Jersey Jazzman: How Economists Hired By Hedge Fund Maniacs Justify Shafting Puerto Rico's Students

Jersey Jazzman: How Economists Hired By Hedge Fund Maniacs Justify Shafting Puerto Rico's Students:

How Economists Hired By Hedge Fund Maniacs Justify Shafting Puerto Rico's Students

Diane Ravitch points us to yet another example of how the very wealthiest in this country are pushing the idea that their having to take a haircut on their investments is a greater threat to our American way of life than schools having enough money to educate poor kids:

The New York Times reported in June that hedge funds invested heavily in Puerto Rico, feeling sure that the Puerto Rican government could turn the economic crisis around. 

Now that the debt crisis has worsened, hedge funds are advising the government of Puerto Rico to save money by closing some schools, laying off teachers, and cutting university budgets. Most people think of education as the seed corn of future growth, but not the hedge funds. They want their debts repaid. Maybe they will propose bringing the African model of cheap, for-profit schools to Puerto Rico, which will cut costs considerably while opening new investment opportunities. (See here.)

A side note: as Diane points out, the Times reported that one of the hedge funds with an interest in Puerto Rico has a special place in the annals of New Jersey education "reform":

Hedge funds like Appaloosa Management, Paulson & Company and Blue Mountain Capital gathered in a conference room at the Barclays offices in Midtown Manhattan last September to talk about what was then the hottest trade: Puerto Rico. 

An hour into the conversation, however, it became clear that if things started going bad, not everyone in the room was going to get along. Some had wagered on real estate, while others had bought up the debts of the central government and its troubled electric utility. [emphasis mine]

Appaloosa was, of course, founded by David Tepper, one of the two sugar daddies funding the reformy exploits of B4K. As the Star-Ledger's Tom Moran loves to tell us, Tepper can be trusted on education policy, because only conspiracy theorists would ever believe he has a personal stake in the outcome. I admit I don't know what Appaloosa's position is related to Puerto Rico, but no matter what, try to reconcile Moran's contention with the rest of this post.

Diane points us to a CNN Money piece about how these hedge fundies are prescribing some awfully bitter medicine for Puerto Rico:

Puerto Rico went into default Monday for the first time in its history. The island's governor, Alejandro Garcia Padilla, has announced a

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