Joe Nocera, a regular columnist for the New York Times, wrote a column about what can only be described as the legal looting of Burger King.
He describes how one group of financiers bought the company, paid themselves a few hundred million, then sold it to some other Wall Street bunkum artists for a billion, who extracted another billion from the company before selling it to yet another group of investors who had figured out how to milk the company one more time. Every time it changed hands, some smart guys on Wall Street laid off workers, did some fancy footwork with financial instruments, got rich and dumped the company.
I read the books about Enron (The Smartest Guys in the Room and Conspiracy of Fools); I know about Ken Lay and Jeffrey Skilling. I read The Predators’ Ball about Michael Milken and his junk bonds. I read Barbarians at the Gate and Liar’s Poker. I read half a dozen other books about the way that ingenious financiers buy a company, break it into parts, and sell it off for more than they paid, or strip the company of its assets and abandon the shell. I learned about how household names and products disappeared as equity investors descended on their parent companies like vultures and picked them apart to make money (read the book about Jack Welch and GE, At Any Cost). I learned about hostile takeovers and corporate raiders. These are the guys who took down what I used to think of as the American way of life and elevated greed as our highest value. Although so much of this is repellent, I felt a certain resignation. That’s their world, I thought, not mine.
But now they are coming into education. They are hedge fund managers and equity investors. These are the guys who play with millions of dollars every day, and they have decided that rearranging the nation’s education system is a fun hobby. They don’t have much sympathy with working stiffs who earn only five figures, and low five figures at that. They don’t understand why there is such a thing as public education; so few of them went to public school and wouldn’t dream of sending their own child to one. Why shouldn’t all schools have a private board of directors like the one they send their children to? Why shouldn’t all schools be deregulated? That’s the way it works in business. Why shouldn’t schools with low scores be closed and replaced by new ones? That’s the way it works in their world. Why should schools be compelled to take children they don’t want, children with severe disabilities and children who don’t speak English? Isn’t winning what it’s all about? Winning means getting the highest test scores, and if you take in the kids who can’t do that, you can’t win.
What if we ran schools like the stock market? There would be a portfolio; you would keep the winners and sell the losers. That’s the way the world works, right?
Their world and the world of education are different spheres. They operate by different rules. Unfortunately, the barbarians are no longer at the gate. They are inside.
Diane
I really recommend another book from 1997 about management consultants called DANGEROUS COMPANY: THE CONSULTING POWERHOUSES AND THE BUSINESSES THEY SAVE AND RUIN by James O’Shea and Charles Madigan. Consultants, especially McKinsey and Boston Consulting Group among others, are very active in education reform and partner with the entrepreneurs. Reading this book is such an unbelievable insight into their world which is seldom exposed or discussed but which I found myself recognizing through the discourse and action of education reformers. I will plan to read some of the other business books you mention. So sad that we have to read business playbooks to prepare ourselves for understanding today’s and tomorrow’s educational landscape.
Sounds good. The one I am reading now is Lords of Strategy, about the same firms.
The stock market has become a rigged casino for quite some time, even before we get to things like Goldman shorting the same securities it is pushing to its customers – that’s not a hedge, that’s corruption, even it it were legal at the time. The corproations are trading for their own accounts in the same securities they are selling to others, and using computers make huge profits by jumping ahead of other transactions, which legally they could. And they refuse to pay a transaction ta even though their trades have nothing to do with investing in production or productivity. It is merely about making money.
And it matters not to them that for ever winner there is at least one loser, often more, as long as they can rig the game so that they are always winners.
That rigging of the game means they make the rules, own the referees, and et to call for a redo if they don’t like the results.
An equivalent to the last in education is Eva Moskowitz getting even more money for schools that already do not have to play by the same rules as public schools.
America developed public schools because we saw it to the benefit of everyone. Even corporate employers recognized the need for a minimally educated work force.
Our modern financial gurus care not about the work force – simply move what minimal production you need elsewhere, using downward pressure on wages and working conditions. It is Naomi Klein’s “Shock Doctrine” writ large.
As we lose public education we may finally realize what some of us have been artuing for years – as we have lost public institutions, as workers have lost the protections of unions, as corporations have been given more power, influence and protection than human persons in direct opposition to the intent of the Founders of this nation, we have had democracy being eaten away.
You are correct, Diane. We are now the savings and loans, the dot.com the real estate bubble. As Muroch said, “a two billion dollar industry waiting to be reformed”. After us, when education is in shambles and sucked dry (for which teachers will be blamed), they will move on to the retiring baby boomers, their retirement funds and the public dollars that go to them. The caretakers to the elderly will need to be reformed.
Actually, Murdoch said it was a $600 billion industry waiting to be reformed. By the technology he is selling.
This is why I can’t really forgive Romney for Bain Capital, and I am a Republican (old style) at heart. I recommend “13 Bankers”, it’s the best I have read.
How do we fix this mess?
Amen Diane. Amen.
Another recommendation, Vulture’s Picnic by Greg Palast. Humor abounds and it reads like a good detective novel
This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a Whopper but a Wimpy.
Excellent video ‘Inside Job’ narrated by Matt Damon
vimeo.com/25491676
I misread the title of this post as: “These Guys Want to RUIN Our Schools.”
Perhaps it really doesn’t matter whether or not the “I” is in there anyway…
you are right. It’s all the same.