Good news for Wall Street! More school closings!
Does Wall Street think it would be a good idea to close down all public schools? Think of the savings to municipalities if we just stopped offering free public education!
A reader writes:
And Bloomberg reports this about Philadelphia school closures:
Closing 12% of Philadelphia Schools Creates Winners: Muni Credit
from Bloomberg
“The nation’s fifth-largest city anticipates saving $24.5 million a year by shutting 29 of its 249 buildings in June. The average building is 64 years old, according to a financial audit. More than 82 percent of students are “economically disadvantaged,” meaning they receive free or reduced-price lunches, school data show.
“It’s very likely” more schools would be closed over the next five years, said Fernando Gallard, a district spokesman, who said he couldn’t estimate how many. “We are wasting money maintaining empty seats and empty space in our buildings,” Gallard said. “There is a better use for that money.” Bond buyers view officials as trying to get a handle on their finances, said John Donaldson, director of fixed income at Radnor, Pennsylvania-based Haverford Trust Co., who manages $750 million in munis.
Diane Ravitch's blog 
And apparently the Wall Street Journal measures successful schools by the number of teachers that are given unsatisfactory ratings.
It never ceases to dismay me how the economic or market standard is the main standard applied to virtually every aspect of our civilization now.
Public education is one of the vital organs of a democratic society — and Wall Street is an organ brokerage that speculates on just how much it can get by selling off our vital organs.
Just as the stock market usually rises when companies announce layoffs, so too the bond market would cheer school closings.
Of course, in reality, Philadelphia will probably wind up spending far more money on charter schools and bogus online “academies,” (to say nothing of the future cost of imprisoning juveniles charters won’t accept) but since much of that will go into the pockets of the Overclass, it’s considered money well spent.
Wall Street did a terrific job getting the target off their back and putting it on public schools and public school teachers. Too bad the top 2 union leaders caved on their fight against this.
How do you come off to blame the teachers unions for what is happening to the entire economy and to labor as a whole? This is 30 years of build up from “Reagan democrats” and “reform.” Too many well-meaning citizens have not learned to appreciate what the labor movement has done for them (as I wrote in Organizing the Curriculum). If teachers want to be strong, they need to stand up WITH their union leaders (and maybe take on union responsibilities themselves – after all, unions are the most democratic institutions we still have).
Where are the unions?
Well if they don’t want to offer public schools then I guess we can stop paying taxes for them. Every person can keep the money they would normally send the government to pay for their own children’s private education. Landlords can take the amount of rent normally allocated for taxes and give it back to tenants so they can pay for their children’s education on their own. This will be great, people who don’t have kids won’t have to pay education taxes at all…oh wait that’s NOT how it’s going to work, at all. They are really just going to take away public school and give the tax dollars to themselves and their friends (the Billy and Rubert gang of 1%).
How to Regenerate Our Inner Cities by Wall Street
Pass laws to enable charter schools.
“Starve” regular public school programs.
Shut schools that are “under enrolled”.
Create more over-crowded poorly performing public schools.
Make attending out of the neighborhood public schools difficult for poor families.
Create more charters to further reduce the public school population and its middle class union salaries.
Close more neighborhood public schools.
Increase credit ratings so city and school district can issue more tax-empt bonds at a cheaper cost.
Provide inner-city land to developers who will build charter schools, upscale housing and shopping facilities.
This used to be called Urban Renewal in the 60s and 70s. But condemning land and moving poor people out of inner cities became politically incorrect.
Now it’s done quietly and called “improving our schools”.
Andi, I think you need to reread my comment regarding the economy!!! My only comment against the union leadership was caving into Duncan, Gates, etal.
Then there is this report about how the banks and financial markets are a major factor in the school budget crisis in Philadelphia:
Too Big to Trust? Banks, Schools and the Ongoing Problem of Interest Rate Swaps
from the Pennsylvania Budget and Policy Center
This January 17, 2012 document details the role that interest rate swaps are playing in the School District of Philadelphia budget crisis.
Consider this when you hear about 23 schools being abandoned, and more to come, to “save” an alleged $29 million dollars in each of the next five year. From page 3 of this document:
“In January 2011, the Philadelphia School District paid $63 million to Morgan Stanley Capital Services Inc., Goldman Sachs Capital Markets LP and Wells Fargo Bank N.A. to cancel a total of five fixed-to-variable interest rate swaps. This comes in addition to the nearly $26.6 million the school district paid to Morgan Stanley Capital Services Inc. and Goldman Sachs Bank USA in April 2010 to cancel another four swaps.
Based on analysis of historical bond and swap interest rates and information obtained through Comprehensive Annual Financial Reports (CAFRs) and bond official statements, we estimate the school district has paid approximately $157,965,000 to the banks and received $86,098,000 in exchange over the entire life of the 10 swaps —a net loss of $71,867,000.xiv Including the cost of the nine cancellations brings the total cost to the school district to more than $161 million. Just as home owners were sold bad deals by Morgan Stanley, Wells Fargo, and Goldman Sachs and are now facing foreclosure, Philadelphia was sold a bad deal and now our children are paying the price —in the form of larger classrooms, fewer teachers, and cuts to music, language, after-school and gifted programs.”
Read more: http://pennbpc.org/sites/pennbpc.org/files/TooBigSwaps.pdf