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by Morna McDermott
Having left the banking and housing industries in ruins, hedge fund managers have now set their sights on our children’s education -- as their latest source of the generation of profit.
They have allies: Bill Gates, The Eli Broad Foundation, McKinsey & Company, and Rupert Murdoch have taken roles in ownership of “education reform” to make this monetization possible. There exists a constellation of power brokers who are spread widely across the education universe, and who are currently manufacturing policies and practices that turn public education from being a public good, into becoming a private industry that is for-profit.
Rupert Murdoch received a no-bid contract with the State of New York to manage that state’s student data system with the private company called Shared Learning Collaborative LCC. Bill Gates’ Bill and Melinda Gates Foundation supplied the initial funding for this consortium – which Murdoch now benefits from. Other participating states from which this arrangement draws funds include Colorado, Delaware, Georgia, Illinois, Kentucky, North Carolina, Louisiana, and Massachusetts. According the NY State Department of Education "The Shared Learning Collaborative (SLC) is a consortium of states organized to help increase the benefits and long-term sustainability of data, curriculum, and instructional improvement initiatives. The SLC is facilitated by the Council of Chief State School Officers (CCSSO) and has received initial funding from the Carnegie Corporation and the Bill & Melinda Gates Foundation. " Citizen journalist Anthony Cody reported on this arrangement in “Education Week.”
But Murdoch is not the only player in the game. McKinsey & Company Consulting firm – which advises, among other clients, the IRS and the Department of Defense -- has its corporate imprint now on nearly all education-related research associated with policy reform. McKinsey cappears to be casting a wide network of goods and services which benefits their other clients: their research tends first indicates a crisis in public education; then, in partnerships with their former employers, they provide lucrative “solutions” to this alleged crisis. The center of this ingenious approach by McKinsey tends to be what the firm terms “big data”: McKinsey advises educators that this is necessary to help “clients improve the efficiency and effectiveness of their central administrative offices and processes.” This data-collection is lucrative for McKinsey, and what it calls for is lucrative for their other current and former clients.
Many former McKinsey consultants are now leading the push for “education reform” which channels public money into this newly minted private sector.
McKinsey & Company are the favored consultants of Mayor Bloomberg, Joel Klein, Bill Gates, and Mitt Romney. Their recommendations to reform school systems include cutting such "high costs" such as teacher health care, and converting the 25 % of schools that scored the lowest on standardized tests to privatized charter-school status (a plan under which schools receiving public funds are run by independent charter associations, or for-profit entities, and operate outside the authority of local school boards). Their recommendations for universities include austerity measures aimed at increasing profit by cutting the institution of tenure and replacing it with a system that relies on less-costly part-time professors and course lecturers. In short, they monetize by destroying educational institutions and gutting teachers’ and professors’ benefits.
In addition to Rupert Murdoch, now running the SLC, McKinsey has powerful friends elsewhere:
Pearson, the largest educational publishing corporation world-wide has Sir Michael Barber as its Chief Educational Advisor. Sir Barber was a former McKinsey partner, and served as head of McKinsey’s global education practice. Pearson’s textbooks and testing products include the multi-million dollar contracts for development of, dissemination of, and/or evaluation of:
As other DailyCloudt.com investigators have reported, Barber’s philosophy on “education reform” centers on these lucrative forms of massive top-down standardized data collection and management methods.
How did Pearson – a British company -- get to be the corporate darling of the US educational system. to provide nation-wide educational data collection and services from “womb to tomb”? Barber’s former McKinsey colleague, David Coleman-- once an associate of Barber’s at McKinsey & Company -- was a chief architect of the National Common Core Standards. Coleman was recently appointed as the President of the College Board. This is the institution that funnels standardized top-down measures of reform into universities, and collects data on student teachers via the Teachers Professional Assessment. (The TPA was designed at Stanford University; Stanford, in turn, now has an exclusive contract with Pearson -- to assist further with TPA services).
As educator and activist Anthony Cody states, “What will it mean for these state-level data systems when these tests are all nationalized through the Common Core? It seems as if we will then have, in effect, a nationwide data system with detailed information about every single person enrolled in a public school.”
So who benefits from all this data collection?
In addition to McKinsey and Pearson -- hedge fund managers benefit. Hedge funds are now the largest investors in the charter school alternatives that are being advocated to turn public schools into private commodities. And in order to treat “educational good and services” -- formerly known as “children” into commodities to be monetized by hedge funds -- big data is necessary. Hedge funders need those big data sets provided by McKinsey, because “in this world, measurements, reporting and data, including the notion of philanthropic return on investment, count."
McKinsey maintains a low-profile family of hedge funds and private equity firms collectively known as the McKinsey Investment Office (MIO Partners) for its own exclusive use. According to a report from The New York Times “hedge fund managers are often numbers-driven refugees of …banks, who chuck the suit and tie and work with a small staff, studying spreadsheets for investment opportunities” that are now being identified in charter school start-ups that are replacing public schools.
Those spread sheets of “investment opportunities” include the incessant flow of what teachers consider to be unreliable, pedagogically unsound standardized test results. These much-hated tests, designed in tandem with the National Common Core, and evaluated by Pearson, are the ones that our children are now forced to take. These spread sheets of test scores are not education –driven but content for profit managers: they serve as the fodder for firing teachers and closing schools, to replace them with managers allied this centralization, that turns public, tax-funded schools into hedge fund investments.
McKinsey & Company has been paid millions of dollars nation-wide for their consulting “services” to places such as Seattle and Minneapolis, which often result in research claims that public schools are “failing” and which catapults system-wide public school turn-around into private hands. Current and former McKinsey consultants now invested in corporate-model education reform are influential across the spectrum of US gatekeepers in education and in politics: these alumni include: Louis Gerstner (co-chair of Achieve-the group that helped sponsor Nation Common Core), Rajat Gupta (financial backer of the Harlem Children’s Zone), Marshall Lux (on the Board of the Harlem Children’s Zone), Andrés Satizábal (Volunteer Consultant at Harlem RBI / DREAM Charter School), Michael Stone (Chief External Relations Officer at New Schools for New Orleans), Terrence McDonough (English Teacher and Department Chair at Edward W. Brooke Charter School and 5th Grade Teacher at Teach for America), Luis de la Fuente (with the Broad Foundation, who develops and manages a portfolio of grants to school districts, charter management organizations, and innovative non-profits), Shantanu Sinha (COO of Kahn Academies), and Jerry Hauser ( who served as the Chief Operating Officer at Teach For America). One final player of note is Bobby Jindal, former McKinsey consultant, and now Governor of Louisiana. He is forming policies to privatize public education for the entire state of Louisiana. Paul Pastorek, the former Louisiana Superintendent of Education, hired Sir Michael Barber to help redesign the Louisiana Department of Education.
The policies and practices which broke the banking and housing systems, but continue to line the pockets of the nation’s top earners, are now being transposed onto public educational policy. Every test our children take, every bundle of prefabricated curriculum purchased from Pearson, every ounce of data we allow them to collect on our children, our teachers, and our future teachers in universities – all serve as their profit generators. And we’re paying them for the privilege of monetizing our public education system – at our children’s and teachers’ expense.
:: photo courtesy of Pink Sherbet Photography via Creative Commons license ::
Morna McDermott has been an educator for over twenty years. She is an Associate Professor of Education and an Administrator for United Opt Out National.