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Posted by madfloridian in General Discussion (1/22-2007 thru 12/14/2010)
Wed Jan 27th 2010, 11:11 PM
The author is a guest blogger at the education blog called The Perimeter Primate. He begins by talking about the way the Oakland, CA schools were taken over and used as a "virtual laboratory for the corporate concept of schools".

He points out what many of us are seeing in the new Democratic policy toward education. It is indeed a scary thought to me.

Oakland teachers have had to face the hard lessons of Privatization earlier than most. The state took over the public schools in 2003 and then turned the school system into a virtual laboratory for the corporate concept of schools: opening charters left and right, closing schools, laying off librarians and custodians, trashing the quality of public education, and testing, testing, testing.

Our experience is that privatization proceeds in pieces, the first step includes turning over public functions to “the market” through corporatizing every policy and procedure. The United States – the first country to establish free, universal public education – is on now track to being the first country to eliminate it. After seven years, far more cities than Oakland are living out what this means.


Here is more of what the author has to say.

Democracy Privatized

It is a long and thorough blog post covering far more than just education. It deserves a full reading.

This is the formal Dispossession of the Public and the elimination of its role in human affairs. Privatization and dispossession are two sides of the same coin. Naomi Klein describes how this began with the federal government, under George Bush II, in her great book The Shock Doctrine. New Orleans showed us what this means in practice.


He spends several paragraphs on the implications of the new Supreme Court ruling about corporations and their roles in elections.

I found his section about Diane Feinstein and her husband, Richard Blum, most interesting. I had never paid close attention to this, and it really caught my attention.

The seizure of public power is now going very far, very fast. Here are just a couple of examples.

1) For example, in 2006, Diane Feinstein, one of the top three richest Senators, amended the Animal Enterprise Terrorism Act, originally passed in 1992. A “terrorist” is now legally defined as someone who commits an act of protest that reduces the profits of a corporation, its suppliers or partners. (November 29-December 5 SF Weekly (matthew.smith@sfweekly). Labeling pickets or demonstrators as “terrorists” is now just a matter of a simple judicial proceeding.

Feinstein’s husband, billionaire developer Richard Blum, is perhaps the most powerful of the UC Regents, who just voted to increase fees at the Universities of California by 32%. This step throws the state’s three higher education systems into immediate crisis.

How this powerful Senator and Corporate Executive team works is just one good example of how CEOs move in and out of the government.


He then links to and quotes from another article titled Investor’s Club: Do the UC Regents Spin Public Funds into Private Profit?

With thousands of students protesting huge tuition hikes, the public needs to know who benefits from controlling the University of California’s $53 billion in Wall Street investments. That is billion, with a B!

Several very wealthy, politically powerful men are fixtures on the regent's investment committee, including Richard C. Blum (Wall Streeter, war contractor, and husband of U.S. Senator Dianne Feinstein), and Paul Wachter (Gov. Arnold Schwarzenegger’s long-time business partner and financial advisor). The probability of conflicts of interest inside this committee—as it moves billions of dollars between public and private companies and investment banks—is enormous. While some of this mammoth cash exchange takes place in the sunlight of the public eye, much of it is done behind closed doors, and the regents decline to disclose the names and activities of many of their private equity investment partners. "Dark pool" investments of this type are not available to ordinary investors--you have to know someone who manages them--like Messrs. Blum or Wachter.



Here is more about Blum, husband of Feinstein.

Diploma mills

Regent Blum, it turns out, has an abiding interest in education—a financial interest: while serving as chairman of the Regents, and head of the investment committee, he took control of a very profitable, national network of “diploma mills,” worth about $3 billion. These “career education” schools rely on federally subsidized student loans to generate profits that are then privately invested. Some of Blum’s schools have been investigated by government agencies (and sued by individuals) for, allegedly, delivering substandard educations, and, allegedly, concentrating on generating government-guaranteed student loan revenue at the expense of providing students with quality educations. Among other items of interest, we will examine how Blum’s role in profiting from federally guaranteed student loans is, possibly, related to the issue of the creeping privatization of the University of California system that has ratcheted up ever since Blum was appointed regent in 2002 by Governor Gray Davis. For example, as the UC system becomes increasingly expensive (and racially exclusive), lower income students are turning toward diploma mills.


This article also is very long, so just another segment to stay within fair use guidelines.

Capital projects

From his base in San Francisco, Blum, who is a major force in the state and national Democratic Party, manages private equity investments for a number of publicly-funded universities, generating substantial management fees and business opportunities for himself. He is deeply embedded in a national network of private-sector bankers with interlocking interests in an array of public pension funds and educational institutions and public works projects. Historically, Blum has specialized in operating firms that are dependent upon government contracts. It is of note that Blum Capital, a multi-billion private investment firm, has benefited from managing hundreds of millions of dollars in California’s public employee pension fund (CALPERS).


Back to the Perimeter Primate post tying this to schools. He speaks of how the "economic crisis begins to be expressed as a political crisis".

He then points out the corporate threat to public schools.

Corporate forces understand this and thus are using their political power to change the role of government in America. The state itself is being restructured to facilitate the needs of private property in a new era, and protect it in new ways. Instead of providing for human beings, government steps in to organize what can only be called a for-real class war - from the top-down. Privatization and the dispossession of the public are features of this process.

.....Government now stands between the corporate attack and the rights of people. It must be forced to guarantee every human need by expanding public property in every direction. The rising political crisis demands that we hold government accountable for the welfare of every single person. If the government isn’t constantly improving the welfare of the public, what good is it?


Ronald Reagan led the way by demeaning public schools.

This demeaning has continued through the years. The attempts to privatize have continued. This is a segment from a Nader website in 1987. Very interesting.

..."Reagan believes that private enterprise con do the job better, more efficiently and without taxpayer subsidy. Has he (not) read of the wasteful boondoggles and practices of private utilities? Are there no sobering lessons from the Defense Departments long-time "privatization" of military contracting for weapons, ships, vehicles and planes? What are the efficiencies of huge cost over-runs, weapons that are defective, $450 for a simple claw hammer or $650 for toilet seat covers?

..."Reagan even is letting profit-making corporations operate the satellites, built by the taxpayer, that record and map the world including where minerals and underground water may he located. How accessible and how promptly public are all of these data to the people?...."The Reagan regime is pushing for privatization of public services and public investments without holding public hearings and consulting with the directly affected persons."


The privatization of schools is coming to fruition with Arne Duncan as Secretary of Education. In these lean economic times it is hard for schools to refuse the billions offered by Duncan to lift the limits on charter schools and allow more and more testing.

Diane Ravitch: I find myself agreeing with Mike Petrilli of the Thomas B. Fordham Institute, who wrote on Gadfly that this “Race to the Top” program should be called “NCLB 2: The Carrot That Feels Like a Stick.” As a former Bush administration official, he knows what he’s talking about. He likes the Duncan plans, but can’t resist shedding a tear for the death of federalism. Now, says Petrilli, we have entered fully into the age of “Washington Knows Best at its worst.” He writes: “If you found No Child Left Behind prescriptive, just wait till you take a look at this baby.”

To me, the problem here is obvious: What if Washington doesn’t know best? What if the “reform” ideas are wrong?


More from Ravitch:

Question: Recently the Obama administration announced the regulations for its $5 billion “Race to the Top” fund. That’s an unprecedented amount of discretionary money. How much was available when you worked in the first Bush Administration?

Ravitch: When I worked at the Department of Education in 1991, we had $10 million in discretionary funds, not $4.3 billion.


The Department of Education is paying big bucks to districts that turn their schools over to private companies so they can run them as charter schools.

Government is not doing its job to stand "between the corporate attack and the rights of people."

It is enabling the takeover. That's a shame.


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