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Furious teachers at a recently shuttered Detroit charter school were notified Wednesday that they won't be paid thousands of dollars they earned during the last school year.
"Last Friday, Matchbook Learning became aware that the holders of MTA's outstanding bond debt are refusing to allow use of funds for any summer payroll and instead, are requiring that any available funds be used toward payment of the bond debt," Matchbook's CEO Sajan George told teachers in the email. "We are disappointed and deeply saddened by this development because this means funds will not be there for July or August payroll."
Source Chalkbeat
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Charter School Bond Holders Refuse to Allow Use of Funds for Payroll
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Power tends to corrupt, absolute power corrupts absolutely.
-- Lord Acton
(Score: 3, Interesting) by VLM on Friday July 28 2017, @08:25PM (9 children)
khallow was technically correct but didn't tackle the "insight" or "what is different here"
Usually secured debt is something that has a lien on it like a mortgage, something the repo man could take. In practice its the only thing that usually comes before the first $10K of employee salaries. Property with a lien isn't entirely yours anymore. Usually this makes a lot of sense in terms of cleaning things up and minimizing lawyers fees and time. The bank thought it was getting 100% of a farm not 50% or something. Theoretically this makes everyones risk lower and interest rates lower. Also lien holders can be a legal PITA if they want and getting 17 farm hands to agree on what to do with their 1% of the farm while the bank owns the other 83% of the farm is rather mysterious and likely incredibly expensive and the only people who will win in the end will be the middlemen anyway.
So there's three insights. First the same legal system for a failing farm doesn't necessarily work sensibly for a government undergoing permanent long term societal collapse that has secured bonds. Detroit is no longer a Western Civilization city and as such can no longer usefully participate in western civilization economy.
The second insight is that Detroit is well and truly doomed like sci fi apocalypse collapse. This is what civilization collapse looks like. When the only funding source possibly available to kick the can down the road is secured credit borrowing, payday loan title loan store work-alike, that means the can has been kicked so far down the road collapse is arriving soon and the people working there knew or should have known they're basically volunteers. The other way Detroit is doomed is when so much assets have been stripped that you can't pay salaries anymore, its just all gone. All of it. Detroit is now Somalia, its done. Plow the whole thing under and rebuild with new leaders and especially with new people. Detroit used to be one of the wealthiest cities on the planet before left wing politics... Not so much anymore, LOL. Silicon Valley will be like Detroit sooner or later. Just kinda how it goes.
The third insight is most or at least many bankruptcies haven't kicked the can so far down the road that the employees get screwed. That's kind of the breakdown of this system. Normally cans can't be kicked that far down the road. If Detroit had declared bankruptcy a couple years ago, the employees would have gotten paid. It would have been bad PR, it would have looked too bad, whatever. Well, waiting just makes it worse. Thats why this is so awful, so much effort was put into pretending its not happening until the collapse. This is the financial equivalent of ignoring years of chest pain and days of gray skin and acting all surprised when the heart attack kills the victim. Or the "oh ignore it, its just a lump" style of cancer treatment. A lot of people went to a lot of work and were paid a lot of money to kick the can further down the road until it became unavoidable. Detroit won't be the last. It'll be interesting seeing Chicago/IL take a similar hit soon.
(Score: 3, Informative) by Bobs on Friday July 28 2017, @09:11PM (3 children)
Almost, but not quite: you keep saying "Detroit ..."
This isn't the city of Detroit. This is a PRIVATE enterprise - a charter school, Michigan Technical Academy.
The charter organization borrowed $16 million before the opened, then couldn't make payments to the lenders.
So the failure is the charter, NOT the city.
I wonder how much the charter org. people pocketed before closing up?
(Score: 2) by NewNic on Friday July 28 2017, @10:10PM
You missed a step in that progression:
The charter organization was so bad at its core mission (educating kids) that it lost its accreditation and with that, its funding from the State.
lib·er·tar·i·an·ism ˌlibərˈterēənizəm/ noun: Magical thinking that useful idiots mistake for serious political theory
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @02:14AM
It's Michigan. Betsy DeVos' Michigan.
There were state $$$ also going to the charter school because "school parity". The long-term goal and intent of DeVos' vision of their charter schools is to suck the money from the state to kill off public schools faster. Benefiting the main investors and players is goal #1. Any product (educated students) produced is secondary.
(Score: 2) by VLM on Saturday July 29 2017, @12:43PM
ugggh you are correct, I messed that all up.
Where I live the three charter schools are school district affiliated and "creationist charters" or whatever are a social media thing, although I'm sure they exist somewhere. Also I crossed the wires of this bankruptcy with the other Detroit bankruptcy.
https://en.wikipedia.org/wiki/Detroit_bankruptcy [wikipedia.org]
(Score: 1, Insightful) by Anonymous Coward on Saturday July 29 2017, @02:11AM (4 children)
Actually, Detroit was successful before White Flight to the suburbs.
Those satellite communities benefited from the jobs in the central city but didn't pay taxes to the City of Detroit.
Neoliberalism/Reagonomics, calling treaties "trade deals", the end of tariffs, and exported jobs played a part as well.
.
...and as Bobs notes, this was a charter school, which specifically hires non-union staff.
With a proper union in place, there would have been a walkout after the first missed paycheck.
One also wonders how things would have gone if the school had been a workers' cooperative from the start.
-- OriginalOwner_ [soylentnews.org]
(Score: 2) by VLM on Saturday July 29 2017, @12:39PM (3 children)
If it was successful, why were the whites fleeing?
Sort of a "Hurricane Katrina was no problem until the whites evacuated" type of argument.
(Score: 3, Insightful) by Thexalon on Saturday July 29 2017, @01:25PM (2 children)
Because of racism. The "white flight" phenomenon was part of a backlash to the Civil Rights Movement. In particular, white parents moved to the suburbs so that bussing wouldn't make it so their kids had to go to school with black kids. Race riots of the late 1960's and early 1970's also played a major role in convincing white people to leave cities, and government policies of that period made it relatively easy for white people to get a nice house in the suburbs while black people were pretty much forced into renting in the inner city.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by VLM on Saturday July 29 2017, @02:03PM (1 child)
Doesn't sound too realistic. Every burb refugee, a klansman? Looking at the media of the time, the non-racists were holier than thou at the time. No, seems very unlikely.
(Score: 2) by Thexalon on Saturday July 29 2017, @02:29PM
There were and still are lots of forms of racism that have absolutely nothing to do with the Klan or threats of overt violence and terrorism practiced by the Klan.
It's well-documented in cities like Boston that efforts to racially integrate schools led to widespread protest and even riots in the late 1960's through mid-1970's. It's easy to find photos with white people holding signs like "We won't go to school with Negroes" and "The whites have rights too" in response to school desegregation programs. And then typically after big protests, the trend of white people moving out of the city accelerated.
The government policies I referred to include a great deal done by the Federal Housing Authority [npr.org]. Basically, the FHA throughout most of the 20th century helped white families buy nice homes in the suburbs, made it near-impossible for black families to buy homes, and also made it difficult for white families to buy homes in the inner city. This also had the effect of reducing the property value of any home a white person already had in the city, encouraging them to move out.
The first generation of Americans to grow up in an environment where open racism was not considered completely normal and socially acceptable are under the age of 40 today.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.