There are a few, but similar, meanings depending on the context. In your case, the idiom is more literal: Foster children frequently wind up in a vicious cycle of drugs and crime in America-- statistically as a result of the nature of the foster care system. Let's call that path crooked. Your example suggests turning them from that path onto a "straight and narrow" one.

Another example would be to "aggressively explain" a counterargument such as below:

__"I can't believe your cousin Mel! He has way too much money to be voting Democrat. Get him on the phone for me so that I can straighten him out!"__

The other usage is more nefarious. It denotes a violent, or potentially violent, response.

__"He's just sixteen, Daddy. He didn't know what he was doing."__

__"He slapped my daughter; now he's going to pay."__

__"What are you going to do? Please don't hurt him."__

__"Ha ha! I'm not going to jail for that piece of dirt. I'm just gonna call his dad. I imagine he'll straighten him out. I imagine he'll straighten him out good."__