You may have been naive enough to think that charter schools are multiplying because some people want better education for American children.
You may have thought they were expanding to give more choices to children trapped in bad public schools.
You may have wondered why they continue to proliferate when so many studies agree that they don’t get better results than the public schools.
But if you thought those things, you were on the wrong track.
There are other reasons that charters are growing by leaps and bounds.
They make money for investors!
They are a great investment opportunity!
Both links refer to the same interview on CNBC with the head of a real estate investment trust who explains why charters are a sure thing.
Follow the money.
Diane Ravitch's blog 
Here’s a link to a 1993 Wired article about Lewis Perelman’s book “Schools Out”. Perelman saw technology as a way to make profits through micro-vouchers. The article opens with the following: “Could your business benefit from a few hundred dollars in new sales? Good. Let’s talk.” It took a couple of decades… but it’s coming soon to a school near you!
http://www.wired.com/wired/archive/1.01/hyperlearning.html
Big money just moves from one big pot ‘o cash to the next, exploiting and pillaging. They ravaged Internet businesses, ruined the housing market, turned banking into a casino, cashed in on health care, crashed the economy, and are on their way to sucking the life out of our schools. It’s organized crime.
“It’s a public payer, the state is the payer on this, uh, category, and uh, if you do business with states with solid treasuries. then it’s a very solid business.”
So, it’s got nothing to do with children.
It’s all about profit and budget-cutting.
The politicians own this policy while the rich “philanthropists” own THEM.
It is corporate welfare in an educational spectrum.
As they say out on the disco floor…Whoomp, they’re it is!”
“Whoomp, there it is!” (so sorry)
Today’s NYTimes has an article on media companies, like Fox and NBC, entering the education market to help offset their losses. While the story is mostly about textbooks, we know the influence is greater than that. It’s the beginning of on-line learning.
Education is becoming big business, and Wall Street needs to continue to blame public schools if they want to see their profits rise. Reformers are laughing all the way to the bank because the joke’s on the American public.
Great find! I don’t know the details of this guy’s investments, but I think that it could be a very good thing if private investors decide to invest in school buildings. The hope would be that we’ll have more (if there aren’t enough!) and better school buildings and that they’d be more efficiently operated from a real estate standpoint. The risk is that the public/private interaction could increase corruption (although there could be lots of corruption even when the real estate is owned entirely by the government).
As usual, I think much of the current education debate is really just pro-free-enterprise versus anti-free-enterprise and how free enterprise should apply to publicly-funded education.
“and that they’d be more efficiently operated from a real estate standpoint.” What exactly do you mean by that statement?
If you believe that there is a “free market” out there with a capability to “efficiently operate” any “good” but especially the “common good” that are public schools, I’ve got some great ocean front property down at the Lake of the Ozarks in central MO for sale quite inexpensively.
@khirsch – what do you mean “invest in school buildings”? Dont CMO rent or lease their properties? I’m curious about that, and I am admitting that I may be wrong in my assumptions. If they rent or lease, given the assumption that more than likely they want to keep cost down, what improvements would they really make to “school buildings”? I’m confused by this.
You are correct that CMO’s often lease the school buildings that they use. (Sometimes they buy the buildings with philanthropic dollars and sometimes, as in NYC, they are allowed to use the space for free.)
The man in the video represents an investment fund that, amongst other things, has purchased school buildings that they then lease to charter school operators. I think it is a good thing if private investors get involved in the business of providing space to charter schools. The relationship between the landlord (in this case the investment fund) and the tenant (in this case the charter school operator) would be the same (in most regards) as in any other commercial lease relationship. This sort of relationship is ubiquitous in most sectors of our economy, but, not surprisingly, can be viewed as a “smoking gun” for those that dislike free enterprise intersecting with public education (or dislike free enterprise in general).
Count me in as one who sees through the sham of “free enterprise”. There is nothing free about the supposed “free market”. The markets are regulated by all the laws that have accumulated since the country began. I contend that there have never been any thing approaching a “free” market at anytime as there have always been those with more and those with less and therefore the “free market” has never obtained as on needs equals to have a free market operate.
Duane, I normally don’t mind a free market when it comes to goods and services, but I am much more reserved when a “free market” is proposed that involves the development of people (students) – especially in such a massive scale as educating ALL of the children in the U.S. A free market in such a case automatically implicates winners and losers, and that is not fair when it comes to developing and building people. This has been the premise of American education for the last hundred years – to build a system where ALL children get a chance at a quality education. We ought to concentrate on making ALL schools places where children are given quality education with equal resources and adequate providers, not setting up a system in which we know some will lose.
@ Duane – the first statement was for you – after that, my comments were directed at khirsch
I like this part: Charters “are allowed to use the space for free.” But those buildings weren’t *free* to me! I paid for them with my tax dollars. It’s the old “socialize the costs, privatize the profits.”
This is an interesting development, but it may not necessarily be a bad thing – aggressive corporate models can deliver quality improvements, reduce waste, provide diversity, etc. in other fields, like health care – why not education? It is something to think about. Maybe we don’t need to be more like Finland to deliver better results in education – can we be more like us, and find our own way to produce better outcomes? With the right mix of autonomy, innovation and accountability, maybe we can. Why EXCLUDE such concepts from public education, as traditional models have done in the past? To protect vested interests, even if it comes at the expense of the fundamental mission to educate children? Atul Gawande’s article in the New Yorker magazine is instructive, I think.
http://www.newyorker.com/reporting/2012/08/13/120813fa_fact_gawande
Profit-making businesses seek to lower costs and maximize profit. That’s their nature. That doesn’t produce good education. If it did, we would see the rich patronizing for-profit schools instead of Exeter, Andover, and other elite schools with small classes, a great curriculum, and splendid facilities.
I think that many who post here also object to charter schools that are organized as non-profit schools like Exeter, Andover, and
pivate colleges like NYU, but perhaps they are mistaken. Could non-profit charter schools be expected to produce a good education?
I read the article recently and had a sinking feeling: Cheesecake Factories are not located in impoverished zip codes… but McDonalds are located everywhere. If public education (and medicine for that matter) mimic food chains, the highest quality chains will be available to affluent or upper middle class families and everyone else will be satisfied with burgers or the corner hot dog vendor…
It is a hostile, no holds barred, takeover by business.
Diane: Posted the Op Ed piece below on several Facebook pages, sent to some legislators in Washington state, submitted as op ed piece tot he Seattle Times.
Change in the Fundamental Concept of Charter Schools
Kenneth A. Mortland
Aug. 20, 2012
Charter schools were originally proposed as a format for addressing the needs of students who were not doing well in the traditional public school system. The idea was to focus resources and effort on a target population of special needs students. However, even during the early years of charter schools, there were those who had other agendas. One example was revealed in a legislative district meeting of precinct committee persons. The concept expressed by several and unchallenged by the rest was that charter schools were the stepping stones to vouchers and charters had to become common place before a voucher program could stand a chance of success. No mention of charters improving our educational institutions, merely being a way station on the routine to vouchers. These were parents with kids already in private schools, who were looking for ways to get the state to reimburse them for their children’s private school tuition costs.
But in today’s world, the focus has changed and the fundamental concept is now on charter schools as investment opportunities. Though many charter schools are run by non-profits, the authority of the managing non-profit allows it to contract with whomever to obtain the facilities and services necessary. And there is the opportunity for profit. And many charter schools don’t even bother with the non-profit façade and are outright profit oriented companies. And these are very good investment opportunities.
David Brain, CEO of Entertainment Properties Trust, describes the charter schools market as:
-a very stable business
-a very high demand product
-an industry that is growing by 12-14% a year
-a recession resistant industry
-is public payer (taxes revenues/allocations) supported
-moderate risk
-has bipartisan support from Republican Party and the Democratic administration
-a recommended investment in today’s market (1)
There is no pretense here of any concern about improving the educational system or providing parents with choices. This is purely a business proposition. That’s something we should be keeping in mind, when we hear charter school proposed in flowery terms of empowering parents, improving educational opportunity, etc.
————————————————————————
The big business of charter schools; By Valerie Strauss; http://www.washingtonpost.com/blogs/answer-sheet/post/the-big-business-of-charter-schools/2012/08/16/bdadfeca-e7ff-11e1-8487-64e4b2a79ba8_blog.html
Corporate Agenda Behkind Public Charter Schools; by Aaaron Regunberg;
http://www.rifuture.org/the-agenda-behind-public-charter-schools.html
Ken, great idea to send this to WA legislators and news media. I can’t believe the arrogance of these investors. It is naive to think of charter schools as an investment let alone compare it to investments of ski resort, retail stores, and movie theaters.
Jon: That comparison was only made because Brain’s company invests in them. No other purpose of comparison was intended, I believe.
If it wasn’t for big business, I don’t think there would be so many charter schools.
http://www.statesman.com/news/texas-politics/can-traditional-schools-learn-a-lesson-from-charters-2438103.html
good article on how Charter “efficiency” is achieved in Texas 🙂 Not only do they hire at a significantly lower salary, they go out of country so that the teachers they hire have different standard they measure their salary against (but I honestly don’t know what a starting teacher in Turkey receives)
I am sorry, but when school districts issue bonds for new construction don’t the construction companies AND the bond investors makes millions billions on the backs of schools and the taxpayers? How is this any different? Aren’t tax free school bonds a ‘GREAT INVERSTMENT’ that ‘MAKE MONEY FOR INVESTORS’ with low risk?
Cynthia: A couple of things.
1) I routinely invest in tax free municipal bonds and they are a good investment. Interest rates are in the lower 4%, which means on a $1000 investment I make about $40 a year. That hardly qualifies as millions and billions.
2) Providing working capital for public projects though issuance of bonds is a long standing tradition in America. I would hardly characterize it as making money of the backs of schools and taxpayers.
3) The issue of charter schools as for profit institutions is not solely a matter of profit. It is the replacement of efforts to improve education with a desire to make money. The latter will most likely mean the former gets short changed.
4) If we routinely look at education reform as investment for profit, we will have changed the concept of universal, free, public education; one of the hallmarks of American society and that which has opened the path to success for millions. That would be a shameful choice.