The Big Business of Charter Schools — MUST READ

The Big Business of Charter Schools — MUST READ

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Don’t take it from me. Meet David Brain, an investor who also owns commercial real estate, movie theatre chains, and other businesses. He talks baldly to CNBC about what a great deal it is to have taxpayer dollars subsidize your investment.

As highlighted in Valerie Strauss’ Answer Sheet, at the Washington Post:

If you are wondering why you should add charter schools to your investment portfolios, here’s David Brain, head of a major investment concern called Entertainment Properties Trust, to tell you.

Video:

So, still think corporate chain charters are rooted in the community and responsive to parents and children?

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 — we have Imagine arrangements 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, ug, particular circumstances. In this case it’s a combination of relationship with the supervisory authorities and educational quality. Sometimes educational quality is very difficult to change in one, two, or three years. It’s a long-term proposition, so uh, there are some of these that occur, but we’ve structured our affairs so this is not going to impact our rent-roll [emphasis mine] and in fact we see this as uh 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.

Because school closures are not disruptive and difficult for families to absorb, and hard on children who must re-attach themselves to new teachers and friends — which is why investors are blithe about starting them up and shutting them down. I’d bet if asked, Mr. Brain would say, “We don’t cry when a McDonald’s under-performs, we just bring in some consultants or enact a turnaround strategy, and freshen it up and get that bottom line where it should be.” Same with a corporate charter chain, right Mr. Brain? You sell the sizzle of vanity customization even though the steak of curriculum, centralized charter management operations, and drill-and-kill might be a little one-size-fits-all.

NOT. I have problems with market approaches to education that treat children as either an inconvenient byproduct of the actual product (that being RENT-ROLL, in case you missed it) or little widgets themselves.

Wonder if there were no New Markets Tax Credits for investors, if corporate charter chains would be quite so popular. Somehow I suspect not.

We currently have the equivalent of Medicare in our public education system. It isn’t perfect and we’ve funded it inconsistently, but there’s darn universal coverage for all who are eligible, and what you need gets covered pretty well. Why would we want to throw Medicare out the window and make education a scarce commodity, much as was done to our health insurance system until we had the gumption to improve it with the Affordable Care Act?

If you had Tri-Care or Medicare, would you give it up for catastrophic coverage that’s expensive and exclusive to those who are already fit and healthy?

That’s what market forces introduced into public education would do.

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I'm Cynthia Liu, Owner/Founder of K12 News Network. I'm the proud product of public schools through post-grad, the mom of a child in public schools, and the daughter of two teachers. Connect with me professionally on LinkedIn: https://www.linkedin.com/in/cynthialiuk12nn

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4 Comments

  1. What Backers of the "Parent Trigger"/Parent Tricker Law Don't Want You to Know: Real Democratic Involvement in Public Schools Works | K-12 News Network - September 4, 2012, 6:21 pm

    [...] in most people’s minds about the many different kinds of public schools serves the interests of hedge fund wheelers and dealers, private equity investors, and billionaire philanthropists to take advantage of New Markets Tax Credits that make one [...]

  2. Public School Supporters Meeting With Governor Dean and Randi Weingarten at the DNC | K-12 News Network - September 8, 2012, 1:01 pm

    [...] I pointed out how many charters have drifted from their original mission, becoming “hedge fund wolves in sheep’s clothing.“ [...]

  3. Lauren Steiner - July 9, 2013, 3:08 pm

    Thanks for this article. It makes a lot of things clearer now. I take issue with one contention you make, however, about Obamacare improving health care coverage. I would contend that Obamacare was one big gift the the health insurance companies, because it provides them with 31 million more Americans who are mandated by buy insurance. However, the unintended but easily anticipated consequence is that first, many employers are dropping their employees hours under 30 so they don’t have to pay for insurance, and second, crazy Republican governors are turning down federal Medicaid funds; and now some of the poorest of the poor will not have access to health care. Also, Obamacare sacrificed cost for coverage, as it does nothing to stop the double digit increases of health insurance premiums for the vast majority of people who have health insurance. No, we need a single payer system in this country. Or at least he should have fought for the Public Option which he promised to do as a candidate. One of Obama’s many disappointments, including his Race to the Top, a continuation of Bush’s No Child Left Behind.

  4. K-12 News Network | Open Letter to President Obama: The One Book You Should Read on Public Education: Diane Ravitch’s Reign of Error - September 20, 2013, 2:36 pm

    […] state of Florida’s actual parents), and conservative hobbyhorses like vouchers enjoy as predatory billionaires motivated by the New Markets Tax Credit work to turn an important part of the public sector and a democratic institution into a chain of […]

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