What can we do to fix the prison system?

About two-thirds of prison inmates will be sent back to the already overcrowded prisons within three years of their release. Is prison even working? From what I've observed, prison is just about distancing the "undesirables" from society more than it is about corrections. I think we increase education, counseling, and anger management/self control classes in the prison system (while creating jobs) to make it more about corrections than just making someone sit in a cage. What are your thoughts on this matter?