This investor dude is making big dollars for himself and his rich clients by taking money out of your public school system. But no, the charter movement is totally progressive.
Alright, folks. If you needed more proof of the real agenda behind the big-box charter movement; if you still weren’t sold that it’s by and large not about the kids, but rather about the looting of public treasuries for the private gain of the one percent; if you still couldn’t bring yourself to believe that all the pretty pamphlets and inspirational advertisements are just a cover for one more innovative strategy to transfer wealth upwards, well, watch this video.
Here, I’m going to give you the link one more time, because it’s absolutely vital that you watch this clip. You have to watch a dumb 10-second commercial beforehand, but it’s worth it.
Alright, for anyone who refuses to click the link, here’s the setup. CNBC is interviewing David Brain, head of a major investment trust, about why charter schools are such phenomenal money-makers for smart investors like him. Here’s the transcript. Read it.
Anchor: Charter schools have become very popular as parents seek more choice in educating their children. But are charter schools a wise addition to your investment portfolio? Well let’s ask David Brain, President and CEO of Entertainment Properties Trust. David, why would I want to add charter schools into my portfolio?
DB: Well I think it’s a very stable business, very recession-resistant. It’s a high-demand product. There’s 400,000 kids on waiting lists for charter schools, the industry’s growing about 12-14% a year. So it’s a high-growth, very stable, recession-resistant business. It’s a public payer, the state is the payer on this category, and if you do business with states with solid treasuries then it’s a very solid business.
Anchor: Well let me ask you about potential risks, here, to your charter school portfolio, because I understand that three of your nine “Imagine” schools are scheduled to actually lose their charters for the next school year. Does this pose a risk to investors?
DB: Well, occasionally—our Imagine arrangement’s on a master lease, so there’s no loss of rents to the company, although occasionally there are losses of charters in certain areas and they’re used to peculiar, particular circumstances. In this case it’s a combination of relationship with the supervisory authorities and educational quality; sometimes the educational quality is very difficult to change in one, two, or three years. It’s a long-term proposition, so there are some of these that occur, but we’ve structured our affairs so this is not going to impact our rent-roll and in fact you see this is maybe even a good experience as the industry thins out some of the less-performing schools and we move on to the best-performing schools.
Anchor: David there has been somewhat of a backlash to charter schools in some areas given their use of public money, as you noted. Any risk to the growth of charter schools generally?
DB: I don’t—there’s not a lost of risk, there’s probably risk to everything but the fact is this has bipartisan support. It’s part of the Republican platform and Arne Duncan, Secretary of Education in the Obama Administration, has been very high on it throughout their work in public education. So we have both political parties are solidly behind it, you have high demand, high growth, you have performance across the board, most studies have charter schools at even or better than district public education. So, I think it has some risk because it’s new and it’s emerging and it is a high-growth category. But at the same time I think much more’s going forward so it’s still a safe area for investment.
Anchor: You’ve invested in retail centers, ski parks, you’ve got charter schools, you’ve got movie theaters. If you could buy one thing right now, David, one type of asset in real estate, what would it be?
DB: Well, probably the charter school business. We said it’s our highest growth and most appealing sector right now of the portfolio. It’s the most high in demand, it’s the most recession-resistant. And a great opportunity set with 500 schools starting every year. It’s a two and a half billion dollar opportunity set annually.
Wow, a two and a half billion dollar opportunity set annually. That’s an incredible amount of profit to be generated by this “public” good that’s all about helping children. I guess this really is good for low-income communities. I mean, I trust this David Brain guy is in a better position than real educators to be driving education policy. RI-CAN and DFER and all those other corporate-funded “grassroots” advocacy groups spending big money lobbying for these schools must be right. State senate candidates Maryellen Butke and Maura Kelly–who are receiving great gobs of out-of-state corporate ed reform cash for their campaigns–must really be onto something. What idiots we’ve all been to argue that the big-box charter movement, like (as Mr. Brain noted) the rest of the Republican platform, is another rich-get-richer, poor-get-poorer scheme.
Sorry for the excessive level of sarcastic anger in this post, but watching that CNBC conversation absolutely makes my blood boil.
Aside from a debate on charter schools in general (which I do not feel educated enough to have a valuable opinion on), I don’t see how this post demonstrates any kind of “rape” of the public at large. This company, as far as I can tell, rents space in thier buildings to charter schools to occupy and operate in. The states, who fund the schools, pay those rents. That is evil…how exactly? These new schools need to operate somewhere. Would it be better for states/municipalities to build or buy buildings for these schools instead, which would cost WAY more money? If you are against charter schools make that point but ranting that this guy is “driving education policy” because he rents space to them and that this is proof of “the poor getting poorer” is beyond a stretch.
I am glad someone is focused on this. I look forward to your posts.
Hi Pucci, appreciate the comment. I think my language in this post was a little bombastic, but I disagree with your premise. Here’s the point, from my perspective: the marketization of public education is something we should worry about. Taking an essential public service and turning it over to investors whose sole motive is profit is not what’s best for students or their communities. But even scarier, with great wealth comes great political power, and these powerful organizations and the hedge funds that back them are using that. A few statistics from a report out of the American School Board Journal:
The online education provider, K-12 Inc., which educates thousands of students through virtual charter schools across the nation, has spent nearly $500,000 on campaign contributions since 2004.
Another for-profit online firm, Connections Academy, spent about $44,000 to support the 2010 re-election bid of Idaho Superintendent of Public Instruction Tom Luna. Connections earned $12.8 million in state revenue that year from the more than 2,900 students enrolled in Idaho Virtual Academy, which the Virginia-based online company operates.
Another political big spender is charter school operator Vahan Gureghian, who gave out more than $600,000 in contributions to Pennsylvania politicians over the past three years. Meanwhile, the National Heritage Academies Inc., a for-profit EMO that operates 71 schools in nine states, spent $320,000 on Washington, D.C., lobbying efforts, according to the Center for Responsive Politics.
Etc., etc., etc., etc., etc., etc..
David Brain and his “Imagine” Charter Schools.
David Brain?
C’mon, you gotta be kiddin’ me.
(Are you going to delete this one, too?)
Pretty soon, it will just be Sully, Bill Monroe, Doug Diesel, and Sully talking to each other.
and turbo…
Can’t forget the turb-meister.
But David Brain??
C’mon now.
How much would WPRI need to burnish this guy’s image?
IMAGINE DAVID BRAIN!! (I’m tellin’ Yoko.)
“IMAGINE DAVID BRAIN!! (I’m tellin’ Yoko.)” Is this a poem?
Okay, this is pretty convincing. The point of Wall St. investment in charter schools is to make money.
Ok Aaron, let’s play devil’s advocate here. Money in education is bad because money can become political power.
educationnext.org/files/UnionSpendingTable.pdf
So the teacher unions in about half of the spent more than $500,000 on campaign contribution. There has also been substantial research to show that teacher union members are far more likely to vote in the common off-cycle elections for school boards (especially when they live in the district they work at). So not only do they contribute way more than these evil, corporate entities, they also get to directly vote for their bosses.
Meanwhile, Burrillville with about 2,600 students made $16,000,000 in state revenue in 2008-09! That’s not even including local tax dollars!! (See what I did there? Yeah, revenue numbers are really inflated and are not the ones you want to use your point.)
How much revenue do textbook companies make? Should we ban for-profit textbook companies? What about how much Dell makes selling computers to schools? Should we ban computers from schools?
I noticed completely absent from your “analysis” is a look at whether or not the profits being made in this case (which appear to be over building rents) come at an additional public cost or not. With building construction in education often topping tens of millions of dollars, I would be very interested to know if maybe our “public” schools are spending too much on building. As an urbanist, I have serious concerns with how we build schools and where we build them. We construct palaces that are supposed to last 100 years (or in the case of Providence we let them rot because of lack of funding). We are unable to effectively open or close schools based on changing overall enrollment and residential patterns that make comfortable, neighborhood schools a fiction in a city without sufficient density. We spend vastly more money on public construction projects than other developed nations (Europe can build trains, parking structures, etc at 1/10 the cost) and it’s largely because of complex safety regulations and union work rules all designed to make America overbuild inflexible structures with the most expensive labor.
So seriously, someone is making money off of renting school buildings? Let’s find out if that’s actually coming at tax payer costs compared to the alternative! I think it probably does, even after all I wrote, but I don’t know and it’s an empirical question that can be answered. You want to report and be taking seriously? Do the legwork before you use the word “raping”.
I think some/most of those companies suck. I am not a big fan of for-profit education and I’m generally happy it’s illegal in Rhode Island. But if you’re going to use the language you’re using to describe some pretty mundane activities you have to support it with something better than, “I don’t like markets, and look they can spend money on elections!”
Quite honestly, you are using the word “raping” lightly, and it’s offensive.
During my third of a century, give or take, in the high school classroom, I saw my share of weak characters venture into the first of what would be five classrooms, plus a duty assignment, to sheepishly work their first day. Understandably, some never came back for a second try, regardless of their intellectual level in what they IMAGINED was their chosen field.
And they were sheepish for good reason.
In order to teach, you first have to get right with the group that you’re working with on a fundamental (read, “animal”) level. If you can’t come to some tacit agreement, on that basis, with the group and the individuals within it, you’re not going very far.
Now, scroll up and take a good look at that picture of DAVID BRAIN.
How long do you think he’d last in a big urban high school today, without the support of his local rightwing sponsors?
A guy like that might become a school superintendent, sure, but never a good classroom teacher.
Hi Jason. If I’ve offended you or anyone with my use of the word “rape,” I apologize. I will edit it out right now. I think this clip is a good example of a very, very real problem, but I am sorry for being insensitive with a word that so rightly holds such emotional power.
Pucci718, If you want the details on how the Brain drains your tax dollars, read this article.
news.firedoglake.com/2010/05/10/wall-street-hearts-charter-schools-gets-rich-off-them/
This is a separate issue from the fact that the majority of charter schools are worse than the public schools they have replaced via the hostile takeover of public education
Wendy Lecker: State uses double standard when judging schools – StamfordAdvocate
This link documents Charter Schools wasting taxpayer money, rampant fraud and harming students.
www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439×2486013
Others have even been potentially associated with terrorists:
my.firedoglake.com/dougmartin/2012/05/05/teaching-as-cia-cover%E2%80%93gulen-charter-schools-dan-burton-and-state-secrets-2/
But they are not all bad. Just ask any right winger!
Aaron, while I appreciate that folks on this blog don’t like charter schools, especially those operating by for-profit companies, I don’t get your outrage based on this video. This guy is an investor. He’ll invest in anything that will make him money, and he’s interpreting the support of Republicans and Democrat politicians in charter schools as a good sign for continued expansion. He’s investing in charter schools; he’s not promoting charter schools. If the charter school market goes south, he’ll be outta there.
Relating this back to Rhode Island, the charter schools I’m most familiar with (those in the southern part of the state) are not at all like the corproate-run charters I read about on this blog. they are, I believe, independent nonprofits who hire their own staff and develop their own curricula. As such, I don’t get too concerned with the fearful posts about the huge “charter school industry”. No matter what this investor says.
I would be interested to learn more about the other charters in Rhode Island – are they operating by for profits? Regionally and nationwide, are charters mainly operated as franchises of national companies are local, organically built schools?
More accurately, he’s providing services (facilities) to charter schools, just as he does to many other types of businesses. He’s not part of the education reform/charter school “movement” as such.
Sure wish you could edit these comments.
“Oh, I don’t pretend to teach. I just run schools.
And my fiduciary responsibilities are such there can be no doubt that my loyalties are spoken for by my investors and/or my corporate board.
But, instead of widgets, I do charter schools.
Therefore, I am no indication of the quality of charter school leadership, or, of the motivation behind corporate schools.”
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Jeez, Aaron, can you do something about these lively commenters so that we can continue to write turgid, dull forty watt business prose and get away with it forever??
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Aaron, you did a good thing by writing this column. Not an infinitely good thing; just a little good thing.
Are you going to apologize to David C for people like me (who, after all, actually read your stuff)??
See if you can just ride this one out.