Disaster Capitalism:  Revisiting the charter schooling and privatization of education in New Orleans

Although the issue of charter schools and the ‘Diverse Strategy’ model for public schools (Paul T. Hill)  after the Katrina Hurricane in New Orleans have been examined by many, it is important to take a close look once again as to how the corporatists used the disaster economic policies of New Orleans to ram their privatization schemes down the throats of citizens.  You will see many of the same players busy today using the Second Great Depression as their ‘natural disaster’ to promote the same policies city by city throughout the nation.  The bankruptcy of cities, an accomplishment many of the same venture capitalist and Wall Street players left in their wake after thirty years of neo-liberal politics, has now provided the new ‘turnaround artists’ with opportunities for making money, breaking unions and privatizing education.

Take a look at how they did it in New Orleans and then put the template over such cities as Pittsburgh, New York, Los Angeles, Houston, Miami and the like and you will see the same crime patterns by the corporate criminals.

Race to the Top and the Obama’s feathering of the dungeons of educational despair being created by Arne Duncan, Secretary of Education, can be clearly seen as the liquid center of the corporatist policies in charterization.

New Orleans

In 2005, after the devastation wrought in New Orleans by Hurricane Katrina, the atmosphere amongst many politicians and those in the business sector was jubilant.  Commenting on the devastation wrought by tumultuous events before, during and especially after the hurricane, Richard Baker, a prominent republican congressman from the city spoke to a group of lobbyists telling them:

“We finally cleaned up public housing in New Orleans.  We couldn’t do it, but God did” (Harwood 2005).Harwood, John Washington Wire: a special weekly Report from the Wall Street Journal’s Capital Bureau Wall Street Journal September 9^th, 2005)

What Baker was referring to were plans to level the existing public housing projects that had been in the city for years and ironically survived the hurricane.  In a similar vein, Joseph Canizaro, a New Orleans developer expressed similar sentiments acknowledging:

“I think we have a clean sheet to start again.  And with that clean sheet we have some very big opportunities” (Rivlin2005).Gary A mogul who Would rebuild New Orleans NY Times, September 29, 2005).

The plan was to replace the leveled public housing units with private condos.  And that’s what happened.  But this was not and is not part of just a ‘housing plan’ for urban New Orleans.  No, the hurricane offered successive opportunities for politicians and businessmen alike.  Lower taxes, fewer regulations, cheaper workers, gentrification, an opportunity for development of urban centers and yes, the replacement of the traditional public school system with a system of charter schools.

It takes a hurricane to raise a village of neo-liberal charlatans

But why did it take a hurricane to reverse the ravages of an ailing traditional public school system in favor of a new ‘charterized’ version of public choice?  Why didn’t privatization advocates like Baker and Canizaro jump on the New Orleans privatization bandwagon before the hurricane?

The answer to these questions lies with the ideology of neo-liberalism itself, as expressed by its main proponent, Milton Friedman, who ironically died less than a year after his economic philosophy was put into effect and became ‘the charter experiment in New Orleans’.  In Friedman’s 1962 book entitled Capitalism and Freedom, Friedman was clear:

“Only a crisis actual or perceived produces real change.  When that crisis occurs, the actions that are taken depend on the ideas that are around.  That, I believe, is our basis function: to develop alternatives to existing policies, to keep them alve and available until the politically impossible becomes politically inevitable”(Friedman 1962, 2). Capitalism and Freedom, 1962, p. 2 Rprint Chicago: University of Chicago Press in 1982)

Hurricane Katrina provided the impetus that Friedman counseled would be needed.  With the city devastated and much of its population forced from the state, policy wonks, economists, developers, businessmen, corporations and politicians seized the hurricane as an opportunity for radical privatization, not much unlike that which Friedman had helped engineer in Chile decades prior.  In Chile, after Friedman’s counsel and ideas came to hold sway under Augusto Pinochet’s dictatorship, Chile saw its entire public school system replaced through privatization in the form of ‘vouchers’, long ago advocated by Friedman.  Now, with New Orleans devastated the opportunity to privatize or at least reconfigure education presented itself as a gift horse opportunity.

The American Enterprise Institute, a neo-liberal think tank that embraces most if not all of the Friedman ideology, expressed their enthusiasm for the opportunity to implement Friedman’s economic and public policy program of what can only be called neo-liberalism this way:

“Katrina accomplished in a day…. What Louisiana school reformers couldn’t do after years of trying” (Saulny 2006).Susan US Gives Charter Schools a Big Push in New Orleans” NY Times June 13, 2006)

Whether public housing or public education the race was on; no longer would New Orleans public schools be held hostage to teacher’s unions, government bureaucrats, or regulation, oversight and transparency.  Now, as Friedman himself noted in the Wall Street Journal shortly before his death:

“Most New Orleans schools are in ruins.  As are the homes of the children who have attended them.  The children are now scattered all over the country.  This is a tragedy.  It is also an opportunity to radically reform the educational system” (Freidman 2005). The Promise of Vouchers, Wall Street Journal, December 5, 2005).

Well heeled capitalist descend on New Orleans

Within months, if not weeks, well heeled businessmen and lobbyists converged on New Orleans with well orchestrated and copious reorganization and restructuring plans to convert traditional public schools into charter schools.  These, they hoped, would be then run by educational maintenance organizations (EMOs) for a profit.  Friedman’s plans would be one step closer to reality and the millions to be made in ‘charterizing’ public schools and then contracting them out to private EMOs would be enormously attractive and lucrative.  Within less than 19 months most of the traditional public schools in New Orleans had been ‘charterized’ and not only were all public school teachers fired with lightening speed, but their collective bargaining gains were torn to shred along with any existing contracts.  The charter movement exploded with a radical ‘takeover’ of public education.  Naomi Klein, in her book The Shock Doctrine, succinctly sums up the obvious:

“I call these orchestrated raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as “exciting market opportunities”, “disaster capitalism” (Klein 2007). Naomi, The Shock Doctrine page 6)

Rapid and irreversible change of the New Orleans public educational system was the objective of the neo-liberal economists advising the state after the hurricane, mostly from the ‘Chicago School of Economics’ located at the University of Chicago where Friedman had left his guru-like mark and a well clad and well heeled group of admirers and supporters.  Conservative think tanks were at the beck and call of the new economics of charter schools in New Orleans, quickly advocating for-profit run charter schools, for-profit educational curriculum, for-profit services, curriculum and the like.  They understood that the ‘charter experiment’ in New Orleans could spread to other states if they acted swiftly enough to put their new plans for New Orleans education into immediate play.  The movement had to be done with immediacy, and it was.

As Sarah Carr, a long time follower of the burgeoning charter school movement in New Orleans and staff writer for the Times Picayune, noted in 2007:

“Throughout the city, various organizations have stepped in to perform the functions no longer handled by a traditional central office. In effect, the role of the Orleans Parish schools administration — which previously oversaw more than 120 schools and now oversees five traditional ones — has been outsourced” (Carr 2007) http://blog.nola.com/times-picayune/2007/11/school_rely_on_more_on_outside.html Schools rely on more on outside helpPosted by The Times-Picayune November 28, 2007 9:11PM

The New Executive Salaries

And the outsourcing has been a boon for executive salaries, according to an article in the New Orleans Metro Real Time News:

Now in control of their own budgets, many New Orleans charter school boards have invested heavily in school leaders, with a few paying well into the six-figure range, doubling or tripling the salaries that principals earned under the old regime.

A top the pay range sits veteran Kathy Riedlinger, head of Lusher Charter School, who earns $203,556, including a $5,000 yearly car allowance. Lafayette Charter School’s Mickey Landry, recruited from a prep school in a national search, is No.2 at $186,000.

At Ben Franklin High School, Principal Timothy Rusnak, also recruited nationally, earns $150,000 annually. And Jay Altman, chief executive of FirstLine Schools, earns $132,000 to oversee both S.J. Green and Arthur Ashe charter schools.

Those salaries are the city’s highest, but they reflect a broader trend of sizable increases for nearly all city school principals, charter and traditional. Nonprofit charter boards have generally led the way in boosting pay. But the market pressure has caused the Recovery School District and the Orleans Parish School Board to set more competitive salaries for their centrally managed schools.

State data show most New Orleans charter principals now earn between $80,000 and $110,000 annually, in line with national averages. Principals at RSD-operated schools make between $83,173 and $101,803. The Orleans Parish School Board pays base salaries between $82,330 and $92,054. Both agencies also pay stipends for additional work.

That’s a big jump. Before Hurricane Katrina, which led to widespread chartering, base salaries for principals ranged from about $55,000 to about $70,000 (Local school principals’ pay reaches new heights by Brian Thevenot, B. (May 17, 2009) The Times-Picayune Sunday May 17, 2009, 2:29 PM New Orleans Metro Real Time News http://www.nola.com/news/index.ssf/2009/05/local_school_principals_pay_re.html

Louella Givens, New Orleans only representative on the state board of education stated, when she asked about the exorbitant salaries:

I was essentially told that, because charters are independent, they have freedom to set salaries however they want.  When I find out that some of these places are operating like little kingdoms, I think this kind of information should be readily available to the public. You assume there’s oversight, but apparently there isn’t (ibid)

It seems that salaries at the more affluent charters are much higher than those serving the neediest students.  The myth that the New Orlean’s educational market naturally works in the favor of the neediest students under the novel New Orleans charter experience is contradicted by the evidence.  This is troubling to many residents and those interested in public education for it seem illogical that those working with the most advantaged students would be rewarded greater than those who must work with students with greater educational needs.

Outsourcing to private for-profit contractors the rule of thumb

In fact, after the hurricane and in the clamor to charterize as many schools as possible, an entire new educational system has emerged that is not only top heavy in ‘executive salaries’ but, according to Carr, outsourcing is the rule of thumb and:

“….. the outsourcing is not to a single company or group. Instead, the job has gone to a complicated array of school administrations, nonprofit groups, foundations and charter school cooperatives, such as the Algiers Charter Schools Association.

Some charters have formed cooperatives, like the Algiers Charter School Association or the East Bank Charter School Cooperative, to bolster their economic might. For a fee of either $8,000 or $18,000 per year — depending on the number of hours requested — charter schools in the East Bank group can access joint legal services, communication, financial accounting, grant writing, public relations and local teacher recruitment, among other things. Baptist Community Ministries significantly subsidizes the cost to schools”(ibid).

New Orleans now boasts the largest number of charter schools serving the largest population of students in any state, with 55% of all public schools students in New Orleans now attending charter schools.  And many of the charter schools, are run by EMOs.

According to the Center for Educational Reform:

Louisiana’s 66 charter schools serve a total of 23,600 students statewide, many of whom come from low-income families that are eligible for free or reduced-price lunch programs (CER Website 2009)//edreform.com/accountability/states/CER_2009_AR_Louisiana.pdf).

What happened in New Orleans, is happening in other places as well, most notably Washington D.C., where charters account for 27% of all public student enrollment (El-Amine, Z. and L. Glazer 2008)

In fact, such rapid and irreversible changes have been suggested by billionaire Bill Gates in a recent publication entitled Tough Choices for Tough Times, put out by The National Center on Education and the Economy in 2007.  The report harkens back to the early debates between DuBois and Washington, Cubberly, Bobbitt, Lippman and Dewey.  Much like the revered report, A Nation at Risk, published under the Reagan administration in the 1980’s as a call for privatization and tougher educational standards, one finds in the new report a corporate wish list of sorts — and the similarities to what the report promotes in theory and what is actually happening in New Orleans, the charter capital of the nation, can’t help but be noticed.

Tough Choices or Tough times: Bill Gates

Tough Choices or Tough Times represents a firm neo-liberal approach to education which would entail the construction of completely new private institutions and systems to replace traditional public institutions.  Some of the talking points in the report include moving beyond charter schools to privatized contract schools.  No longer are charter schools even discussed as engines of innovation to raise educational standards and practices in traditional public schools.   On the contrary, agreeing with the Education Next report put out by the Hudson Institute, Tough Choices or Tough Times implicitly concurs that charter schools are simply Trojan horses for what entrepreneurs and investors really want, which is the privatization of all public schools for lucrative profits and standardization of both curriculum and its delivery.  This of course will require the elimination of all school board powers and all regulations in favor of empowering private companies to create a new ‘school system’, both in governance and oversight.  What will be the role of the state?  The answer is simple, to assure that all laws, regulations and oversight remain within the new private system – to assure a ‘free market’ for educational goods and services and unfettered opportunities for continued capital formation.  In the words of the report:

“First, the role of school boards would change. Schools would no longer be owned by local school districts. Instead, schools would be operated by independent contractors, many of them limited-liability corporations owned and run by teachers. The primary role of school district central offices would be to write performance contracts with the operators of these schools, monitor their operations, cancel or decide not to renew the contracts of those providers that did not perform well, and find others that could do better. The local boards would also be responsible for collecting a wide range of data from the operators specified by the state, verifying these data, forwarding them to the state, and sharing them with the public and with parents of children in the schools. They would also be responsible for connecting the schools to a wide range of social services in the community, a function made easier in those cases in which the mayor is responsible for both those services and the schools. The contract schools would be public schools, subject to all of the safety, curriculum, testing, and other accountability requirements of public schools. The teachers in these schools would be employees of the state, as previously noted.

The schools would be funded directly by the state, according to a pupil-weighting formula as described below. The schools would have complete discretion over the way their funds are spent, the staffing schedule, their organization an management, their schedule, and their program, as long as they provided the curriculum and met the testing and other accountability requirements imposed by the state.

Both the state and the district could create a wide range of performance incentives for the schools to improve the performance of their students. Schools would be encouraged to reach out to the community and parents and would have strong incentives to do so. Districts could provide support services to the schools, but the schools would be free to obtain the services they needed wherever they wished.

No organization could operate a school that was not affiliated with a helping organization approved by the state, unless the school was itself such an organization. These helping organizations — which could range from schools of education to teachers’ collaboratives to for-profit and nonprofit organizations — would have to have the capacity to provide technical assistance and training to the schools in their network on a wide range of matters ranging from management and accounting to curriculum and pedagogy.

Parents and students could choose among all the available contract schools, taking advantage of the performance data these schools would be obligated to produce. Oversubscribed schools would not be permitted to discriminate in admissions. Districts would be obligated to make sure that there were sufficient places for all the students who needed places. The competitive, data-based market, combined with the performance contracts themselves, would create schools that were constantly seeking to improve their performance year in and year out” (Tough Choices or Tough Times Website 2007).http://www.skillscommission.org/pdf/exec_sum/ToughChoices_EXECSUM.pdf Tough Choices for Tough Times: The Report of the New Commission on the Skills of the American Workforce 2007 National Center on Education and the Economy.

Tough Choices or Tough Times even goes so far as to recommend ending high school for many poor and minority students after the 10th grade, such as those who score poorly on standardized tests intended for high school seniors.  Students testing poorly on the mandated tests could go on to ‘vocational’ schools, while those who did well would be channeled into the corridors of power through the colleges or universities:

“Our first step is creating a set of Board Examinations. States will have their own Board Examinations, and some national and even international organizations will offer their own. A Board Exam is an exam in a set of core subjects that is based on a syllabus provided by the Board. So the point of the exam is to find out whether the student has learned from the course what he or she was supposed to learn. For most students, the first Board Exam will come at the end of 10th grade. A few might take it earlier — some might not succeed on their first try, so they might take another year to two to succeed. The standards will be set at the expectations incorporated in the exams given by the countries that do the best job educating their students. But it will in any case be set no lower than the standard for entering community colleges in the state without remediation. We believe that when all of our recommendations are implemented, 95 percent of our students will meet this standard. Students who score well enough will be guaranteed the right to go to their community college to begin a program leading to a two-year technical degree or a two-year program designed to enable the student to transfer later into a four-year state college. The students who get a good enough score can stay in high school to prepare for a second Board Exam, like the ones given by the International Baccalaureate program, or the Advanced Placement exams, or another state or private equivalent. When those students are finished with their program, assuming they do well enough on their second set of Board Exams, they can go off to a selective college or university and might or might not be given college credit for the courses they took in high school. These students and the ones who went the community college route will have the option when they finish their programs of taking a second set of state Board Exams, and if they hit certain scores, they will be guaranteed the right to go to their state colleges and some state universities as juniors” (ibid).

Also suggested in the report is ending remediation and special education aid for low-performance students in an effort cut costs.  Furthermore, the report is clear on the need for ending teacher pensions and reducing their health and other benefits.   The idea is not to motivate teachers to create innovation; on the contrary, teachers are now to be ‘trained’ to deliver pre-determined curriculum and held to ‘standards’ the new system would impose.  This is hauntingly familiar to demands currently made on students – to be ‘trained’ to meet what many teachers feel are inauthentic state mandatory standards, ill-designed to motivate or create innovation among students.  According to the Gate’s funded report, the conception of curriculum on the part of teachers is to be divorced from the actual implementation:

“When we have the right assessments, and they are connected to the right syllabi, then the task will be to create instructional materials fashioned in the same spirit and train our teachers to use the standards, assessments, syllabi, and materials as well as possible, just as we train our physicians to use the techniques, tools, and pharmaceuticals at their command as well as possible. But it all starts with the standards and assessments” (ibid).

And like the charter experiment in New Orleans, Tough Choices or Tough Times points the accusatory finger of blame for educational malaise at teachers recommending that unions be reduced and/or eliminated.  The report also urges ending teacher seniority and introducing competition among teachers through devices such as merit pay and other teacher differentials based on student performance on standardized tests.

Tough Choices or Tough Times is a summary or playbook for what actually is going on in New Orleans since hurricane Katrina devastated the city and what could be a theory and practice foisted on other states.   The message seems to be clear:  create a system like the New Orleans model to show other states what is happening in New Orleans could happen to them.

The transformation grows each and every day as the billionaire philanthropists rule the day

The transformation of public schools into private entities is gradually being accomplished as the neo-liberal agenda makes its ascendancy in economically strapped and often bankrupt urban centers throughout the nation.  This is why Naomi Klein and others critical of the privatization schemes posed by charter schools as Trojan horses for a larger privatization agenda compare the structural adjustment programs taking place in New Orleans, Ohio, Washington D.C. and elsewhere to the global structural adjustment made by the world bank and the IMF.  Certainly they represent a step ever closer to the privatization of education advocated for years by neo-liberals and market-based reformers.  As Zein El-Amine, a longtime D.C. community activist and writer and founding member of the Save our Schools Coalition astutely noted, what the public is witnessing is:

“The purposeful neglect of public entities, the siphoning of public resources, the attack on public sector workers, and a false promise that a market solution is less bureaucratic, less costly and more effective” (El-Amine, Z. and L. Glazer 2008)

Tough Times or Tough Choices is a throwback to Cubberly, Bobbitt, Lippman, DuBois and the educational debates of the past.  Echoing the calls of the super-functionalists who bemoan America’s ‘competition’ in the world and the entrepreneurial class that stands to make billions off any transformation to a market-driven approach to education where education is seen as a product or commodity to be delivered, the report claims:

“The governance, organizational, and management scheme of American schools was created in the early years of the 20th century to match the industrial organization of the time. It was no doubt appropriate for an era when most work required relatively low literacy levels, most teachers had little more education than their students, and efficiency of a rather mechanical sort was the highest value of the system.

In recent years, American industry has shed this management model in favor of high performance management models designed to produce high-quality products and services with highly educated workers. Some school districts are moving in this direction. That movement needs to be accelerated, formalized, and brought to scale. We share here one way to make that work. No doubt there are others that would work as well” (Ibid).

The report is certainly correct as to one issue: there absolutely are other approaches to providing a decent and sound education to our nation’s children; the issue is whether we as citizens wish education to remain public, accompanied with full disclosure, transparency, equitable and decent funding, authentic standards for educational student achievement, excellence in teacher recruitment, pay and training; or if we, as citizens, prefer to have a privatized system of education operated by for-profit entrepreneurs and corporations, accompanied by commodified and standardized curriculums, ‘class’ and ‘race’ based educational opportunities, and for-profit management of schools subsidized by tax dollars.  This too is a ‘public choice’, and that choice, as citizens, is ours.

If we are not educated as to the circumstances within which we make these choices and well informed as to the implications for our society and our children that each educational choice brings, we may awaken to find a system not of our own making, one instead that is constructed to do the bidding for those who conceive, control and otherwise make the educational ‘choices’ as to how we are going to live.