I read a lot of blogs about economics, so I've become educated about “rent seekers”; individuals or corporations that find ways of diverting public money into their own coffers without providing any significant service in return. Pro Publica has exposed a prime example in the charter school industry:
“A couple of years ago, auditors looked at the books of a charter school in Buffalo, New York, and were taken aback by what they found. Like all charter schools, Buffalo United Charter School is funded with taxpayer dollars. The school is also a nonprofit. But as the New York State auditors wrote, Buffalo United was sending “ virtually all of the School's revenues” directly to a for-profit company hired to handle its day-to-day operations.
Charter schools often hire companies to handle their accounting and management functions. Sometimes the companies even take the lead in hiring teachers, finding a school building, and handling school finances.
In the case of Buffalo United, the auditors found that the school board had little idea about exactly how the company – a large management firm called National Heritage Academies – was spending the school's money. The school's board still had to approve overall budgets, but it appeared to accept the company's numbers with few questions. The signoff was “essentially meaningless,” the auditors wrote.
In the charter-school sector, this arrangement is known as a “sweeps” contract because nearly all of a school's public dollars – anywhere from 95 to 100 percent – is “swept” into a charter-management company.”
via Pro Publica.
The charter school industry is an example of rent seeking extraordinaire, with our kids being the prime victims. The “sweep contracts” scam will, if allowed to fester, reduce the already dismal quality of charter schools to even lower levels. In those places where a non-profit facade is legally required, we will surely see non-profits arising that are initiated and wholly controlled by for-profit companies, assuming this hasn't happened already. The Pro Publica article points out that once these private companies get involved it becomes impossible to find out how public money is being spent, as they refuse to provide the information, arguing that it is “proprietary” information. But even that state of affairs is likely to be only a phase. As ALEC and its ilk take control on the state level, we will hear more and more that only for-profit corporations can deliver quality education, for, after all, the government is, by definition, incapable of doing anything right. (Oddly enough, the people pushing this line also assert that they and they alone truly love this country, which they assert is the greatest in the world). So, our education dollars will be openly shunted to for-profit corporations that will be unaccountable to anyone. Our educational system will be a pathetic shambles, but almost no one will realize that, because we'll be fed a constant drumbeat of propaganda designed to convince us that an educational system producing excessive profits, underpaid and disempowered teachers, and powerless local communities is somehow superior to what we have now. It's a win-win for the Koch types: yet another way to transfer money from the masses to the rich, and a sure fire guarantee that the population will become even more stupid and docile than it already is.
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