Tuesday, October 5, 2010

Children Are New Jersey's Future Profit Centers

Last week the Governor announced his school reform agenda. He wants merit pay for teachers, and he wants student test scores to count for 50% of a teacher’s evaluation (as it is in Chancellor Rhee’s D.C. schools). And he wants changes in tenure, a statewide data system than tracks student achievement, a teacher evaluation task force, the ability to designate “master” teachers and alternate route certification for principals.

Merit pay and tenure reform require the legislature to act.

Money for merit pay increases would come from firing bad teachers. Says the Governor:
“Any type of compensation that allows for anything but merit – gone.”

Seniority and graduate degrees (outside of math and science) would not affect pay.

But it is the Governor’s own plan that should fail any test based on merit. It ignores every major study on the issues. For example, a study recently released by Vanderbilt University and the Economic Policy Institute shows that merit pay simply does not work. The studies showing the unreliability of the use of student test scores in teacher evaluations have been discussed on this blog previously. This is not fact-based policy, this is politics.

According to NYU professor Diane Ravitch, “One of the signature issues of business people and conservative Republicans for the past 30 years has been merit pay. They believe in competition, they believe that financial rewards can be used to incentivize better performance, so it seems natural for them to conclude that merit pay or performance pay would incentivize teachers to produce better results.” Kind of like telling your kid they get $10 for an A and $5 for a B on their report card.

The last piece of economic reform proposed by the Governor would be to allow private companies to operate charter schools. Christie also called for swift passage of the Opportunity Scholarship Act, which would provide corporate dollars as scholarships to low income students who want to attend private or parochial schools.

So, connecting the dots, here’s the Governor’s plan. First, the Governor delivers a budget that diverts more tax revenue away from suburbs and into urban school districts than ever before. Second, the Governor announces a voucher lottery where 24,000 of the kids in the districts that got all the money can apply towards private school tuition. In New Jersey, educational funds follow the student, not the school. So when a student leaves a public school and goes to a private school, the state money also leaves the public school and goes to a private school. So, in reality, the Governor is taking taxes from the suburbs and giving them to private schools.

Another piece of the Governor's plan is that corporations will provide the scholarships that allow students to use their lottery vouchers and attend private schools. In exchange, the corporations get a tax break. So now the Governor is taking corporate income taxes away from the State and giving them to private schools.

So, in the final analysis, this is classic Chris Christie. Use educational policy to reward those who support him – private business and those who favor parochial schools – and punish those who oppose him – teachers. And the inner city kids who don’t get scholarships and have to stay in even less functional schools? Collateral damage. Acceptable losses.

I guess we should be grateful that the Governor is unwilling to take these policies to their fullest potential. For example, the school voucher program could set the scholarships at 75% of the price of private school tuition, creating a market for a new student loan program.

So Junior wants to go to school? Here's his first lesson -- nothing is free. Here's his second lesson -- in order to be a productive citizen, Junior must carry debt. Yes, we must start teaching Junior that the American way of life requires borrowing to live beyond your means. America doesn't actually produce that much anymore, so the only truly reliable source of revenue for corporate American is interest income on debt. So how better to teach Junior to be patriotic than to start him accumulating debt and paying interest at the earliest possible age? Because only when the middle class is completely strapped by debt and has no choice but to work at whatever job they can get can government pursue its true purpose -- servicing corporations.

Let's say Junior doesn't have the money to start repaying his loans when they come due in the sixth grade. Well, then we create a "work-study" program. Junior will spend 10 hours a week working either for the private bank that provided his student loan or the corporation that provided his scholarship. Because we have to support the student's right to make choices with respect to his or her education.

Perhaps the company has to pay its janitors too much money because of a pesky union. No problem -- send in Junior and the rest of the sixth grade class from Our Sister of Perpetual Debt. Or, maybe one day you will be driving down the Garden State Parkway and see a sign that says "The next mile of this road is maintained by Generic Bank", and there will be Junior and the sixth grade class cleaning up the highway wearing bright orange vests that read "Another Proud Private School Student."

But even this does not go far enough. To truly squeeze the full potential out of this school voucher program, we have to think of New Jersey's children as not just our future but as our future profit centers.

We can start small, auctioning off advertising space on the lapels and ties of the new mandatory private school uniforms. Nothing garish. The kids will just look like they are playing at the Masters or at the U.S. Open.

But the real money comes from all of that glorious debt the kids are generating. The State could take all of that debt, lump it together, then carve it up into little pieces and sell it as asset-backed securities (the assets are the loans, not the actual students -- at least at first). And, of course, the State will then sell credit default swaps so that the people buying the student loan backed securities can insure themselves against student loan defaults. The State will then start a program where, if you move your company into the State, you get to pick all of the student loans that go into a given asset-backed security -- then the State will go out and sell that security while the relocating company and the State sell the security short. It's win-win!

Of course, there is an inevitable end-game. Ultimately, the churches become ever more reliant on State-sponsored vouchers and loans. Then, when the market for student-loan backed securities goes bust and companies stop providing scholarships, the churches will become insolvent. And at that point, the State will swoop in and acquire the churches in a pre-negotiated bankruptcy, achieving the ultimate Church-State which has been the dream of the religious right since the invention of birth control.

Lucky for us Chris Christie isn't this ambitious.

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