If there’s one thing we know about Wall Street, it’s that most Wall Street firms are not in the business of philanthropy.
Yet the city is about to enter into a $30 million agreement with several Wall Street lenders to finance an early education program that from all appearances will allow banks to profit off the educational success of children with almost no risk to their own bottom lines. -- Mark Anderson at the Ward RoomInstead of simply finding the money in the city budget to expand the program and keep the benefits for itself, however, the city has turned to lenders such as Goldman Sachs, Northern Trust and the Pritzker Family Foundation to provide the upfront money, with promises of substantial profits for the lenders down the road if the program goes as planned.
Fran Spielman at S-T writes:
Rahm' plan for funding early childhood education is being compared to former Mayor Daley's parking meter plan.
“This is basically privatizing Head Start — giving these banking companies a very high rate of return — higher than even what we saw in the Infrastructure Trust,” said Ald. Scott Waguespack (32nd), one of a handful of aldermen who voted no.
“Head Start has been proven to work for decades…. It reminds me of the parking meter deal. The same type of people came in and said it was a high-risk asset [when] it was a low-risk asset...We lost billions of dollars. We’re not gonna lose billions here. But, taxpayers under this scheme are gonna pay a lot more than if we just went out and re-allocated resources we already have.”