Blah, Blah Free Market

Finally I see more articles in the media about some of the failures of our current free market. Mostly stemming from the anger caused by the banking situation, but more recently a case in Pennsylvania came to light.
Namely, some judges put more kids in private (for profit) juvenile detention centers after receiving financial kick backs to do so. What caused this whole scandal was the change from state-run facilities to private ones in order to save money. The old conservative argument: privatize everything and save money! Yay! Government is wasteful, the private sector is always better! The market always corrects itself, blah, blah.
So I can't figure out if these free market dip shits really believe their own words, or do they just say these things to ensure their own access to wealth driven schemes continues.

Case in point- Through my years I have worked in 3 different social service agencies. Two were for profit, one non-profit. The first (a boarding school for emotionally disturbed children) was a fairly ok place, but it was surprising that kids treatment plans, were directly correlated to their insurance money. If your money ran out--you were "cured", but if you had plenty of insurance, treatment continued, regardless of your progress. But that's not as bad as the therapy center I worked at later. No matter how much I begged and argued with my supervisors to discontinue services to certain clients (because they obviously did not need them anymore), their names continued on our rosters, simply because they had the insurance to cover it. These situations wouldn't even be remotely considered corruption cases, but it helped open my eyes to how people behave when the dollar is at stake.
So I can never really understand how these conservative think tanks pat themselves on the back talking about "the free market will take care of itself". It's like some kind of delusional dream. Do they live in isolation and have never met human beings? Don't they even know that greed trumps all? I mean we are wired that way. My dog will tell you she certainly is. Leave the dog food out without locking it up---and the whole bag will be eaten.