Bill Gates had an idea. He was passionate about it, absolutely sure he had a winner. His idea? America's high schools were too big.

When a multibillionaire gets an idea, just about everybody leans in to listen. And when that idea has to do with matters of important public policy and the billionaire is willing to back it up with hard cash, public officials tend to reach for the money with one hand and their marching orders with the other. Gates backed his small-schools initiative with enormous amounts of cash. So, without a great deal of thought, one school district after another signed on to the notion that large public high schools should be broken up and new, smaller schools should be created.

This was an inherently messy process. The smaller schools—proponents sometimes called them academies—would often be shoehorned into the premises of the larger schools, so you'd end up with two, three or more schools competing for space and resources in one building. That caused all sorts of headaches: Which schools would get to use the science labs, or the gyms? How would the cafeterias be utilized? And who was responsible for policing the brawls among students from rival schools?

But those were not Gates's concerns. He was on a mission to transform American education, and he would start with the high schools, which he saw as an embarrassment, almost a personal affront. They were "obsolete," he declared. "When I compare our high schools to what I see when I'm traveling abroad," he said, "I am terrified for our workforce of tomorrow."

There used to be a running joke in the sports world about breaking up the Yankees because they were so good. Gates felt obliged to break up America's high schools because they were so bad. Smaller schools were supposed to attack the problems of low student achievement and high dropout rates by placing students in a more personal, easier-to-manage environment. Students, teachers and administrators would be more familiar with one another. Acts of violence and other criminal behavior would diminish as everybody got to know everybody else. Academic achievement would soar.

That was Bill Gates's grand idea. From 2000 to 2009, he spent $2 billion and disrupted 8 percent of the nation's public high schools before acknowledging that his experiment was a flop. The size of a high school proved to have little or no effect on the achievement of its students. At the same time, fewer students made it more difficult to field athletic teams. Extracurricular activities withered. And the number of electives offered dwindled.

Gates said it himself in the fall of 2008, "Simply breaking up existing schools into smaller units often did not generate the gains we were hoping for."

There was very little media coverage of this experiment gone terribly wrong. A billionaire had had an idea. Many thousands had danced to his tune. It hadn't worked out. C'est la vie.

But Gates was by no means finished. He and his foundation quickly turned to the task of trying to fix the nation's teachers. They were determined, one way or another, to powerfully influence American public education.

I've covered Gates, and his desire to improve the quality of education in America seemed sincere. But his outsized influence on school policy has, to say the least, not always been helpful. Although he and his foundation were committed to the idea of putting a great teacher into every classroom, Gates acknowledged that there was not much of a road map for doing that. "Unfortunately," he said, "it seems that the field doesn't have a clear view on the characteristics of great teaching. Is it using one curriculum over another? Is it extra time after school? We don't really know."

This hit-or-miss attitude—let's try this, let's try that—has been a hallmark of school reform efforts in recent years. The experiments trotted out by the big-money crowd have been all over the map. But if there is one broad approach (in addition to the importance of testing) that the corporate-style reformers and privatization advocates have united around, it's the efficacy of charter schools. Charter schools were supposed to prove beyond a doubt that poverty didn't matter, that all you had to do was free up schools from the rigidities of the traditional public system and the kids would flourish, no matter how poor they were or how chaotic their home environments.

Corporate leaders, hedge fund managers and foundations with fabulous sums of money at their disposal lined up in support of charter schools, and politicians were quick to follow. They argued that charters would not only boost test scores and close achievement gaps but also make headway on the vexing problem of racial isolation in schools.

None of it was true. Charters never came close to living up to the hype. After several years of experimentation and the expenditure of billions of dollars, charter schools and their teachers proved, on the whole, to be no more effective than traditional schools. In many cases, the charters produced worse outcomes. And the levels of racial segregation and isolation in charter schools were often scandalous. While originally conceived a way for teachers to seek new ways to reach the kids who were having the most difficult time, the charter school system instead ended up leaving behind the most disadvantaged youngsters.

Bob Herbert, an opinion columnist for the New York Times from 1993 to 2011, is a distinguished senior fellow at Demos, a public policy think tank in New York City. This article is an adapted excerpt from Losing Our Way: An Intimate Portrait of a Troubled America (Doubleday), out Oct. 7.

In her book Reign of Error, Diane Ravitch explains the problem: "Many studies show that charters enroll a disproportionately small share of students who are English-language learners or who have disabilities, as compared with their home district. A survey of expulsion rates in the District of Columbia found that the charters—which enroll nearly half the student population of the district—expel large numbers of children; the charters' expulsion rate is seventy-two times the expulsion rate in the public schools. ... As the charters shun these students, the local district gets a disproportionately large number of the students who are most expensive and most challenging to educate; when public students leave for charters, the budget of the public schools shrinks, leaving them less able to provide a quality education to the vast majority of students."

While there undoubtedly were charter schools that performed exceptionally well (just as there have always been many first-rate traditional schools), the overall record of charters, especially considering the amount of financial and political support they have received, has not been impressive.


Few people would accuse Gates of acting out of greed. For other school reformers, however, a huge financial return has been the primary motivation. While schools and individual districts were being starved of resources, the system itself was viewed as a cash cow by so-called education entrepreneurs determined to make a killing. Even in the most trying economic times, hundreds of billions of taxpayer dollars, earmarked for the education of children from kindergarten through the twelfth grade, are appropriated each year. For corporate types, especially for private equity and venture capital firms, that kind of money can prove irresistible. And the steadily increasing influence of free-market ideology in recent years made public education fair game.

Stephanie Simon, writing for Reuters in the summer of 2012, captured the excitement of investors eager to pounce: "The investors gathered in a tony private club in Manhattan were eager to hear about the next big thing, and education consultant Rob Lytle was happy to oblige. Think about the upcoming rollout of new national academic standards for public schools, he urged the crowd. If they're as rigorous as advertised, a huge number of schools will suddenly look really bad, their students testing way behind in reading and math. They'll want help, quick. And private, for-profit vendors selling lesson plans, educational software and student assessments will be right there to provide it."

With billions to be reaped from the schools by proponents of online classes and entirely online charter schools—virtual schools—teachers would find that they, too, were expendable.

The foothold established by for-profit virtual schools was extremely disturbing. Their most fervent advocates spoke in the most glowing terms about getting rid of buildings, classroom teachers, playgrounds—everything most people associate with going to school. "Kids have been shackled to their brick-and-mortar school down the block for too long," said Ronald Packard, a former Goldman Sachs banker who was the CEO of K12 Incorporated, the nation's largest operator of online public schools, likes to say.

Packard was an operator, not an educator. When he founded K12 in 2000, one of his two primary financial backers was Michael Milken, the disgraced junk-bond king of the 1970s and 1980s. The other was Larry Ellison, the billionaire co-founder of Oracle and the fourth-richest person in America. The first chairman and chief proselytizer of K12 was William Bennett, who had served as education secretary under Ronald Reagan and drug czar under George H. W. Bush. There was something odd about Bennett's trumpeting the wonders of cyberschools. In his book The Educated Child, published just a year earlier, he had sounded less than enthralled about the potential of online schooling. "When you hear the next pitch about cyber-enriching your child's education," he wrote, "keep one thing in mind: so far, there is no good evidence that most uses of computers significantly improve learning."

He was, nevertheless, the energetic public face of K12 until 2005, when he had to resign because of a controversy that erupted over a comment he'd made on his radio program. (In response to a caller, Bennett had offered what he described as a thought experiment, saying, "If you wanted to reduce crime ... you could abort every black baby in the country, and your crime rate would go down." He added, "That would be an impossible, ridiculous, and morally reprehensible thing to do, but your crime rate would go down.")

Virtual schools remained under the radar for several years before eventually becoming too big to ignore. There were close to a quarter of a million full-time students attending online charter schools in the United States in 2014, and that number was growing. The schools were heavily advertised, and the companies running them spent tens of millions of dollars on political lobbying. Very few taxpayers were aware that some of the money they thought was paying for schools of the brick-and-mortar variety was actually being used for advertising and politics and to fatten the portfolios of virtual school proselytizers and promoters.

Bob Herbert, an opinion columnist for the New York Times from 1993 to 2011, is a distinguished senior fellow at Demos, a public policy think tank in New York City. This article is an adapted excerpt from Losing Our Way: An Intimate Portrait of a Troubled America (Doubleday), out Oct. 7.

Even fewer knew how poorly virtual schools performed. The National Education Policy Center at the University of Colorado did extensive research on the academic outcomes of primary and secondary cyberschools, with a particular focus on K12, the largest and most aggressive outfit in the field. The results were grim. Math and reading scores were poor. Attrition rates were high and graduation rates were abysmally low. When the center looked at virtual schools in Colorado, it found that "half the online students wound up leaving within a year, and when they returned [to their traditional schools] they were often further behind academically than when they started."

Though cyberschools received large amounts of public money, there was no way for outsiders to know what cyberpupils were really doing in the privacy of their homes, often with minimal, or no, adult oversight. The teachers were in remote locations, usually their own homes, sometimes hundreds of miles away. They were less well paid than traditional classroom teachers and were typically saddled with sky-high student-teacher ratios. The potential for a wide variety of abuses, including cheating, was enormous. And, of course, the socialization process that is normally an integral part of actually attending school can be hampered.

Ronald Packard did not seem at all dismayed by the performance of the students in his company's schools. When I talked to him, he had the prototypical upbeat air of the corporate pitchman. Everything K12 was doing was great. Test scores lagged, he said, because the students drawn to virtual schools were, in many cases, already behind their peers academically. He dismissed critics of online schools, saying, "There were critics of the automobile when it came out as well." And he made no apology about being in the field for the money: "K12 is for-profit in the same way that a textbook company would be for-profit, or a computer company."

Packard received $5 million in compensation in 2012 and $3 million the following year. When I asked if that presented a public relations problem, he seemed unperturbed. If you looked at the compensation of CEOs at public companies comparable to K12, he said, "I am paid right in the middle."


Ron Packard might have been a leader in the spread of full-time online schooling, but he and his academically challenged virtual schools were just a small part of the corporate stampede to cash in on the public education system. The biggest player of all, the corporate behemoth known as Pearson, pounced on the testing craze set off by No Child Left Behind. Pearson didn't just provide schools with tests, it offered entire standardized testing systems. It sold the tools to grade tests and the programs for analyzing test performance. It sold textbooks, online courses and data systems.

Pearson wielded enormous influence in Texas politics. "Its contract with the state for the years 2010 to 2015 was worth close to half a billion dollars," wrote the Texas Observer in 2011. "Pearson pays six lobbyists to advocate for the company's legislative agenda at the Texas Capitol—often successfully. This legislative session, lawmakers cut an unprecedented $5 billion from public education. ... Despite the cuts, Pearson's funding streams remain largely intact."

It was easy to lose sight of the best interests of children as corporations throughout the country did all they could to maximize profits from public education. Consider, for example, the Rupert Murdoch-Joel Klein connection. Murdoch, king of the News Corp media empire, moved aggressively into the increasingly contested territory of market-based education. Klein—who had previously run the New York City school system under Mayor Michael Bloomberg—was his point man. Murdoch and Klein tried hard to present themselves as reformers, but Murdoch found it difficult to hide his delight as he broached the subject of profit potential. Two weeks after hiring Klein, Murdoch spent $360 million to acquire 90 percent of a Brooklyn-based technology company called Wireless Generation. He said at the time, "When it comes to K through 12 education, we see a $500 billion sector in the U.S. alone that is waiting desperately to be transformed." (The Murdoch-sponsored breakthroughs had to be put on hold when News Corp became embroiled in a ferocious phone-hacking scandal.)

The former Florida governor Jeb Bush was another prominent figure in the front ranks of the corporate push for public education dollars. He hosted an education conference in San Francisco in the fall of 2011 at which Murdoch was the keynote speaker. In the audience were corporate executives, supporters of market-oriented education and elected officials responsible for the laws and policies that regulate corporate access to public education dollars. Using his allies and contacts from his days in the Florida statehouse and his relationship with two former presidents, Bush was tireless in his promotion of the corporate education agenda. With Bob Wise, the former West Virginia governor, he started an organization called Digital Learning Now!, which took on the task of persuading state legislators to make it easier for companies to get public funding for virtual schools and for the installation of virtual classrooms in brick-and-mortar schools.

Bob Herbert, an opinion columnist for the New York Times from 1993 to 2011, is a distinguished senior fellow at Demos, a public policy think tank in New York City. This article is an adapted excerpt from Losing Our Way: An Intimate Portrait of a Troubled America (Doubleday), out Oct. 7.

In June 2010 Bush gave the commencement speech to graduates of a huge, for-profit virtual school in Columbus, Ohio, called the Electronic Classroom of Tomorrow. Bush used the occasion to extol the virtues of online learning, but in fact the Electronic Classroom of Tomorrow was a particularly poor example. Mother Jones examined the school's track record: "In 2010, barely half of its third graders scored proficient or better on state reading tests, and only 49 percent scored proficient in math, compared with state averages of 80 percent and 82 percent, respectively. ECOT's graduation rate has never exceeded 40 percent."

Joel Klein—first Bloomberg's right-hand man, then Murdoch's—also encountered problems. From the perspective of market-oriented school reformers, Bloomberg and Klein had been riding high for a few years. The state legislature had given Bloomberg almost total control of the New York City school system. He and Klein quickly imposed their vision of corporate-style governance, which included extensive testing, an intense commitment to charter schools, and, more than anywhere else, the adoption of Bill Gates's notion that breaking up large high schools into smaller, often specialized schools was a key to improving education outcomes.

The Bloomberg-Klein reforms seemed promising at first, and kudos from around the nation and even around the world rolled in. Student achievement appeared to be rising significantly, and the black-white achievement gap seemed to be narrowing. But rigorous analyses showed that much of the progress had been illusory. The apparent gains in reading in 2009, for example, were the result of a test-score bubble. The tests had been dumbed down.

Worse was to come. It started with Klein's announcement in November 2010 that he was quitting as chancellor to move into the much higher-paying precincts of the Murdoch operation. Bloomberg's choice to replace him was bizarre. Cathleen Black—or Cathie, as she preferred to be called—was a longtime media executive. Her most recent positions had been president and then chairwoman of the Hearst magazine empire. Her social world was similar to Bloomberg's—the glitzy, moneyed playgrounds of the corporate and media elite. Political observers, and even some of the mayor's closest associates, scratched their heads. Even Black was surprised when Bloomberg offered her the job of running the nation's largest school system, a behemoth of an operation with a multibillion-dollar budget, 135,000 employees and 1.1 million students.

Black had had no previous experiences with the public schools. She hadn't attended them (as Joel Klein had). She hadn't taught in them. She hadn't sent her children to them. In one of her first public appearances after the appointment, she said, "What I ask for is your patience as I get up to speed."

Black was hapless in the job. According to the New York Times, she came to be seen as a "feeble figure within the department," sitting quietly, or silently, at high-level meetings and deferring to the people she was supposed to be supervising. She had trouble mastering the system's maddeningly complex budget processes and was inept in her preparations for television interviews. Aides finally decided to just keep her off TV.

Black lasted in the job just 95 days. Bloomberg pulled the plug suddenly on a Thursday morning in April 2011. Black hadn't seen that coming, either. Later, reflecting on her brief tenure, she expressed irritation at what she felt were unflattering photos of her that had appeared in the press. "The worst pictures!" she complained in an interview with Fortune magazine.

The Black debacle, Bill Gates's small-schools initiative, and the Packard-Milken-Ellison virtual schools venture are just a few vivid examples of the dangers inherent in a school reform movement driven by millionaires and billionaires with no real knowledge or understanding of public education. I could go on—the Walton Family Foundation, for example, has pushed a privatization agenda that would siphon money from public schools by funneling tax dollars, in the form of vouchers and other initiatives, to families that want to send their children elsewhere. And the Eli and Edythe Broad Foundation has established training programs to groom non-traditional types—business executives, military officers, lawyers—for appointments as public school superintendents or to other high-level managerial positions, where they put the foundation's free-market and privatization policies into practice. One Broad graduate, Jean-Claude Brizard, took over the Chicago school system under Mayor Rahm Emanuel, where he continued the reformist policies of his predecessors—firing teachers and shutting down schools—with no appreciable gains in academic performance.

The amount of money in play is breathtaking. And the fiascos it has wrought put a spotlight on America's class divide and the damage that members of the elite, with their money and their power and their often misguided but unshakable belief in their talents and their virtue, are inflicting on the less financially fortunate.

Those who are genuinely interested in improving the quality of education for all American youngsters are faced with two fundamental questions: First, how long can school systems continue to pursue market-based reforms that have failed year after demoralizing year to improve the education of the nation's most disadvantaged children? And second, why should a small group of America's richest individuals, families, and foundations be allowed to exercise such overwhelming—and often such toxic—influence over the ways in which public school students are taught?

Bob Herbert, an opinion columnist for the New York Times from 1993 to 2011, is a distinguished senior fellow at Demos, a public policy think tank in New York City. This article is an adapted excerpt from Losing Our Way: An Intimate Portrait of a Troubled America (Doubleday), out Oct. 7.