Selling America's Schools: Update

"big profit potential...tantalizingly huge market...entire ecosystems of investment opportunity"

Those were some of the phrases used by attendees at an investment gathering focusing on public education as a "market" for entrepreneurs.

The public education system has been set up for private takeover over the last dozen years by No Child Left Behind (NCLB) and Race to the Top (RttT). That takeover has become a reality in more and more places thanks to financial and political encouragement for things like increased caps on and tax incentives for corporate charters, vouchers for private schools, reduced funds for public education systems, attacks on unions and the de-professionalization of public school educators.

The problem, according to a Reuters article about the gathering titled, Private firms eyeing profits from U.S. public schools, is that public education has been a difficult "market" for private enterprise to intrude on.

Traditionally, public education has been a tough market for private firms to break into -- fraught with politics, tangled in bureaucracy and fragmented into tens of thousands of individual schools and school districts from coast to coast.

"Fragmented into thousands of individual schools and districts?" We used to call that "local control." Before NCLB, states and local school boards determined what their local schools were doing. Local school boards ran the schools and answered to the parents and taxpayers of the local communities for the success or failure of their policies.

With NCLB, however, power over what happened at the state level and in local districts was transferred to the US Department of Education and the former "keep-the-feds-out-of-my-hair" crowd began the process of destroying public education in America. The "no federal intrusion" folks didn't seem to have a problem with the federal takeover of education since that just made it easier to privatize the system.

The assumption, of course, is that the private sector is more efficient and better at managing everything.

"Education is behind healthcare and other sectors that have utilized outsourcing to become more efficient," private equity investor Larry Shagrin said in the keynote address to the New York conference.

Yes, we all know how efficient and cost effective America's health care system is compared to elsewhere in the world. [sarcasm intended -- See The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations. Even Mitt Romney noticed that we spend an excessive amount on health care. See Socialized medicine gets rave review from Mitt Romney]

NCLB and RttT have made it all but impossible for public schools, especially those with high levels of poverty to succeed. Enter the venture capital wolves...

They're pouring private equity and venture capital into scores of companies that aim to profit by taking over broad swaths of public education.

The important phrase in that sentence is "aim to profit." That's what they're after. Unlike local school boards, who have families and livelihoods rooted in their communities, the private enterprise folks are after the bottom line -- profit.

The goal: an education revolution in which public schools outsource to private vendors such critical tasks as teaching math, educating disabled students, even writing report cards, said Michael Moe, the founder of GSV.

They are achieving their goal by buying legislators of both parties. Diane Ravitch is quoted...

Vendors looking for a toehold in public schools often donate generously to local politicians and spend big on marketing, so even companies with dismal academic results can rack up contracts and rake in tax dollars, Ravitch said.

"They're taking education, which ought to be in a different sphere where we're constantly concerned about raising quality, and they're applying a business metric: How do we cut costs?" Ravitch said.

We can cut costs by getting by with fewer teachers. Personnel has always been the highest cost item for school systems, so when you're looking to cut costs do it by cutting teachers. That method has already saved millions of dollars for states and school systems who get rid of older teachers. Without collective bargaining due process rights disappear leaving the door open to get rid of teachers who are at the top of the pay scales. Experience and advanced degrees don't matter. Hire cheaper teachers. But don't stop there...

Education entrepreneur John Katzman urged investors to look for companies developing software that can replace teachers for segments of the school day, driving down labor costs.

Teaching becomes, not only short term employment, but a part time job as well.

There's no pretense any more of trying to emulate high achieving nations like Finland. There are several reasons why we can't keep up...the most important is that our level of childhood poverty is so much higher (more than 20% for us, vs. less than 5% for them).

At the more than 5,500 charter schools nationwide, private management companies -- some of them for-profit -- are in full control of running public schools with public dollars.

"I look around the world and I don't see any country doing this but us," Ravitch said. "Why is that?"

The answer to that question is simple. As a nation we're more interested in profit than in the well being of our children.

See also http://dianeravitch.net/2012/08/02/profiteers-circling-the-schools-looking-for/.

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Stop the Testing Insanity!

Sign the National Resolution on High Stakes Testing!

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