Wednesday, April 15, 2009

The Corporatization of Public Education

The Corporatization of Public Education

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Education Secretary Arne Duncan's pledge to put more big-city mayors in charge of their school districts would exclude democratic forms of school governance and let big businesses decide the fate of public schools.

Before an audience of big-city mayors and school superintendents in late March, Secretary of Education Arne Duncan offered an early - and troubling - indication of his vision for the future of public K-12 education in the United States. Duncan told audience members at the Mayors' National Forum on Education in Washington, DC, that more mayors need to take control of low-performing, urban school districts, and that he was prepared to do whatever it takes to shift leadership of urban districts from school boards to City Halls. "I'll come to your cities. I'll meet with your editorial boards. I'll talk with your business communities," Duncan said. "I will be there."(1)

Right now, seven major cities have complete mayoral control over their public school systems, including Washington, DC; New York, and Chicago, where Duncan spent eight years as the CEO of the Chicago Public Schools system working under Mayor Richard Daley. These districts under mayoral control, Duncan explained, are more stable and benefit from stronger leadership. "Part of the reason urban education has struggled historically is you haven't had that leadership from the top," Duncan said. "Where you've seen real progress in the sense of innovation, guess what the common denominator is? Mayoral control."

For those familiar with Duncan's controversial legacy in Chicago, one that emphasized the privatization and militarization (2) of that city's mayor-led public schools, Duncan's vow to give more big-city mayors control over their city's schools is a worrying harbinger of reforms to come. His vocal support of mayoral control in underperforming urban school districts looks an awful lot like an attempt to replicate the Chicago education model of shuttering public schools, replacing them with privatized or militarized schools, shutting out teachers' unions and taking power away from community members and citizens - all on the recommendation of the city's corporate elite - on a national scale.

This is hardly the kind of "change" needed to boost student achievement, encourage more young people to become teachers and turn around this country's underperforming schools. Instead of empowering local school boards in urban districts to better govern their schools, promoting mayoral control of schools would likely consolidate power in the hands of a single leader - and a politician at that, someone beholden to wealthy supporters and special interests, always with an eye on reelection. By giving more big-city mayors control over their school districts, Duncan is essentially handing that control to the corporate elite of these big cities to craft educational reforms with their own interests in mind.

Look no further than Chicago's divisive Renaissance 2010 reform model for evidence of why increased mayoral control is a poor idea. The centerpiece education reform for both Mayor Daley and former Chicago Public Schools CEO Duncan, Renaissance 2010 is a sweeping program that seeks to close underperforming schools or schools with low enrollment and replace them with multiple new, smaller, "entrepreneurial" schools. Many of these new Renaissance 2010 schools are "contract" or charter schools operated by independent nonprofit organizations which can - and mostly do - eliminate the teachers' union. What's more, these nonprofit organizations can, in turn, outsource management of their new schools to for-profit education management organizations, privatizing what used to be a public school.

Under Daley and Duncan's Renaissance 2010, elected local school councils, made up of democratically elected community leaders and parents, have lost much of their influence. Many Renaissance 2010 schools can opt out of having local school councils, choking off a community's ability to govern its schools. Largely replacing these councils is the Renaissance Schools Fund, a body comprised of unelected business leaders, the school system's CEO, and the Chicago Board of Education president. Once described as a "secret cabinet,"(3) this group of Chicago's corporate elite selects and evaluates new Renaissance 2010 schools and decides how much or how little funding they receive. With new schools competing against each other for limited resources doled out by the Renaissance Schools Fund, it ensures that while some schools in this us-versus-them system will succeed and receive funding, others will be left behind in crumbling facilities with fewer resources and fewer talented teachers.

Though Mayor Daley first announced(4) the Renaissance 2010 plan in a major press conference in 2004, it was by no means his idea. As DePaul University Professor Kenneth Saltman writes, the Commercial Club of Chicago, a long-standing organization of the city's most powerful corporations, had given the plan to Daley, who, at the unveiling event for Renaissance 2010 hosted by the Commercial Club, essentially repeated back what he had been given. "Business power in the city," Saltman writes, "spoke through the mayor."(5)

Thus, by saying he wants to give more mayors control over their schools, Duncan could very well open the door for big businesses to assume de facto control over schools. It happened on his watch in Chicago, where the corporate elite simply used the mayor and his authority over the school system as an avenue to privatize and militarize Chicago's schools under the guise of Renaissance 2010, a program that so far has seen, at best, very mixed results.

In New York City, schools chancellor Joel Klein, an appointee of Mayor Michael Bloomberg who controls the city's school district, has been criticized by politicians and citizens alike for his inaccessibility and lack of accountability. At a hearing of the New York State Assembly's Education Committee on February 6, an assemblywoman said the hearing was the first time in four years the committee had been able to question Klein. William Thompson Jr., the New York City comptroller, was more pointed in his remarks to Klein. "Failure to involve parents in the education policy process has reinforced a widespread perception that the department is arrogant and out of touch." Thompson said. "With its top-down approach, the current administration has sought to avoid debate and public scrutiny, while fundamental decisions regarding reform have been made by executives with no education background."(6)

And it's not only big businesses and wealthy individuals that see mayoral control over schools as an opportunity to push an agenda of privatization and increased competition among schools, either. The Broad Foundations, which supports school districts using charter management organizations and performance-based compensation models, sees a common thread running through the districts in which it invests. "We have found that the conditions to dramatically improve K-12 education are often ripe under mayoral or state control," the foundations' 2008 annual report said.(7)

There's no question that wide-ranging changes are needed in our schools. American students continue to fall behind their international peers in assessments like the Trends in International Mathematics and Science Study, which provides data on the math and science achievement of fourth and eighth graders in the US and abroad.(8) But is giving mayors more control over underperforming urban school districts the answer? A step in the right direction even? Put simply, it's hard to see how sweeping aside more democratic forms of school governance and transferring that power to unaccountable corporate leaders and school chancellors and politicians, all of whom appear to favor privatizing public schools, eliminating teachers' unions and treating young people like customers, will improve our public school systems and empower our students and teachers.

(1) Libby Quaid, "School chief: Mayors need control of urban schools," The Associated Press (March 31, 2009). http://www.kansascity.com/440/story/1116083.html

(2) Andy Kroll, "The Duncan Doctrine: The Military-Corporate Legacy of the New Secretary of Education," TomDispatch.com (January 18, 2009). http://www.tomdispatch.com/post/175022/andy_kroll_will_public_education_be_militarized_

(3) Pauline Lipman, "From Accountability to Privatization and African American Exclusion: Chicago's 'Renaissance 2010'," Educational Policy (April 24, 2007). http://epx.sagepub.com/cgi/content/abstract/21/3/471

(4) "Mayor Daley Announces Renaissance 2010 Neighborhood Schools Program," City of Chicago (June 24, 2004). http://egov.cityofchicago.org:80/city/webportal/portalContentItemAction.do?blockName=Mayors+Office%2fJune%2fI+Want+To&deptMainCategoryOID=-536882034&channelId=0&programId=0&entityName=Mayors+Office&topChannelName=Dept&contentOID=536909820&Failed_Reason=Invalid+timestamp,+engine+has+been+restarted&contenTypeName=COC_EDITORIAL&com.broadvision.session.new=Yes&Failed_Page=%2fwebportal%2fportalContentItemAction.do&context=dept

(5) Kenneth J. Saltman, "Chapter 3: Renaissance 2010 and No Child Left Behind Capitalizing on Disaster: Taking and Breaking Public Schools" (Boulder: Paradigm Publishers, 2007).

(6) Jennifer Medina, "Klein Defends Mayoral Control of Public Schools," The New York Times (February 6, 2009). http://www.nytimes.com/2009/02/07/education/07klein.html?emc=rss&partner=rss

(7) "The Broad Foundations 2008 annual report," (2008). http://www.broadfoundation.org/asset/101-124-2008tbfsannualreportfinal.pdf

(8) Trends in International Mathematics and Science Study (TIMSS), National Center for Education Statistics. http://nces.ed.gov/timss/index.asp

US economy goes back to 1955 as deflation returns

US economy goes back to 1955 as deflation returns

'The notion that inflation will pick up in the near-term is completely out of the picture,' said one analyst

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The US economy has begun to deflate for the first time in more than half a century as a slump in demand pushes energy and food costs lower.

The consumer price index fell at an annual rate of 0.4% in March, the first decline since August 1955, figures from the US labour department showed today. It was bigger than the 0.1% drop expected by economists.

Compared with the previous month, consumer prices dipped by 0.1%.

The decline was mainly caused by lower energy costs, which offset a surge in tobacco prices, the biggest since 1998. If energy and food costs are excluded, the annual inflation rate stands at 1.8%.

Energy costs fell by 3% on the month and gasoline prices were down 4%. Food and housing costs both edged down by 0.1%.

"It reinforces the deflationary fears that the Fed has been voicing," said George Davis, currency strategist at RBC Capital Markets.

A 2.4% fall in hotel room rates and a 0.2% decline in clothing prices reflected the weakness of consumer demand. But David Buik at BGC Partners pointed out that with "oil prices now stable at close to $50 a barrel, there is no near-term prospect of a further substantial decline in energy prices". He does not think that the latest figures signal the beginnings of widespread deflation this year.

Certainly, inflation is no longer an issue.

"The notion that inflation will pick up in the near-term is completely out of the picture," said Peter Kenny at Knight Equity Markets in New Jersey. "Now we're looking at numbers that speak to recession without the prospect of inflation."

The figures came as the head of Wal-Mart said that he still saw a "lot of stress" in the economy and did not anticipate a quick end to the recession. "It's not a 'V' recession, where we're just going to bounce out and come back," Mike Duke said on NBC's Today Show.

His comments contrasted with those of Barack Obama and Ben Bernanke, the head of the US central bank, who made a concerted effort yesterday to talk up the prospects for the American economy despite fresh evidence of the squeeze on consumer spending. US retail sales unexpectedly fell last month.

"With the unemployment rate and the output gap both headed for 10% and the financial system still crippled, the risk of a pernicious debt-deflation emerging [where the collateral on loans decreases damagingly in value] is still much bigger than the risk that the Fed's quantitative easing actions will lead to runaway inflation," said Paul Ashworth, senior US economist at Capital Economics.

Britain is also on the brink of deflation. Inflation as measured by the retail price index, which is used as a basis for wage negotiations, was zero last month but failed to turn negative as the City had predicted

Foreclosures Soar in March, Up 44 Percent Over February's High

Foreclosures Soar in March, Up 44 Percent Over February’s High

Lenders End Moratoria, Opening Flood of Foreclosures; Re-Defaults and Job Losses Also Take Their Toll

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Completed foreclosures hit another monthly record in March as 175,199 homes were lost to foreclosure, up 44 percent from February’s record high, according to the latest U.S. Foreclosure Index released today by ForeclosureS.com, a leading real estate information provider.

The number of foreclosed properties was up dramatically from 121,756 in February. Nearly 370,000 properties have been repossessed by lenders so far this year – 18.3 of every 1,000 households – up more than 38 percent from 266,986 in the fourth quarter of 2008, the U.S. Foreclosure Index shows, and up 76 percent from 210,280 in the first quarter of 2008.

The first-quarter 2009 total is the highest quarterly total of completed foreclosures since the foreclosure crisis began. Pre-foreclosure filings – filings that could lead up to a completed foreclosure – also reached their highest quarterly level, topping 600,000 for the first time since the foreclosure crisis began.

While February and March headlines boasted of government efforts to stop foreclosures, in fact March was the first month when major government-backed lenders – including Fannie Mae and Freddie Mac – lifted moratoria on many properties in the first week of March. Only properties eligible for modification under the Obama administration’s plan were covered by continuing foreclosure moratoria, according to statements by the two agencies.

“The floodgates of foreclosure opened with the expiration of these foreclosure freezes,” says Alexis McGee, foreclosure expert, educator, and author. “With rising unemployment, a backlog of delayed foreclosures and increasing abandonment of properties, foreclosures soared in March to levels we have not seen in this crisis.”

“Hopefully, this is a short-term surge caused by months of delayed foreclosures. This is a very troubling turn after seeing some bright spots earlier this year. However, with Obama’s new Making Homes Affordable Plan now in effect we are hoping that in the near future we will see a reduction in new pre-foreclosure filings, which will help stabilize the housing markets,” McGee said.

“March’s high numbers may also be caused by defaults on previously modified loans. Earlier this month the Office of the Comptroller of the Currency and the Office of Thrift Supervision reported higher and rising re-default rates on modified mortgages as part of their fourth-quarter 2008 report,” McGee added. “The report points to the fact that not all previously modified loans result in lower monthly payments, and when combined with today’s economics, the result can be catastrophic for already strapped homeowners.”

The Obama administration’s Making Home Affordable Plan is intended to help promote loan modifications by bringing debt-to-gross income ratios down to 31 percent. In short, that would allow homeowners to only spend 31 percent of their income on the mortgage, including taxes. With such low payment levels – compared to 50 percent payments as the recent norm of banks – people who get their loans modified under the new plan will be far more likely to remain in their home.

Regionally, the U.S. Foreclosure Index of Completed Foreclosures (Real Estate Owned) shows double-digit increases in March over February’s already record high monthly numbers:

NATIONWIDE REOs
Region January February March

Mar-Feb
Increase

Totals

Midwest

12,716 24,130 35,707 48% 72,553

Southeast

21,839 32,024 43,085 35% 96,948

Northeast

4,495 10,706 12,645 18% 27,846

Southwest

33,513 54,676 83,363 52% 171,552

Other States

131 220 399 81% 750
Nationwide 72,694 121,756 175,199 44% 369,649

California led the nation in number of foreclosures last month — 38,318, up more than 59 percent from February, the U.S. Foreclosure Index shows.

“But the state also is a leader in the housing recovery,” says McGee, “and mixes the good with the troubling news. It’s indicative of what’s beginning to happen in states across the country.”

Consider a few numbers from the California Association of Realtors:

  • Existing, single-family home sales in the state increased 83 percent in February to a seasonally adjusted rate of 620,410 on an annualized basis.
  • The statewide median price of an existing single-family home decreased 40.8 percent in February to $247,590.
  • CAR’s Unsold Inventory Index fell to 6.5 months in February, compared with 15.3 months in February 2008.
  • The median number of days it took to sell a single-family home declined to 51.5 days in February 2009, compared with 69.3 days in February 2008.

The U.S. Foreclosure Index ranks Florida No. 2 nationally in March foreclosure numbers, with 18,946 foreclosures, up 33 percent from February. Similarly the Florida Association of Realtors reports solid housing economic news, too:

  • Existing home sales in that state rose 20 percent in February over a year ago, the sixth month in the row with year over year increases.
  • February’s statewide existing home sales were 16.7 percent higher than January’s statewide sales.
  • Statewide sales of existing condominiums rose 15 percent in February over a year ago, with sales also up 25.1 percent over January.
  • Florida’s median sales price for existing homes last month was $141,900, down 29 percent from a year ago.

Even in an economically hard-hit state like Michigan where the unemployment rate is among the highest in the nation, and March foreclosures top 11,000 (up 25.6 percent from February), the Michigan Association of Realtors reports year-over-year home sales up 3.5 percent in February. Average home prices were down nearly 30 percent, too.

Nationwide REOs 6 month

Rank State Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09

Totals

Per
Household

1

California

17,214 16,032 20,952 14,351 23,988 38,318 130,855 1.14%
2

Florida

10,187 11,373 12,786 10,007 14,243 18,946 77,542 1.23%
3

Arizona

7,415 7,553 7,658 5,250 10,651 15,401 53,928 2.84%
4

Texas

5,425 4,645 7,505 5,367 7,998 9,140 40,080 0.66%
5

Michigan

4,783 4,974 5,138 2,465 8,869 11,138 37,367 1.25%
6

Georgia

5,524 5,322 5,753 4,746 6,170 8,831 36,346 1.73%
7

Ohio

3,884 3,314 5,594 4,300 4,763 7,046 28,901 0.74%
8

Nevada

3,196 3,551 4,039 3,207 3,989 8,778 26,760 3.60%
9

Illinois

2,909 2,155 2,217 2,111 3,301 4,869 17,562 0.46%
10

Tennessee

1,795 2,252 2,529 1,659 2,988 3,935 15,158 0.72%

The U.S. Foreclosure Index also found that nationally the number of properties in the pre-foreclosure process climbed slightly to 225,131 in March, up 5.8 percent from February’s 212,703.

Nationwide Preforeclosures 2009
State January February March

Mar-Feb
% Change

Totals

Midwest

19,319 23,021 24,665 7% 67,005

Southeast

56,853 70,491 67,642 -4% 194,986

Northeast

15,616 17,020 21,839 28% 54,475

Southwest

74,563 101,492 110,132 9% 286,187

OtherStates

405 679 853 26% 1,937

Nationwide

166,756 212,703 225,131 6% 604,590

For the quarter, 604,590 pre-foreclosure filings occurred nationwide, up 14.5 percent from 528,241 in the fourth quarter of 2008 and up 17.3 percent from 515,411 in the first quarter of 2008. The quarterly pre-foreclosure filings are also the highest quarterly numbers since the foreclosure crisis began.

Annualizing that number, the U.S. is on track to top 2.4 million pre-foreclosure filings before year-end.

California had the most pre-foreclosure filings, followed closely by Florida, in March. Over the last six months, however, Florida has had the most pre-foreclosure filings, followed by California, Arizona, Illinois and Nevada.

Nationwide Pre-Foreclosures 6 month

Rank State Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09

Totals

Per
Household

1

Florida

46,281 47,371 50,633 43,070 53,173 51,985 292,513 4.62%
2

California

19,211 30,363 41,710 33,008 44,713 59,763 228,768 1.99%
3

Arizona

10,970 11,988 12,327 10,223 16,453 15,477 77,438 4.10%
4

Illinois

9,016 7,549 9,637 8,165 10,725 11,130 56,222 1.45%
5

Nevada

8,132 6,891 6,935 6,774 9,738 13,081 51,551 6.97%
6

Texas

7,899 7,471 8,210 9,917 8,661 2,954 45,112 0.86%
7

New Jersey

8,180 7,219 7,385 5,887 6,928 7,775 43,374 1.42%
8

Michigan

5,847 4,574 4,728 5,752 6,033 6,979 33,913 1.21%
9

Georgia

5,888 4,487 4,585 4,315 6,129 4,995 30,399 1.22%
10

Colorado

2,810 3,463 3,914 3,373 3,811 4,542 21,913 1.38%

ForeclosureS.com has been the professional’s source for accurate foreclosure property information for more than 20 years. To ensure the accuracy of its foreclosure statistics, ForeclosureS.com bases its analysis on the number of formal notices filed against a property during the foreclosure process. That can include notice of default, notice of foreclosure auction, and/or notice of REO (lender-owned real estate that occurs after a foreclosed property fails to sell at auction and reverts back to the lender). Pre-foreclosure filings are initial notices that all do not end up as foreclosures.