in short time ans with less expenses on the company...other than flexibility to afford additional tasks with out any complains.

Hard working new hire deserves more in given scenario. 

hard working new hire. its easier to teach a young dog new tricks

Undoubtedly the new hire to be promoted and in fact it will be a learning lesson for the old lousy employee to evaluate himself as to why this happened. From then on if he wants to correct and improve.

I would of course promote the new hire.

I would promote the new hard working employee because that is better hundreds of times than an old bad and lazy employee

Promoting lousy long time employees sends a message that the system rewards lousiness specially when it stays for long time, whereas promoting hard working new hires sends a strong message that promotion is the reward for hard work not for staying long. This is the right message that should be sent to be properly received