CEO Tells Education To Take Low-cost Hike

Stephen Schwarzman, CEO of the Blackstone Group, took to the stage in Davos, Switzerland to speak at the World Economic Form event, "Business Backs Education." His message? Business  would prefer not to back education at all.

As reported by David Sirota for International Business Times (and if you're not familiar with Sirota's work, you should be), Schwarzman unloaded the usual baloney about the pressing need to avoid "throwing money at schools."

In the Catholic schools they spend much less money than the public schools, and they get amazing results. Private schools spend much more money than the public schools and they get remarkable results...So as an analyst, this can’t be just about money because you keep having great outcomes regardless of that. And so I would suggest that there are a lot of ways to be successful in education. It's usually good to have more resources of all types, but you can make due [sic] with a lot less and have great outcomes in large scale.

Now that is some top-notch analysis there. I am imagining the meeting at Blackstone where Schwarzman says, "Johnson over there has been doing great work and he gets less pay than most of you, so effective immediately, nobody at this company gets paid more than Johnson." 

But Schwarzman, not content to say just one dumb thing, decided to search further up his own alimentary canal for other nuggets of wisdom. For instance, when he says "make do with a lot less," he's not kidding.

“I’ve always wondered, what you do in a society with people who just retire,” he told conference attendees. “If you could get those people, like a board, [to be an] unpaid workforce, pay them next to nothing or nothing, and have them go into the school system to be mentors to kids, and be an example of a certain type of success that you would get dramatically different outcomes. If you can get unemployed people that cost nothing, that can have this dramatic difference, that costs nothing. I love things that cost nothing that have great results. Imagine if you laid on technology and other types of things, you could really set the world on fire with this type of stuff.”

I am sure that Schwarzman's own retirement plan at Blackstone includes a program that involves him coming back as a consultant at the company, for free. Of course, he may be touting the Work For Free After You Retire Plan because a vast chunk of Blackstone's investment pool comes from public employee pension funds.

So maybe Schwarzman knows something the rest of us don't. On the other hand, clearly many other people know something that Schwarzman does not.

The same day Schwarzman was unleashing some Blackstone bloviation overseas, Noah Smith at Bloomberg View was reporting on a recent paper from the National Bureau of Economic Research. Bloomberg's headline? "Throw More Money at Education."

The study found some results that seem clear and unsurprising. Spending more on schools results in benefits for the students who attend there and the communities they head out into.

Smith hits two points regarding the report. The first is a special wrinkle in the findings-- spending more money has the greatest effect when the money is thrown at poor schools.

The second is Smith's own response to the oft-cited complaint that the US already spends a bigger chunk on education than many other countries. Maybe, Smith suggests, that's because we need to, because we have such a massive mess of poverty to overcome.

And remember-- this was being reported in the Bloomberg/BusinessWeek online batch of sites. Schwarzman did not even need to venture into the world of education reportage to find the evidence that he was wrong-- even other people in his own business-oriented universe (you know-- the same universe where it makes sense to offer the investment bankers who tanked the US economy huge bonuses to stay on because you have to pay big money to hold onto valuable expertise) know that he's wrong on this. Though I suppose he could prove his point by taking a pay cut, moving to a smaller, crappier office, and planning to volunteer his time as a school janitor and mentor when he retires.