A few years ago, as the charter movement began to grow and get stronger, it became clear that it had attracted the enthusiastic support of a large number of super-wealthy hedge-fund managers.
The New York Times noticed this in 2009 and 2010 and published two different prominent articles ( see here and here )about how charters had become the hottest charity in the hedge fund world.
One of these articles appeared in the “Style” section, as if to suggest that charters had become a really cool hobby for people who normally spend their time racing polo ponies or cruising the Mediterranean on their yacht. There was no suggestion that any of the funders involved had attended a public school or ever sent their own child to one. No, they were investing in good deeds by opening privately managed schools to compete with public schools, get higher scores, then take away the entire building of the public school. Mayor Bloomberg encouraged the co-location of charter schools, creating a scenario that some called “academic apartheid,” in which the charter kids had the best and latest of everything, while the public school kids on the other side of the building had to make do with the remains and enroll the children that the well-endowed charter did not want: those who did not read English, and those with severe disabilities, those who didn’t follow the rules.
Steven Brill wrote about the birth of “Democrats for Education Reform” in 2005 in his book Class Warfare, and he makes clear the sense of noblesse oblige felt by those in attendance. The investment in charter schools was exciting for men (and women) who had gone to the nation’s finest prep schools and best colleges and had accumulated great wealth. He tells the story of DFER’s first organizing meeting, held at a luxurious penthouse; the guest speaker was the rising young Senator from Illinois, Barack Obama. When Obama was elected, DFER sent its list of choices for cabinet positions to the new President; its choice for Secretary of Education: Arne Duncan. The best way to reform schools, they concluded, and to save the lives of minority children, was to create privately managed charter schools with people like themselves on the board of directors.
As I reflected on this bit of background to the role of hedge fund managers in promoting the privatization of public education, I suddenly remembered an email I received in 2010. The writer asked me not to mention his name, for obvious reasons. I never forgot his letter.
I post it here.
I manage money and I’m black. I am distressed by the barrage of mail I’ve been getting from fellow money managers who somehow think there is a fairly easy solution to educating the “underclass” by using charter schools. I’d like to share with you a few points from my experience which may help you contextualize my concern.
1. Hedge fund managers typically don’t add value to society.
2. Hedge fund managers often have very little practical real world experience. Many have not worked for anyone else. Yet activist managers are very comfortable giving advice to operating managers of companies in which they take a stake.
3. Hedge fund managers virtually never hire minorities outside of Asians
4. Hedge fund managers have attended exclusive private schools and almost always send their kids to the same.
5. Hedge fund managers know virtually nothing of incentive systems and largely supported the Wall Street incentives which nearly created the demise of our society as we know it.
6. Hedge fund managers and private equity managers typically don’t pay their share of Federal taxes. (I personally elect to pay my carried interest as regular income)
With my experiences as a backdrop, I’m somewhat concerned that groups such as DFER (Democrats for education reform) are receiving so much positive press.
As I have begun to research education I wonder if you can point me in the right direction?
1. Has there been a study on the effect of educational lotteries (like the kind that are run to select students for some charter schools) on the students who aren’t picked? It seems a bit demoralizing to me…
2. Has there been a study of teachers who would work for incentives? In other words I’m not sure free market incentives work for professionals like all the teachers I know?.
Background
I am a 22 year veteran of [tech company] who left to start a money management business. One of my early management assignments at [tech company] was to manage public sector sales for the Philadelphia area. This job afforded me a great deal of interaction with teachers and students of the Philly school district.
My current business manages money for clients with assets from XXX to several hundred million. It is the intention of my family to pay out all business profits from our internal hedge fund to urban squash and music education in public schools.
Thanks in advance for your consideration
Diane Ravitch's blog 
Why do people keep asking questions to which the answers are obvious?
Because the ones they ask the question of don’t understand this:
Nelba Marquez-Greene’s 6-year-old daughter Ana Grace, who was killed in the shooting at Sandy Hook Elementary on Dec. 14, 2012.
As another school year begins and old routines settle back into place, I wanted to share my story in honor of the teachers everywhere who care for our children.
I lost my 6-year-old daughter Ana Grace on Dec. 14, 2012, in the rampage at Sandy Hook Elementary School. My son, who was in the building and heard the shooting, survived.
While waiting in the firehouse that day to hear the official news that our daughter was dead, my husband and I made promises to ourselves, to each other, and to our son. We promised to face the future with courage, faith, and love.
As teachers and school employees begin this new year, my wish for you is that same courage, faith, and love.
It takes guts to be a teacher. Six brave women gave their lives trying to protect their students at Sandy Hook. Other teachers were forced to run from the building, stepping over the bodies of their friends and colleagues, and they came right back to work.
When I asked my son’s teacher why she returned, she responded, “Because they are my kids. And my students need me now more than ever.” She sent daily updates on my son’s progress, from his behavior to what he’d eaten for lunch. And four months later, when my son finally smiled one day after school, I asked him about it. His response? “Mom. My teacher is so funny. I had an epic day.”
While I pray you will never find yourself in the position of the teachers at Sandy Hook, your courage will support students like my son, who have lived through traumas no child should have to.
Your courage will support students who are left out and overlooked, like the isolated young man who killed my daughter. At some point he was a young, impressionable student, often sitting all alone at school. You will have kids facing long odds for whom your smile, your encouraging word, and your willingness to go the extra mile will provide the comfort and security they need to try again tomorrow.
When you Google “hero,” there should be a picture of a principal, a school lunch worker, a custodian, a reading specialist, a teacher, or a bus monitor. Real heroes don’t wear capes. They work in America’s schools.
Being courageous requires faith. It took faith to go back to work at Sandy Hook after the shooting. Nobody had the answers or knew what would come tomorrow, but they just kept going. Every opportunity you have to create welcoming environments in our schools where parents and students feel connected counts.
Have faith that your hard work is having a profound impact on your students. Of the 15,000 personal letters I received after the shooting, only one stays at my bedside. It’s from my high school English teacher, Robert Buckley.
But you can’t be courageous or step out on faith without a deep love for what you do.
Parents are sending their precious children to you this fall. Some will come fully prepared, and others not. They will come fed and with empty bellies. They will come from intact homes and fractured ones. Love them all.
When my son returned to school in January, I thought I was going to lose my mind. Imagine the difficulty in sending your surviving child into a classroom when you lost your baby in a school shooting. We sent him because we didn’t want him to be afraid.
We sent him because we wanted him to understand that while our lives would never be the same, our lives still needed to move forward.
According to the 2011-12 National Survey of Children’s Health, nearly half of America’s children will have suffered at least one childhood trauma before the age of 18. They need your love.
A few weeks before the shooting, Ana Grace and I shared a special morning. Lunches were packed and clothes were picked out the night before, so we had extra time to snuggle. And while I lay in bed with my beautiful caramel princess, she sensed that I was distracted and asked, “What’s the matter, Mom?” I remember saying to her, “Nothing, baby. It’s just work.” She looked at me for a very long time with a thoughtful stare, then she told me, “Don’t let them suck your fun circuits dry, Mom.”
As you begin this school year, remember Ana Grace. Walk with courage, with faith, and with love. And don’t let them suck your fun circuits dry.
Thank you very much for sharing your/your family’s wisdom.
This came across the BAP forum today: http://www.stockholdersfirst.org/
…..and make sure you read all the way to the bottom of the page! *grin* Clever!
Here’s a tangentially related story:
Socratic Labs, an education technology accelerator (a program that takes a percentage of ownership in a startup company in exchange for mentorship and other help), was recently the subject of a scathing leak about unprofessional conduct and broken promises.
Details here: http://valleywag.gawker.com/the-psychotic-investor-behind-an-anonymous-startup-horr-1245494067
Reblogged this on Blog of an e-marketer by Main Uddin.
“There was no suggestion that any of the funders involved had attended a public school or ever sent their own child to one. ”
Ten years ago I would have said whether a politician or policy maker attended a public school shouldn’t and doesn’t matter.
I no longer believe that. The truth is public schools and private schools are very different, and I am not sure that people who attended private schools understand how public schools work, or how they’re supposed to work. They simply don’t understand the public school role in our communities. They’re more than schools.
I believe I read that Michelle Rhee attended Maumee Valley outside Toledo, which is a very wealthy private school. I’m sure it’s a great school, but it is not connected to any community in Toledo, or wasn’t when I lived there. That matters. When people in Chicago or Philadelphia say they want their local school to stay open, she doesn’t get that on a gut level, because she never attended a school that was woven into a community like that. Sadly, I think the same is true of President Obama.
Chiara,
“Ten years ago I would have said whether a politician or policy maker attended a public school shouldn’t and doesn’t matter. ”
I have to disagree with you on this one. I went K-12 through the Catholic schools in St. Louis. There is no doubt that the private and public schools are different. But some of us have overcome the burden of “privilege” and reject that thinking to understand (hopefully) that the supposed elite schools are not the end all be all.
Wow. A fantastic post, Diane. I’m glad you kept this man’s email to you.
deutsch29: every once in a while some blogger will highlight a revelatory quote from someone in the know.
Often they come right from the leading charterites/privatizers themselves.
For example, on BRIDGING DIFFERENCES, in one of Eric Hanushek’s postings he unabashedly affirmed the following, obviously completely unaware how uncoupled from reality it was:
“In our conversations about accountability, we have skirted around the issue that I think drives the most heated debate—namely, that accountability involves evaluation of teachers and administrators. And teachers and administrators are “agin it,” period.”
Link: http://blogs.edweek.org/edweek/Bridging-Differences/2013/03/dear_deborah_in_our_conversati.html
Or there’s Bill Gates who during his TED talk removed all doubt that he has a shoe-shaped mouth:
“Unfortunately,” Gates says, “there’s one group of people who get almost no systematic feedback to help them do their jobs better. And these people have one of the most important jobs in the world. I’m talking about teachers.” According to Gates, “until recently, over 98% of teachers just got one word of feedback: satisfactory.”
Link: http://www.pbs.org/wnet/ted-talks-education/speaker/bill-gates/
Lest we forget Paul Vallas, he describes his string of colossal train wrecks as, well, in his own words summing up his entire ed biz career:
“I go in, fix the system, I move on to something else.”
Link: http://www.nbcchicago.com/blogs/ward-room/Paul-Vallas–213999671.html
The gentleman featured in Diane’s posting does not belong to that select group; he actually seems to have a conscience and his wits about him.
I am not a betting person, but a 13th percentile get you a 90th that this posting will remain in people’s memories for a long long time.
How can I be so sure? “Men lie and women lie but numbers don’t.” [Dr. Steve Perry, channeling rapper Jay-Z]
Go figure.
🙂
Obama has been bad news in education since at least 1995 as at the same time he became president of the Annenburg Foundation for Chicago Public Schools, privatizeer, along with his wife Michelle who was one of Daley’s $100,000 club doing privatization. So Obama has no correction factor as FDR did with Eleanor. Without Eleanor none of this was possible. She pushed FDR and he listened. Not now. Both want to become richer than Clinton did.
Hedge funds are in for the profit and power. That is it. When you can double your money in 7 years instead of the normal 12 what do you think they will do. This is like buying gold several years ago as some friends did. What do you think is is worth now? Look at the charter school guys in Florida worth about $160 million along with the revenue from operating the schools. The schools are merely the means to the big money, the property and revenue from it with the tax breaks. What they make from the charter schools is nothing to the property game. This is increased asset valuation with revenue. These guys are the hedge fund and managers in one package they take all the percentages.
Obama is a right wing republican libertarian in sheep’s clothing. It is time we dealt with the facts on the ground about the democratic party. It is bought and sold by the same people that own the republicans. Now we are UNIPARTY. Any apparent difference is a joke on us through the media they own. Thank Clinton for taking away the Free Press, jobs and the ruination of the financial system. This is how it really rolls.
He’s a total fraud, a Manchurian candidate for the billionaires and other crooks who are actually running and ruining things.
I saw what he was WAY back and didn’t bother to vote for him at all last election.
several thoughts immediately come to mind. The first is a contrast between George Romney who did not take all the deductions to which he was entitled on his federal income tax because he did not think it was fair, and his son Mitt, who at one point said that anyone who did not take advantage of every single possible tax break was not qualified to be President.
The next is that in any field there are those who see an ethical / societal responsibility beyond their own (and familial) well-being and those who do not. The problem is that in some fields, those who do not somehow benefit from the work we all do while not paying back as they are able for the benefits they have received. That is selfish, self-centered, greedy, and in the long term destructive of the well-being of the society from which they have benefited.
Finally there is this – our lawmaking process is slanted to the benefit of corporations and the wealthy at the expense of ordinary people because our politics is so dependent upon money which they can provide while the rest who do not have such flexibility in their finances get excluded, both from the politics and from the policy I have to some degree been able to get beyond that because some in the political and policy arenas value my analysis and advice, and on occasion wish to take advantage of whatever writing skill and audience I might have. Thus I have come to understand the financial pressures many candidates/office-holders face.
We can overcome all this.
We can if enough of us are committed win enough elections to begin to change the rules/laws that make our politics (and hence our policy) so dependent upon money, and thus level the playing field for policies that benefit more than just the already wealthy and powerful. Howard Dean pointed out that a million people each given $100 raises just as much money as 100 people each giving a million. But we will have to decide that that $00 – or $10 from eacah of ten million people – is a worthwhile expenditure.
Most of all, we will not only have to participate beyond financially, but use our circles of connections to persuade others to do so as well.
Just remember, there are far more ordinary people than there are those in the 1%. We can prevail if we persist.
I agree about our lawmaking policies being slanted to enable many of the issues for hedge funds that are problematic for society as a whole (one that cares about people, anyway). I think we really have to look at which laws are enabling this type of situation and work there. The problem is people’s price tags are not high enough. As my husband says, everyone has a “price.” Leaders who have sold out our public schools have not realized that they are in fact priceless—and so they have sold us short because they were impressed with big dollar numbers. If someone waved 60 million dollars in your face and said “give up your law license, spend 2 years in prison and this is all yours,” it might create temptation. Unless a person allows self to believe that 60 million is too low. That some things are priceless.
I also agree that we have to try to use our circle of connections to persuade people—but it is tricky. Believe me the folks I know at our country club are getting to know that I will bring up education if I am allowed to. That said, I have watched family members who are hedge fund managers argue with more liberally minded family members and the hfm will not budge. They have convinced themselves that the way they operate is good. And so, as long as they are allowed to operate that way, they will. Somehow public education should be part of that “lock box” Al Gore was teased so endlessly about. That old nostalgic notion of always honoring your mama (and similar notions like you should not sell off the public’s schools) don’t seem to hold much weight with many who are in charge (I spend some time trying to consider if there is a life circumstance that enables this, like is it a by-product of having divorced parents (or more of a risk?. . .I have divorced parents, but I’m just trying to figure out why someone would price the public’s schools so low, even though the numbers seem big at the time)).
Just because a lawmaker is impressed with dollars doesn’t mean he or she should be allowed to sell off a public asset or institution, where many (if not most) are not impressed by the dollars.
Joanna,
I believe you have said that your husband is a lawyer. Please correct me if I am wrong. And you have also stated that as a “southern” girl you have had a hard time overcoming the “husband as the head of the household”. Again, please correct me if I am wrong.
“As my husband says, everyone has a “price.”
Well he’s wrong. He thinks that way because of the profession he is in. That does not make it true.
That’s his (and lawyer’s rationalization) for representing reprehensible characters. Oh, everyone has a price! Bull effin shit!
Duane
P.S. Sorry to be so crude but as a “male” in the society in which you have been conditioned, I obviously “know better” than you as a female.
Duane. I tend to agree with you. That’s why I keep coming back to this blog. I am not satisfied with the answers to education questions I tend to get in my usual circles. I am working hard on becoming the one people listen to in those circles instead of the one only listening.
I think the public’s schools have been taken for granted. It will take me to help people look and think a little harder about what is going on.
But I also think there are certain points where temptation (a certain dollar value or new vision of a situation) might make choosing or resisting harder. Our leaders who signed us up for RttT were blinded by dollar values, don’t you think?
One’s “price” might be the point where you wrestle with what is right.
Dollars do dry a lot of tears sometimes, whether or not they should. RttT has only brought more tears. We sold out. Our “price” was too low. It should have been that no dollar amount would make us sign up for a nationally imposed curriculum and tests of same determining what schools stay open and what teachers teach.
Somebody had a price, though.
Thank you Ken. Always enjoy your commentary.
Hi Diane: This is not quite related, but I was wondering if you were aware of this 3 page ad the NYC DOE is running in NY Metro (the free newspaper given out at the subways). It paints a very rosy picture of the Core Curriculum, teacher evaluations and all of the new “small schools” that the DOE has opened. The ad is designed to look like an article entitled “Public School Press” I noticed it yesterday.
You can find the online version here.
http://issuu.com/metronyphlbos/docs/20130814_newyork/19
Thank you for all you do on behalf of students and teachers. As a NYC public school parent, I really appreciate everything and look forward to buying your new book.
NYC Mother: I had not seen the ad in the Metro, but I did hear an ad on the radio boasting of the amazing accomplishments of the NYC DOE. I assume it was paid for by taxpayer funds, or perhaps the Mayor’s pocket. In either case, it just proves that you can’t rely on the DOE for any accurate, nonpartisan information. They are in the business of self-promotion. Which is very sad.
I didn’t even think about taxpayer funds being used for this. This is so maddening. My child’s D2 school had $200K yanked from the budget at the last minute on top of all of the budget cuts from recent years. This forced the principal to collapse the fourth grade from 5 sections to 4 sections to bring those classes to the cap. And she had to add another K section to an already over-crowded school. It’s beyond distressing.
We should start referring to public school as the public’s schools. Like the People’s Princess. It might open some eyes.
“Hedge fund managers often have very little practical real world experience. Many have not worked for anyone else. Yet activist managers are very comfortable giving advice to operating managers of companies in which they take a stake.” Aha –I see. Education is not the only “industry” that these guys imperiously restructure without any deep knowledge of the industry. This is their modus operandi.
Obama didn’t attend public schools either, did he? I know part of his education was at that famous, huge private school in Honolulu (I forget the name.)
If you bust something up, it loses its value.
Then the woman whose son was alive said to the king, because her heart yearned for her son, “Oh, my lord, give her the living child, and by no means slay it.” But the other said, “It shall be neither mine nor yours; divide it.” Then the king answered and said, “Give the living child to the first woman, and by no means slay it; she is its mother.”
I’m also a money manager and have noticed the same phenomena remarked upon by your correspondent.
It is certainly true that moneyed oligarchs, their children, or their friends never have to suffer the consequences of the education mayhem they are unleashing. They are chefs that do not eat the cooking. They know the answers and are not interested in the facts of what is actually happening.
The main impulse for what they do is self-aggrandizement. For example, when you create a charter school, you typically create a board so that your friends can burnish their resumes and feel like they are giving back. If you give enough money, like a Bruce Rauner or a Pritzker, you get your name engraved and maybe even displayed in lights outside. Of course, you also get clout with city by having created a nice shiny object that the mayor can point to come election time.
How do you stop this? I don’t think you’ll ever change the minds of the top dogs, but if you change the narrative among the people they associate with, then you will start to see “education reform” as no longer being something that people want to automatically be associated with. Make it controversial and toxic. For example, get the message through that all of the reforms don’t actally work and are counterproductive. Spread publicity about the fraudsters, shysters, and boodlers in the “education reform” industry. Continually remind them of the deeply disparate racial impact of their policies, and that most minority communities seem to want their community schools and don’t see them as failures. Get them to interact face to face with the people they’re hurting by spreading information, canvassing, marching, and protesting in wealthy communities, for example in Lincoln Park and Lakeview in Chicago.
It’s grand larceny, pure and simple.
Al Capone and Bonnie and Clyde had far better ethics.
This letter makes me sad. If the writer could tour some inner city charters he would be disgusted. They get a bunch of good press but are in no way an answer to the problems in urban areas. Conservative legislatures have taken advantage of RTTT and really allowed junky schools to open. They have become cash cows. It is all lies and propaganda. A charter school in Michigan recently opened in an old Target. You’d never see this school in a wealthy suburban area. No parent would stand for it. I really think people are exploiting the most needy people in our society. I know someone who lives in Ohio who said they saw a charter open in an old supermarket then was gone in two yrs. You know someone made some money off of kids.
Not sure timing is quite correct on when the fix was in on Duncan to Sec of Ed– I understand that it was in the spring of 2008, before and related to the hedgers getting onboard with Barry. Sad if true but that, fellow citizens, would explain why Duncan has ramped up the Repub Talking Points for the past five years on education, which “will never be Obama’s issue.” Good morning, and good luck– keep speaking truth to power as the train is slowing and can eventually be sent back the other way . . .
My understanding agrees in part with Bertis’s timing. Remember, Linda Darling-Hammond was a key advisor on education during the campaign. But during March, knowing they had clinched the nomination, the key figures in the campaign decided they wanted Wall Street money for the general election, hence titled in the direction of DFER policies.
That said, it is fair to argue that Duncan was not yet a done deal, until after the election when Linda’s name was floated the TFA network began a serious organized pushback. Just remember, Obama does not like confrontation unless he initiates it. That is one reason for example that Rep. Raul Grijalva was not picked for Secretary of the Interior – hunters and gun groups pushed back against himheavily.
However, from some sources within the campaign and one source within the office that was doing staffing (albeit not at the cabinet level), there were still a variety of names in theory under consideration, some of which would have raised much more ire than Duncan.
Remember, for Obama his personal comfort level is very important. It is why he is seriously considering the horrible idea of Lawrence Summers for the Federal Reserve. He knew Duncan from serving on the Annenberg Challenge in Chicago (where he had also served with Bill Ayers, by then a distinguished professor of urban education at U of Illinois Chicago Center).