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Posts Tagged ‘Economic Issues’

Chicago School District’s Financial Chicanery

November 28, 2014 Leave a comment

Yves Smith wrote a post today about an investigative report recently completed by the Chicago Tribune describing the adverse consequences of the Chicago School District’s decision to “…obtain $1 billion of needed ten-year financing not through the time-and-tested route of a simple ten year bond sale but the supposedly cost-saving mechanism of issuing a floating-rate bond and swapping it into a fixed rate.”  While the technical flaws inherent in this decision by the school district are dense and arcane, it appears that MANY school districts and public entities fell prey to the use of questionable investment tools. Here’s Smith’s overview:

What is important about this story is that the CPS’ sorry experience has been replicated at state and local entities all over the US and abroad, yet remarkably few have been willing to sue. In some cases, it’s likely that rank corruption was involved, that the consultants hired to vet the deal were cronies and not up to the task, or worse, that key people at the issuer were overly close to the banks involved. In other cases, officials are afraid of banks, that if they sue them, they’ll be put on a financing black list and will have trouble fundraising. That’s nonsense by virtue of how competitive and fee-hungry bank are. And the more government authorities that got the nerve to sue, the less noteworthy any particular case would be.

Smith then summarizes the Tribune’s findings, which indicate that the Chicago school district experienced every problem in the highlighted phrase above. And here’s what is maddening about this:

  • Mayor Emmanuel’s unwillingness to sue the banks will shift the blame to the school district in the same way victims of predatory loans are blamed for their gullibility in accepting liar loans from banks.
  • The school district will be required to make budget cuts to offset the revenue lost as a result of financial mismanagement… and the budget cuts will affect the children in the schools while the banks who made the loans will be held harmless
  • The involvement of investors who make contributions to political campaigns and stand to gain if more for-profit charter schools open is suspicious.
  • It appears that these financial decisions were made during Duncan’s tenure as CEO of the CPS… a link that Smith did not make but which is not lost on many education policy wonks like me.

From my perspective, this is yet another example where de-regulation failed, where banks take the risk and taxpayers pay the price, and government takes the blame.

Charters, Tracking, Real Estate, and Re-Segregation

November 24, 2014 Leave a comment

Two recent articles illustrate how charter schools and tracking amplify the trend of re-segregation in public schools, a trend that is tied inextricably to zip codes.

Last week Atlantic blogger Sonali Kohli posted an article titled “Modern Day Segregation in Public Schools” that described how the longstanding practice of tracking exacerbates the emerging trend of resegregation using a recent NJ State Board decision to illustrate her point. The problem local districts face is that their use of standardized test scores, GPAs, and teacher recommendations to determine who qualifies for advanced courses or “gifted and talented” courses results in a disproportionate number of white students being placed in classrooms. The USDOE, which requires States to use standardized testing to identify “failing schools”, is intervening and recommending some sort of de facto quota system whereby the districts who using tracking of any kind must ensure that the student populations in advanced levels and/or gifted and talented programs mirror the racial patterns of the district as a whole.

Today’s NJSpotlight features an insightful blog post by Laura Waters titled “Self Selection of Public Schools, New Jersey’s Double Standard” which uses a recent quote from Newark’s CEO Cami Anderson as the jumping off point:

In response to a question regarding a four-point drop in test scores among Newark students enrolled in traditional elementary schools, Anderson acknowledged that the city’s growing sector of public charter schools serves children who are less poor and less likely to be classified as eligible for special-education services.

“I’m not saying they [the charter schools] are out there intentionally skimming,”said Anderson, “but all of these things are leading to a higher concentration of the neediest kids in fewer [district] schools.”

Charter advocates winced and went on the defensive. Charter detractors grinned and high-fived. Both reactions miss the point.

The point Ms. Waters makes is one that I’ve made in this blog on several occasions:  parents in affluent zip codes get a wider range of choices than parents in urban areas serving children raised in poverty:

Given a choice between Newark and Millburn, motivated parents of any means would most likely choose to send their kids to school in the latter, as long as they could afford the freight of the median house cost of $665,000 and an average annual tax bill of $20,439. This sort of self-selection — skimming, if you will — is regarded as a cause for applause, an emblem of good values and good parenting. In New Jersey we embrace school skimming. With our ZIP code-driven district-assignment system, town choice is school choice. If you can afford granite countertops then you can afford great public schools.

Ms. Waters chides those who criticize charters in urban systems for skimming of the best and brightest children of engaged parents without challenging the de facto segregation that results from real estate choices.

But in Newark, a system that allows families to choose more successful, albeit nontraditional, public schools is suddenly suspect. A proud N.J. tradition is transformed into a scourge, simply because we’re talking about poor parents and not rich ones.

Waters describes offers a lukewarm proposal for solving the problem but closes with a statement that poses a conundrum for those of us who do not want to see the expansion of for profit charter schools:

So what’s the answer? Paul Tractenberg half-heartedly suggests county-wide school districts, although he concedes that such a conversion is a “quintessential political third rail” due to New Jersey’s addiction to local control. Whatever that answer is or, indeed, whether it exists, let’s agree that parents should be able to make school choices for their children, and that their right to do so shouldn’t rest on their ability to afford granite countertops.

Here’s the conundrum from my perspective: politics is the art of the determining what is possible as opposed to what is ideal… and what is possible NOW under the system we have in place is offering choices within districts and ensuring that those choices within districts do not result in segregation by race. Charter schools, be they for-profit or not-for-profit, are the most politically viable solution we have NOW. The political reality as I see it is that any solutions that approach the “ideal” (e.g. choice among all schools, equitable funding across the board, early intervention programs for children raised in poverty, county districts that enable the re-drawing of boundaries to achieve racial and socio-economic balance, etc.)  are, to echo Mr. Tractenberg, a “quintessential third rail”.

In earlier posts I’ve proposed a third rail solution with relatively voltage: the redirection of ALL federal funds to less affluent districts in states, like NJ, where civil rights violations are found and/or courts have determined that existing funding mechanisms are unconstitutional. It’s been 60 years since Brown vs. Board of Education and in those years the Federal funding for public schooling has increased substantially and enrollment patterns driven by zip codes have increased segregation across the country. One look at the data cited in each of these articles should persuade anyone that segregation continues within school districts and between school districts and the current tools in play, “strongly worded directives” and de facto quota systems are unsatisfactory and simplistic solutions to deep and complicated problems. Redistribution of federal funding to address issues decided in State and/or federal courts would promote local solutions to these problems.

From my perspective, the ideal solution to all equity issues would be the institution of constitutionally equitable per pupil allocations, the abandonment of age-based cohorts, and the implementation of individualized instruction programs. Such a reformatting of school would help schools develop self-actualized learners who have the interpersonal skills to thrive in the multi-cultural world our students are living in. If we want a fully engaged electorate of well-informed voters we cannot continue operating public schools that segregate students based on their learning rates, the knowledge they bring into schools when they enter, and whether their parents can afford granite counter tops. Such a system only reinforces what we have in place today and the direction we are heading.

MI Court Rules State NOT Required to Educate Well

November 21, 2014 Leave a comment

In a case that could have national implications, the Michigan Court of Appeals ruled that the state has “…no legal obligation to provide a quality public education to students” in a school district that the state turned over to a charter school that has not improved its performance. This overturned a lower court decision that the State has a “broad compelling state interest in the provision of an education to all children.”

Kary L. Moss, executive director of the American Civil Liberties of Michigan who filed the suit on behalf of eight students of nearly 1,000 children attending K-12 public schools in Highland Park, MI, stated that “This ruling should outrage anyone who cares about our public education system. The court washes its hands and absolves the state of any responsibility in a district that has failed and continues to fail its children.”

As reported in The Michigan Citizen blog,

The suit, which named as defendants the State of Michigan, its agencies charged with overseeing public education and the Highland Park School District, maintained that the state failed to take effective steps to ensure that students are reading at grade level.

Let’s remember it was the state that turned the entire district over to a for-profit charter management company with no track record of success with low performing schools,” said Moss. “It is the state that has not enforced the law that requires literacy intervention to children not reading at grade level. It is the state’s responsibility to ensure and maintain a system of education that serves all children.

Why could this have national implications? As noted in earlier posts, school districts in “failing districts” are often taken over by the State who, presumably, have the ability to overcome the effects of poverty more effectively than the local school boards and, increasingly, States look to privatization as the answer (e.g. Newark and Camden NJ; Philadelphia PA; Chicago IL, to name a few). If State’s are not responsible for providing a quality education, who is? Are parents in affluent districts the only ones who will have their children attending quality public schools? Will for-profit schools be allowed to continue to operate even if they fail to get results?

While I am not well versed in the structure of MI’s court set up, I have to assume their Supreme Court will have the find say on this… and I assume the MI State “…agencies charged with overseeing public education and the Highland Park School District” will continue to argue that they are not responsible for ensuring that every child gets a quality education.

Here’s my final question: how can the state defend it’s willingness deny a quality education to all children while at the same time wresting the control of “failing schools” from local boards who are more than willing to make every effort to achieve that goal?

Keep Your Eye on the .01%

November 21, 2014 Leave a comment

Several articles of late have emphasized that “the 1%” aren’t the real problem with the effects of inequality in our country, it’s the .01%.

Progressive economist Robert Reich’s essay titled ” If you Want to Know What’s Happened to Our Democracy, Follow the Richest .01%”, describes the effects of inequality in stark terms. After providing lots of statistical information detailing how wide the spread is between the 16,000 people who control 11% of the total wealth in our country, and a description of how this is affecting the debts of the bottom 90%, Reich outlines the political reasons for why we should care about this:

…the top .01 percent have also been investing their money in politics. And these investments have been changing the game.

In the 2012 election cycle (the last for which we have good data) donations from the top .01 accounted for over 40 percent of all campaign contributions, according to a study by Professors Adam Bonica, Nolan McCarty, Keith Poole, and Howard Rosenthal.

This is a huge increase from 1980, when the top .01 accounted for ten percent of total campaign contributions….

All this money has flowed to Democrats as well as Republicans.

In fact, Democrats have increasingly relied on it. In the 2012 election cycle, the top .01 percent’s donations to Democrats were more than four times larger than all labor union donations to Democrats put together.

(And) their political investments have paid off in the form of lower taxes on themselves and their businesses, subsidies for their corporations, government bailouts, federal prosecutions that end in settlements where companies don’t affirm or deny the facts and where executives don’t go to jail, watered-down regulations, and non-enforcement of antitrust laws.

Since the top .01 began investing big time in politics, corporate profits and the stock market have risen to record levels. That’s enlarged the wealth of the richest .01 percent by an average of 7.8 percent a year since the mid-1980s.

But the bottom 90 percent don’t own many shares of stock. They rely on wages, which have been trending downward. And for some reason, politicians don’t seem particularly intent on reversing this trend.

If you want to know what’s happened to the American economy, follow the money. That will lead you to the richest .01 percent.

And if you want to know what’s happened to our democracy, follow the richest .01 percent. They’ll lead you to the politicians who have been selling our democracy.

But why should advocates of public education care about this increasing inequality? An Inside Philanthropy blog post titled “Be Afraid: The Five Scariest Trends in Philanthropy” by David Callahan outlines five reasons:

  1. The growing push to convert wealth into power: (see Reich’s article and this quote from Callahan offers an example in public education: “Look at nearly any sector of U.S. society, and you’ll find private funders wielding growing power. Most dramatic has been the reshaping of public education by philanthropists like Gates and the Waltons, but the footprint of private money has also grown when it comes to healthcare, the environment, the economy, social policy, science, and the arts.

    Whether you agree or disagree with the specific views pushed by private funders, you’ve got to be disturbed by the growing army of hands-on mega donors and foundations that seems to get more clever every year about converting their money into societal influence. Love it or hate it, the Common Core is a great example: In effect, private funders are helping determine how tens of millions of kids will be educated for years to come. And to think that we once saw public education as America’s most democratic institution!”

  2. How philanthropic dollars have become another form of political money: (see Reich’s article for lots of examples)
  3. The decline of the public sector relative to private fundersThis means that as public funding for schools diminishes and schools are privatized the wealth trickles UPWARD instead of ACROSS the workforce. As a result, the extraordinarily wealthy individuals (e.g. philanthropists) who make “generous donations” to public schools have more and more influence in how schools spend money.
  4. The rise of the know-it-all funderSee Bill Gates and any hedge fund manager or technology squillionaire who provides a “generous donation” to schools contingent on the implementation of a program they are certain will be a game-changer. Callahan describes how this is playing out in public education: “In an age of hands-on living mega donors, the possibilities for big screwups are self-evident and we’ve seen some doozies so far—like, say, turning urban school districts upside down to create small high schools and then realizing that this idea wasn’t as brilliant as MS-DOS.”
  5. A rising flood of anonymous moneyThis is playing out as dark money flows into elections for State and County Superintendents, governors, and various referenda on issues like the elimination of tenure, school funding, etc. 

Inequality matters to public education and it matters to democracy. Here’s hoping that the issue gets an airing in 2016… but as long as the richest .01% buy and own our political leaders and buy and control the advertising that is the basis for voters’ decision making having a dialog on this issue will be difficult.

Unions’ Self-Inflicted Wounds

November 19, 2014 Leave a comment

Thomas Edsall’s column today, “Republicans Sure Love to Hate Unions”, describes the systematic efforts of the Republican party to reduce the power of labor unions and, in so doing, diminish the power of the Democrats who benefit from the support of unions. But based on the content of his column, it could just have easily been titled “Neither Party Loves Unions” since he provides lots of evidence that the Democrats are ignoring union issues or— even worse, taking union support for granted— or worse yet, buying into an anti-union stance themselves. The article provided evidence of all three possibilities, noting that the Obamacare penalty for “Cadillac” health care provisions will hurt union members more than anyone else.

As I read this, though, I couldn’t help but notice that in some cases the unions are wounding themselves. In public schools, unions have adopted some of the concepts of their brethren in the auto industry (and, to be fair, Boards have adopted the same concepts in framing their bargaining positions). One particularly short-sighted approach to achieving settlements that enable management to reduce costs while simultaneously enabling veteran union members to get wage increases and retain benefits is to offer lower pay scales and fewer benefits to those to be hired in the future. As these bi-furcated agreements phase in, the newer employees have no reason to support the union and they often harbor resentments against their seasoned partners, resentments that manifest themselves in either NOT supporting the Democratic candidates chosen by the union or by staying home. This lack of enthusiasm for the union is, I believe, an underlying factor in the diminishing number of union members, especially as laws are passed that do not require everyone to pay union dues.

These bifurcated agreements also drive down wages and benefits, and those lower wages and benefits are a drag on the economy.  By agreeing to contracts that undercut wages of new hires the unions, then, are helping the pro-business candidates get elected… thereby closing a vicious cycle.

 

State Takeovers Don’t Work

November 19, 2014 Leave a comment

This Public School $hakedown blog post by Jan Ressenger describes the American Enterprise Institute’s unwillingness to hear bad news about the impact of the two-decade-long takeover of Newark NJ public schools on the parents and students who reside in that city. The mismanagement of urban schools several decades ago combined with (or perhaps cause by) patronage by mayors and school board members made State takeovers a popular solution twenty years ago. The reasoning in the 1980s was that State Departments of Education had the expertise to operate underperforming school districts effectively and under their apolitical oversight the district’s would shed the patronage assignments and be organized more efficiently. Once the state intervened, so the thinking went, the State’s expertise would increase test scores and their administrative skill would reduce operational costs.  Twenty years later, as this post indicates, Newark still flounders academically and the patronage associated with locally elected officials has been replaced with state-level patronage (aka privatization). In the meantime, in the past thirty years the expertise of State Departments has diminished due to deep budget cuts making the whole notion of State control preposterous. And now instead of Newark being able to determine it’s own destiny with locally elected officials it is being privatized clumsily and dictatorially by the State appointed Superintendent who answers only to the Governor.

It would be good to see State legislatures who have “state takeovers” as a solution to underperforming schools either repeal those laws or provide the State with funds to oversee the schools they are mandated to operate. Instead, I expect the majority of states to move in the direction of “market based” solutions whereby an administrator is given the authority to oversee the dismantling of the public schools and their replacement with for-profit charters…. because we ALL know that making money is the primary reason people go into the field of education.

Rotten Apples? Hardly!

November 14, 2014 Leave a comment

A few weeks ago Time magazine hit the news stands with this horrific cover:

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When the article came out progressive bloggers went ballistic and Facebook was full of links to send letters to the editors of Time to decry their cover, which stated (wrongly) that is was impossible to fire a teacher. Having written several posts on this topic, I clicked on the AFT’s link and sent a letter explaining the reality of the situation, namely that teachers have a probationary period that is typically three years and that some of the teachers who “opted out” of the profession were, in fact, counseled out. Because of this, the reality is that 98% of the teachers are doing well in their work even though this fact vexes politicians like Andrew Cuomo.

My daughter in Brooklyn who shares my frustration at the bashing of public education sent me a link to this blog post from Valerie Strauss of the Washington Post, who dedicated most of the space to a well researched letter to Time in response to their reprehensible cover. Written by Nancy F. Chewning, assistant principal of William Byrd High School in Roanoke, VA, the letter includes the following points, some of which I have not made in my earlier posts decrying the bashing of teachers:

  • Aspiring teachers are held in low esteem on campuses
  • Teachers make substantially less than others with an equal education
  • The OECD reports that “American teachers work far longer hours than their counterparts abroad.”
  • No other professions are held to a 100% standard- Only teachers!
  • And this gem: “According to a new study from the Journal of Patient Safety, 440,000 people per year die from preventable medical errors. In fact, this study found that medical errors were the third leading cause of death in the United States today.” Are we closing hospitals because of this? Are doctors losing tenure because of this?
  • The NEA [National Education Association] ranks 221st in terms of lobbying expenditures… WELL behind banks, military, and other professions— like doctors– who are not depicted as “Rotten Apples”

The letter describes the money teachers spend on their own supplies and to provide their students with food, school supplies, and clothing. It describes the time teachers spend advocating for their children outside of school. It describes the responsibilities teachers are asked to assume for the well-being of their children. And it describes the devastating impact poverty has on the children in Roanoke, VA, impact that is felt in every district that serves children who are raised in poverty across the country.

I wish some political leader in our country would stand up for public education and especially for the teachers who work tirelessly to help children raised in poverty…. but it’s easier to blame teachers than to blame poverty because “fixing” poverty requires the redistribution of wealth and (gasp) spending money on people in our country who are in need. Here’s hoping the silence about poverty ends as we consider who to elect for President in 2016.