The New York City teachers union feels under attack and their long-cherished sweetheart work rules are in jeopardy. And you know who they blame for this?
Hedge funds. That’s right.
In the June 3, 2010 issue of New York Teacher, the official publication of the United Federation of Teachers, a front-page headline next to the words “War on Truth” states: “Hedge fund managers spending big bucks to attack UFT: Their motivation? Stripping teachers of all job protections and using schools to make bigger bucks.”
The article stresses that a number of hedge fund managers are behind a group — Education Reform Now — that recently sent out a mass mailing seeking to lift the charter school cap (which did in fact happen). Keep in mind that charter schools are also heavily supported by President Barack Obama and his Education Secretary, Arne Duncan.
Of course, Obama and Duncan are Democrats. And the writer of the article points out that Education Reform Now is an arm of Democrats for Education Reform, which it says promotes charter schools, mayoral control of schools and school choice (including vouchers for private and parochial schools) in New York and several other states.
So, basically the teacher’s union is demonizing democrats — who have historically enjoyed a symbiotic relationship with the teacher’s union — simply because they have a plan for improving schools and education that might jeopardize teacher jobs.
After all, many charter schools hire non-union teachers, who are then required to work longer days than their unionized brethren. The charter schools also usually wind up with the better students and those whose parents actually care about their children’s education.
The anti-teacher hedgie activists named in the article include John Petry, a partner at Gotham Capital Management, who chairs the board of Education Reform Now, and other board members, including Sidney Hawkins Gargiulo of Hawkshaw Capital, John Sabat of SAC Capital, and Brian Zied of Maverick Capital.
The article also points out Education Reform Now has ties to Julian Robertson’s foundation, which a major supporter of charter schools.
So why are the hedgies supporting charter schools? NY Teacher quotes a New York Times article that stated: “Charter schools appeal to the maverick instincts of many who run hedge funds.” Of course, so did John McCain and Sarah Palin, and the hedgies didn’t exactly campaign for them.
The article laments that charter schools are the hot cause for hedge funds with the goal to privatize public education. The article asserts that charter schools harness the hedgie’s anti-regulatory instincts to oppose teacher unions and advocate for private management of public schools.
And then — drum roll — here is the kicker: “There is already close to $2 billion in public funds in the charter school system in New York State, and the hedge funds are angling to control a chunk of that money,” the article asserts.
Oh, so that’s why they are supporting charter schools. I thought their free market principles that support competition, not a socialistic system that offers no reward for going above and beyond the others in your pay grade, led them to believe charter schools could be one solution to improving education in cities like New York, where half the kids don’t graduate on time and dozens of schools have been deemed to be failing.
“Democrats for Education Reform is part of a Wall Street effort to influence the Democratic Party,” the article continues. It claims the group sees trade unions, “a traditional backbone of the party and defender of workers’ rights, as bureaucratic stumbling blocks to the privatizing reforms they advocate.”
The article concludes: “Maybe Education Reform Now could direct some hedge fund money to prevent layoffs instead of exploiting teachers’ fears about losing their jobs to further its own political agenda.”
So, basically the teachers union is demonizing hedge funds — long time supporters of the Democratic party and Democratic causes — because hedgies don’t support the teacher’s union’s need to preserve the status quo.
So sad.
Stephen Taub, who has covered the hedge fund industry for 30 years, is a contributing editor to Institutional Investor and Absolute Return-Alpha magazines.
