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Sunday, July 28, 2013

Why do we have Charter Schools? Follow the money

From the DailyKos, by Teacherken

"Just follow the money" -

Embedded in the middle of an Alternet story by Kristin Rawls titled Corporations Advise School Closings, While Private Charters Suck Public Schools Away are several paragraphs that help explain why hedge funds and other corporate interests are so enamored of charter schools.   Please continue to see what I mean. Thanks to a little discussed law passed in 2000, at the end of Bill Clinton’s presidency, banks and equity funds that invest in charter schools and other projects in underserved areas can take advantage of a very generous tax credit – as much as 39% -- to help offset their expenditure in such projects.

In essence, that credit amounts to doubling the amount of money they have invested within just seven years. Moreover, they are allowed to combine that tax credit with job creation credits and other types of credit, as well collect interest payments on the money they are lending out – all of which can add up to far more than double in returns. This is, no doubt, why many big banks and equity funds are so invested in the expansion of charter schools. There is big money being made here -- because investment is nearly a sure thing.And it’s not just U.S. investors who see the upside of investing in charters. Rich donors throughout the world are now sending money to fund our charter schools. Why?

Because if they invest at least $500,000 to charters under a federal program called EB-5, they’re allowed to purchase immigration visas for themselves and family members -- yet another mechanism in place to ensure that the money keeps rolling in.Proponents of education reform insist that investments like these are all about how successful charter schools are, and show how much support they’ve garnered in just a few short years. But it’s hard to take this on faith when there are billions of dollars of profit—and, for some, a path to U.S. immigration—at stake in these investments.

Okay, there is a lot packed into those three paragraphs.  And before I go forward especially credit should be given to David Dayen whose work at FireDogLake is the basis of the information in the first of those paragraphs.
The first point I want to make is to note the origin of the mechanisms which have encouraged Wall Street Banks and others to push charters - something done during the Presidency of Bill Clinton.  We need to remember that the Clinton administration was very cozy with Wall Street, with the like Robert Rubin and others from companies like Goldman Sachs.  We should also note that the organization driving Democratic educational policy in recent years, the to my mind ill-named  Democrats for Education Reform, has a board dominated not by educators (there are none) but by financiers.

This administration continues to push charters - one of the criteria for states to receive funds from Race to the Top was that they lift any caps on charters, even though at the time what evidence there was showed that charters performed no better than the traditional public schools from which they drew and there were no requirements for quality - even by the flawed measurement of test scores - for charters to continue their existence.  In part this can be traced to a decision the Obama campaign made in 2008 at a time when they already knew they had the nomination.  In  March, even though a key advisor on education was Linda Darling-Hammond of Stanford U, the campaign decided to move away from her ideas on education and move towards those advocated by DFER in order to secure Wall Street money for the general election.

Folks, there are billions spent annually on the education of our young people.  For most local
governments, schools are the biggest single expenditure.

The pro-charter groups are attempting to push charters on communities even if those communities do not want them.  Thus we see in TN a new bill in the state legislature that would take away from counties with 600,000 or more the power to control charters.  It just so happens that the only such counties in TN contain Memphis and Nashville, two cities containing the vast majority of the minority population of the state, and in the caase of Memphis a school board that four times has rejected the application of a charter operator with a questionable record, thereby angering both the state education commissioner (Kevin Huffman, who taught only 2 years, was vice president of Teach for America, and is the father of Michelle Rhee's children, and who punished the district by withholding millions in state funds) and the Governor, who to put it mildly has never been a friend of public education or of teachers unions - and remember, turning public schools into charters is a way of breaking teachers unions since most charters are not unionized and are protected by the chartering legislation from the normal unionization process.

It is worth noting that the state legislature is imposing upon the local government.  There is a historical precedent for this, and that was state legislatures that were dominated if not owned by railroads in part as a means of controlling the US Senate, whose members were then elected by the legislatures.  The grassroots pushback against that led to the 17th Amendment and direct election of Senators.

In the past I have often warned people that what happened with public schools was the canary in the coal mine for American society.

We have seen increasing privatization of public facilities.  It actually is somewhat more advanced in the criminal justice system, with the existence of private prisons who lobby for more arrests to fill their spaces, and thus things like the "papers, please" law in Arizona to put more money into the coffers of the likes of Correction Corporation of America.  We are seeing it in things like the privatization of the Indiana Toll Road.  In NC, now that Republicans finally control both houses of the state legislature and Governor McCrory seems to have Art Pope whispering in his ear all the time, the legislature is moving to tak over the water system in Ashville  (preparatory to selling it off?) and is also moving on airports.

Just follow the money

Our democracy is being sold off, one piece at a time.

The idea of local control of public functions is disappearing.

And remember that the restrictions imposed upon government agencies with respect to rights protected in the Bill of Rights and elsewhere do not necessarily apply to corporate entities.  No pubic school could fine a parent for a child's behavior, nor expel a child without due process, but charters are known to do both, often with regularity.

Perhaps it is hard for people to understand how much the profit motive is driving the expansion of charters - which I might note is only one part of the corporate attempts to control the hundreds of billions in tax revenue intended to fund PUBLIC education.  The traditional media organizations have done a horrible job in covering this aspect of what is happening in American public education.

Just follow the money

Remember that we know from sad experience that if we allow the profit motive to run rampant the result is increasing wealth (and power) into too few hands while the rest of us suffer the consequences.
If you did not know before, now you should have no doubt, that the primary push for charters is coming about not because they are a better means of educating children, but because moneyed interests understand how much they can make when public schools are replaced by charters.   And for some, the ability to break teachers unions, a major Democratic constituency, is merely an additional benefit gained along the way.

If the resulting charter schools in fact did a better job of educating children, there might be SOME justification.

But they do not.

Just follow the money - as in Watergate, that will help you understand what has really been happening.

1 comment:

  1. Spot on. Not only are the hedge funds investing in education, they are buying up residential real estate for cash and renting out the properties. The taxpayers bailed out Wall Street and this is how we are rewarded: gutting education and buying up the real property. It is all about money, sadly. Google "Blackrock", a hedge fund that is soliciting residential real estate owners in Jacksonville.