Investors Ready to Liquidate Public Schools

investors, public schools, stocks, charter schools,
A busy day on the NYSE. Investors in this arena have their eyes on public schools conversions to private schools. Photo by Ben Hider/NYSE Euronext

Plans are under way for investment corporations to execute the biggest conversion – some call it theft – of public schools property in U.S. history.

That is not hyperbole. Investment bankers themselves estimate that their taking over public schools is going to result in hundreds of billions of dollars in profit, if they can pull it off.

I was a public schools teacher for 16 years and knew many highly skilled teachers. Now, in addition to teaching ESL classes in a very good community college, I write about the politics of public education. That puts me in the presence of many very good, committed public school teachers. They grew up loving public school and love it now. And not one of them seems to really imagine the destruction of the current public schools system in the U.S.


But, there are very clear plans being made for just such a thing.

The plan has been and still is to execute the complete conversion or liquidation of public schools property built up at taxpayer expense for generations.

It involves raiding pensions that have been hard-won from years of legislative work by teachers and their unions. I reported on ideas being floated in Oklahoma along these lines in this piece that I did for Red Dirt Report earlier this year.

It will all be done through the control of legislatures that have been mostly compliant with lobbying efforts due to the Supreme Court’s Citizens United  decision that allowed huge corporate money, mostly unidentified, to flow into elections. The Andre Agassi Foundation is just one of many who have worked this angle for their own return on investment.

Watch closely

In Oklahoma is there any sign that our Republican dominated legislature has any motive to resist? No. They have long been the beneficiaries of  investor campaign money that flowed freely and is now a flood.

In fact, our newly elected Republican Superintendent of Public Instruction along with wins at the polls will only embolden those powerful investor voices.

Joy Hofmeister, Superintendent, education, tests,
Joy Hofmeister is the newly elected State Supt. She won in a state-wide election Nov 4th.

It was fun getting acquainted with Joy Hofmeister during the campaign. I believe that she has a genuine heart for children, education, and the educators of this state.

But the Republican Party will expect compliance from Hofmeister since she ran as a Republican. She not only benefited from big Republican money, but also attacks on her opponent by Republican legislators. Even if she doesn’t think so, other Republicans will think that she owes them.

As I said in an earlier post, unless we stand up and demand that she remain independent she could become a cog in this big, powerful machine. If educators don’t embrace her, the investors will.

The raider way

So how does the pattern of investor raiding work? Look no further than Mitt Romney’s Bain Capital which may not have been as flamboyant as the firm portrayed in the movie Wall Street, but certainly had the same structure of attack.

  • Offer to buy out a profitable company that has little or no debt.
  • Silence the work force by tricking them into thinking life will be better with the new owners.
  • Once the purchase is complete, fire the workforce.
  • Liquidate the pension fund.
  • Liquidate the company for the cash value of its paid-for property.
  • Leave the host community in financial ruins.

Here is an anti-Romney campaign ad from the 2012 presidential campaign that is a good testimonial of what happened with one profitable manufacturer that was liquidated by Bain Capital.

Here is another testimonial from the same anti-Romney series of ads about a manufacturing company that was working three shifts and profitable.

Investors are good at this. They know how to do it in the manufacturing sector, and they are currently experimenting with  how to make it work in the public education arena. Only public education is more complex because it is more tied to the traditions of its host communities.

The new public schools raiders

In states where they have successfully launched this takeover process they have started with big, urban cities where the voices of people of color and poor are far less valued in our society. I described in detail this process in earlier posts about New Orleans, Detroit, and Newark.

It goes like this:

  1. Compliant legislatures reduce funding for public education.
  2. Weakened by fewer funds, the schools who serve the poor and have more social problems to address begin to struggle the most, first.
  3. Use compliant, big corporate media to convince the public that the underfunded schools that serve the poor are wild, dangerous places. Editors love “teacher knocked out by student” stories.
  4. Once the public is convinced that those scary urban “jungle” schools are hopeless, pass legislation that allows corporate charters to take over and convert public property to their profitable use.
  5. Pass laws that allow charters to be black boxes where the public has no idea how their tax money is being used.
  6. Charters regiment children of the poor in ways that prepare them to be compliant service workers who don’t expect to have a voice.
  7. Use big corporate media to convince the public that charters are doing better even though they are not.
The big “IF

The big “if” in all of this is the question of whether or not educators, concerned parents, and concerned community members can rally to maintain local, democratic control of public schools. Any degree of standardization that comes from beyond the state only serves large, nation-wide investor interests.

IF educators can successfully counter the investor propaganda that parents are the only true stakeholders in a child’s education, then raiders can be opposed successfully. The oldest to the youngest and richest to poorest members of every community are the true stakeholders in public schools and public education.

IF local, democratically elected school boards can stay empowered to make decisions for the local public schools, then this raider process can be resisted.

IF all stakeholders can successfully press legislators to listen to them instead of paid, professional lobbyists hired by large, investor-owned charter corporations, then we can resist the raider attempts.

These are all some big “ifs” and will take much energy. And standing up to a slick, well-packaged organization is much more difficult than opposing a single person in a public office.

My next post will focus on Anthony Cody’s newest book, The Educator and the Oligarch: A Teacher Challenges the Gates Foundation. I will use some very good reviews of the book by my friend Dr. John Thompson.