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R.I.P. Lester Thurow

March 30, 2016 Comments off

I just finished reading the Boston Globe obituary on Lester Thurow and now realize why I was drawn to his writings in the late 1980s and early 1990s. As the newly appointed Superintendent in a Western MD county school district, in the initial speeches I gave to groups like the Chamber of Commerce and Rotary Clubs when I was being introduced I drew heavily on quotes from Zero Sum Society, whose message is encapsulated as follows in the Globe obituary:

Having just turned in the manuscript for what would become his best-selling book “The Zero-Sum Society,” he added in the interview that “these solutions, whether they are planning-oriented or market-oriented, have the common denominator that the government must be willing to impose large economic penalties on one group or another.

After leading school districts in New England for seven years, I realized that the public needed to accept higher property taxes and/or higher sales or income taxes if they wanted to have better schools… and, therefore, any discussions about improving schools would necessarily involve discussions about the revenue side of the budget as well as the spending side. And Thurow’s writings always inferred that economic justice was not being rendered under the current economic system. As MIT President L. Rafael Reif said in a statement after learning of Thurow’s passing, “Lester Thurow spent his life trying to make society more farsighted and more fair” . 

I’ll close this post with a quote from Zero Sum Society that I feel confident I paraphrased nearly three decades ago in my introductory speeches in MD:

“There is really only one important question in political economy. If elected, whose income do you and your party plan to cut in the process of solving the economic problems facing us?”

I will vote for any candidate who answers that question directly.

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The “Reformers” Are Winning the PR War

March 30, 2016 Comments off

The Naked Capitalism blog recently crossposted an Alternet article written by Kali Holloway on media maven Campbell Brown, a former news anchor who is now the point person for “school reform”. But as Holloway notes in the article, Campbell Brown is not acting in isolation: there are billions of dollars being spent by a relative handful of investors to help persuade the American public that public schools are failing and only the forces of the marketplace (i.e. an abundance of charter schools combined with school choice) can save them.  Worse yet, these funds are not only being invested in a host of spiffy new websites, they are being invested in formerly independent education publications like Education Week and Chalkbeat, mainstream publications like The New York Times and Atlantic and, of course, NPR, the newly corporatized broadcaster. And if anything, Holloway underplays the impact of these investments. She writes:

Among those betting on Brown’s brand, the Walton Foundation has been notoriously dogged in its efforts. Run by the family behind Walmart, the foundation has already spent $1 billion over the last 20 years on its education vision and recently committed an additional billion to bolster charter development. Thanks to their bottomless coffers, privatization pushers like Walton not only fund media entities that openly promote their agenda, but contribute to those that don’t seem to carry water for charter marketers at all. According to Walton’s most recent annual report, the foundation provides money to “shape public policy” to a list of grantees that includes the Atlantic Monthly Group, the New York Times and National Public Radio. The art of detecting if and how Walton money affects the editorial tone of these entities is at best imprecise. But for traditional public education defenders, it’s a relationship that merits interrogation.

As a subscriber to the NYTimes for over a decade and a blogger for three+ years I can assure Ms. Holloway that readers of this blog have seen countless examples of that newspaper’s explicit and implicit support for “reformers”, especially Eva Moskovitz’ Success Academy. The notions that schools should run like a business, that unions are ruining public schools, and that the funding of “government schools” is necessarily wasteful are all ideas that media outlets repeat. Consequently, these are all notions that the general public now accept as “given”. When this mindset is in place, news consumers lap up misleading and inaccurate articles like the one’s written by Ms. Brown that are cited in Holloway’s article and the articles on blatant wrongdoing like the one cited in my previous post. Unfortunately, once the public believes schools are “failing” because of bogus data gathered in the name of “accountability”, reports of fiscal misconduct by administrators, cheating by teachers, and student misconduct in classrooms get more and more traction and they reinforce the cycle of negativity initiated by the likes of Campbell Brown…. and there are no hedge funders interested in investing in public schools or the public services students raised in poverty need and so the economic divide widens and the vicious cycle accelerates.

There are public schools that are failing… but the vast majority of “failing” public schools are not doing well because the students enrolled in those schools are not doing well outside of school. Children raised in poverty face daily challenges that involve food, clothing, and shelter— the basic needs on Maslow’s hierarchy– and until those needs are met the great majority of those students will not be able to focus on the next level of needs. Alas, public spending on these items cannot result in a profit… and so the economic divide widens and the vicious cycle accelerates.

 

Detroit Principals Who Bilked Taxpayers Money for Students Deserve Vilification, Jail Time

March 30, 2016 Comments off

I was appalled to read the latest setback to the credibility of the Detroit Public Schools (DPS): the arrest of 13 Principals who collectively bilked the taxpayers in Detroit of over $900,000 over a period of several years. The NYTimes reported the scheme as follows:

The principals, including five who have retired and one who became a district administrator, ordered supplies like paper, workbooks and chairs from the vendor, and Detroit Public Schools paid the bills. The vendor then delivered only some of the supplies to the schools, and paid $908,518 in kickbacks to the principals, according to documents filed in Federal District Court in Detroit…

According to the charges, the principals used an array of methods to disguise the kickbacks, including receiving prepaid gift cards or having payments made to sham companies they had created…

Prosecutors said that some of Mr. Shy’s payments to (one of the defendants) had gone to a travel agency she owned, and that in other cases, he had paid contractors to do work on her home.

How does something like this happen?

  1. Turnover and incompetent leadership at the top: DPS has had four “emergency managers” since 2009, the six year time period when all but one of the scams occurred. Each of the emergency managers was appointed by the Governor, and one “manager” was a private for-profit management company that presumably would bring the hard-nosed business practices
  2. Inattention to detail in purchasing procedures at all levels: This kind of scheme can only work when there is no clear system in place for tracking the delivery of orders and no inventory control. These procedures are not eye-catching “reforms” like the decision to turn over the school system to a private for-profit management company, but they could have created a culture of accountability that was sorely lacking in DPS.
  3. The lack of transparency that results from authoritarian leadership: The Principals could only pull off a scam like this if they had total and complete control over the budgets and refused to allow their subordinates or parent organizations participate in budget development.
  4. Incremental budgeting: The combination of poor district level leadership, lax purchasing controls, authoritarian leadership, and incremental budgeting can create an opportunity for a dishonest building level administrator to skim funds in the fashion described in the article. If, for example, $50,000 was budgeted in 2009 for “supplies” and the Principal spent only $40,000, they could arrange with a vendor to place a ghost order for the $10,000 balance and split the “proceeds” with the vendor without “doing any harm to the students”.  An incremental budgeting procedure, one that bases the subsequent year’s budget on the prior year’s spending, would allow this $10,000 “cushion” to remain in place over a period of years.
  5. Austerity budgeting: Unfortunately an austerity budget increases the possibility of this kind of scam. When teachers have wages frozen and are asked to pay more for benefits, they are not surprised when their supplies are diminished. This cut-back on supplies can allow the dishonest administrator to cut the supply budget without reducing the margin between the budget figure for supplies and the actual amount spent on supplies with that margin going into the pocket of the vendor and the dishonest administrator.

And here’s what is very problematic: when all of the factors outlined above are in place, the chance of a dishonest employee getting caught is slim. An auditor wouldn’t catch this problem as long as the employees involved in the scam followed the district policy for tracking purchases because auditors don’t look to see if a product was delivered, they only look to see if it was purchased in accordance with the procedures in place. The clerical staff in the office are unlikely to be aware of the gap between spending a acquisition of materials because managing inventory was the Principal’s responsibility, not theirs. And the teachers would be none the wiser as long as they had sufficient supplies to teach in their classroom or… as was likely the case in DPS, accepted the fact that they didn’t have supplies because of the ongoing budget crisis. I’m not sure how the prosecutor got wind of the ongoing scam, but whoever did blow the whistle deserves to be lionized. As for the dishonest administrators who took advantage of the adverse circumstances in DPS, they should be stripped of retirement funds and benefits, sentenced to time in prison, and vilified. The public trust in public schools is degraded as a result of their misconduct and the trust can only be restored if some kind of serious punishment results.