I didn’t know charter schools were considered “private.” Maybe the Canadian system is different.

And even where they do not directly channel money - are ‘truly’ private, as you say, they lobby against public investment on the grounds that it’s “unfair competition”. This is exactly what we saw, for example, in Britain, as private interests lobbied to shut down BBC efforts to provide free learning materials to all Britons.

What information do you have about the lobbying activities of public school proprietors? I’d be interested…I didn’t think any private schools were large enough to have that much clout.

And we see the same lobbying effort in the United States. Telecom companies, for example, taking municipal governments to court in order to prevent them from providing free civic wireless internet access[...]

Obviously this is not just about public vs. private schools, but about the public vs. private sectors in general. At least the Friedman Foundation is up front about its objectives.

Just an FYI, when the two companies are Fannie Mae and Freddie Mac, it is absolutely not ridiculous to pin the housing crisis on them. Here’s a little insight into the way mortgage markets work. Put simply, there’s the consumer-level market where individuals make deals with companies like Countrywide, and then there’s the back-end market, where lenders lend to banks.

The housing crisis started when Fannie Mae and Freddie Mac started flooding this back end market with money beyond what lenders were seeking. Realizing that all this extra money was now there to be had, consumer-level lenders began loosening their lending standards. For Fannie Mae and Freddie Mac, this was a great thing, since their reason for being was to increase the availability of credit to every American.

This government-driven lending bubble caused housing prices to increase as people had more money to play with, pushing housing prices well beyond wages and making more of the population dependent on sub-prime loans to buy the overpriced houses. Fast-forward to 2007 and the first rate adjustments on these sub-prime loans and you’ll find a rampant increase in defaults. In response you’ll find a tightening of the credit market, and in response to that you’ll find a decrease in home prices as buyers can’t borrow as much. Now you have people stuck in mortgages for more than their homes are worth.

So yes, had Fannie Mae and Freddie Mac not existed to flood the mortgage markets with money, the housing crisis would not have occurred. The market was trying to signal that lenders’ standards were too loose well before the bubble burst, but that signal was lost to the static introduced by Fannie Mae and Freddie Mac.

Fine. We’ll agree to disagree on this one, but writing off the last hundred years of economic study as propaganda is mighty funny if you ask me.

And I must congratulate you on your talent for writing many words and completely avoiding the issue of choice. It’s perfectly clear that, since your vision of choice is the state schools or the state schools, that you are an absolute opponent of choice. It is totally dishonest for you to say otherwise. What part of the fact that all state schools are part of the same monopoly is so hard to understand?

Anyway, I don’t want to know, since I really don’t want the displeasure of further debating the nationalization lobby.

We didn’t all know this. Indeed, I was blissfully unaware. All this time, I had the naive impression that the operators of KIPP, Achievement First, Uncommon Schools et al. represented an effort to give kids in communities like the one I worked a chance at a decent education. Now I come to learn it’s a cynical attempt to enrich themselves by dining at the public trough! I feel so naive. They sure fooled me.

> you go on to cite the exceptions to well-run, efficient business and try to hold that up as a rule.

9 out of 10 business ventures fail.
http://www.webcopyplus.com/content/view/190/62/

> The majority of actual evidence, as opposed to anecdotes from the media, shows quite well that private enterprise is more efficient than government.

Sorry, there is no such evidence. There is a good amount of propaganda. But the putative ‘evidence’ we see cherry-picks and panders to prejudices.

> … we may well have never had a housing crisis in the first place.

It is ridiculous to say that the housing crisis is the result of one or two companies. It is well documented that the entire industry is in crisis - which is why it is pulling the entire economy down with it.

It is also worth noting that there was more than a little dishonesty involved - for example, the buying of very poorly rated credited which was then rolled up and represented and sold as very good rated credit.

> if the mortgage market worked like public education in the US does, the companies making smart loans wouldn’t get anything while the companies that constantly failed would get budget increases.

Unfounded speculation. And incorrect, as it turns out. Government lending in Canada - the Canadian Mortgage and Housing Corporation, for example, or the Business Development Bank - make loans, but the result is nothing like what you describe. http://www.ocol-clo.gc.ca/html/bdc_e.php

> Please find me one example, anywhere, of a highly-regulated industry that performs better than a non-regulated industry.

Depends on what you mean by ‘performs’ - since a lot of the regulation is in place to protect customers, not ho help businesses ‘perform’ better.

But if you define ‘performs better’ as (say) ‘not poisoning customers’ then the regulations in the food industry are effective (and necessary). Or if you define ‘not crashing into each other’ then the regulations in the transportation industry (including the enforcement of traffic laws) are effective.

Again - the arguments that purport to show that unregulated industries ‘perform’ better are cherry-picked. No industry at all could survive in anything like an effective manner without a good deal of regulation - and in fact, for precisely this reason, all industries are regulated.

> Truly private schools aren’t taking one red cent from public schools, and pay teachers less, yet you claim they’re ruining public schools.

I love the weasel word ‘truly’ in this argument.

In fact, as we all know, there is an ongoing campaign on the part of proprietors of private schools to channel money away from the public system and into private schools. What do you think the charter school system is supposed to be? Or school vouchers?

And even where they do not directly channel money - are ‘truly’ private, as you say, they lobby against public investment on the grounds that it’s “unfair competition”. This is exactly what we saw, for example, in Britain, as private interests lobbied to shut down BBC efforts to provide free learning materials to all Britons.

And we see the same lobbying effort in the United States. Telecom companies, for example, taking municipal governments to court in order to prevent them from providing free civic wireless internet access. The mere existence of a private school system results in a large and well-funded lobby advocating against public support for the public school system. The fruits of which are sham ‘research’ like the subject of this discussion.

To Richard:

> How might you get them into a top-notch school by September?

This is of course a ridiculous requirement.

First, it supposes that if I can’t solve society-wide systemic issues overnight, my argument is a failure. Which is ridiculous.

Second, it is an instance of fawning for the ‘quick fix’, rather than genuine reform.

And most importantly, third, there’s nothing a private school could do that could not be done in a public system.

The fact is, if you were willing to invest the resources and staff, it would not be a difficulty to provide a top-notch education for these students.

But it would involve investment contrary to the interests of a well-funded business lobby. It would involve not such school programs, but nutrition programs, housing programs, policing, lunch-hour and after-school programs, health programs, and more.

Because you can’t just change the education of a person and expect it to work. You have to change the life of a person - and that takes an investment the United States has never been prepared to make in its people (unlike, say, Canada or Finland).

To Quincy again,

> And no, state school number 1 vs. state school number 2 isn’t a choice since I’d still be dealing with the same monopoly.

You simply haven’t read my column. Go read that.

–

This concludes my discussion of these issues. You can have the last word; it doesn’t signal a ‘victory’ of any sort. I’ve made my point; I see no value in continuing to engage with the privatization lobby.

You say that “The presumption is that governments are inefficient, while private enterprise is efficient. The evidence does not support this.” Then you go on to cite the exceptions to well-run, efficient business and try to hold that up as a rule. Sorry, but I’m not going to let you get away with that.

The majority of actual evidence, as opposed to anecdotes from the media, shows quite well that private enterprise is more efficient than government.

You mention the mortgage crisis, and decry the fact that Bear Stearns got whiplashed by the bad loans it put out. And you say that like it’s a bad thing. Quite frankly, if Fannie Mae and Freddie Mac had been whiplashed for *their* bad financial decisions, we may well have never had a housing crisis in the first place. These two front companies for Uncle Sam kept ignoring signals from the market that credit was expanding too quickly, and it was their inflationary actions that caused the bubble that burst and took Bear Stearns with it. You call that efficiency? I certainly don’t.

Oh, and while you’re at it, remember that of all the banks in the US, no more than five are being hit with serious backlash from the mortgage crisis, and they’re the ones who made bad loans. Again, in a market economy, companies getting hit with consequences for poor decisions, up to and including complete failure, is a good thing. Incentives matter.

That said, if the mortgage market worked like public education in the US does, the companies making smart loans wouldn’t get anything while the companies that constantly failed would get budget increases. That would certainly lead to more irresponsible lending, don’t you think?

Now, you say that Finnish schools are better because they put up high governmental barriers to competition. Please find me one example, anywhere, of a highly-regulated industry that performs better than a non-regulated industry.

Airlines? Nope. All the legacy carriers in the US, born in the days of heavy regulation, are in deep trouble, while their newer competitors like Southwest and JetBlue are doing just fine. Phones? Nope. AT&T was America’s phone company for a long time and the funny thing was that the phone was pretty much the same in 1950 as it was in 1980. Break up AT&T and allow for competition, and you suddenly get a wave of innovation that leads to things like DSL and cell phones. How about banks? They’re pretty regulated and have heavy interference from government. Didn’t prevent the mortgage crisis, did it? Nope. *Caused* the mortgage crisis.

Finally, you said that private schools exist in Finland “Because there’s always that minority of people, even in Finland, who think they’re better than everyone else and are entitled to special privileges.

In the U.S., such people run rampant, and the education system is ruined. In Finland (and other countries that score well), they;re reined in, and a viable education for everyone is preserved.”

A great piece of wild speculation, but utterly worthless in countering my point. Given the barriers to their creation and operation, I have a hard time believing it’s simple elitism at work. Something more has to be driving it, and I’d be interested to find out what.

Moreover, your bit about these folks in the US “ruining” the education system is bunk. If they’re doing it with their own money, HOW are they ruining public education? Truly private schools aren’t taking one red cent from public schools, and pay teachers less, yet you claim they’re ruining public schools. I really want to hear what you think on this one because right now I don’t see any way your claim can make sense.