Archives for category: Charter Schools
« Older Entries
Newer Entries »

Trump Runs the Federal Government Like a Charter School

By dianeravitch
April 27, 2019 //
58

 

Mitchell Robinson, Professor at Michigan State University, has a brilliant insight. Donald Trump runs the federal government (to the extent that he runs anything other than his Twitter feed) like a Charter School.

He write:

“One of Trump’s major goals as president* has been to eliminate or weaken regulations in eight major categories: agriculture, education, environment, finances, health care, housing, labor, telecommunications, and transportation. And on this one issue, even his detractors have to admit he’s exceeded their expectations. As of 2018, the Trump administration was eliminating 22 regulations for every 1 new regulation approved, surpassing their stated goal of “2 out for every 1 in.” These actions represent nothing less than a wholesale dismantling of the federal government’s oversight responsibility for every major sector of the country’s economic and environmental enterprises, many of which have been in place for decades. Taken along with the dramatic number of judicial appointments that the administration has jammed through, Trump’s influence on the nation’s direction is hugely outsized when compared to his legislative impact, which has been negligible.

“This focus on rolling back regulations was, of course, the entire rationale for the existence of charter schools. That the “purpose” of charters has now morphed perversely into a profit seeking endeavor only reinforces the importance of a lack of oversight to the proliferation of charters across the country. Charter management corporations depend on this lack of governmental accountability to hire uncertified teachers, pay them less than teachers in traditional public schools, pay charter leaders more, and keep teachers unions out of their schools. And when forced to play by the same rules as public schools, they just can’t compete.”

In addition, he hires completely unqualified people and has high staff turnover.

What’s more, he is in it for the money, just like so many charter leaders.

Robinson’s hope is that Trump’s administration closes as quickly as most charter schools.

 

 

 

 

Categories Accountability, Charter Schools, Education Reform

Hillary Clinton Advisor: No Regrets About Our Support for Charter Schools!

By dianeravitch
April 26, 2019 //
84

Catherine Brown was a senior advisor to the Hillary Clinton campaign. She has long been associated with the neoliberal Center for American Progress. She also worked for former Congressman George Miller, who was a favorite of Democrats for Education Reform (DFER), the hedge fund managers’ charter-promoting organization.

In this article, published fittingly enough at Campbell Brown’s website The 74, Brown says she has no regrets about supporting charter schools. She defends Beto O’Rourke, whose wife is deeply enmeshed in charter schools in Texas, and who has expressed his admiration for privately managed charters in the past.

Curiously, she feels no embarrassment about embracing a “reform” that destabilizes public schools and that is endorsed by every Red State governor and legislature.

She doesn’t seem to care about the fiscal impact of charters on the public schools that enroll 85-90% of the nation’s students. Why does she prioritize charters over public schools?

It is interesting that she does not address the recent NPE report demonstrating that the federal Charter Schools Program wasted nearly $1 billion between the years 2006-2014 (during the Obama administration) on charter schools that never opened or closed soon after opening. About 1 of every 3 charters funded by the federal program failed.

Nor does she address the daily reports of charter fraud, waste, abuse, and embezzlement.

Nor does Brown mention that 90% of the charters across the nation are non-union.

Nor that their biggest single private funder is the anti-union Walton Foundation.

Oh, no, she favors “high-quality” charter schools, you know, the ones that cherry pick the highest scoring students and post high test scores due to their admissions and discipline policies.

This article is a strong statement of the neoliberal Democrat view of charters, which has helped to defund public schools and undermine teacher unions across the country.

The overlap between the views of Betsy DeVos and neoliberal Democrats is hard to miss.

Note to the Center for American Progress:

Progressive Democrats support real public schools. Progressive Democrats do not support privately managed charter schools. Progressive Democrats do not support a sector that was built to smash teachers’ unions and that is 90% non-union. Progressive Democrats support democratically controlled public schools. 

 

 

Categories Budget Cuts, Charter Schools, Democrats for Education Reform, Funding, Walton Foundation

Oakland: Remember Laurene Powell Jobs’ $100 Million Giveaway Contest to Reinvent High Schools? This One Collapsed

By dianeravitch
April 26, 2019 //
7

Remember when Laurene Powell Jobs announced that she was running a competition for ideas to reinvent the high school? She was offering $10 million to each winning proposal, which she called “Super Schools.”

Nearly 700 proposals were entered, but only 10 were chosen.

One of the winners was in Oakland, California, a district that has been subject to nonstop disruption, charters, and and constant meddling by the Eli Broad foundation. For years, the district has been led by Broadies, who have run it into a ditch and failed to revive its fortunes.

The Oakland winner planned to open a Super School that incorporated Mark Zuckerberg’s Summit Learning online platform.

But things went poorly after Oakland’s Broadie superintendent Antwan Wilson was lured to the District of Columbia to be its chancellor (where he was soon ousted after it was revealed that he pulled strings to get his daughter into one of the best public schools, a practice that Wilson had forbidden for others. Wilson is now running an education consulting business.)

Two years ago, the Oakland Super School was abandoned before it opened. 

The turmoil in the district, which has been a near constant for years, made it impossible to open.

Summit Public Schools, which operates a chain of charter schools, with support from the Oakland school district and Mayor Libby Schaaf’s office, submitted a winning proposal for a charter school focusing on personal learning and real-world experiences. The goal was to open the new school at the California College of the Arts on Broadway in Rockridge in fall 2018.

But the effort started to fall apart over the last several months and was ultimately abandoned in recent weeks, The Chronicle has learned. Now, Summit leaders will use the money for one of their existing charter schools in Daly City.

“There are just better ways for us to help kids in the Bay Area,” said Jason Solomon, senior director of advocacy and engagement at Summit Public Schools, which operates eight charter schools in the Bay Area and three in Washington state.

Solomon noted that the team’s entry to build the new school included the support of former Oakland Superintendent Antwan Wilson, who resigned this year to lead the Washington, D.C., schools. On top of the turnover in leadership, the district is grappling with the need to close or consolidate schools given declining enrollment while juggling a $30 million budget shortfall over the next year.

Community groups were unhappy that the proposed charter would be sited very close to an existing Oakland public school that had not yet been disrupted and destroyed.

With Antwan Wilson gone, Summit charters was not sure they would have a champion so they shifted the funding to one of their schools in Daly City.

Summit substitutes computer-based instruction for real teachers, and it has driven out in places as distant as Connecticut and Kansas, by parents and students.

Categories Accountability, Billionaires, Chan-Zuckerberg Initiative, Charter Schools, Disruption, Education Industry, Privatization, Technology

Oakland: A Must-Read Lexicon of Charter Frauds

By dianeravitch
April 26, 2019 //
16

 

Jane Nylund, a parent activist in Oakland, wrote this incisive overview of charter frauds in her district and submitted it to the Task Force reviewing the California charter law. Please copy and forward to the Task Force at:

chartertaskforce@cde.ca.gov

She writes:

For fifteen years as a parent, volunteer, and employee of Oakland Unified, I’ve been witness to what is now a full blown privatization movement in Oakland under our “portfolio district” model. A movement designed to crush our real public schools and privatize them; a movement to close our schools and gentrify our neighborhoods. A movement to allow outside interests and corporations to feed at the trough. And the current laws in California that allow this to happen, unchecked and unfettered. And the absolute failure of any of it to collectively improve the lives of our most vulnerable children. 

 The time for this damaging experiment on our children is over. Stop clutching at the billionaires’ purse strings, while at the same time declaring that more choice is the answer. Here’s why it isn’t.

 Choice in Oakland-Do you want fries with that?

What does choice in Oakland mean? The model here isn’t much different than saturating the poor neighborhoods with cheap fast food. Oh, there’s choice all right-McDonalds, Burger King, KFC, or Taco Bell. Plenty of choice, take your pick. How about a nice juicy steak? Forget it, you don’t need that choice, but here’s some other choices for you. Poor nutrition that fills you temporarily, but ends up starving you of any real sustenance. Saturating neighborhoods with charter schools is the same business model. I heard an East Oakland resident say, in a public meeting, that charter schools were like having drug dealers on every corner. Keepin’ it real….

 Scandals? You want ’em, we got ’em

 Scandal #1-American Indian Charter

The CEO of AIMS, Ben Chavis stole $3.8M from his schools in rent and paid it to his own leasing company which held the leases for his own schools. Self-dealing Gone Wild. He is in jail in North Carolina awaiting trial for money laundering and mail fraud. You’d think the school would be shut down after that? Nope, the school board wilted under the facade of those amazing test scores, gamed in part by shutting out African Americans and SPED from the AIMS schools, as well as having obscenely high rates of attrition. 

https://www.eastbayexpress.com/oakland/turmoil-returns-for-charter-schools/Content?oid=9074129  

 Scandal #2-Bay Area Technology School

A Gulen school run by Turkish teachers and a Turkish school board. In a squabble worthy of a B-rated movie, the principal was forced out but somehow managed to flee to Australia with $400,000 of our hard-earned tax dollars in his pocket. Nice gig if you can get it. 

https://www.eastbayexpress.com/oakland/former-principal-alleges-oaklands-baytech-school-was-source-of-funding-for-gulen-movement/Content?oid=19390167  

 Scandal #3-Oakland School for the Arts

Full disclosure-I’m a huge arts supporter, and I know plenty of parents who support the school and who have kids there. It’s not the program; it’s the enrollment policy. OSA is an experiment in what happens when a school supported by our former governor is allowed to select its own student body. OSA is now the second wealthiest school in Oakland and has virtually no ELL. How can that possibly happen when the school has a lottery? Easy. You have the kids do an audition and allow the kids into the lottery based on the results of the audition. Private schools do that. Is it discriminatory? Yes, the ACLU said as much.  Does it violate charter law? Yes. Has anyone done anything about it. No, because of big $$$ and the support of Jerry Brown and Friends. Alternatively, Jerry could have supported more arts funding in public schools instead of opening OSA. Food for thought….

 Scandal #4-Castlemont Junior Academy and Primary Academy

This was a script that practically wrote itself. Open charters right next door to the neighborhood elementary, Parker. Next, install a OUSD board member, James Harris on the charter board, as well as Yana Smith, the wife of former OUSD Chief of Schools Allen Smith. While it might have been legal, the perceived conflict of interest was breathtaking. Lastly, watch in amazement as the charters implode a few months later, due to low enrollment. Parker, the real public school has to enroll approx. 85 children from the elementary charter mid-year. It doesn’t get more disruptive than that. Startup funding? Gone….

https://www.eastbayexpress.com/oakland/two-highly-touted-oakland-charter-schools-quickly-closed-andmdash-and-now-owe-the-district-money/Content?oid=5091277  

 Scandal #5-Aspire Eres and the annexing of the Derby Parcel

When Reed Hastings says “Jump!”, Aspire says, “How high?” Aspire, in a bid to purchase city-owned public land for charter school expansion, tried to negotiate a backroom deal with the city. The expansion had not even been approved by the school board, but that’s okay because Reed Hastings doesn’t like elected school boards anyway. They just get in the way of his personal business. Public school activists found out, organized the public, pushed back hard, and thwarted the deal. 

https://www.eastbayexpress.com/oakland/oaklands-exclusive-deal-to-sell-city-owned-land-to-charter-school-draws-opposition/Content?oid=15872497  

 Scandal #6-the 100% Grad Rate myth

This is one of my personal favorites because of the inevitable comparison of district schools’ to charter schools’ performance. How many more times do we need to see grad rates/test scores stats tossed around on social media, popping up like so many toxic mushrooms. How can a charter school claim 100% (or close to it) grad rates when they lose 40, 50, or 60% of their children in high school? Easy, charters typically don’t backfill. Real public schools backfill; they fill that seat as soon as a student wants it, at any time. Any student, not just the easy ones.

 Scandal #7-Charters are superior to district schools because of their amazing test scores! (Marketing 101)

See Scandal #6. Until charters can claim that they educate the same number of FRPL, ELL, and SPED kids, and also have the same number of suspensions/attrition, there is no valid or fair comparison here. The student populations served (or not) are usually significantly different.

 Scandal #8-the “rightsizing” myth

Portfolio models “rightsize” (translation:downsize) by closing mostly district schools. But the schools don’t close; they are privatized into charters via Prop 39. Out of 18 of the last Oakland district school closures, 14 were converted to charters. This scandal illustrates the utter lack of local control on any charter openings/closings. Easy to open, nearly impossible to close, favoring charter growth by design. OUSD admitted that closing schools doesn’t save money, and yet they (Walton/Bloomberg-bought board) push the narrative constantly. It’s a mantra that’s growing stale but refuses to die.

 Scandal #9-the “high demand” for charters myth

See Scandal #8. How to create demand? Close your neighborhood elementary schools, which then feed into the middle schools (demand dries up there as well). Then, open a charter right near these same schools. Doesn’t take a genius to see how that will turn out. Ask the students at Roots International how they feel about their neighborhood school closure. But our charter-friendly ($$$) school board fully supports this portfolio model; there are charters right around the corner that former Roots students can attend instead. Instant charter demand creation.

https://www.kqed.org/news/11721015/the-big-fight-over-a-small-school-in-oakland-what-you-need-to-know  

 Scandal #10

The fact that all these scandals exist at all, and that public school advocates, as well as tenacious local reporters, have to do the important work of digging up the information and presenting it to the public. This is what accountability looks like in Oakland and the rest of California. We are getting tired of doing the job that the Office of Charter Schools is supposed to be doing, but doesn’t. And this list is far from exhaustive; it’s likely just the tip of the iceberg, because of the lack of transparency.

 Our school district loses $57M a year to unfettered charter expansion. It’s time to get back to some no-nonsense approaches to this problem such as real local control, as well as including impact to district finances. Charter schools don’t have the right to expand just because it’s what the Waltons and Reed Hastings want. The Waltons don’t send their children to Oakland public schools.  District schools aren’t offered the same expansion opportunity and if they were, Oakland Technical would be the size of a small college by now. This failed experiment on our most vulnerable children must end, and I implore the task force to make the recommendations that will serve the needs of ALL students and stop supporting an agenda that clearly favors charter expansion, the theft of taxpayers’ dollars, and not much else. The time is now, and if not now, when?

 Thank you for your attention in this matter.

Categories Accountability, California, Charter Schools, Competition, Education Reform

Los Angeles: The LA Times Prefers a School Board Member with Neither Experience Nor Knowledge

By dianeravitch
April 25, 2019 //
8

 

The Los Angeles Times wrote an editorial endorsing Heather Repenning over Jackie Goldberg for the LAUSD seat in a special election. The editorial admitted that Jackie Goldberg has the experience and knowledge that her opponent lacks but the Times preferred a blank slate.

Repenning admittedly knows little about education issues but she previously worked as an aide to Mayor Eric Garcetti. In the primary, and she said she would not take charter money. Now that she is in a runoff with the far better qualified Jackie Goldberg, Repenning has decided that it is okay to take money from the charter billionaires. 

The Times lauded her as independent. The fact that she is now the favorite of people like billionaire Republican Bill Bloomfield is evidence that she is not independent. She will cast her vote, if elected, to support the Eli Broad privatization and Disruption agenda.

The Times posted some of the letters to the editor that it received objecting to its endorsement of an unqualified candidate, including one from me.

One letter came from a retired principal, who wrote, “The Times is repeating the mistake it made when it endorsed Ref Rodriguez in 2015 and other candidates bought and paid for by billionaire privatizers.” Rodriguez operated a charter chain at the time of his election, but was removed from the board after he was convicted on felony counts for campaign finance violations. He did not step down until the board had selected the unqualified, inexperienced Austin Beutner as superintendent of the nation’s second largest school district.

This is the Times’ description of Jackie Goldberg:

“She’s brimming with experience, smarts and humor — and connections. She’s been a teacher and served as a member of the school board, the City Council and the state Assembly, and she knows everyone involved in the world of education in California. To say that her chances of winning the May 14 runoff are high would be an understatement.

”Nor would it be a terrible thing if that happened. Goldberg’s institutional memory and her talent for digging to the heart of an issue would be of value to the board.”

So why didn’t the Times endorse her? Because the teachers already endorsed her.

Educators know and trust Jackie.

The charter billionaires know and trust her opponent.

I say to the voters of District 5: Vote for the candidate with experience and knowledge.

Don’t let the billionaires buy another seat on the school board.

Vote for Jackie Goldberg on May 14.

She will represent you, your children, and your schools, not Eli Broad and the other billionaires.

 

Categories Accountability, Billionaires, Charter Schools, Los Angeles

Eva Moskowitz Accused of Violating Student Rights, Wins $10 Million from DeVos, Will Receive an Honorary Degree from Tufts

By dianeravitch
April 25, 2019 //
26

 

As Leonie Haimson explains in this post, it has been a busy few weeks for Eva Moskowitz, founder and CEO of NYC’s controversial Success Academy charter chain.

Once again, her chain has been accused of violating the rights of students; Betsy DeVos awarded $9.8 million to her schools, added to the $43.4 million  Eva previously received from the federal Charter Schools Program; she will receive an honorary degree from Tufts University; and the President of Harvard University is giving the commencement speech to her graduating class.

How does it happen that the president of the nation’s most prestigious university is speaking to what may be a graduating class of a few dozen students at a charter school? .

“The former president of Tufts, Lawrence Bacow, who is the current president of Harvard is scheduled to speak at the Success high school’s graduation, which last year only graduated 16 out of the 73 students who entered the school in Kindergarten  or first grade.  No doubt both occurrences were influenced by the fact that the head of the Success board, hedge funder Steve Galbreath, is also on the Tufts board of trustees and heads its investment committee.”

Follow the money.

Don’t be surprised if next year Moskowitz land DeVos herself, America’s leading charter school champion.

 

Categories Accountability, Billionaires, Charter Schools, Education Industry, Harlem Success Academy, New York City, Privatization

Chicago: Teachers at Unionized Charter Schools Plan to Strike

By dianeravitch
April 24, 2019 //
15

When the Waltons and Gates and Bloomberg read this, they will be very disappointed. Chagrined. The point of charters is to bust unions, they thought.

NEWS RELEASE:
For Immediate Release| ctulocal1.org

CONTACT: Chris Geovanis, 312-329-6250, 312-446-4939 (m), ChrisGeovanis@ctulocal1.org

CTU charter members to announce strike date against operators

Teachers, support staff will walk out if demands for living wages, adequate student supports, pension rights, protections for immigrant and diverse learners are not met.

CHICAGO—Chicago could be on the cusp of a third strike against charter operators in the current school year, as negotiations drag on with operators of five schools, and four additional schools consider striking this spring. This would be the first multi-employer charter strike in U.S. history.

CTU educators will join City Colleges clerks and technical workers in AFT/IFT Local 1708 at 4:30 PM on Thursday, April 25 at the Arturo Velazquez Westside Technical Institute at 2800 S. Western Ave., where both groups will announce strike dates. Then workers will head two blocks north to Instituto Progresso del Latino’s IHSCA charter campus at 2520 S. Western Ave. to rally.

CTU charter members at two schools run by Instituto Progresso del Latino share a common target with City College clerks. City Colleges chancellor Juan Salgado ran Instituto before he was appointed as top brass at City Colleges. Under his leadership, workers at both shops have gotten the shaft, charge teachers. City Colleges clerks have been without a contract for almost three years, while Instituto under both Salgado and his heirs has steered public dollars away from classroom needs into a bloated bureaucracy and non-educational spending.

The five schools considering striking employ 134 CTU members who educate almost 1,800 students. All five schools voted overwhelmingly to strike earlier this month, with 94 percent of union members voting, and 97 percent voting to strike if there is no progress at the bargaining table.

CTU members are demanding protections built into the contract to provide special education students with the services they both need and are entitled to under federal law. They’re demanding more support for English language learners and immigrant students—including sanctuary protections enshrined in contract language. And union members are demanding adequate staffing and resources for schools that confront serious shortages of both, along with equal pay for equal work with their colleagues in CPS, who teach the same student population for better wages and working conditions.

At ChiArts, which was cofounded by wealthy investment banker Jim Mabie, teachers are also fighting to force the operator to contribute to their pension fund—a move opposed by the board at the same time that Mabie is trying to gut the pensions of striking Chicago Symphony Orchestra musicians. Mabie sits on both boards.

High turnover is a chronic issue at the schools, driven by systemic under-resourcing and poor wages and working conditions. Staff churn, which can be upwards of 20% per year or more at some schools, undermines students’ learning conditions and the stability of school communities.

Union charter workers want to reform these practices with these operators as part of an effort to reform the entire charter industry, which chronically undercuts investment in academic programs and student supports while expanding bloated bureaucracies, inflating executive salaries and shunting education dollars into high management fees.

While this number could grow, the schools announcing a strike date include:

  • IHSCA, the Instituto Health Sciences Career Academy, which serves more than 700 high school students. City Colleges chancellor Juan Salgado had oversight of IHSCA and Instituto’s other school programs and civic projects, yet failed to ensure that public dollars went into classrooms instead of Instituto’s management expansion and fee structure for ‘managing’ its school portfolio.
  • IHSCA is bargaining a joint contract with another small Instituto-controlled school, IJLA, the Instituto Justice Leadership Academy. The school serves just under 100 students aged 17-21 who previously left school and are seeking a high school diploma.  Both schools are ovewhelmingly low-income and Latinx, with high percentages of limited English-speaking students.
  • ChiArts, where more than 40 teachers are fighting for more classroom resources, and contributions to their pension fund. Management at the publicly funded selective enrollment school of 600 students has refused. Wealthy investment banker and ChiArts’ co-founder Jim Mabie is also treasurer of the Chicago Symphony Orchestra’s board, where he and his fellow board members are fighting to cancel the pensions of the orchestra’s striking world class musicians, even though moving musicians into a ‘defined contributions’ style plan would be more expensive than the current pension plan.
  • Latino Youth High School, or LYHS, run by CMO—charter management organization—Pilsen Wellness Center (PWC), which has demanded a longer school day and school year plus reductions in contractual benefits, while rejecting the union’s demand for equal pay for equal work. The school’s 220 students, who suffer from high rates of trauma, are almost 90% Latinx and 10% Black.
  • YCLA—Youth Connection Leadership Academy—where CTU members are bargaining with charter operator YCCS, which, like many operators, has inflated executives positions while shortchanging spending on students’ academic needs. YCLA’s CEO earns almost $180,000 per year and the top deputy makes almost $160,000 per year, while some educators make barely a fifth of that. Management has drawn complaints that range from body-shaming to shortchanging special education students at the overwhelmingly Black, low-income school on Chicago’s South Side.

###

The Chicago Teachers Union represents nearly 25,000 teachers and educational support personnel working in schools funded by City of Chicago School District 299, and by extension, the nearly 400,000 students and families they serve. The CTU is an affiliate of the American Federation of Teachers and the Illinois Federation of Teachers and is the third-largest teachers local in the United States. For more information please visit the CTU website at www.ctulocal1.org.
Sent via ActionNetwork.org. To update your email address, change your name or address, or to stop receiving emails from CTU Press, please click here.

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

Rhode Island: Governor Raimondo Takes First Steps Towards State Takeover of Providence Schools

By dianeravitch
April 24, 2019 //
11

 

Governor Gina Raimondo, formerly a hedge fund manager, is unhappy with the public schools of Providence. Their test scores are low. They are definitely lower than the schools of Massachusetts.

She is thinking of a state takeover.

Whatever might she have in mind?

One assumes privatization by charter schools.

Hedge funders have a bad habit of believing that privatization fixes low test scores.

All they lack is evidence.

If they ran their hedge funds like they try to run schools, they would be bankrupt.

Categories Accountability, Charter Schools, Privatization, Providence, Rhode Island

Tennessee: Republicans Oppose Local Control

By dianeravitch
April 24, 2019 //
12

 

It has become a national pattern. Republicans are on record opposing local control of public schools.

In Tennessee, the State Senate voted to create a state charter school commission, appointed by the Governor, with the power to override decisions by local school boards.

This is surely not because charter schools are more successful than public schools. They are not. The state’s so-called Achievement School District spent $100 million dollars while taking over the lowest performing schools, giving them to charters, and failed.

Why fund more failure?

Categories Charter Schools, Failure

Capitalism Is in Crisis, and Billionaires Know It

By dianeravitch
April 24, 2019 //
52

 

 

This article in the Washington Post examines the alarming increase in inequality as a small number of billionaires take control of the economy and the future. The article does not mention the billionaires’ political efforts to gain control of state and local school boards so as to destroy the public schools by replacing them with privately managed charter schools.

The article mentions the deep concern of Seth Klarman, a hedge funder in Boston, but fails to note that he was a Dark Money contributor to the 2016 referendum in Massachusetts that was intended to add 12 charter schools every year wherever they wanted to open. Teachers,  parents, unions, and civil rights groups combined to defeat the billionaires—not only Klarman, but Bloomberg, the Waltons, and others.

My comments are in BOLD.

”PALO ALTO, Calif. —A perfect California day. The sun was shining, a gentle breeze was blowing and, at a Silicon Valley coffee shop, Rep. Ro Khanna was sitting across from one of his many billionaire constituents discussing an uncomfortable subject: the growing unpopularity of billionaires and their giant tech companies.

“There’s some more humility out here,” Khanna (D-Calif.) said.

The billionaire on the other side of the table let out a nervous laugh. Chris Larsen was on his third start-up and well on his way to being one of the wealthiest people in the valley, if not the world.

“Realizing people hate your guts has some value,” he joked.

“For decades, Democrats and Republicans have hailed America’s business elite, especially in Silicon Valley, as the country’s salvation. The government might be gridlocked, the electorate angry and divided, but America’s innovators seemed to promise a relatively pain-free way out of the mess. Their companies produced an endless series of products that kept the U.S. economy churning and its gross domestic product climbing. Their philanthropic efforts were aimed at fixing some of the country’s most vexing problems. Government’s role was to stay out of the way.

“Now that consensus is shattering. For the first time in decades, capitalism’s future is a subject of debate among presidential hopefuls and a source of growing angst for America’s business elite. In places such as Silicon Valley, the slopes of Davos, Switzerland, and the halls of Harvard Business School, there is a sense that the kind of capitalism that once made America an economic envy is responsible for the growing inequality and anger that is tearing the country apart.”

Something is terribly wrong, and even the billionaires know it. Some might want change, but they want to control the change. 

“The 2008 financial crisis may have revealed the weaknesses of American capitalism. But it was Donald Trump’s election and the pent-up anger it exposed that left America’s billionaire class fearful for capitalism’s future.

“Khanna was elected in 2016, just as the anxiety started to spread. In Europe, far-right nationalist parties were gaining ground. Closer to home, socialists and Trump-inspired nationalists were winning state and congressional elections.

“Conversations of the sort that Khanna was having with Larsen were now taking place in some of capitalism’s most rarefied circles including Harvard Business School, where last fall Seth Klarman, a highly influential billionaire investor, delivered what he described as a “plaintive wail” to the business community to fix capitalism before it was too late.

”The setting was the opening of Klarman Hall, a new $120 million conference center, built with his family’s donation. “It’s a choice to pay people as little as you can or work them as hard as you can,” he told the audience gathered in the 1,000-seat auditorium. “It’s a choice to maintain pleasant working conditions . . . or harsh ones; to offer good benefits or paltry ones.” If business leaders didn’t “ask hard questions about capitalism,” he warned that they would be asked by “ideologues seeking to point fingers, assign blame and make reckless changes to the system.”

No, no, we don’t want anyone making reckless changes to the system!

“Six months after that speech, Klarman was struck by how quickly his dire prediction was coming to pass. Leading politicians, such as Trump, Sanders and Sen. Elizabeth Warren (D-Mass.), were advocating positions on tariffs, wealth taxes and changes in corporate governance that would have been unthinkable a few years ago.

“Klarman wasn’t opposed to more progressive taxation or regulation. But he worried that these new proposals went much too far. “I think we’re in the middle of a revolution — not a guns revolution — but a revolution where people on both extremes want to blow it up, and good things don’t happen to the vast majority of the population in a revolution,” he said.

Too bold no one asked Klarman why he wants to undermine public schools, one of the few institutions that billionaires don’t own. 

“He wasn’t the only one who felt a sense of alarm. One of the most popular classes at Harvard Business School, home to the next generation of Fortune 500 executives, was a class on “reimagining capitalism.” Seven years ago, the elective started with 28 students. Now there were nearly 300 taking it. During that period the students had grown increasingly cynical about corporations and the government, said Rebecca Henderson, the Harvard economist who teaches the course.

“What the trust surveys say is what I see,” she said. “They are really worried about the direction in which the U.S. and the world is heading.”

As Giriharadas says, the billionaires want to drive any changes in the economy, proclaiming their deep concern for the millions left behind by their success. Never forget that any changes they control will protect them and their billions.

”The billionaires in Khanna’s district, meanwhile, were consumed by a different worry. Mixed in with the valley’s usual frothy optimism about disruption and inventing the future was a growing sense that the tech economy had somehow broken capitalism. The digital revolution had allowed tech entrepreneurs to build massive global companies without the big job-producing factories or large workforces of the industrial era. The result was more and more wealth concentrated in fewer hands.

“As technology advanced, some feared things were only going to get worse. Robots were eliminating much factory work; online commerce was decimating retail; and self-driving cars were on the verge of phasing out truck drivers. The next step was computers that could learn and think.

“What happens if you can actually automate all human intellectual labor?” said Greg Brockman, chairman of OpenAI, a company backed by several Silicon Valley billionaires. Such thinking computers might be able to diagnose diseases better than doctors by drawing on superhuman amounts of clinical research, said Brockman, 30. They could displace a large number of office jobs. Eventually, he said, the job shortages would force the government to pay people to pursue their passions or simply live. Only Andrew Yang, a long-shot presidential candidate and tech entrepreneur, supported the idea of government paying citizens a regular income. But the idea of a “universal basic income” was discussed regularly in the valley.

“The prospect was both energizing and terrifying. OpenAI had recently added an ethicist — Brockman sometimes referred to her as a “philosopher” — to its staff of about 100 employees to help sort through the implications of its innovations.

“To Brockman, a future without work seemed just as likely as one without meat, a possibility that many in the valley viewed as a near certainty. “Once we have meat substitutes as good as the real thing, my expectation is that we’re going to look back at eating meat as this terrible, immoral thing,” he said. The same could be true of work in a future in an era of advanced artificial intelligence. “We’ll look back and say, ‘Wow, that was so crazy and almost immoral that people were forced to go and labor in order to be able to survive,’ ” he said.”

What kind of future are the billionaires imagining for the other 99.9%?

 

Categories Accountability, Billionaires, Charter Schools, Education Reform, Privatization, Technology
« Older Entries
Newer Entries »