The CCA logo (as seen on the flag) even looks vaguely OCP-ish, like something out of the particularly '80s vision of the corporate future as envisioned in the original Robocop.
"spending less on rehabilitation doesn't just save money now, it also brings higher recidivism and so makes for a healthier future market for these corporations..."
Exactly. And let's not forget that these same corporations who run prisons also lobby for harsher sentencing, mandatory minimums, looser prison labor laws, and so forth.
It's a sticky subject because nobody -- politician, man on the street, mother of children, or law-abiding citizen -- wants to come right out and say that he or she is advocating for prisoner's rights. Nobody's ever won an election being "soft" on crime (at least not to my knowledge). So the prison-industrial complex has it pretty easy, as far as built-in political incentives are concerned. Ultimately their agenda is self-fulfilling, and the social externalities are highly negative. Costs may be cut in the short run, but as you suggest, recidivism means nobody in the system is ever really going to escape it -- hence, we're shortchanging the future to save pennies in the present.