This article in The New Yorker is a long read. It will introduce you to a subject about which you are probably unfamiliar. It describes the world of Paul Singer, a billionaire investor. He is relevant to this blog because he is not only a billionaire but he gives generously to charter schools and Republican causes. Charter schools are the favorite hobby of hedge fund managers, equity investors, and Wall Street. These groups make large campaign contributions to influential politicians. They are underwriting the destruction of public education. They don’t know much about education, but they know markets. It is important for you to understand their thinking.

Categories Accountability, Billionaires, Charter Schools, Education Industry, Privatization

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David Di Gregorio says:

December 27, 2018 at 10:04 am

I have not read the article yet, but big money would best be spent this way:
https://www.linkedin.com/pulse/new-kind-professional-development-mini-sabbatical-david-di-gregorio/

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LeftCoastTeacher says:

December 27, 2018 at 11:38 am

This paragraph:

Over time, this lack of long-term vision alters the economy—with profound political implications. Businesses are the engine of a country’s employment and wealth creation; when they cater only to stockholders, expenditures on employees’ behalf, whether for raises, job training, or new facilities, come to be seen as a poor use of funds. Eventually, this can result in fewer secure jobs, widening inequality, and political polarization. “You can’t have a stable democracy that has not seen any increase in wages for the vast majority of working people for over thirty years, while there’s a tremendous increase in compensation and earnings for a small percentage of the country,” Martin Lipton, a founding partner of Wachtell, Lipton, Rosen & Katz, who has spent decades working with companies targeted by corporate raiders, told me. “That is destructive of democracy. It breeds populism.”

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- Joel Herman (@jwherman11) says:
  
  December 27, 2018 at 5:07 pm
  
  LeftCoastTeacher
  
  I just had the same argument about CEO compensation and shareholder primacy. Populism is not the problem. Populism “support for the concerns of ordinary people”; is in essence democracy. Right wing xenophobic Nationalism and fascism are not populism as pointed out by Sherod Brown to Chuck Todd a few weeks back.
  
  There are populist solutions to the Singers and Mercers of the world. It usually winds up with as Nick Hanauer said: with Pitchforks and Guiloteens. Short of that the whole model of vulture capitalism is built on tax benefit for taking on debt. Bankruptcy laws that give limited liability to shareholders and corporate boards. What a different world it might be if workers and consumers were given priority in a Bankruptcy filing. Picture the past shareholders of a Sears or a “Toys are Us” getting a bill for the pension liabilities of the Company. The Vultures operate within the system we allow them to have;. They control the political decisions that decide how the production of the economy is shared.
  How the tax burden is shared. I vote for the days that Capital Gains and Dividends are treated as income. That share buybacks are considered manipulation and are illegal again. That the top Marginal tax rate is 93%. And only 50% of profits are returned to shareholders as was the case when America was great in the 50s. When corporate taxes paid 30% of the Federal budget. Leaving ample profits for R&D capital investment. And investment in the other stakeholder Employees.
  
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  - retired teacher says:
    
    December 28, 2018 at 8:37 am
    
    Well stated. The above changes mentioned would bring back some balance to our top heavy economy.
    
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- LeftCoastTeacher says:
  
  December 27, 2018 at 7:35 pm
  
  Joel,
  
  Well said. I completely agree. I was quoting the article, but I agree about democracy and populism. I’m a Berniecrat. We could use some progressive populism. Vulture capitalism is ruining us.
  
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  - Joel Herman (@jwherman11) says:
    
    December 27, 2018 at 8:01 pm
    
    Amen
    
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  - Lloyd Lofthouse says:
    
    December 27, 2018 at 11:01 pm
    
    Vulture capitalism is a terminal cancer and also a short-term profit Ponzi scheme gone mad.
    
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- Linda says:
  
  December 28, 2018 at 8:28 am
  
  Both the vulture firms’ bleeding of Puerto Rico and Singer’s active role in Peru and Argentina’s debt, created the playbook for the United States to be victimized by Wall Street’s legalized theft. Politicians at the national level who are rolling in Wall Street’s cash include Marco Rubio and Joni Ernst.
  
  BTW- Individually-held debt by Americans already far exceeds that of Russians. Trump’s Russian-owned debt has been the subject of widespread rumors.
  
  Trump has weakened the nation. But, his harm was not the beginning. It began with the conjoining of the right wing and neo-liberals. The Koch’s political dominance, with political opposition limited to lip service, expanded America’s vulnerability significantly in the past 5 years.
  
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retired teacher says:

December 27, 2018 at 12:38 pm

The investing by Singer and company goes far beyond simple ‘activist investing.’ It is vulture investing at any cost including digging up dirt on CEOs and squeezing the economies of other nations. It is interesting that some CEOs are reluctant to take their companies public in order to keep hedge funds from finding and exploiting weakness from which they can profit. It is somewhat ironic that a Bush became a victim of hedge fund campaign and trap to undermine his company.

Hedge funds are masters of manipulation, but they are not a great asset to the economy except for the super-wealthy investors. They help contribute to the volatility and financial insecurity that plague our economy and people. That hedge funds have set their sights on public education should be concerning to all people that understand the value of public schools to communities, people and society at large. Hedge funds will stop at nothing to impose their will. Only a groundswell of angry, defensive citizens that will fight to change laws to deny them access to public funds can stop them.

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- Linda says:
  
  December 28, 2018 at 8:37 am
  
  It’s been estimated that the financial sector drags down GDP by 2%.
  That’s why it’s such a fraud when ed. deformers pretend their motivation is improvement of the economy. If it was their objective the richest men in America would have taken on cleaning up the financial sector.
  I assume Gates either knows he is inadequate for that job or the private gain from for-profit schools-in-a box appeals to him more.
  
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Threatened Out West says:

December 27, 2018 at 1:02 pm

Is this the hedge fund manager who is demanding that schools in Puerto Rico close in order to pay off the debt that the hedge fund manager owns?

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- dianeravitch says:
  
  December 27, 2018 at 2:23 pm
  
  The very same.
  
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Susan Lee Schwartz says:

December 27, 2018 at 1:23 pm

Posted your blog as a comment on Singer, at https://www.opednews.com/Quicklink/Paul-Singer-Doomsday-Inve-in-General_News-Investors_Wolves-181227-174.html#comment720567

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Lloyd Lofthouse says:

December 27, 2018 at 2:29 pm

It’s easy to understand their thinking and Lord Acton showed us how back in the 18th or 19th century when he said or wrote:

“Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority; still more when you superadd the tendency of the certainty of corruption by authority.”

“Despotic power is always accompanied by corruption of morality.”

“Authority that does not exist for Liberty is not authority but force.”

“Everybody likes to get as much power as circumstances allow, and nobody will vote for a self-denying ordinance.”

“Absolute power demoralizes.”

https://acton.org/research/lord-acton-quote-archive

Nothing has changed but the names of those that crave power no matter what they have to do to get it.

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SoneDAM poet says:

December 27, 2018 at 5:42 pm

Hedge funds are leeches that suck the life blood from the economy.

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Linda says:

December 28, 2018 at 8:48 am

It would be a good day for America and a bad day for tech tyrants, Wall Streeters and discount retailing heirs if the so-called “liberal” voice from the Center for American Progress spoke out against disaster capitalism and privatization of United States’ most important common good. (Check out the bio of the person that the Gates-funded CAP chose to lead its self-appointed efforts in Puerto Rico.)

But, that’s not going to happen at the Podesta/Tanden operation so, their favorite politicians like Cory Booker have to be replaced by those who are good for the country, like Katie Hill from California.

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bethree5 says:

December 28, 2018 at 9:36 pm

Singer sounds like lawyer Mr Vholes of Bleak House [with govt of Argentina cast as the Jarndyce estate]: “so eager, so bloodless and gaunt, always looking at the client, as if he were making a lingering meal of him with his eyes.”

Bush has a good take on ‘activist’ hedge-funders’ deleterious effect on innovation and productivity:
“I’m obsessed with Fidel,” Bush mused. “All he did was harvest what was already there, until everyone was starving to death.”
“He pointed to a sculptural piece by the Cuban artist Juan Roberto Diago, who had fastened together slabs from old automobiles, representing the way that people in his native country were forced to continually repurpose things in the absence of actual creation. It was, Bush said, just a “joining of scars. There’s nothing being built fresh. Things are just being reshuffled.”

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