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Milken, M

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1 24 an robt reich

when I was a boy, my father sold dresses and blouses to the wives of factory workers. As the wages of those workers rose through the 1950s, my father earned enough to expand his business to a second shop in another factory town not far away. We were by no means rich, but he earned enough to put us in the middle class.

For three decades after World War II, the average hourly compensation of American workers rose in lockstep with the nation’s productivity gains. In other words, as workers produced more value, they got more pay.

It was a virtuous cycle, from which our family and tens of millions of others benefited: The economy grew, and the middle class expanded. Its purchasing power rose, causing the economy to grow faster. This fueled new investments and innovations that further enriched and enlarged the middle class.

But then, beginning in the late 1970s, the virtuous cycle came to a halt.

While productivity gains continued much as before and the economy continued to grow, wages began to flatten. Starting in the early 1980s, the median household’s income stopped growing altogether, when adjusted for inflation.

Today, the median household is earning just a bit more than it did in 1979, 45 years ago (adjusted for inflation).

If you’re a non-supervisory worker who relies on an hourly wage — still the vast majority of workers — you’re earning no more than you earned in 1969. Job security also declined.

So, despite an economy that’s far larger and more productive than it was 40 or 50 years ago, the typical American worker has gone nowhere.

The standard explanation attributes this to neutral “market forces,” especially globalization and technological innovations that have made many working Americans less competitive.

While surely important, the standard explanation can’t account for much of what’s happened. It doesn’t explain why the transformation occurred so suddenly, over a relatively small number of years. Nor why other advanced economies facing similar forces didn’t succumb to them. Nor why so much of the nation’s income and wealth have gone to the top.

America’s middle class has shrunk because of its declining bargaining power — orchestrated and directed by America’s oligarchy. The economic gains that would otherwise have gone to the middle class went instead to the moneyed interests at the top. Let me explain.

1. The financialization of the economy

Before the 1980s (as I noted in our discussion about the decline of the common good), large corporations were in effect owned by all their stakeholders, who were assumed to have legitimate claims on them.

As early as 1914, the popular columnist and public philosopher Walter Lippmann called on America’s corporate executives to be stewards of America. “The men connected with [the large corporation] cannot escape the fact that they are expected to act increasingly like public officials …. Big businessmen who are at all intelligent recognize this. They are talking more and more about their ‘responsibilities,’ and their ‘stewardship.’”

This vision of corporate governance came to be widely accepted by the end of World War II. Frank Abrams, chairman of Standard Oil of New Jersey, declared in a 1951 address that typified what other chief executives were saying at the time:

*“The job of management is to maintain an equitable and working balance among the claims of the various directly affected interest groups … stockholders, employees, customers, and the public at large. Business managers are gaining professional status partly because they see in their work the basic responsibilities [to the public] that other professional men have long recognized as theirs.”

Pulp and paper executive J.D. Zellerbach told Timemagazine that “[t]he majority of Americans support private enterprise, not as a God-given right but as the best practical means of conducting business in a free society … . They regard business management as a stewardship, and they expect it to operate the economy as a public trust for the benefit of all the people.”

But a radically different vision of corporate ownership emerged in the late 1970s and early 1980s. It came from corporate “raiders” who mounted hostile takeovers with high-yield junk bonds.

The raiders used leveraged buyouts and undertook proxy fights against the “industrial statesmen” who, in their view, were depriving shareholders of the wealth that properly belonged to them.

The raiders assumed shareholders were the only legitimate owners of the corporation and that the only valid purpose of the corporation was to maximize shareholder returns.

This transformation did not happen by accident. It was a product of changes in laws governing corporations and of financial markets — changes that were promoted by the monied interests, America’s oligarchs.

In 1974, at the urging of pension funds, insurance companies, and Wall Street, Congress enacted the Employee Retirement Income Security Act. Before then, the giant portfolios of pension funds and insurance companies could be invested in only high-grade corporate and government bonds. Legally, it was their fiduciary obligation.

The 1974 Act changed that, allowing pension funds and insurance companies to invest in the stock market — thereby making a huge pool of capital available to Wall Street.

In 1982, another large pool of capital became available when Congress allowed savings and loan banks — the bedrocks of local home mortgage markets — to invest their deposits in a wide range of financial products, including junk bonds and other risky ventures promising high returns.

The convenient fact that the government insured savings and loan deposits against losses made these investments all the more tempting (and ultimately cost taxpayers some $124 billion when many of the banks went bust).

Meanwhile, the Reagan administration loosened other banking and financial regulations and simultaneously cut the enforcement staff at the Securities and Exchange Commission.

All this made it possible for corporate raiders to get the capital and the regulatory approvals they needed to mount unfriendly takeovers.

During the whole of the 1970s, there had been only 13 hostile takeovers LBO of companies valued at $1 billion or more. During the 1980s, there were 150.

Even where raids did not occur, CEOs felt pressured to maximize shareholder returns for fear their firms might otherwise be targeted. Hence, they began to see their primary role as driving up share prices.

The easiest and most direct way for CEOs to accomplish this feat was to cut costs — especially payrolls, which constitute most firms’ largest single expense.

Accordingly, the corporate statesmen of the 1950s and 1960s were replaced by the corporate butchers of the 1980s and 1990s, whose nearly exclusive focus was to “cut out the fat” and “cut to the bone.”

When Jack Welch took the helm of GE in 1981, the company was valued by the stock market at less than $14 billion. When he retired in 2001, it was worth about $400 billion. Welch accomplished this largely by cutting payrolls.

Before his tenure, most GE employees had spent their entire careers with the company. But between 1981 and 1985, a quarter of them — 100,000 in all — lost their jobs, earning Welsh the moniker “neutron Jack.” Even when times were good, Welch encouraged his senior managers to replace 10 percent of their subordinates every year in order to keep GE competitive.

Other CEOs tried to outdo even Welch. As CEO of Scott Paper, “Chainsaw” Al Dunlap laid off 11,000 workers, including 71 percent of headquarters staff. Wall Street was impressed, and the company’s stock soared.

When Dunlap moved to Sunbeam in 1997, he promptly laid off half of Sunbeam’s 12,000 employees. (Unfortunately for Chainsaw Al, he was caught cooking Sunbeam’s books; the SEC sued him for fraud, and he settled for $500,000, agreeing never again to serve as an officer or director of any publicly held company.)

In consequence of this change in the purpose of the American corporation, share prices soared, as did the compensation packages of CEOs. The results have been touted as “efficient” because resources theoretically have been shifted to “higher and better uses.”

But the human costs of this transformation have been huge. Millions of workers have lost jobs and wages. Many communities have been abandoned.

Nor have the efficiency benefits been widely shared.

As corporations have steadily weakened their workers’ bargaining power, the link between productivity and workers’ income has been severed.

Almost all the gains from growth have gone to the top. As noted, the average worker today is no better off than his or her equivalent 40 years ago, adjusted for inflation. Most are less economically secure.

Not incidentally, few own any shares of stock.

The richest 1 percent of Americans now own 52 percent of all the shares of stock owned by Americans. The richest 10 percent, 93 percent. The nation’s economic gains, once distributed broadly to the working and middle class — have been siphoned to the top.

2. Globaloney

Wages have also been suppressed because workers who are worried about keeping their jobs have accepted lower pay, relative to the economy’s productivity gains, than they did 40 years ago.

Here again, political decisions steered by the nation’s oligarchy have played a significant role. Some of the prevailing job insecurity is the result of trade agreements that invited American companies to outsource jobs abroad.

The conventional view equating “free trade” with the “free market” — in contrast to government “protectionism” — is wrong.

Just as all nations’ markets reflect political decisions about how they should be organized, so-called “free trade” agreements entail complex negotiations about how different market systems are integrated.

Within these negotiations, the interests of large corporations and Wall Street, to fully protect the value of their intellectual property and financial assets, have repeatedly trumped the interests of average working Americans to protect the value of their labor.

3. The Fed and inflation

When the Federal Reserve raises interest rates and Congress opts for austerity to reduce federal budget deficits — two policies favored by the oligarchy — the resulting unemployment also undermines the bargaining power of average workers.

Higher unemployment keeps wages low. This means higher corporate profits, leading to higher returns for shareholders.

The high inflation after the pandemic was driven in part by supply shortages and a major government stimulus. But it was also driven by monopolistic corporations using the excuse of inflation to raise their prices.

The Fed, however, believed that a root cause of inflation was wage growth, and it set out to slow the economy and loosen the labor market by raising interest rates. Here, too, the strategy was consistent with the views of the moneyed interests and was pushed by them.

4. The risk-shift to workers

Public policies that emerged during the New Deal and World War II placed most of the risks of economic change on large corporations rather than workers — through Social Security, worker’s compensation, 40-hour workweeks with time-and-a-half for overtime, and employer-provided health benefits (wartime price controls encouraged such tax-free benefits as substitutes for wage increases).

By the 1950s and 1960s, a majority of the employees of large companies remained with the companies for life. Their paychecks rose steadily with seniority, productivity, the cost of living, and corporate profits. When they retired, they received generous corporate pensions.

But after the junk-bond and takeover mania of the 1980s, that relationship broke down.

Even full-time workers who have put in decades with a company can now find themselves without a job overnight — with no severance pay, no help finding another job, no health insurance, and little or no pension.

Nearly one out of every five working Americans is now in a part-time job. Many are temporary workers, freelancers, independent contractors, or consultants, whose incomes and work schedules vary from week to week or even day to day. Two-thirds of American workers are living paycheck to paycheck.

The risk of getting old without a pension is rising.

In 1980, more than 80 percent of large and medium-sized firms gave their workers “defined-benefit” pensions that guaranteed them a fixed amount of money every month after they retired.

Now, fewer than 10 percent of companies provide their workers defined-benefit pensions. Instead, they offer “defined contribution” plans whose risks have been shifted to the workers. When the stock market tanks, as it did in 2008 and then again in 2020, their 401(k) plans tank along with it.

A quarter of all workers with so-called “matching” defined-benefit plans get no match because they don’t earn enough to contribute to them.

Meanwhile, the risk of a sudden loss of income continues to rise. Even before the crash of 2008, the Panel Study of Income Dynamics at the University of Michigan found that over any given two-yearstretch, about halfof all families experienced some decline in income.

Those downturns have become progressively larger. In the 1970s, the typical drop was about 25 percent. By late 1990s, it was 40 percent. By the mid-2000s, family incomes rose and fell twice as much as they did in the mid-1970s, on average.

Workers who are economically insecure are not in a position to demand higher wages. They are driven more by fear than by opportunity.

This is another central reality of American capitalism as organized by those with the political power to make it so.

5. The demise of labor unions

Fifty years ago, when General Motors was the largest employer in America, the typical GM worker earned $35 an hour in today’s dollars.

Today, America’s largest employer is Walmart, and the typical entry-level Walmart worker earns about $11 an hour.

This doesn’t mean the typical GM employee a half-century ago was “worth” four times what the typical Walmart employee today is worth. The GM worker was not better educated or motivated than today’s Walmart worker.

The real difference is that GM workers a half-century ago had a strong union behind them that summoned the collective bargaining power of all autoworkers to get a substantial share of company revenues for its members.

Because more than a third of workers across America then belonged to a labor union, the bargains those unions struck with employers raised the wages and benefits of non-unionized workers as well. Non-union firms knew they would be unionized if they did not come close to matching the union contracts.

Today’s Walmart workers do not have a union to negotiate a better deal. They are on their own. Because only 6 percent of today’s private-sector workers are unionized, most employers across America have no incentive to match union contracts. This puts unionizedfirms at a competitive disadvantage.

The result has been a race to the bottom.

Some argue that the decline of American unions is simply the result of “market forces.” But other nations have been subject to many of the same “market forces” and continue to have strong unions. In Sweden, 90 percent of workers in the private sector are unionized. These unions continue to provide their middle classes sufficient bargaining power to command a significant share of economic growth — a much larger share than that received by the middle class in the United States.

Why the difference? Look to politics and the allocation of power.

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The National Labor Relations Act of 1935 guaranteed American workers the right to organize into unions and imposed on employers the legal responsibility to bargain with them.

As unions gained economic power in the late 1930s and 1940s, they gained greater. political power and wielded it to further enlarge the bargaining clout of American workers. After the legendary Treaty of Detroit in 1950, when Big Business and Big Labor agreed to share productivity gains in exchange for labor peace, the rate of unionization increased dramatically, as did wages and benefits.

Which is why, by the mid-1950s, almost a third of all American employees in the private sector of the economy belonged to a union, and why the median wage increased in tandem with productivity growth.

But starting in the late 1970s, the process went into reverse. Union membership began to decline, as did the economic and political power of unions, along with the bargaining clout of most workers.

The reasons for the decline involved the changes I’ve already noted — globalization, labor-replacing technologies, and a shift in the purpose of the corporation to maximizing shareholder returns.

But the decline of labor unions was also the consequence of political and legal decisions demanded by the monied interests.

When the Taft-Hartley Act of 1947 allowed states to enact “right-to-work” laws, workers who did not pay dues got a free ride off of those who did, thereby undermining the incentive for anyone to join a union in the first place.

Until the 1980s, such laws had minimal effect because they were enacted in southern and western states. Most industries remained in the north.

But as corporations came under increasing pressure to show high returns and cut labor costs, many CEOs found “right-to-work” states more alluring. Even the old heartland industrial states of Indiana and Michigan have enacted “right-to-work” laws.

CEOs whose corporations had high percentages of unionized workers moved, or threatened to move, to “right-to-work” states.

Additionally, Reagan’s notorious firing of the nation’s air traffic controllers for going on strike (which he had a right to do because they had no right to strike) signaled to the nation’s large employers that America had embarked on a different era of labor relations.

Workers who inhabited the local service economy — retail, restaurants, custodial, hotels, elder and child care, hospitals, transportation — faced a different challenge. Their jobs were in less danger of disappearing, because they couldn’t be outsourced abroad and most would not be automated. In fact, the number of local service jobs in America has continued to grow.

But because so many workers expelled from the older industrialized economy had no choice but to seek local service jobs, service-sector employers easily found people willing to work for low wages, few benefits, and little chance of advancement.

Walmart and major fast-food chains, such as Starbucks, have been aggressively anti-union. They’ve blocked union votes, fired workers who tried to organize, refused to enter into contract negotiations, and intimidated others into rejecting the union — all in violation of the National Labor Relations Act.

A succession of Democratic presidents have promised legislation streamlining the process for forming unions and increasing penalties on employers who violate the law, but nothing has come of these promises. (President Biden has been the first to strengthen the National Labor Relations Board and encourage it to enforce the law.)

The result of all this has been a steady decline in the percentage of private-sector workers who are unionized. Despite the jolt of labor activism in 2023, that percentage continues to drop.

The decline parallels the declining share of total income going to the middle class.

Take a look:

6. Summary

The underlying problem is that average working Americans have steadily lost the bargaining power to receive as large a portion of the economy’s gains as they received in the first three decades after World War II. As a result, instead of the middle class growing, it has shrunk.

To attribute this to the impersonal workings of the “free market” is to ignore how the market has been reorganized since the 1980s. America’s oligarchs — the moneyed interests — have spearheaded this reorganization in order to receive a steadily larger share of the nation’s economic gains. As those gains have risen, so has the oligarchy’s power to accumulate even more.

But it doesn’t have to be this way. Next week we’ll look at whether — and how — countervailingpower can be restored so that more of America’s poor and working class can ascend into the middle class once again.

*Robert Reich is a professor at Berkeley and was secretary of labor under Bill Clinton. You can find his writing at https://robertreich.substack.com/.*

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https://www.washingtonpost.com/politics/trump-pardons-former-san-francisco-49ers-owner-edward-debartolo/2020/02/18/e47f9ed6-526a-11ea-9e47-59804be1dcfb_story.html

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no lnx

Washington Post

Trump grants clemency to high-profile individuals, including Rod Blagojevich, Michael Milken and Bernard Kerik

By

Anne Gearan,

Josh Dawsey,

Beth Reinhard and

Colby Itkowitz

Feb. 18, 2020 at 4:06 p.m. PST

President Trump on Tuesday used his sweeping presidential pardon powers to forgive the crimes of a list of boldface names, including disgraced politician Rod R. Blagojevich, convicted junk bond king Michael Milken and former New York police commissioner Bernard Kerik.

Trump pardoned or commuted the sentences of seven convicted white-collar criminals at the center of federal anti-corruption and tax fraud cases spanning decades, alongside four women whose cases were not as well known.

The action frees Blagojevich, the former Democratic governor of Illinois, from the federal correctional facility in Colorado where he was serving out his 14-year sentence. He was convicted on corruption charges in 2011 for trying in 2008 to sell President-elect Barack Obama’s vacated Senate seat.

“He’ll be able to go back home with his family after serving eight years in jail,” Trump told reporters. “That was a tremendously powerful, ridiculous sentence in my opinion and in the opinion of many others.”

Tuesday’s clemency announcements came as Trump has been flexing his power in recent days after being acquitted by the Senate on two impeachment charges. The president has removed from their jobs witnesses who testified against him and publicly weighed in on criminal cases concerning his associates while also dismissing the idea that his actions have crossed ethical or legal lines.

The pardons and commutations focus on the type of corruption and lying charges his associates were convicted of as part of the Russia investigation, once again raising the question of whether he will pardon former campaign chairman Paul Manafort, former national security adviser Michael Flynn and longtime adviser and friend Roger Stone. Trump said he hadn’t thought about pardoning those three but made clear he wasn’t happy with the cases brought against them.

“I think Roger Stone has been treated unfairly. I think General Flynn has been treated very unfairly,” he told reporters. “I think a lot of people have been treated very unfairly.”

The executive actions announced Tuesday fit a pattern of highly personal presidential justice that largely bypasses the traditional pardon process administered by the Justice Department. Most of the people who have received clemency under Trump have been well-connected offenders who had a line into the White House or currency with his political base.

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Most Trump clemency grants bypass Justice Dept. and go to well-connected offenders

Milken received a pardon with the White House providing a long list of advocates for the wealthy financier, including Transportation Secretary Elaine Chao, political donors Miriam and Sheldon Adelson, and House Minority Leader Kevin McCarthy (R-Calif.).

Milken became a symbol of the culture of greed during the 1980s that was fictionalized in movies such as “Wall Street,” where Michael Douglas plays ruthless financier Gordon Gekko, who declares that “greed is good.”

Milken rose to prominence for his role in developing high-interest-bearing securities markets, known as junk bonds, before pleading guilty in 1990 to six felony counts, including securities fraud, mail fraud and aiding in the filing of a false tax return.

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Milken, a major donor to causes such as cancer research, has sought to rehabilitate his image.

Also on Trump’s pardon list were Kerik, who was convicted of tax fraud, and Edward DeBartolo Jr., the billionaire former owner of the San Francisco 49ers football team, who pleaded guilty two decades ago to charges related to his role in a corruption case against former Louisiana governor Edwin W. Edwards (D).

The president also pardoned David Safavian, a senior official in the George W. Bush administration who was convicted of obstructing a federal investigation as part of the scandal surrounding lobbyist Jack Abramoff,and two lesser-known business executives, technology executive Ariel Friedler and construction company executive Paul Pogue, who were convicted of computer and tax charges. He also pardoned Angela Stanton, an author who served a six-month home sentence for her role in a stolen vehicle ring.

Kerik is a frequent visitor to the president’s Mar-a-Lago Club in Florida and recently posted a picture at the Trump International Hotel in Washington, tagging the president and bragging of “Badassry” there. He declined to comment. Safavian now works at the Trump-aligned American Conservative Union Foundation’s justice center and attacks Trump critics through his Twitter account. Blagojevich’s wife lobbied for her husband’s release, including going on Fox News to make her case.

The White House says all 11 actions help people who were treated unfairly or had repaid society through good works. Most are white men with connections to power and, in some cases, to Trump himself.

Blagojevich and Trump were well acquainted from when Blagojevich was a contestant on Trump’s show “The Apprentice” in 2010. Trump fired Blagojevich for shoddy work on a Florida theme park project, telling him, “Your Harry Potter facts were not accurate. Who did the research?”

Kerik and Milken were prominent New Yorkers during Trump’s professional rise as a real estate magnate there.

“We have Bernie Kerik, we have Mike Milken, who’s gone around and done an incredible job,” Trump said, adding that Milken had “paid a big price.”

The 11 clemency grants Tuesday mark the largest group Trump has announced, but it barely dents the record-setting backlog of nearly 13,000 people waiting for responses to their clemency requests.

The White House released a synopsis of each granted case Tuesday, including lists of supporters that reads like a who’s-who of the president’s elite orbit.

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Nelson Peltz, who threw the president a $10 million fundraiser at his $95 million Palm Beach, Fla., house Saturday night, recommended the pardon of Milken.

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TV personalities, including Geraldo Rivera, Andrew Napolitano and Maria Bartiromo, were cited as pardon advocates.

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Former New Jersey governor Chris Christie, who advises the president, also takes on legal clients, including Friedler, who received a pardon.

Trump’s personal lawyer, Rudolph W. Giuliani, was listed as a supporter for both Milken and Kerik, who also received backing from disgraced Navy SEAL Eddie Gallagher, who was granted clemency by Trump last year. Kerik rode his prominence as Giuliani’s police chief during the Sept. 11, 2001, terrorist attacks to a nomination to be homeland security secretary in the Bush administration. But he soon ran into legal trouble, and his nomination was pulled.

Newsmax Media chief executive Christopher Ruddy said he had lobbied Trump on behalf of Kerik and Blagojevich.

“It was just so glaring that it was a political case,” Ruddy said of Blagojevich.

The entire GOP delegation from Illinois lobbied against the Blagojevich commutation, officials said.

“We are disappointed by the President’s commutation of Rod Blagojevich’s federal sentence. We believe he received an appropriate and fair sentence,” Reps. Darin LaHood, John Shimkus, Adam Kinzinger, Rodney Davis and Mike Bost said in a statement. “History will not judge Rod Blagojevich well.”

Trump made phone calls to the Illinois Republicans including LaHood last week to argue that the Blagojevich sentence was unjust, two administration officials said. But the lawmakers were not convinced.

Some campaign and White House officials opposed the clemency grants — particularly for Blagojevich — believing they could be damaging politically and were unnecessary. Some officials were still seeking to talk Trump out of the actions — some of which had been in the pipeline for more than a year — this weekend.

Rep. Peter T. King (R-N.Y.), who signed a letter supporting the Kerik pardon, said the president “has had a lot of respect for Bernie over the years.” Rivera also signed the letter and was instrumental in the pardon, King said.

Trump acknowledged that in deciding whom to pardon, “a lot of times I really rely on the people that know them.”

The head of the Justice Department’s pardon office during the first two years of the Trump administration told The Washington Post that he quit last year because the White House had sidelined his office in favor of taking its cues from celebrities, political allies and Fox News.

DeBartolo and Kerik were denied pardons under Obama. Friedler had never applied to the pardon office, Justice Department records show.

Most presidents in recent decades have faced accusations that they exploited the pardon power. President Bill Clinton issued pardons in the final hours of his presidency to his half brother, a Whitewater business partner, his former housing secretary and a fugitive commodities trader married to a major Democratic donor.

Under Trump, however, politically motivated grants have become the rule, not the exception.

. Nearly all of those selected had been sentenced under the mandatory-minimum penalties deployed during the “war on drugs” that critics say disproportionately punished minority communities. Nearly all of the people who received commutations from Obama were men and nearly 80 percent were African American and Hispanic, according to a report by the U.S. Sentencing Commission.

Obama granted an unprecedented number of commutations, about 1,700, under a sweeping initiative that prioritized nonviolent drug offenders

The program ended when Trump took office. He has granted clemency to only one African American man so far: the late boxer Jack Johnson.

The White House also announced Tuesday that Trump had granted commutations to three women convicted of nonviolent drug or fraud offenses. The cases of Tynice Nichole Hall, Crystal Munoz and Judith Negron were supported by Alice Johnson, a criminal-justice advocate who had her life sentence for a nonviolent drug offense commuted by Trump in 2018. Johnson, whose case was featured in a Trump campaign ad aired during the Super Bowl this month, had been recommended to Trump by reality star and criminal-justice advocate Kim Kardashian West.

“It’s a clemency process for the well-connected, and that’s it,” said Rachel Barkow, a New York University Law School professor and clemency expert. “Trump is wielding the power the way you would expect the leader of a banana republic who wants to reward his friends and cronies.”

Blagojevich was caught on FBI wiretaps talking about trying to sell Obama’s vacated Senate seat, saying that it was a “valuable thing” and that “you don’t just give it away for nothing.”

Trump has mentioned the Democrat’s case frequently in recent years, focusing on what Trump said was a disproportionate punishment for an offense he suggested was really just politics.

“He’s been in jail for seven years over a phone call where nothing happens — over a phone call which he shouldn’t have said what he said, but it was braggadocio, you would say,” Trump told reporters last year. “I would think that there have been many politicians — I’m not one of them, by the way — that have said a lot worse over the telephone.”

Trump first publicly mused about commuting Blagojevich’s sentence in 2018, when he exercised his clemency powers in a string of cases and speculated about others he might pardon. Others mentioned at the time included Martha Stewart, the television personality and lifestyle mogul who was convicted in 2004 of obstructing justice and lying to investigators about a well-timed stock sale.

Trump has routinely downplayed and mischaracterized the case against Blagojevich, whose trial included not only the wiretap but also witnesses testifying that he had solicited campaign cash in exchange for official acts.

In comments last year, Trump also falsely blamed Blagojevich’s treatment on “the Comey gang and all these sleazebags,” a reference to James B. Comey, the FBI director Trump fired amid the mounting investigation of Russian interference in the 2016 presidential election. Comey was in the private sector at the time of Blagojevich’s prosecution and conviction in 2011.

At a fundraiser last year at his Chicago hotel, Trump polled the room on whether he should grant a pardon, taking some donors by surprise. Trump was pleased that so many people said they would be okay with it, people familiar with the event said.

Blagojevich’s turn as a contestant on Trump’s NBC reality show came after he was indicted but before his convictions. Trump praised Blagojevich at the time for having “a lot of guts” to appear on the program.

John Wagner and Marc Fisher contributed to this report.

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http://www.mercurynews.com/education/ci_29777973/is-california-online-school-cashing-failure

k12is the nation's largest player in the online school market.In California, it manages four times as many schools as its closest competitor, filling a small but unique niche among the state's roughly 1,200 charter schools. And despite a dismal record of academic achievement in California and several other states -- including Ohio, Pennsylvania and Tennessee -- the business regularly reports healthy profits.

"This company has shown an inordinate level of failure, yet it's continually given lifelines by policymakers who have irresponsibly ignored what's going on," said Luis Huerta, a Columbia University associate professor of education and public policy who is one of the nation's leading experts on online education.

TAKING A CLOSER LOOK

K12 was launched in 2000 by Ronald Packard, a former Goldman Sachs banker, and William Bennett, U.S. secretary of education under President Ronald Reagan, with seed money from Oracle chief executive Larry Ellison and disgraced junk bond king Michael Milken.

The company opened its first California Virtual Academies in San Diego, Kern and Tuolumne counties 14 years ago and has watched enrollment in the 17 schools it operates grow from several hundred students in 2002 to more than 15,000 today. Under state law, each academy may enroll students who live in adjoining counties. That means California children who live almost anywhere south of Humboldt County can sign up for one of K12's schools.

To understand how the network of online academies operates, this newspaper reviewed hundreds of pages of education and tax records, examined complaints filed with public agencies and lawsuits, and interviewed dozens of parents, teachers and students affiliated, or once affiliated, with the schools. The investigation found:

• Students who spend as little as one minute during a school day logged on to K12's school software may be counted as present in records used to calculate the amount of funding the schools get from the state.

• About half of the schools' students are not proficient in reading, and only a third are proficient in math -- levels that fall far below statewide averages.

• School districts that are supposed to oversee the company's schools have a strong financial incentive to turn a blind eye to problems: They get a cut of the academies' revenue, which largely comes from state coffers.

• Michael Kirst, president of the State Board of Education, worked for K12 as a consultant before Gov. Jerry Brown appointed him to the post in 2011.In March 2015, the board voted against shuttering a school run by the company that California Department of Education staff said should close because it was in financial disarray, marking the only time such a recommendation has been ignored.

K12 repeatedly declined this newspaper's requests to interview its executives about its California schools' academic programs and finances, citing an ongoing investigation by Attorney General Kamala Harris into California's for-profit online schools. In a series of emails, however, K12 spokesman Mike Kraft defended the schools' academic performance, arguing that "they will not have the same test scores as schools in high-funded districts with favorable demographics."

"Many families choose online schools because they are fleeing a school or situation that wasn't working for their child," wrote Kraft, K12's vice president for finance and communications. "Their academic performance expectations should be put into context...

A school that requires such little contact with teachers might be appropriate for students at the graduate level," he said, "but it's surely not appropriate for students in kindergarten through 12th grade."

Kraft confirmed that the company's schools do not require "live attendance." Instead, he said, teachers work with students to develop a program that fits their individual needs.

A scathing report published in October by Stanford University's Center for Research on Education Outcomes, or CREDO, found that most online charter students across the country had far weaker academic growth than their peers in brick-and-mortar public schools.

Each 180-day school year, students are supposed to gain an equivalent number of days of learning in each of their core subjects as measured by standardized state tests. Instead, online charter students nationwide are advancing the equivalent of only 108 days in reading compared with their peers. And they're not advancing at all in math.

The students are learning so little in that subject that it's as if they hadn't attended a single math class all year. And in California, the Stanford report shows, the students attending online schools such as those operated by K12 and other smaller companies are falling 58 days of math instruction behind their peers rather than advancing 180 days.

'SHOCKING' NUMBERS

"Some of these numbers are pretty shocking," said James Woodworth, a senior research analyst at CREDO who noted that these learning deficits are the largest the group has ever recorded in any of its research on different types of charter schools over the past 15 years.

Nationally, 70 percent of students enrolled in online charters attend schools managed by for-profit companies such as K12 and its leading competitor, Connections Academy, while 30 percent attend charters that are independent or run by nonprofits....

==

diane ravitz kpfa sun show 9 am 5/29/16

jerry brown veto; mil academy oakland mayor

ca virt academy: push out low score but $ stays for year

Chronology of Enron's Influence, Rise and Fall

1985

-Kenneth Lay merges Houston Natural Gas Co. With Nebraska-based InterNorth. The deal is financed by Michael Milken. Lay also hires Arthur Anderson to be in charge of Enron’s accounting.

http://www.citizen.org/cmep/article_redirect.cfm?ID=7101

--

more than 1b in income one year?

Prison Nation: The Warehousing of America's Poor

Paul Wright, Tara Herivel

Routledge, Oct 23, 2013 - Political Science - 344 pages

https://books.google.com/books?id=MZe0AQAAQBAJ&dq=milken+enron+public+citizen&source=gbs_navlinks_s

==

Mike Milken' s "career has mirrored his three main professional passions: medical research, education and finance. In each, he has been uniquely successful in creating value whether measured in saved lives (Fortune magazine called him "The Man Who Changed Medicine"), inspired students or job creation. Between 1969 and 1989, he financed more than 3,200 companies that created millions of jobs. His philanthropy began in the 1970s and paralleled his business career. In 1982, he co-founded the Milken Family Foundation. He also heads FasterCures, a Washington-based think tank that works to remove barriers to progress against all life-threatening diseases. He is chairman of the Milken Institute, which conducts economic research; and the Prostate Cancer Foundation. He and his wife, Lori, have three children and two grandchildren and will celebrate their 40th anniversary this year." [1]

The Taste for Living Cookbook, which Milken co-authored with chef Beth Ginsberg.

"Following his diagnosis, Milken and his wife Lori began researching aspects of holistic medicine. Their inquiries took them to the Maharishi Ayurveda Health Center in Lancaster, Massachusetts. This Berkshire Mountains facility treats people with therapies sourced from India’s three thousand year-old healing tradition of Ayurveda... Here, the Milkens experienced Ayurvedic “herbal cures and relaxation,” he writes in The Taste for Living Cookbook,” co-authored with his personal and corporate chef, Beth Ginsberg. According to the US National Institutes of Health (NIH) National Center for Complementary and Alternative Medicine (NCCAM), Ayurveda is defined as a “whole medical system.” The NIH defines a whole medical system as “a complete system of theory and practice that has evolved over time in different cultures and apart from conventional medicine.” ...

"Intrigued by their initial experience of Ayurvedic healing, the Milkens arranged for a doctor trained in Western and Ayurvedic medicine to move into their home for a few months. “Early in the morning and late at night,” Milken recounts in Geoffrey E. Moore’s book, A Call to Action, he worked on “breathing techniques, herbal therapy, meditation and yoga.” The Milkens also learned how massage can activate the body’s T-cells, which fight cancer, and that aromatherapy can energize the immune system. In addition to traveling to China to meet with what Milken calls “chi” doctors, he met with integrative physicians such as Deepak Chopra, MD. “I felt it was important to connect the mind with the body,” he notes in A Call to Action." [2]

Affiliations

Criticism

Knowledge Universe "is a global education company with a network of more than 3,700 education locations globally employing over 40,000 teachers and professional staff, as well as large online schools, colleges and school management systems which touch over five million students daily. " [1]

Contents

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Board

Accessed December 2010: [2]

Contact

URL: http://www.kueducation.com

Resources and articles

Related Sourcewatch

The Milken Institute was founded in 1991 "with a mandate to step outside the box and find new ways to create jobs and generate capital for entrepreneurs both locally and globally." [1]

Contents

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History

Personnel

Staff

Board of Directors

Funding

The institute does not disclose its funding sources on its website but has different classes of supporters including:

Contact information

Milken Institute1250 Fourth StreetSanta Monica, CA 90401Phone: (310) 570-4600Fax: (310) 570-4601E-mail: info@milkeninstitute.orgwebsite

"Betsy is a Senior Fellow at the Milken Institute, with expertise in impact investing, community development finance, corporate governance and strategic philanthropy; and an Executive Fellow at the USC Center for Communication Technology Management. She consults with investment funds and organizations on building and growing sustainable investment programs that generate positive financial and social returns.

"She previously served as the inaugural director of the RFK Compass Program at the Robert F. Kennedy Center for Justice and Human Rights. The RFK Compass Program engages institutional investors to explore and advance the connections among investment performance, fiduciary duty, and public interest issues. Earlier, Betsy launched and directed the Milken Institute’s Center for Emerging Domestic Markets. During her tenure there, she managed the Institute’s work in mission-related investing, corporate governance and development finance, working with institutional and individual investors, foundations, governments, entrepreneurs and policymakers. Prior to joining the Milken Institute, Betsy provided strategic management and marketing advisory services to clients in the public, private and non-profit sectors, with a specialty in corporate responsibility and financial performance. She also held senior roles in financial and business affairs at several entertainment companies.

"Betsy is a member of the board of directors of US SIF – the Forum for Sustainable and Responsible Investment; and sits on the advisory board of the Center for Community Investments at the Federal Reserve Bank of San Francisco, and the Council of National Advisors for Springboard Enterprises, a national organization catalyzing equity capital for high-growth, women-led companies. She has authored numerous reports and op-eds, and speaks frequently at industry conferences and to the media. She received both her B.A., cum laude with distinction, and her M.B.A. from Yale University." [1]

"Lowell Milken is a leading educational pioneer and reformer, and co-founder of Knowledge Universe. He has been widely recognised with awards from the National Association of State Boards of Education, the Horace Mann League, theNational Association of Secondary School Principals, UCLA School of Law, Jewish Theological Seminary and Hebrew Union College.

"Lowell chairs the Milken Family Foundation (MFF), and has led its advances in education and medical research. ...Based on TAP's rapid growth, strong results and high demand, in 2005 Lowell established the National Institute for Excellence in Teaching (NIET) as an independent public charity. Further education efforts championed by Lowell include Lowell Milken HighTech-Los Angeles, a public charter school that engages students with a rigorous curriculum rich in technology and complemented by real-world internships.

"Lowell is also chairman of London-based Heron International, a worldwide leader in property development and investment. He earned his bachelor's degree from the University of California, Berkeley and his law degree from University of California, Los Angeles." [1]

Peter Ackerman is the Chairman of the Fletcher School of Law and Diplomacy at Tufts University, Boston. He is also the chairman of the International Center on Nonviolent Conflict, the former chairman of Freedom House, and a "a member of the Council on Foreign Relations, the U.S. Advisory Council of the United States Institute of Peace, and the Business Advisory Council of :{United States :(style="background-color:#ffffff;"):}::{Olympic Committee:(style="background-color:#ffff66;"):}:."[1]

In recent years there has been a long-running debate between critical scholars and affiliates of Ackerman's International Center on Nonviolent Conflict, with the critics suggesting that the ICNC and their founder and primary funder, Peter Ackerman, are acting in the service of imperialism. [2]

"Peter Ackerman is the Managing Director of Rockport Capital Incorporated, a private investment firm. Since its inception in 1990, Rockport has made numerous direct investments in fields as diverse as movie libraries, publishing, propane distribution, textiles, custom labeling, wax refining, auto part remanufacturing, variable life insurance, SMS integration, and internet-based food retailing. From 1978 to 1990, he was Director of International Capital Markets at Drexel Burnham Lambert where he structured, financed, and invested in hundreds of recapitalizations including the largest and most complex leveraged acquisitions of that period."[1] He was the Executive Producer of the documentaryBringing Down A Dictator.

Contents

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Early History

Peter Ackerman was born in New York City, Nov 6 1946, and educated at Colgate University and the Fletcher School of Law and Diplomacy (Tufts University) where he earned a PhD in International Relations.[3]

After his graduation he joined the junk-bond dealers, Drexel Burnham Lambert, and for most of the next fifteen years, he was the right-hand man to Michael Milken the "Junk-Bond King". He became the key deal-maker and strategist for the company, and his innovative approach to deal-making, together with his unusual academic qualifications, earned him the nickname "the absentminded professor". But the record shows that he was far from absent minded.

He was the primary decision-maker in most of the enormous debt-structured deals Drexler did with Kohlberg Kravis & Roberts (KKR), the leverage buyout (LBO) specialists. Drexler's ability to generate junk-bond funding were central to the success of KKR and other LBO deal-makers during the 1980s. "The Age of Leverage", as this decade came to be called, culminating with KKR/Drexel's take-over of RJR Nabisco, the tobacco-and-food conglomerate (previously R.J. Reynolds Tobacco Company). During this time, the fees and salary Ackerman earned from LBO deals were astronomical. According to Wall Street journalist/author George Anders in his book, The Merchants of Debt, as the chief strategist for the company, Ackerman earned up to $125 million a year.[4] Milken himself only earned $5 million in 1976 before the LBO boom, but government investigators later discovered that his income jumped to $295 million in 1986, and $550 million in 1987 (according to Pulitzer Prize-winner, James B. Stewart's "Den of Thieves").[5] Unlike Milken who liked to flaunt his wealth, Ackerman lived relatively modestly and socked his income away in Treasury Bills at CitiBank. From 1981 when he first contacted KKR on behalf of Milken, to 1989 when the LBO business virtually collapsed overnight, Ackerman generated many billions of dollars in fees for the company, and when the crunch finally came with the Black Monday stockmarket crash in October 1987 (in the midst of the take-over battle for RJR-Nabisco,) he designed a scheme which saw Drexler and KKR win the tobacco-food company by issuing an 'innovative' form of 'reset bonds' - which had special obligations and variable interest rates tied to corporate performance. These reset bonds later came to haunt the RJR Nabisco deal when high-debt companies suddenly faced new problems, and they are credited with responsibility for what was almost "the largest corporate collapse" in American corporate history. During February 1990, the terms of the RJR Nabisco bonds timed-out and needed to be renegotiated in markets unwilling to lend. KKR had to pay out over $250 million in special bank fees to extricate itself from the mess - quite apart from astronomical interest rates. The financial crisis nearly sent KKR itself broke and forced it "to buy RJR a second time" (by borrowing even more from its lenders and banks), and these reset bonds are said to be the primary cause of Drexler’s own bankruptcy.

But at the end of the 1980s, especially late 1987 onwards, Milken was also fighting government security-fraud charges, and Ackerman had taken over most of Milken's duties. The prosecutors also threatened to go after Milken's family and associates with RICO charges which forced Milken to deal with the prosecutors.

From March 1989, when Milken was formally indicted on 98 counts of racketeering and securities fraud, Ackerman virtually ran the company. Anders says Ackerman was propping "up Drexler's market-share statistics by selling a lot of bonds of dubious quality" -- and this was the time of the RJR Nabisco takeover.[4]

In the fall of 1990, Milken pleaded guilty and was sentenced to ten years imprisonment (he served only two). He paid $200 million in fines, and agreed to a settlement with the SEC which returned $400 million to shareholders: this reduced Milken's net worth to about $1 billion.

Before Milken's imprisonment Ackerman moved to London where he joined the International Institute for Strategic Studies.

Recent History

A recent Tufts Univ. biography summarized his other exploits:

Peter Ackerman is the Managing Director of Crown Capital Group Incorporated, a private investment firm. For the past decade, Crown has made successful direct investments in such diverse fields as propane distribution, ball bearings, textiles, auto part remanufacturing, publishing, variable life insurance and internet-based food retailing. From 1978 to 1990 he was the Director of International Capital Markets at Drexel Burnham Lambert where he structured, financed, and invested in hundreds of recapitalizations including the largest and most complex leveraged acquisitions of that period.Dr. Ackerman is a member of the boards of CARE, Colgate University and the Cato Institute. He is a member of the Council on Foreign Relations and the Executive Council of the International Institute for Strategic Studies. He co-authored Strategic Nonviolent Conflict, published in 1994, and A Force More Powerful: A Century of Nonviolent Conflict. The latter volume was a companion book for the Emmy nominated documentary of the same title that appeared on PBS in September 2000, for which Dr. Ackerman served as the series editor. Most recently, Dr. Ackerman has co-produced a documentary on the fall of Slobodan Milosevic in Serbia for PBS, which won the Peabody Award.After earning a B.A. from Colgate University in 1968, Dr. Ackerman studied at the Fletcher School of Law and Diplomacy at Tufts University, earning an M.A. in 1969, M.A.L.D. in 1971 and a Ph.D. in 1976. He joined the Board of Overseers to the Fletcher School in 1993 and has served as chair since 1996. He was elected to the Tufts University Board of Trustees in 1996 and currently chairs the Investment Committee. [6]

He is married to Joanne Leedom-Ackerman. [7] In August 2005 he talked at a conference titled Solidarity Twenty-Five Years On: Lessons in the Struggle for Freedom which was "Cosponsored by Freedom House, the German Marshall Fund of the United States, the International Republican Institute, the Lech Walesa Institute, the National Democratic Institute, the National Endowment for Democracy, Radio Free Europe/Radio Liberty". [8]

Swarming "non-violence"

Ackerman suggests that civic groups can accomplish regime change by engaging in "strategic nonviolenc conflict". A succint explanation of his theories can be found here:

Indicative of the common objective are the comments of the theoreticians of the post modern coup, for example, Dr. Peter Ackerman, the author of Strategic Nonviolent Conflict. Writing in the National Catholic Reporter on April 26, 2002, Dr. Ackerman offered the following corrective to Bush's Axis of Evil speech targeting Iraq, Iran, and North Korea, which he otherwise approved: "It is not true that the only way to 'take out' such regimes is through U.S. military action."

Speaking at the "Secretary's Open Forum" at the State Department on June 29, 2004, in a speech entitled, "Between Hard and Soft Power:The Rise of Civilian-Based Struggle and Democratic Change," Ackerman elaborated on the concept involved. He proposed that youth movements, such as those used to bring down Serbia, could bring down Iran and North Korea, and could have been used to bring down Iraq – thereby accomplishing all of Bush's objectives without relying on military means. And he reported that he has been working with the top US weapons designer, Lawrence Livermore Laboratories, on developing new communications technologies that could be used in other youth movement insurgencies. "There is no question that these technologies are democratizing," he stressed, in reference to their potential use in bringing down China, "they enable decentralized activity. They create, if you will, a digital concept of the right of assembly." [9]

Some might suggest that when foreign powers get involved with the affairs of other nations they manipulate the outcome in their favor. On the other hand, giving people communications technology and teaching them about nonviolent strategy might simply be seen as empowerment of the masses.

Affiliations

Resources and articles

Michael Milken and the Corporate Raid on Education

Kenneth J. Saltman

2003-10-03

Rehabilitation for Milken's Junk Habit 

A much expanded version of this paper that, in part, links issues of corporatized education to global militarization appeared in Robin Truth Goodman and Kenneth J. Saltman, Strange Love, or How We Learn to Stop Worrying and Love the Market. Rowman & Littlefield, 2001.

The May 10, 1999 issue of Business Week magazine features a picture of convicted felon Michael Milken on its cover. In the picture Milken sits cross-legged in a meditation pose smiling with his hands outstretched. Instead of his fingers joining thumb and fourth finger to complete the Buddhistic pose, pieces of fruit fly from his hands. Milken is juggling fruit. His lap is filled with vegetables - broccoli, peppers, squash, tomatoes, artichokes. Carrots overflow one pocket and spinach leaves the other pocket of a blue work shirt, which looks as if he might have snuck it out of the minimum security Federal Penitentiary where he served two years on a ten-year sentence for ninety-eight counts of fraud. The headline reads, "The Reincarnation of Mike Milken: a close-up look at his life, his education business, and his quest to cure cancer." Business Week happens to be owned by McGraw Hill, the largest educational publisher and one of the biggest investors in precisely the kinds of for-profit education businesses that Milken is buying up.

In a March 1998 article in Business Week regular Wall Street Journal financial reporter Craig Roberts argues that Michael Milken has done more to help mankind than Mother Theresa.Business Week, March 2, 1998, p. 28

Business Week and the Wall Street Journal are not the only mainstream publications singing the praises of Michael. The New York Times writes of "restoring the junk bond king" while the Independent of London calls Milken's entry into education and medical research a "resurrection." The Economist calls Milken "The Comeback King." Time,Newsweek, USA Today and a bevy of mainstream publications join in a chorus of praise for a man that federal prosecutors and the Securities and Exchange Commission allege returned to lawbreaking "the moment he stepped out of prison."

In the 1980s Michael Milken was sent to prison for his illicit financial dealings - fraud and insider trading. However, even his legal activities in the junk bond market were destructive to companies, to retirees, and to the general public. He was a major factor in the Savings and Loan collapse that cost the public billions. He invented the junk bond market and promoted its use in hostile corporate takeovers that destroyed businesses, labor unions, and job security while enriching a tiny corporate elite. He promoted greed as a public virtue and still claims that his destructive profit-seeking behavior is the essence of democracy. Since his early release from prison, Milken has been building the first education conglomerate, Knowledge Universe, which is aimed at transforming public education into an investment opportunity for the wealthy by privatizing public schools, making kids into a captive audience for marketers, and redefining education as a corporate resource rather than a public good vital to the promotion of a democratic society.

Part of what is so disturbing about Milken's predatory move into education is that the popular press has hailed it as redemption for a man with a tainted history. In reality, Milken's predatory financial activities, which bilked the public of billions while making him a billionaire, are continuing in education.

In his defense of privatization, Milken is suggesting that he is helping children, giving them opportunities within a corporate future where the competition will make it increasingly difficult for them to participate in the economy:

Education must address individual needs. Rapid corporate evolution and frequent restructuring - including downsizing, rightsizing and outsourcing - mean an employee can no longer rely upon a "job for life." We believe that those who have the ability to learn and apply new skills are most likely to achieve career success and personal fulfillment.

Corporate culture claims to solve the problems of schooling by remaking the school in the image of the corporation. What Milken is not saying is that he himself is actively sponsoring and building that cutthroat future with no job security, low pay, and exploitative work conditions. What is in fact a hostile takeover of education as a vital public good is being sold to the public as philanthropy.

Education, Inc.

Education must address corporate needs. Companies face a global economy with increased competition, decreasing product life cycles, more demanding customers and constant technological innovation. In this environment, employees must continuously be retrained to meet the evolving demands of the global marketplace.

Michael Milken's attack on the public sphere needs to be understood as a part of the broader movement for privatization taking place in all aspects of society. Not only schools but prisons, legal defense, public medical facilities, parks, social security, all are subject to the call to privatize.

Incontrovertibly, the corporate media trust is selling the public on privatization through news and entertainment which portrays privatization as the only option, which equates capitalism with democracy and which actively depoliticizes citizens. Corporate media is so concentrated that a group of five companies control almost all of American film and television: Time Warner, Viacom CBS, News Corp, Bertellsman/Westinghouse, and Disney ABC. Book and magazine publishing is even more concentrated and intersects with the film and television monopoly. Michael Milken directly contributed to the rise of the media monopoly by pioneering the use of the junk bond for corporate media mergers.

The media monopoly relates directly to the rise of the educational conglomerates in that both share the ability to monopolize knowledge production. Private monopolies on the production of knowledge and culture threaten the possibility of democracy because they frame issues in the corporate interest, block public access to media production and content control, eliminate curriculum or content which challenges structural uninequalities, and fail to distinguish public from private interest.

The political and pedagogical implications of this struggle over the control of knowledge and language are readily apparent in corporatization of school curricula. Shell Oil's freely distributed video curriculum on the environment concentrates heavily on the virtues of the internal combustion engine, "while offering students pearls of wisdom like, `You can't get to nature without gasoline or cars.'" The Nation, "The Corporate Curriculum" by Steven Manning, Sept. 27, 1999, p. 17. In this case Shell Oil rewrites environmentalism as its diametric opposite - the plunder, exploitation, and consumption of nature.

But what Milken has in store for education is more than the transformation of school kids into a captive audience for corporate commercials. Knowledge Universe and the other "lifelong learning" companies seek to reinvent the school on the model of the corporation. Today the wild drive for "computer literacy" for teachers and students, the emphasis on instructional technology, and the general faith in technology as an inherently educative and liberating force belies another yet more disturbing faith - a (radically misguided) faith in the corporation to provide employment, fair work conditions, security, and a general state of bounty for the student, for the nation, and for the world.

Historically, corporations have proven their lack of concern with the welfare of the world's citizenry from the slave trade, to colonization, to the exploitation of industrial labor and child labor, to the gutting of the public sphere through corporate welfare, to the cultural elevation of greed and selfishness, and restoration of racism, and sexism as virtues, to the carceral and military industrial complexes, to the destruction of whole communities with pollution and infrastructural undermining. Increasingly the public is becoming enslaved to the corporate interest in nearly every sphere from politics to culture to law.

KU's Teacher's Universe business exemplifies the transformation of the school by corporate culture:

Using PowerPoint presentation software, Lee Whitton puts the finishing touches on a computer "slide show" she has created. The topic: Why teachers at Flanagan (Ill.) Elementary School, where Ms. Whitton is the principal, should take the same technology-training course that she is completing. "I've created one slide show to persuade my school board we need it, and another to convince the teachers," Ms. Whitton says. Creating sharp-looking documents and spreadsheets is among the tasks she mastered in a five-day training institute run by Teacher Universe, a new company that for the time being is focused on helping teachers integrate technology into the classroom... "Administrators have to be as knowledgeable as teachers," says the principal, whose 550-student district in central Illinois paid her travel expenses, plus the $450 tuition, for the institute here. "Focus On Teachers," Education Week, February 3, 1999.

Clearly, the curriculum at Teacher's Universe involves more than the tools involved in transforming any classroom in the image of a corporate boardroom. Administrators learn to use the new tools to market the technology training courses to other administrators. Some glaring questions emerge from this such as: how in the world does this benefit education? We also need to ask who will receive this corporate culture and who will not (we know the answer to this because it will be distributed as other educational resources are currently - based on wealth).

The transformation of school through corporate culture is about more than an emphasis on style over substance. Corporate culture in schools makes politics less possible by way of anaesthetized technicization. When the problems of public schooling appear as technical difficulties rather than structural manifestations of deeper flaws, solutions are sought in the corporate sector - a sector largely responsible for causing those social problems in the first place by fostering political exclusion and creating inequalities of wealth. Yet, KU's Teacher's Universe does not intend to simply sell computer learning apparatus. They will sell knowledge too:

Teacher Universe instructor Lloyd Spruill focuses on integrating Windows applications into the classroom. (Teacher Universe offers training on a variety of operating systems and applications.) Creating a PowerPoint slide show about the Brazilian rain forest can lead students to use economics, math, language arts, geography, and other subjects, Ms. Spruill says. "If we isolate computer skills, that's like having a pen teacher, or having a pen lab in the school," said Ms. Spruill, who was a school district technology director in Bertie County, N.C., before joining the training firm that preceded Teacher Universe."Focus On Teachers," Eduation Week, February 3, 1999.

And Michael Milken is ready to link his curriculum to his learning technologies through Teacher's Universe, KU Interactive Studio, and its subsidiary MindQ Publishing.

What can educators seeking learning materials through Teacher's Universe's helpful links expect to find in a lesson on say, Brazil? Mostly issues framed in terms of Western tourism, though some links do consider the importance of ecology. However, none of the links discuss the reason that the rain forest is being destroyed - corporate profit. Slash and burn methods turn rainforest into grazing land for cows that will become McDonald's hamburgers. Whoops! Minor ommission in the curriculum. The politics links on Teacher's Universe are predictably Right-leaning, with the Left represented by a conspiracy theory link. The only military-related link celebrates the virtues of military spending and glorifies military hardware with graphic images. It does not mention the fact that the world's only superpower continues to invent new enemies and uses for the military to spend record amounts on defense because corporate profit is at stake in the distribution of public money to high tech firms. It omits minor contradictions such as the massive military expenditure involved in attacking Yugoslavia for "humanitarian interests" (bombs for peace), while at the same time U.S.-funded forces were committing genocide in East Timor because "we have economic interests there." This politics link also fails to mention that Milken's own Milken Family Institute, through the Jerusalem Center for Public Policy, funds research on militarized policing methods of oppressed Palestinians in Israel, lobbies for the privatization of Israel's public schools, and funded the slander of progressive intellectual and Palestinian human-rights spokesperson Edward Said in this country. I am referring to the Milken-funded attack on Edward Said by former Israeli security official Justus Weiner in Commentary Magazine which turned out to be a series of falsehoods. The New York Times covered the Weiner allegations but never covered their refutations by Said himself and Alexander Cockburn.

Junk King Education: My Own Little Revolution

But old habits die hard... his penchant for secrecy surrounds Knowledge Universe. The firm's ownership structure resembles a set of Russian nesting dolls: Each company opens up to reveal yet another, until at the core one finds the Milken brothers and Ellison. And while the trio have recruited such high-tech players as Larry Geisel, a former Netscape VP who's now Knowledge Universe's CTO, they've also installed longtime lieutenants in other positions, according to SEC records. Todd Woody the Industry Standard

According to Michael Milken himself, his education company is a direct continuation of his financial activities. They are both, he argues, about democratization. Milken has repeated this post-jail narrative in multiple outlets -- through the Milken Family Foundation, the Milken Institute, and in press interviews. The story goes like this: Milken says he lived an idyllic life in Southern California until the Watts Riots of 1965. After the riots Milken drove to Watts, where his father, an accountant, had clients. Milken claims to have spoken with a man who had set fire to his own "workplace."

I'm out of this `Happy Days' family in the San Fernando Valley, and I couldn't understand why people were burning buildings that they were living in or might have worked in... He had no savings and now he had no job. I asked him why and he told me that he wasn't a part of the system. He wasn't living the American Dream. Michael White, Former Junk Bond King Rules Over New Empire, AP, Boston Globe, May 2 1999, C15.

The story continues that upon returning to Berkeley, where Milken was enrolled as a math major, he changed his major to business with "the vague idea of changing the financial system" to provide investment opportunities for minorities and those excluded from the economic system. If we are to believe Michael Milken, his invention of the junk bond was geared towards economic justice by democratizing access to investments. "Eventually, he came to the conclusion that the system could be opened to more people by providing credit based on a company's potential instead of its past history. Junk bonds became the vehicle." Ibid. Says Milken, "I viewed that as an opportunity. I viewed that as my own little revolution." Ibid. According to Milken his junk bond activities of the eighties successfully "democratized capital." What examples does Milken give to support his version of the democratization of capital for the poor, the excluded, and the underclass? A poor marginalized company called MCI couldn't compete against AT&T. But the junk bond helped finance its growth to current oligopolistic proportions. The only other example I have been able to locate of the junk bond's great egalitarian power is his example of its use in financing media giant Time Warner's purchase of media giant Turner Broadcasting.

If only those other Berkeley radicals had gone to business school, economic injustice and racism could have been conquered. Reactionary New York Times columnist Thomas Friedman actually says this explicitly in all earnestness. According to Milken, who refers to himself as a social scientist, these injustices have been conquered. Despite the realities of a steadily increasing wage gap, growing inequalities in the concentration of wealth, the racial and gendered nature of economic inequality, systematic police brutality and white supremacist attacks against non-whites, and immigrants, despite Rodney King, the L.A. uprising, despite the destructive corporatization of the health care industry, the denial of AIDS medicine to the poor, rising rates of child poverty and homelessness Michael Milken claims to have conquered economic injustice in the early 1980's through the "democratization of capital." "I believe that mission succeeded by the early 1980s." Ibid.

In reality the junk bond didn't even turn out to be a good investment for the rich (Milken himself got out of investing in them early on), it didn't really ever finance small business expansion, individual entrepreneurship, or allow workers control and ownership of their workplaces. The real issue here is not merely the false claim that the junk bond "created jobs." Rather the issue is that Milken's definition of democratic economics translates to corporations providing jobs in a market economy. In other words, Milken defines democracy by the benevolence of those few people in control of markets, people such as himself. In this case, the profit-seeking behavior of the corporate sector is democracy. If this profit-seeking by the rich results in the creation of some jobs then that is proof of the democratizing potential of profit-seeking behavior and a system designed around maximizing profit for the rich. Milken's vision of democracy excludes citizens not only from control of their own labor and control over their workplaces but also from being involved in decision-making about the kinds of work they will have available in the future. Furthermore, this way of thinking defines democratic action as competition against other citizens for scarce goods and services and defines democratic action as the pursuit of individual interest though such behaviors as consuming private educational services rather than defining democratic action as the pursuit of the public good or common good through the individual and collective behaviors of public service, activism, or civic participation.

Milken's attacks on the public sphere in his educational endeavors are extensive and potentially far more destructive than his anti-public actions in the financial realm. Milken aims to privatize public education and make money from it. He is already doing this with KU's Nobel Learning Communities, Inc. As Justin Martin writes in Fortune magazine, "private schools represent only a sliver of the K-12 education market. Public schools are the big quarry." Though neither KU's website nor Nobel's website reveals it, Knowledge Universe owns a "significant ownership position" in what is the largest private school system in the U.S. which spans 13 states and includes 140 schools. Nobel claims they are "currently pursuing plans for further nationwide expansion."

According to the company, "Nobel Learning Communities' programs are targeted towards the working families of America." Why do America's working families need private schools? "Analysts believe the opportunity to build an education company into a significant and profitable business is huge and is fueled by the Nation's need to reform a system that is getting failing grades." Are the "Nation's" schools really in need of reform or are only some of the nation's citizens' schools in need of reform? Certainly Nobel is not targetting the larely white suburban schools populated by the children of the professional class. Nobel schools could certainly not compete with the public schools of professional elites in such places as Lower Montgomery, Pennsylvania outside of Philadelphia, Fairfield County, Connecticut and Westchester County, New York outside of New York City or Montgomery County Maryland outside of D.C. So Nobel's response to schools getting failing grades is, in fact, a response to a highly unequal system of public allocation of education as a public good. The remedy for such unequal allocation should be the redistibution of educational resources. This redistribution needs to be tied to a broader social redistribution of decision-making about how social resources are allocated.

Fixing the public schools in a place like Camden, NJ with an infusion of public investment needs to be tied to the revitalization of that city's infrastructure. The reason the Camden schools are radically underfunded has to do with the fact that city's tax-base has been dismantled by the flight of business and residences. Where did business go? To nearby wealthy white Cherry Hill and overseas. The loss of local jobs and tax revenue in Camden resulting from corporate flight left an unemployed population with a gutted public sector. Without fixing the economic conditions that result in unemployment, poverty, despair, the resort to drugs and alcohol for consolation and income, and violence, fixing the Camden schools is an empty gesture. The fact is, the corporate sector is complicit in destroying communities in urban areas and now wants to come back and prey on these communities by making them rely on private education. Public schools do need public investment and support so that they can be sites from which citizens can struggle for economic and cultural empowerment and broader social transformation. The public investment in public schools should be based in a broader democratic public transformation, not on the ephemeral promise of competing for scarce and low-paying jobs. Such rejuvenation should be premised on the development of a critical and compassionate citizenry, the development of a vision for the future in which citizens decide the kind of work they do and the subjugation of the corporate sector for the public good, rather than the subjugation of citizens for corporate profit.

Milken Family Values

The kindness in my father's eyes took nothing away from his serious message. "Never forget," he said sternly, "Businesses are built on trust, and trust starts with the balance sheet."

One of Nobel's enticements to investors is that, "There are also more working mothers with children than any other period in history." Nobel sells pre-school services to working parents. Aside from Nobel's assumption that women are natural caregivers to children, the company recognizes that there is loot to be scored by taking advantage of worsened economic conditions for working class citizens. Due to continually decreasing real wages for working class families, (in an "economic boom") families of four now require two earners as opposed to one. While the economic boom of the late nineties has benefited corporate CEOs and the ruling class it has not materialized for the majority of the population. So Nobel as well as Knowledge Universe's other child-care business' benefit financially from worsened economic conditions for working class and largely non-white populations. What must be understood is the extent to which the corporate sector has been instrumental in making families poorer and hence dependent upon the consumption of the corporate child-care industry.

Knowledge Universe owns Children's Discovery Centers of America, for which it paid $80 million.

As with corporate training, early-childhood services make good sense for KU. These days, 80% of families are either dual income or headed by a single parent. But running an on-site day-care center is costly; thus, many corporations outsource this service as well.(Martin, 1998: 197-200)

Wall Street considers the "early-childhood" market to be a $30 billion opportunity for corporations. The obvious labor issue here involves the ethical question of whether the victims of worsened economic constraints on working class and middle class citizens should be subject to rely on corporate provision of child-care services. Child-care services should be a universal public good which allows parents the opportunity to participate in the economy. In Milken's world, equal participation in the economy by men and women depends upon the consumption of his private, for-profit childcare services.

Leverage buyout masters, junk bond kings, and finance houses are turning to kiddie care in droves. Recent consolidations include: KUs Nobel and Children's Discovery Centers, Kohlberg, Kravis, & Roberts' KinderCare Learning Centers (the nation's biggest chain), Chase Capital Partners' La Petite Academy (number two), Lazard Capital Partners' $16 million equity stake in ChildrenFirst, Inc.

The predatory move into child-care does not stem from altruism. Rather, the corporations are responding to three primary sources of new child-care spending. 1) President Clinton included $600 million in childcare in his federal budget proposal last February. 2) Massive tax credits to corporations have been proposed in Congress "toward the cost of setting up, operating or subsidizing on-site child care for their employees." And 3) the big haul is "$22 billion in federal money over six years to help subsidize child care for welfare recipients who return to work." (Cummings, 1999: D1) Even as Congress has allocated $4.5 billion for childcare to be spread over five years, children eligible for childcare vouchers in states like Mississippi are not receiving them, and yet the state's budget for childcare remains in the coffers - approximately $25 million in federal allowances and $17 in state allowances (Houppert, 1999: 15). The difficulties of administering and distributing welfare benefits at the state level - where these functions are now controlled, due to block grant legislation - creates a greater opening for privatization and the move of corporations into the industry to pick up the slack.

The 1996 Republican-led and bipartisan-enacted welfare dismantling was an attack on the idea of a social safety net for those citizens in most need. In this sense, the dismantling of welfare was a part of what Stanley Aronowitz has identified as the gutting of the "compassionate functions of the state." However, it was also fundamentally a redistribution of public resources to the private sector in that direct government provision and non-profit provision largely shifted to for-profit provision. While the people who lost in this attack on social services were the poorest, least enfranchised and historically most victimized segments of the population forced to "sink or swim," the winners were big corporations such as military contracting giant Lockheed-Martin which had lined up before the law even passed to be rewarded when it did pass with 20 contracts in four states. As William P. Ryan points out in the Harvard Business Review, this privatization has resulted in a radically destructive shift in the culture and economics of social service. Huge capital means for-profits can take over projects quicker and also quit projects when the bottom line doesn't pan out. They do the projects that promise to pay the most. They have a short-term outlook often at odds with individuals or community interests. They force non-profits to compete and operate based on profit and price-competition instead of based in a mission of helping people. They remove profit from projects rather than reinvesting them.

What is particularly disturbing is that Knowledge Universe and the other "lifelong learning" companies have a financial interest in the government not providing fundamental social services including childcare, education, welfare, and worker training. As Alex Molnar points out, the endless attacks on the quality of public education from the corporate sector come despite the fact that U.S. corporations spend less on worker training than any other industrialized country. Obviously the "quality" issue that corporate CEOs such as Louis Gerstner of IBM hurl at the public schools do not concern the schools from which IBM will draw employees. Those schools, heavily funded, largely white schools in suburbs are providing IBM with well-educated members of the professional class. So the "failing" schools are not the ones from which IBM intends to benefit by hiring their graduates. However, IBM can certainly benefit from convincing the government that IBM can allow urban schools and their students to compete with wealthy white suburban schools for IBM's shrinking number of jobs if those urban schools buy IBM's many products.

KU's Unext.com and its MindQ are competing for the corporate worker retraining market. The success of these companies depends upon decreased job security. Making corporate retraining an outsourced element of corporations allows big corporations with benefits packages for employees to avoid paying these to in-house trainers. This exploitative practice of outsourcing is apparent in the university system. For example, St. Joseph's University subcontracts food services from Aramark so that St. Joseph's, despite its overt mission of ethics, care, and Jesuit concern with social justice, can have an underpaid staff of mostly black women on a wealthy white campus. These women and men are not entitled to free tuition, university benefits or decent pay despite the fact that they work on university grounds full-time and live in the mostly black working class neighborhoods surrounding this mostly white professionalclass school.

Education On the Line

KU's Unext is also striving to be an online university which stands to worsen and intensify the effects of corporate power in education such as the anti-labor practice of contracting.

Unext.com will push its elite-school connections (would-be partners are said to include the London School of Economics and Colombia, Stanford, Cornell and Carnegie Mellon universities) and multimedia productions linking students and "mentors," simulating classroom exchanges. (Strahler, 1999: 3)

Part of the problem with Milken's plan for distance learning is that it defines the quality of instruction in typical market logic fashion - by the prestige carried by brand-names. In other words, education as consumer commodity cannot comprehend necessary ethical and political questions such as to what extent this program of learning promotes democratic, equal, free, and just social relations in all social spheres or simply questions of whose interests this knowledge represents. But this online university is more than a high-tech form of instrumentalization and what educational critics have long identified as a form of technocratic rationality. It is also an attack on university labor and academic freedom.

The first fully-accredited online university, Jones University, is proving to be a model for future major players in the online learning market:

Jones University, which became the first online-only university to gain accreditation this spring, already has 600 adult students who pay $4000 a year, vs. $3200 at the average state college. Jones has no overhead for dorms or sports fields. And each course is a standard product taught by adjunct instructors instead of costly tenured professors. Still, Jones won't be profitable unless enrollment hits a projected 3000 in two years - a tall order for a college trying to build a reputation from scratch. (Morris, 1999: 90)

By linking to elite established universities, KU's Unext.com has avoided the credibility problem that Jones University faces. Yet, in order to profit Unext.com will be forced to use the same destructive tactics of standardized curriculum and extensive if not complete use of adjuncts (effectively an attack on the tenure system). David Levin, director of DePaul University's distance learning project says that online education is the "most rapidly growing area of distance learning. Every day or so, I see some new organization opening up" (Strahler). Many critics in education are proclaiming that this could mean the destruction of higher education. David F. Nobel, a history professor at York University in Toronto says, "Ten years from now we will look at the wired remains of our system and wonder how we let it happen" (Morris, 1999: 90).

Online distance learning in its corporate incarnation means more than the attacks on full-time academic labor, tenure, face to face instruction, and education as a form of critical dialogue. It implies a radically different educational culture and yet one which continues to structure unequal opportunities based on class position. As higher education continues to be prohibitively expensive for working class students, fewer of the most privileged students will have the opportunity to go to non-virtual college. Online education will inevitably bring with it a two-tiered system in which workers of the information economy can be trained to do low-paying high-skilled tasks. Recall KU's vision statement:

We believe that those who have the ability to learn and apply new skills are most likely to achieve career success and personal fulfillment.

As for those not privileged enough and not naturally endowed to consume Milken education or online distance learning, too bad, says the Milken rationale. Yet those slated for the ranks of control will not be denied real live education at universities with all that it entails. This is not, in other words, a system which offers more opportunities, but a way for corporations such as KU to attack public education so they can benefit by selling private schooling, then sell worker training and vocational higher education to the students that they deprived of free universal education in the first place.

Despite the fact that conglomerates are scrambling to make the web into a way to lower educational overhead, critical educators should not underestimate the power and potential of online distance education for being a new counter-public sphere. As a counter-public sphere online distance education could possibly (depending on how it is configured) provide a space for critical educators and those concerned primarilly with social justice to convene with social movements, labor organizers, foreign political parties, and subjugated populations internationally. Critical educators should rush to seize these emerging spaces rather than denouncing them as inherently oppressive. By being involved in the establishment of online distance learning, critical educators increase the possibilities for politicized curricula, a social justice agenda, and the preservation of labor conditions necessary for the maintenance of academic freedom. Of course, such struggles over the future of academic labor must be linked to multiple broader struggles against corporate power and privatization of the public sphere and for the expansion of genuinely democratic social relations and public life.

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