Mark NAISON, co-founder of the BATs, explains why he thinks that charter schools are the subprime mortgages of our time.

Categories Charter Schools

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Noelle Green says:

July 26, 2014 at 12:10 pm

Link?

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- Robert Blomeyer says:
  
  July 26, 2014 at 12:36 pm
  
  http://withabrooklynaccent.blogspot.com/2014/07/why-charter-school-scandals-resemble.html
  
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Robert Blomeyer says:

July 26, 2014 at 12:23 pm

This is a text version of the same story from Mark Naison’s “With A Brooklyn Accent” blog:http://withabrooklynaccent.blogspot.com/2014/07/why-charter-school-scandals-resemble.html

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Joe says:

July 26, 2014 at 12:25 pm

Is this the link? https://www.youtube.com/watch?v=hIf0xpVBZKQ

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- Joe Nashville says:
  
  July 26, 2014 at 3:43 pm
  
  Yes, that’s the link.
  
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justateacher says:

July 26, 2014 at 12:56 pm

Here’s a wonderful analysis by Jeff Faux, written a couple of years ago, titled

“Education profiteering: Wall Street’s next big thing?”

http://www.epi.org/publication/education-profiteering-wall-street/

Thanks to my public education for promoting my (first) reading of the American classic quoted below. Do they allow it to be taught any more? Is it on the literature hit list yet?

“They were careless people, Tom and Daisy – they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made…”

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- Zorro says:
  
  July 29, 2014 at 2:16 am
  
  Ahhh, The Great Gatsby. I taught that many times in Los Angeles public high schools. Hollywood has never done it justice, failing to see that, in part at least, Fitzgerald was warning us that the American Dream had been corrupted by self-delusion and greed. One of the best books I ever read. Or taught.
  
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Some DAM Poet (Devalue Added Model) says:

July 26, 2014 at 1:28 pm

“Charter- (aka Wall- (aka Shake-down)) Street”

Socialize the losses
Privatize the gains
~~Wall~~Charter Street gets the to$$e$
Main Street gets the chains

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Lloyd Lofthouse says:

July 26, 2014 at 2:12 pm

Correct me if I’m wrong, but I think those who benefit the most from fiascoes like the sub-prime mortgage crises seem to walk away filthy rich to return and repeat the same process to become even wealthier, while the people who suffer the most are the working class and those who live in poverty–repeatedly.

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- Chiara says:
  
  July 26, 2014 at 2:59 pm
  
  “For households at the median level of net worth, much of the damage has occurred since the start of the last recession in 2007. Until then, net worth had been rising for the typical household, although at a slower pace than for households in higher wealth brackets. But much of the gain for many typical households came from the rising value of their homes. Exclude that housing wealth and the picture is worse: Median net worth began to decline even earlier.
  “The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001,” said Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.”
  
  Just so we’re clear, it certainly doesn’t benefit “small business” when people have less money to spend. They’re sinking along with everyone else. These are their customers.
  
  This is benefitting almost no one. Yet it continues.
  
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  - Lloyd Lofthouse says:
    
    July 26, 2014 at 3:06 pm
    
    It continues because this benefits the top one percent, for instance, the Koch brothers, the Walton family and corrupt and decadent hedge fund billionaires—who I’m sure are all psychopaths, sociopaths and narcissists.
Chiara says:

July 26, 2014 at 2:42 pm

You guys will get a kick out of this.

David Brennan, of White Hat charter school fame, is now involved in an unrelated scandal regarding state contracts going to his law firm:

http://www.plunderbund.com/2014/07/25/david-brennans-law-firm-makes-millions-from-dewine-contract-circumvents-campaign-finance-limits/

Many of you may know this, but White Hat is multi-state. Wait, it gets better! When White Hat employees leave White Hat, they form NEW charter management companies
It just goes on and on and on. I genuinely believe no one in government will ever regulate these entities. It’s too late. They’re too entrenched.

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- Donna says:
  
  July 26, 2014 at 2:59 pm
  
  Nothing but jail will stop the unscrupulous charters – wait and see where the Jumoke turds show up next. They just keep regenerating, like a tape worm.
  
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Chiara says:

July 26, 2014 at 3:18 pm

“Lloyd Lofthouse
July 26, 2014 at 3:06 pm
It continues because this benefits the top one percent, for instance, the Koch brothers, the Walton family and corrupt and decadent hedge fund billionaires—who I’m sure are all psychopaths, sociopaths and narcissists.”

I think they’re doing it again with auto loans. It’s anecdotal, it’s just based on what I observe where I live, but it looks like the same thing they did with mortgages.

They can’t afford these car payments. It’s going to crash. It isn’t based on anything real.

It seems like all we know how to do anymore is create bubbles, collect interest, and extract profit from public funding thru privatization. We’re not creating anything real. It’s all skimming 10% off the top of either public funds (thru contracting and privatization) or collecting interest on consumer loans. That isn’t “an economy”. I don’t know what it is.

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Chiara says:

July 26, 2014 at 3:26 pm

This is somewhat encouraging. He’s a moderate rural candidate for the Ohio statehouse who is running on public schools. I just thought it was interesting that real concern about privatization has now reached rural areas:

http://www.voteforlymanstall.com/

It’s going to be difficult to paint this guy as a conspiracy theorist or wild-eyed Leftist 🙂

He’s pretty middle of the road.

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- Linda says:
  
  July 26, 2014 at 4:41 pm
  
  In a small turnout election, if state, county and municipal workers and their families, private union members and their families, public pensioners and activist Democrats vote for (1) Locals: Lymanstall, Gillis and Schneider (2) State candidates: Fitzgerald, Pepper, Turner, Pillich and Carney, the sun might shine in Ohio, again.
  
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retiredbutmissthekids says:

July 26, 2014 at 3:33 pm

Yes, Mark Naison, I have been thinking exactly the same thing for a very long time.
If the corporations/wealthy/bought gov’t officials can’t squeeze money from the Military-Industrial Complex, then they’ve gone after the Agricultural Industry. Then, every number of years or so, a war is fomented (Iraq made handsome profits for Halliburton! Good job, Chaney!). Next, homeowners were in line to suffer the fruits of the Subprime Mortgage cash-cow (Wells Fargo! Chase! Goldman Schs! Freddie MAC & Fannie Mae!) Then–like Alaska!!! (The Final Frontier!! Thar’s gold in them hills!)–the $$$$Education INDUSTRY. Seminars on how to make money in one- million-&-one ways (virtual schools! publishing monopolies! Computer programs! Charter schools!TFA! Increasing class size!Eli Broad! Bill Gates!) proliferate.

1973? Reference ALEC playbook? UNhappy 41st birthday, ALEC.

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cary444 (@cary444) says:

July 26, 2014 at 4:23 pm

Yes, they are. Charter schools and low income housing, which is really on the rise thanks for Precor investments (opps I mean builders).

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Chiara says:

July 26, 2014 at 4:51 pm

I was reading President Obama’s new workforce training act. This is the section on which entities qualify to be “one stop training centers”

“(2) Eligibility.–To be eligible to receive funds made
available under this subtitle to operate a one-stop center referred
to in subsection (e), an entity (which may be a consortium of
entities)–
(A) shall be designated or certified as a one-stop operator
through a competitive process; and
(B) shall be an entity (public, private, or nonprofit), or
consortium of entities (including a consortium of entities
that, at a minimum, includes 3 or more of the one-stop partners
described in subsection (b)(1)), of demonstrated effectiveness,
located in the local area, which may include–
(i) an institution of higher education;
(ii) an employment service State agency established
under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), on
behalf of the local office of the agency;
(iii) a community-based organization, nonprofit
organization, or intermediary;
(iv) a private for-profit entity;
(v) a government agency; and
(vi) another interested organization or entity, which
may include a local chamber of commerce or other business
organization, or a labor organization.
(3) Exception.–Elementary schools and secondary schools shall
not be eligible for designation or certification as one-stop
operators, except that nontraditional public secondary schools and
area career and technical education schools may be eligible for
such designation or certification.”

If I’m reading that right, the one and only entity that may NOT be a one stop training center is a public school.

A for-profit? Sure! A public school? No!

They really go beyond ignoring existing public schools in DC. At this point they’re actively hostile to them. I have never seen anything like it. I have no idea why I’m paying these people in DC to actively undermine and harm public schools. It’s crazy.

https://beta.congress.gov/bill/113th-congress/house-bill/803/text

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- Yvonne Siu-Runyan says:
  
  July 26, 2014 at 6:28 pm
  
  I need to find a bucket and puke now…TOO TRUE! Obama’s education policies are for the 1%-ers.
  
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  - Chiara says:
    
    July 26, 2014 at 11:07 pm
    
    Virgina Foxx introduced the original House bill. She’s one of the House members who receives donations from and promotes for-profit career training outfits.
    
    “Foxx and committee Chairman John Kline (R-Minn.) both have received campaign contributions from for-profit colleges. Foxx invoked the Holocaust in her defense of for-profit colleges in February.”
    
    http://www.huffingtonpost.com/2013/07/25/virginia-foxx-make-college-affordable_n_3654419.html
- Veteran Educator says:
  
  July 27, 2014 at 2:18 am
  
  Doesn’t “non-traditional public secondary public schools and area career and technical education schools” include charters? Where public schools have been discouraged from providing vocational education, there seems to be a new market opening up for another kind of charter school.
  
  Yes, it really is astonishing how many salvos this administration has aimed at public education.
  
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Mike Turner says:

July 26, 2014 at 9:01 pm

You can bet that if/when this happens, the charterites will spin it in a way that deflects blame from themselves (i.e. lenders were “forced” to selling mortgages to unqualified minority borrowers out of fear of being labeled racist).

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- Kay says:
  
  July 26, 2014 at 10:56 pm
  
  That’s nonsense, too. We don’t have any minorities here, but we have a lot of low income people. They were lending like crazy to everyone, and they were inflating the value of real estate with bogus assessments and aggressively selling second mortgages against the inflated value.
  
  If subprime was about “minority borrowers” you could have fooled me, unless “minority” now means “poor people”, which it doesn’t.
  
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FLERP! says:

July 26, 2014 at 11:00 pm

Until charter schools can be securitized and and re-securitized, I don’t think they’re going to be the subprime mortgages of any day.

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- Tim says:
  
  July 27, 2014 at 12:00 am
  
  There are also some slight differences in proportionality: at the peak of the bubble, approximately 20% of mortgage debt outstanding was subprime. That’s 3 TRILLION dollars, give or take. Right now about 6% of US public school students attend a charter school, and public expenditures on charter schools total about 24 billion dollars.
  
  Naison’s analysis of the subprime debacle also misses a critical point: what caused so much harm in predominately minority neighborhoods wasn’t subprime mortgages being pushed on people with terrible credit, but rather subprime mortgages being pushed on people who qualified for a prime mortgage and/or already actually owned their own home.
  
  The subprime collapse caused millions to lose their homes and caused many more to lose an enormous amount of personal wealth, at least on paper, and its impact was felt disproportionally by minorities. Charters are no better or worse than district schools, the studies say, and here is where the analogy truly breaks down. Where is the harm being done to students who attend charters, or to the students who don’t?
  
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  - Michael Fiorillo says:
    
    July 27, 2014 at 11:20 am
    
    “Charters are no better or worse than district schools, the studies say…”
    
    Nice try with the pro-charter spin, but it’s false: the Credo study, to which you presumably refer, showed that a large majority of charters score no better OR WORSE than public schools. That’s a significant difference from what you stated.
    
    As for the sub-prime analogy, it’s useful in that it draws a connection between the PR/marketing/branding of charter schools and the targeting of poor and minority home buyers/owners by parasitic mortgage companies and the Wall Street firms that pooled and securitized their mortgages.
    
    However, as Flerp correctly points out, the financial engineering and mechanisms are very different, since as of now there is no securitization of charter school real estate taking place. That’s where the analogy breaks down.
    
    Then again, give our financial innovators and disruptors on Wall Street some time, and I’m sure they’ll be happy to oblige.
  - Tim says:
    
    July 27, 2014 at 12:25 pm
    
    Yes, I was using the commonly accepted shorthand for the CREDO study–there’s no significant difference between the majority of charter and district schools, and about an equal number of charters performing significantly better as perform significantly worse. If I were looking for pro-charter spin, there are much juicier things to pull from CREDO 2013, including the trajectory of at-risk charter school student growth, and then of course there’s the New York City CREDO study . . .
    
    I’m sorry to see you fall back on the contention that parents are dupes who are being driven to charter schools by slick PR and marketing. The reality is that most of the kids attending NYC charters live in hypersegregated neighborhoods and are zoned for hypersegregated schools of last resort. Given the history behind how these schools and neighborhoods got this way, it is offensive to suggest that the most important step toward fixing them is to not let anybody leave.
    
    I’m aware of the financial abuses in states with looser regulatory systems, but in New York State at least, the evidence that charter schools are a financial play seems scarce. I’d much rather talk about issues like attrition, backfill, weighting lotteries, and whatnot.
  - Michael Fiorillo says:
    
    July 27, 2014 at 8:59 pm
    
    Calling parents dupes are your words, not mine.
Ellen T Klock says:

July 28, 2014 at 12:11 am

Cream rises.

How well a school does or doesn’t do depends upon the students who fill the halls. Yes, excellent teachers and a positive environment (both at home and in the school) can make a difference, but ultimately it is the make up of the student population who determine the outcomes – charter or public.

Cream rises.

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