How much lobbying does the privatization movement do? I can assure you it is spending far more money that teachers’ unions.
Why would they do that? Is it “for the children”? Hell no!
Good for Business; Kids Not So Much
While most education reform advocates cloak their goals in the rhetoric of “putting children first,” the conceit was less evident at a conference in Scottsdale, Arizona, earlier this year.
Standing at the lectern of Arizona State University’s SkySong conference center in April, investment banker Michael Moe exuded confidence as he kicked off his second annual confab of education startup companies and venture capitalists. A press packet cited reports that rapid changes in education could unlock “immense potential for entrepreneurs.” “This education issue,” Moe declared, “there’s not a bigger problem or bigger opportunity in my estimation.”
Moe has worked for almost fifteen years at converting the K-12 education system into a cash cow for Wall Street. A veteran of Lehman Brothers and Merrill Lynch, he now leads an investment group that specializes in raising money for businesses looking to tap into more than $1 trillion in taxpayer money spent annually on primary education. His consortium of wealth management and consulting firms, called Global Silicon Valley Partners, helped K12 Inc. go public and has advised a number of other education companies in finding capital.
Moe’s conference marked a watershed moment in school privatization. His first “Education Innovation Summit,” held last year, attracted about 370 people and fifty-five presenting companies. This year, his conference hosted more than 560 people and 100 companies, and featured luminaries like former DC Mayor Adrian Fenty and former New York City schools chancellor Joel Klein, now an education executive at News Corporation, a recent high-powered entrant into the for-profit education field. Klein is just one of many former school officials to cash out. Fenty now consults for Rosetta Stone, a language company seeking to expand into the growing K-12 market.
As Moe ticked through the various reasons education is the next big “undercapitalized” sector of the economy, like healthcare in the 1990s, he also read through a list of notable venture investment firms that recently completed deals relating to the education-technology sector, including Sequoia and Benchmark Capital. Kleiner Perkins, a major venture capital firm and one of the first to back Amazon.com and Google, is now investing in education technology, Moe noted.
The press release for Moe’s education summit promised attendees a chance to meet a set of experts who have “cracked the code” in overcoming “systemic resistance to change.” Fenty, still recovering from his loss in the DC Democratic primary, urged attendees to stand up to the teachers union “bully.” Jonathan Hage, CEO of Charter Schools USA, likened the conflict to war, according to a summary posted on the conference website. “There’s an air game,” said Hage, “but there’s also a ground game going on.” “Investors are going to have to support” candidates and “push back against the pushback.” Carlos Watson, a former cable news host now working as an investment banker for Goldman Sachs specializing in for-profit education, guided a conversation dedicated simply to the politics of reform.
Sponsors of the event ranged from various education reform groups funded by hedge-fund managers, like the nonprofit Education Reform Now, to ABS Capital, a private equity firm with a stake in education-technology companies like Teachscape. At smaller breakout sessions, education enterprises made their pitches to potential investors.
