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Privatization = More Inequality

April 16, 2014 Leave a comment

A post in the  Angry Bear blog, described as a “Slightly left of center economic commentary on news, politics and the economy”, describes how the emergence of Private Public Partnerships (P3) contribute to inequality by rewarding the oligarchs who can afford to make the private investments and effectively penalizing the consumers who pay increased fees for formerly public services. The article uses Chilean highways and Chicago parking meters as a means of explaining how the oligarchs profit and consumers are bilked. After reading the post, I left the following comment: 

The P3 idea is emerging in public education to ill effect… and accountability based on standardized testing is accelerating the trend. Affluent communities whose test scores are high to begin with are spending more and their students are retaining the broad curriculum offerings and solid teachers. Urban schools serving children raised in poverty get low test scores and are then replaced by for-profit charters whose focus is on the topics tested, whose operations are less costly, and whose profits are returned to shareholders instead of being used to expand social services needed by the students.

Politicians in both parties hail P3 as a means of bringing business practices into the private sector, getting work done more quickly and efficiently, and avoiding the need to raise taxes. What politicians don’t tell voters is the back-end costs for these P3s are more expensive, corrosive to democracy, and contribute to inequality.

The Oligarch’s Way

April 16, 2014 Leave a comment

An article in today’s NYTimes describes how former NY Mayor Michael Bloomberg intends to spend $50,000,000 to take on the NRA over the issue of gun control. In brief, he intends to create a national umbrella organization along the lines of MADD and fight for legislation that increases regulations regarding the sale and use of weapons on a State-by-State basis as well as at the federal level. The article noted that he intended to also rate candidates of both parties the way the NRA does, hoping to increase awareness of candidates who are either wishy-washy or opposed to gun control.

The article caused me to think about the oligarchy we are living in today where extraordinarily wealthy individuals like Michael Bloomberg can spend huge sums of money to get elected, to influence the political dialogue, and– thereby— advance their own personal agendas without waiting for grassroots support to generate a new way of thinking. While I am in agreement with Michael Bloomberg’s thinking most of the time (e.g. on this issue, on his ideas about commuter taxes, his desire to attack obesity through legislation, on his environmental positions), I am unsettled by the reality that if I accept Bloomberg’s right to invest huge sums in political issues I agree with, I must also accept the right of the Koch brothers to invest huge sums of money in political issues I disagree with… and recognize that in both cases they are using their money to advance their personal agendas by either buying political influence or buying media time to influence the public’s thinking about issues through the use of polarizing advertisements. Gun advocates will likely feel the same knot in their stomach when Bloomberg’s advocacy group speaks as I feel when I read an advertisement touting the jobs that Keystone XL will bring to the midwest.

Bloomberg’s twelve years as mayor shows how oligarchs would rule if they bought their way into office. Wherever and whenever possible they would push for control over personnel compensation and operations and implement the business practices that helped them accumulate wealth. In NYC Bloomberg did this to good effect in most aspects of the cities operations: voters supported his ability to make the city operate efficiently and safely. But part of operating like a business is ignoring the voices of dissent and side-stepping democratic procedures. Major corporations do not seek public approval for plant closings: they look at the bottom line and make decisions on a cost-benefit basis. In  the minds of many businessmen and entrepreneurs democracy slows things down at best or completely blocks progress at worst. In their minds it is better to improve the bottom line and move ahead than take the time to build a consensus on where to head and how to get there.

The perfect example of how one oligarch handled public education is to look at Bloomberg’s record in NYC. To avoid any public debate over his ideas on how to improve public education, Bloomberg sought and gained legislative approval to have the final word on the operation of the school district. Once he gained that authority, he systematically implemented a plan that whereby the school administration devised their own accountability system that identified “failing schools” that were replaced by unregulated for-profit charters funded by his fellow oligarchs, who the media hailed as “school reform” advocates. These schools used facilities bought and paid for by taxes without paying rent, operating without legacy costs and with new, lower paid, non-union teachers. The school system’s accountability system showed how well these “reforms” were working and the public was generally pleased with the direction the Mayor headed based on the information they read in the media. The oligarch/mayor seemed to be bring cost-effectiveness to the school system and had stood up to the unions in doing so. In his last term in office, though, NYC witnessed the underside of the rule of the oligarchs. First,an independent analysis of NYC’s student performance indicated that the increased test scores were a mirage. They were the result of setting ever lower cut scores as opposed to  having students achieve ever higher test scores. The mayor attempted to replace the outgoing Superintendent with an unqualified publishing CEO who resigned after making several gaffes, and parents of students whose neighborhood schools were closed on the basis of test scores began rallying in opposition to the mayor’s way of doing business.

But here’s a conundrum: what if a wealthy oligarch wanted to use his or her wealth to get elected to mayor of a major metropolitan area and, once in control, implemented the kind of schooling that I agreed with: one that abandoned age-based grade levels; replaced the rigid PreK-12 curriculum with personalized learning plans; replaced time-limited instruction with mastery learning; provided wraparound services for children raised in poverty; and converted schools into community resource centers? And what if the mayor wanted to do this despite opposition from community school boards, social service agencies and unions… because such a program WOULD result in resistance from many quarters.

The bottom line in all of this is the need for our elected officials to take action to eliminate the oligarchs before they control and influence all of our actions and thoughts. This would mean imposing for more progressive taxes, imposing higher estate taxes, and limiting the spending on political campaigns and activities. We can’t depend on the oligarchs being high-minded… because they are by their very nature business minded and anti-democratic and resistant to regulations. If we want to retain our democracy, slow paced though it is, we need to take back our opportunity to control public discourse and public control of services we fund.

 

A Question for Washington DC.

April 14, 2014 Leave a comment

Two articles in two different publications led me to this question: If we managed to find BILLIONS of dollars to bail out the banks, who now have money to dig costly tunnels to make money that provides no value to the economy, why can’t we find money to connect ALL students to the internet?

The articles that prompted this were Paul Krugman’s op ed piece describing the huge investment made by banks to shave milliseconds off their communications. The reason: by getting information faster than other investors banks can make money. The problem with this? Krugman offers a history lesson that provides the answer:

Back in 1815 Baron Rothschild made a killing because he knew the outcome of the Battle of Waterloo a few hours before everyone else; it’s hard to see how that knowledge made Britain as a whole richer. It’s even harder to see how the three-millisecond advantage conveyed by the Spread Networks tunnel makes modern America richer; yet that advantage was clearly worth it to the speculators.

So what happens is a small percentage of high frequency traders is getting much wealthier but that dealt is adding nothing to the economy.

Meanwhile, Education Week offers sobering news on the implementation of high speed internet:

Applications for federal E-rate money show broad gaps between wealthy and poor school systems’ access to high-quality technologies, and varying abilities among districts to purchase connectivity at affordable rates, a new analysis reveals.

Among Education SuperHighway’s findings:

  • School districts that are already meeting the ConnectED goals pay on average only one-third the price for broadband as schools that don’t meet that standard. That could be because they’re buying more broadband, with economies of scale, or because they’re in geographic locations where it’s cheaper, Marwell said. But it also could be driven by other factors, he said, such as they could have greater resources and competition from providers;

  • School districts that already have fiberoptic cable connections have nine times the bandwidth, and 75 percent lower costs, per megabit per second, than districts without fiber;

  • School districts with access to “competitive options” pay two to three times less for wide-area-network connections compared with those served by “incumbent” telephone and cable companies. Ideally, those incumbents should be challenged for school district business by local utilities, muncipal networks, and competitive local exchange carriers, Marwell argues.

  • School districts already meeting the ConnectED goals have budgets for accessing the Internet that are, on average, 450 times larger than those that don’t meet those goals, and they invest $7.16 per student, compared with just $1.59 for schools falling short of the mark;

  • While just 20 percent of all school districts surveyed are meeting the ConnectED goals, the number is lower, 14 percent, among districts with at least three-quarters of students on free or reduced price lunches. By contrast, a much higher portion, 39 percent, of schools with less than 1 percent of free or reduced price lunch students are meeting the ConnectED goals.

So the affluent districts, who spend much more per student than distort serving children raised in poverty, are getting faster and cheaper internet services. The digital divide is exacerbating the economic divide and undercutting any chance for equal opportunity.

So I ask again: If we managed to find BILLIONS of dollars to bail out the banks, who now have money to dig costly tunnels to make money that provides no value to the economy, why can’t we find money to connect ALL students to the internet?