Starving the Schools—To Feed the Banks and Profit

Oct 1, 2012

The following article was excerpted from presentations given in public meetings in both Detroit and Los Angeles in September.

Barack Obama’s Education Secretary, Arne Duncan, said that Hurricane Katrina was the best thing to happen to the New Orleans public schools. New Orleans’ destruction gave “reformers” an excuse to privatize and charterize the entire school district in one fell swoop.

Duncan had previous experience in unleashing his own Katrina before he became Education Secretary. As head of the Chicago school district, he oversaw the closing of 100 public schools and the opening of 105 charter schools. Since Rahm Emanuel, Obama’s former Chief of Staff, became mayor of Chicago a year ago, he’s carried out the same attacks on the schools that Duncan had, pushing to turn more public schools into charters.

That push to privatize public schools—that attack on public education for poor and working class children—was behind the recent Chicago teachers strike.

(And just to demonstrate that the attack on education is bi-partisan, Republican vice-presidential candidate Paul Ryan said of the Chicago teachers’ strike, “We know that Rahm is not going to support our campaign, but on this issue and this day we stand with Mayor Rahm Emanuel.”)

Authorities have been unleashing a slow-moving Katrina in city after city, destroying districts so they can privatize the schools and loot them. More and more, so-called “reformers” of schools are blatantly ripping them apart and ripping them off.

In Los Angeles, the second-largest school district in the U.S., the budget has been cut by 1.5 billion dollars, from 8.5 billion dollars down to seven billion dollars in the past two years alone. That’s an 18% cut. This enormous cut has resulted in layoffs of teachers and other school workers, which in turn has pushed class sizes even higher, especially in high schools. There were also pay cuts for teachers, elimination of art and music classes, drastic cuts in classes offered in summer school, the elimination of the adult education program, etc.

Since 2002, the L.A. school district has built dozens of new schools, using 19.5 billion dollars of state and local bond money approved by voters. Then the L.A. Board of Education handed many of these new schools, built with taxpayer money, over to private companies that run charter schools. Today, there are about 230 charter schools in L.A. Unified School District.

Detroit: Consciously Created Chaos

The process in Detroit began in earnest in 2009. Then-Governor Jennifer Granholm (a Democrat) appointed Robert Bobb, trained by the pro-charter Broad Foundation, as the district’s emergency manager.

The Broad Superintendents Academy, set up by billionaire real estate speculator Eli Broad, trains mostly former corporate executives, financial consultants and military officers to become administrators in public school systems. Broad and his fellow billionaire Bill Gates are prominent sponsors of school “reform.” Through their foundations, both Broad and Gates fund charter schools directly—and so do the Waltons, the owners of Wal-Mart. Administrators connected to these foundations have fanned out across the country, pushing the privatization agenda in school district after school district.

Robert Bobb pushed that agenda in Detroit. In one summer, he closed 29 schools, sending those students to 36 other schools. In addition, he completely reorganized or “reconstituted” 35 more schools in the district. Principals were removed and replaced, and 1,000 teachers were made to reapply for their jobs.

All in all, two-thirds of the district’s then 84,000 students were affected by these moves, creating chaos for all involved.

The very next year, Bobb announced he was closing 41 MORE DPS schools—only to reopen them as charter schools.

Then came Roy Roberts, a former GM executive with absolutely no educational experience or training, appointed as the new Emergency Manager by Republican Rick Snyder.

Roberts crippled what was left of the schools, laying off teachers and other staff, increasing class size, leaving students even more vastly underserved. All 4,100 teachers in the district were laid off after last year, and no one was called back until two weeks before the beginning of the school year. Up until mid-August, teachers had absolutely no idea if they had a job, or where it would be, or what classes they would be teaching. How well-prepared do you think they were for the beginning of the school year? What kind of school year could students expect, in the midst of this chaos?

Officials SAY they HAD to close all these schools because students were leaving the district. In fact, the opposite is true: students left the district because officials were closing schools. Last year, in the 2011-12 school year, the DPS had 66,000 students enrolled. Charter schools in Detroit enrolled 56,000. So, if not for charter schools, the DPS would have 120,000 students!

They haven’t been trying to stem the tide of an exodus from the school district. They’ve been actively DRIVING kids OUT of the school district—and handing schools over to for-profit private companies as a gift!

This was even before Roberts and Governor Snyder took 15 schools out of the DPS to form an “Educational Achievement Authority” or “EAA.” Supposedly, these schools were chosen because they were among the 5% lowest-performing schools in the state. But they just happened to be newly renovated or rebuilt schools on taxpayer dime—and they went to charters or the EAA.

These 15 Detroit schools have been removed from district control and given to a special “district” out of anyone’s control. Appointed by Snyder, Roberts is head of the Board for the EAA, too. Others on the Board are business people—all of them—appointed by Snyder, like Roberts. “Chancellor” John Covington, another Broad Foundation alum, was brought in from Kansas City—where he’d wrecked schools there.

Just as in Chicago, the EAA has hired “Teach For America” young people, with little to no actual teaching training. These TFA staffers will watch over large numbers of students sitting in front of computers. They will be gone after two years, contributing to the chaos and disruption in children’s lives.

The EAA’s talk of “individualized lesson plans” means students will receive their material from computers, with no actual instruction at all from teachers. And that, of course, means that computer companies and software companies will clean up, while money spent on teachers is cut. (The claim to put more resources into the classroom has already been shown to be false—a biggerpercentage is spent on administrative costs than in the public schools. The Chancellor is being paid $400,000 this year—for only fifteen schools.) And the latest news is that the high school classes will be taught through the Michigan Virtual High School—a private, profit-making company, set up about 10 years ago with public funds.

The EAA has been touting its long school hours and long school year—11 months out of the year. That might be fine—if kids were getting a real education for all that time. That’s NOT what will happen. They’re selling parents on the idea of a babysitting service, not education. Of course, in a society where no decent, affordable daycare service is readily available on a social level, many parents are desperate for daycare options—single parents, or families where both parents are working. It’s tragic that this is all that’s being offered here, not education.

Some of these schools are already charters run by for-profit companies. In ALL of them, profits are made by the computer and software companies.

Business people with zero education experience are hijacking our kids!

They Say It’s About Money

The State of Michigan, like other states, has been cutting back on its revenue sharing with local governments and education funding for districts for quite a while. This has been hurting poorer cities and school districts especially; wealthier districts can make up the difference with local taxes.

On top of that, all sorts of schemes like Renaissance and Enterprise Zones have been set up over the years, supposedly to help foster development in poverty-stricken areas. Big chunks of the city are paying little to no taxes: industrial areas; gentrifying areas. Detroit is getting less and less money for schools from its most valuable properties.

More and more districts like Detroit are pushed further into debt to pay the bills and keep operating. And this is great news for the banks. This is one way the banks get hold of all that public money.

Across the country, banks have created loans and sold bonds to cities and school districts that looked like the subprime ARMs (Adjustable-Rate Mortgages) homeowners got: ballooning interest rates and payments that saddled these entities with increasing debt impossible to pay.

The school districts ended up floating more loans, more bonds to pay old loans—a vicious cycle. The new bonds mask for a time the shift of money, pushing the debt into the future. We just saw a very stark example of this in Detroit: When Robert Bobb came in as the “Financial Manager,” the DPS debt grew by 50% under him (from 200 to 300 million dollars). Roy Roberts just announced that Detroit Public Schools debt is down to 75 million dollars from more than 300 million dollars in just over a year. Wow, Roberts must be a financial genius! No, this was because of another 200 million dollars in bond sales. That just takes this debt off the books for THIS year, and dumps it back twenty years from now when those bonds come due. These new bonds will end up costing the DPS 500 million dollars to repay. The debt is increasing under Roberts, just like under Bobb.

The debt these “financial managers” ran up is now the excuse they give for closing schools, laying off teachers and other employees, and demanding wage and benefit cuts from those remaining employees.

It’s also the excuse for emergency managers to stuff more kids into charter schools, with the fraudulent idea that private companies will be more efficient and responsive than public bureaucracies, because they compete, and they want to produce a profit. The reality has been very different. Charter schools have been MORE expensive, with fewer resources going to the classroom than in public schools. Today, 75% of Michigan charters are for-profit. Their aim is to produce a profit, and any extra money spent on actual education is money off of their profit margin.

Turning Schools into Profit Machines

This push is national. There’s a national group called “Democrats for Education Reform,” or DFER. Financial interests are overwhelmingly represented in the group. On their Board of seven members, only ONE has any educational training. The rest are all representatives of one or another capital management group. What is their interest in “education reform”? One member, a hedge fund operator named Whitney Tilson, put it this way: he called charter schools “the perfect philanthropy for results-oriented business executives.... Hedge funds are always looking for ways to turn a small amount of capital into a large amount of capital.”

Notice, nothing is said in there about education. At all. Their interest in education is all about money. And this group is playing a major role in making policy at a national level.

In a nutshell, school employees, and workers’ children, are made to pay, are tossed away so that the banks and private education companies can continue to be paid. Every dollar of profits is that much less going to the kids, with programs cut left and right.

But something else is possible. If we use the resources we have for the benefit of the population instead of to feed the banks, we can build truly great schools!

Imagine what that could mean for our society, and for the world, if EVERY child could have the benefit of a top-notch education: small class size, for individual attention; state-of-the-art buildings, including fully-outfitted science labs and computer labs, theater, pools, not to mention libraries and bathrooms that WORK, and ceilings that don’t leak. Full sets of RECENT textbooks for all students, not to mention all sorts of supplementary materials. Art classes, music classes, physical education…. If EVERY child were given the opportunity to truly engage their natural curiosity and thirst for knowledge and understanding, if every child were given a truly thorough scientific understanding of the world, if every child were allowed the chance to engage their creativity—think of how fast society would progress: all the things we could do, all the advances we could see!

That’s in our interest; it’s in workers’ interest; but it’s not in the interest of the for-profit education companies, or the banks, or all those officials who represent them. If we want a better life for our kids, it WILL take a major fight against those interests—to pry that wealth out of their grubby little fingers.