Bailing Out the Foes of Public Eduction


We live in dubious times when staunch deregulators howl for vigorous and immediate regulation.

Lessons from the past

In 1983, the release by the Reagan administration of the report A Nation at Risk, launched over two decades of attacks on public education by right wing foundations and corporate pundits. Teachers and students were ill equipped to defend against the Heritage Foundation, the Hoover Institution, and the American Enterprise Institute, just a few of the many shock troops aiming their sights on the public schools.

The document stated that we were losing the battle against economic powers such as Japan, “unilaterally disarming ourselves” by miseducating youth.

In a previous Fighting Bob article, Demolition Reauthorization, it was described how

“some of the loudest critics of public education, the Hoover Institution, the Fordham Foundation, the Aspen Institute, Bill Gates, Eli Broad, Milwaukee’s Bradley Foundation and Fortune 500 corporations everywhere have partnered with the federal government in an effort to, they claim, save our public schools.”

The strategy employed so successfully in this all out blitz of the media by supposedly august foundations and think tanks is to attack the public schools, try and drain them of funds through tax payer vouchers to private schools, then to ‘save’ the remaining public schools, placing them under increased regulation, and when they fail, restructure them and reopen them as newly reconstituted charter schools.

The collapse of the banking, investment and housing industry draws similar parallels.

Some of the same critics of public education have also roundly criticized government. . . until this last week.

As the feds buy up bad loans and “toxic” securities, the critics have found new hope in big government. Republicans and Democrats band together in a newly minted bi-partisanship. The current proposed buyout of the reckless speculation in the collapsed housing finance bubble dwarfs any previous efforts of big government to rescue finance capitalism from its worst tendencies. Indeed big government is under way, in an unprecedented scale of intervention with the Federal Reserve, not only to rein in the floundering “quasi-governmental” agencies of Freddie Mac and Fannie Mae, but also to throw a life-line to the Mortgage insurance/security agency, (AIG).


Naomi Klein explains this phenomenon when she writes of a pernicious “disaster capitalism” in the prescient document, The Shock Doctrine. Disasters, it seem, breed opportunity. There are only too many financial predators ready to take advantage of others’ tragedy, be it war, lack of affordable housing or a decent education. They strike during the shock, quoting Friedman all the way.

In the case of New Orleans, the aftershock is truly tragic; the city, (as well as much of the Gulf Coast, lest we forget) devastated by flood, was truly doubly shocked when thousands of teachers were fired and hundreds of housing units were leveled. Ushered in with new force were “school choice” or vouchers by Bush and Congress, and a latent “Recovery School District” management style, based largely on the philosophy that a newly fashioned and deregulated system of Charter schools would work best.

With the recent demise of several investment banks, insurance companies, and “quasi-governmental” agencies, the nation and the world’s financial markets left spinning, the obvious question would be (and following upon The Shock Doctrine’s formula): how soon before the wealthy and connected benefit from the current economic meltdown and how much will the taxpayer have to pay to foot the bill?

Fannie Mae, Lehman Brothers, and AIG: Foes of Public Education

The Bush administration saved Fannie Mae, but Treasury Secretary Henry Paulson and Federal Reserve Chairman Ed Bernanke sat on their hands while the Lehman Brothers’ stock went south. Then they became nervous and bought up AIG.

Fannie Mae survives, barely. Fannie Mae is also fond of charter schools. The Fannie Mae Foundation, the World Bank, and the Washington Regional Association of Grant makers have set up a Public Education Partnership Fund to implement ‘reform’ in DC Public Schools and to “develop charter school capacity.”

Lehman is a notorious privatizer. As noted by educational statistician and writer Gerald Bracey (2003), they sponsored a conference in 1996 with the Center for Education Reform where they boasted: “we’ve taken over the health care system; we’ve taken over the prison system; our next big target is the education system. We will privatize it and make a lot of money.” Lehman worked to set up a front group called Fight for Children which received, as noted by writer Basav Sen, Walton Family Foundation funding, and support from “Anheuser Busch, Bank of America, Citigroup, The Gap’s Donald Fisher, Lockheed Martin, the Marriott Foundation, Microsoft, Exxon Mobil, the New York Times, Northwest Airlines, former Secretary of State Colin Powell, the U.S. Chamber of Commerce, Verizon, Wachovia, and the Washington Post.” Lehman’s CEO made $17,000 an hour while the one hundred and fifty year old company tanked. Even the President’s brother Jeb, brought in as a last minute advisor couldn’t save the company.

AIG has close links to Los Angeles billionaire Eli Broad and his Broad Foundation. Broad is the long-time chairman of AIG Retirement. Eli Broad is the most outspoken advocate of the business model for education-treat school district like corporations, schools like “profit centers”, students as “revenue sources”. Broad’s disciples now control or heavily influence public education in dozens of large urban centers, including New York, Philadelphia, Chicago and Oakland. Broad has poured hundreds of millions of dollars into charter schools-through direct donations to charter school chains like KIPP, Green Dot and Aspire, as well as by funneling money through the Silicon Valley-based New Schools Venture Fund. Eli Broad, and his close collaborator, disgraced former AIG chief executive officer Maurice “Hank” Greenberg (who was forced to resign as AIG CEO when he was caught fraudulently inflating the value of AIG stock a few years ago), are upset with the federal bailout of AIG. They want an even bigger bailout from taxpayers. Public schools that aren’t “profitable” should be closed, says Broad-but AIG investors losses must be subsidized! Truly, privatization of profit, socialization of loss!

The deregulation agenda is occurring in the school districts in not only Washington D.C., and New Orleans, Louisiana, but in Chicago and elsewhere in Ohio, and despite tepid results (where those results are even released), Charters continue to gain support.

Charter Schools to the Rescue

In Chicago, where we work with teachers sharpening their knowledge and craft in graduate school and preparing for National Board Certification, teachers are overburdened and discouraged by the relentless before, during and after school preparation for standardized testing. They are told to not worry about social studies, and in many cases, to not even teach science as mathematics and reading consume the bulk of their curriculum. More and more teachers we work with have been handed scripted curriculum written by outside private contractors. When their schools fail to meet Annual Year Progress under NCLB, they face declining enrollment as students are recruited for the burgeoning charter schools growing in Chicago.

Last spring, despite vociferous community resistance, eighteen public schools in Chicago were permanently closed, reorganized with the complete replacement of building principals and teachers or reconstituted as new charter schools. These trends go forward with the substantial political and financial support from the Chicago corporate and banking leaders who typically live in the suburbs or don’t send their own children to the schools they have come to control behind the scenes.

Meanwhile, the continuing expansion of charter schools undermines the teacher union movement as charters by law exclude unions. And in the past year the Daley run school system appears to have moved to silence community involvement in school operation by increasing the number of appointed local school leaders and attacking the integrity of school councils across the city. In this brave new world of alternatives to public schools, teachers become lone entrepreneurs in the spirit of the free market advocates who push for the replacement of public education in the United States. And all of this moves forward with Chicago school operations dictated by the mayor’s office in alliance with the corporate school agenda of the Commercial Club of Chicago.

Renaissance 2010

But finally, and beyond the merit of Charter schools versus Public schools is the question: why can’t we find the will to fix public schools? To fund them properly?

As stated by a Chicago group, Teachers for Social Justice, Charters are being used to replace public schools. Cited verbatim from their blog is the following assertion:

Renaissance 2010 is not just a school plan. It is part of a much larger plan for gentrification and for moving out low-income African Americans and some Latinos from prime real estate areas, in fact from the city altogether. These are the areas where the proposed school closings are concentrated. Gentrification is a central source of profit for developers, banks, and investors and a key element in making Chicago a global city of increasing inequality in housing, income, quality of life, and use of urban space.

Unfortunately, both major party candidates seem intent on expanding charter schools with Obama calling for a doubling of federal money for subsidizing charter expansion. And this support comes in the face of the 2006 Department of Education large scale study which showed public schools outperform charters on the limited, but mandated, measures being used to determine student learning and school success.

This is not to say that Charter schools or their advocates are all the same. Nor does this suggest that everyone who supports charters, supports deregulation, or supports in turn the dismantling of the public school system. As Joe Nathan pointed out for the magazine Rethinking Schools when the charter movement kicked into gear in the mid 90’s, charter schools can serve as creative responses to needs unmet by the larger school system, and can offer alternatives that may inform and guide the larger public education system “to empower the powerless and to help encourage a bureaucratic system to be more responsive and more effective.” Unfortunately, from the beginning of charter schools free market ideologues have sought to privatize and repackage large swaths of public education into another consumer choice option joined at the hip to the pervasive inequalities of market capitalism.

Much of the thrust of the current charter school movement, and certainly of the last twenty years of vouchers is clearly indicative of those educational policy makers who, with their corporate and foundation backers, see no problem in steering public funds to private and for-profit corporations. And it is those same foundations and corporations today, hat in hand, begging for handouts, who are responsible for the proposed and current deregulation and privatization of our commons. With the current track record comes the even more obvious question:

Why do we let them get away with it?

In this so far victorious war of the soon to be rescued finance industry super-powers against the public schools, disaster capitalism has made an impressive debut. The scenario of wrecking institutions in the public sector in order to save them with intervention by private capital has now spread like a wildfire that can only take hold in the rest of the public sector — health, housing, and Social Security retirement income provision. Too bad for Lehman that they won’t be around to share the rewards from this coming Golden Age of privatization and deregulation for which they can claim such a key share of authorship.

TODD ALAN PRICE, author of The Myth and Reality of NCLB: Public Education and High Stakes Assessment & John Duffy, author and contributor to Democracy and Education, are professors of education at the National College of Education in Chicago, Illinois.



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