Fiorillo on Wall St. Robber Barons as Ed Deformersh/t Education Notes Online
Michael Fiorillo, ICE-TJC candidate for UFT HS Exec. Bd debates Kitchen Sink, a charter school operator at this Gotham Schools post:
Just as a point of fact, the rich hedge fund/Wall Street/robber barons, whatever you want to call them, donors and board members of charter schools: they GIVE money to the schools, adding resources to the public schools in NYC. They don’t TAKE money.
They give, don’t take. If you need me to say it louder, they GIVE, don’t TAKE.
Are their motives all pure? Certainly not. Are their politics diverse? Certainly yes. But remember, they GIVE, don’t TAKE.
Let's take a look at this issue of finance capital (which on these pages, hedge and private equity funds are usually a proxy for), it's role in society and its more recent role in education.
The ostensible purpose of finance capital is to allocate money from those who have it to those who can productively use it, and make interest and/or fee income in the process. So far, so good: that's how capitalism works, and as long as there is some kind of healthy balance between lenders and borrowers/producers, then a market economy can function well according to its own terms.
But it that what's really happening in this country, or globally, for that matter?
No. What we have seen over the past 35 years is the financial end of the economy becoming engorged with capital and power, at the expense of both the productive economy and the democratic process, which has been captured by those financial interests. Look no further than home, where NYC's executive office has been purchased by a Finance/media mogul.
The past 35 years have seen:
- the rescinding of usury laws that limited interest charges, resulting in those 30% interest charges on credit cards.
- the shrinking of the productive, goods-producing (and unionized) side of the economy, with finance becoming an ever-greater percentage of GDP. This has led to the physical and social decline of huge regions of the country that were once major economic engines for the US. This has not been some "natural" process, as mainstream economists would like to fantasize about (or propagandize, depending on your point of view), but has occurred while Finance, through merger and acquisitions, private equity takeovers and outsourcing, has directly based much of it growth on cannibalizing the patrimonial wealth that the goods-producing part of the economy generated over many decades. In fact, this is what is driving both the current financial crisis and the attack on public schools: these fundamentally parasitic forces have extracted so much wealth from the private sector that they are now driven to go after society's public wealth. Thus the ever-increasing attacks on public education and Social Security.
- Because their wealth and power is increased by enlarging how much they can skim from every corner of the economy, in the form of rents (interest, fees, royalties and actual rents) there is ultimately a negative relationship between the expansion of Finance and the overall health of the economy and society. This doesn't mean that some, even many, don't benefit: they do. What else accounts for Manhattan becoming a Xanadu of opulence and ostentatious wealth in the past generation? And there is some trickle down: art auctioneers, designers, high-end caterers and restaurants, valet parking attendants all get their little cut, but the overall effect is the decline of long-term, real wealth-generating capacity. As Finance has fattened off the land, the poverty rate in NYC has increased (and NYC has fared much better than many other parts of the country).
- Because there is a limited amount of wealth-producing opportunities for Finance to invest in, and because the money must go somewhere, it goes into ever more abstruse financial instruments that are ever more abstracted from the physical world of work and wealth: credit default swaps, trading of interest rate indexes, futures trading by parties that have no relation to the commodities being traded, foreign exchange plays, etc. As all of this grows relative to the "real" economy, the system becomes top-heavy and more susceptible to crisis. That explains the increasing incidence and severity of financial crises over the past 35 years, most of it directly related to the credit system: NYC's "bankruptcy' (really a banker's coup) in 1975, a succession of Third World debt crises in the 1980's, the S&L crisis of the late 80's and early 90's, the Asian debt crisis and Russian default of 1997, the LTCM crisis, Dot Com meltdown, and our current crisis, which is entirely fueled by debt and "financial engineering" (really just a euphemism for an ever-expanding financial casino gamed by big players).
What does any of this have to do with education? Well, as I said, these immense amounts of money must go somewhere, and opportunities for "investment," which has devolved into systemic extraction of wealth, must be found. Enter the the public schools, "the Big Enchilada" (actually just the "Pretty Big Enchilada:" Social Security is really the Big One) according to Jefferies and Co.
But Finance has a PR problem. Most people (rightfully) don't fully trust Wall Street gamblers. And don't be fooled: a hedge fund is nothing but a gambling machine, creating no tangible wealth whatsoever. Their "investments" are short term bets, which often (as we're seeing right now in the case of Greece, Spain, Ireland and Portugal) have negative consequences. So plutocrats and Wall Street gamblers must start foundations, and have Society benefit balls, and make patronizing statements about their concern for the "underprivileged." Look at the very term "social entrepreneur": there is a (deluded or deceptive) notion that marketizing the right to an education will somehow benefit people. Sorry, that's not how postmodern capitalism works.
Meanwhile, they have dollar signs in their eyes. Having ignored if not benefited from the decades-long disinvestment in inner city schools and communities (which were largely a result of their own investment decisions, combined with their political efforts to reduce their taxes), they become part of the chorus chanting about the failures of public education (which in reality does have many problems and shortcomings, problems that these very same people have an indirect hand in as a result of what they do for a living every day).
Finance makes "investment" decisions that often reduce the productive capacity of the nation, leaving communities and entire regions (Upstate NY, the Great Lakes, etc.) hollowed out: that's a TAKE.
Finance captures the political process to extend its power and wealth, further skimming wealth: that's a TAKE.
Finance (along with its political and media assets) uses its increased power to create an echo chamber that endlessly harps on the failures of public education (and the public sector in general) and the faults of teachers and their unions in those failures: that's a TAKE.
Finance helps establish a parallel, privately-run (but publicly-funded) educational system that consciously skims, filters and creams some students, and excludes or counsels out others. At the same time, it diverts money from the public schools system: that's a TAKE.
Finance works to create the political climate for the diversion of funds from the public schools by imposing executive (mayoral) control over school systems, disenfranchising school communities, in particular the minority communities they claim to serve: that's a TAKE.
Now, KS, what exactly do they GIVE?