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How Bubble Barons Protected Their Influence While the Economy Tanked

AlterNet citizen journalists investigated bubble barons who got rich as the rest of the economy tanked. The project shed light on the barons' power delusions and toll on society.

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Core to the remaking of his image is the Prostate Cancer Foundation, which Milken founded after being diagnosed with the disease in prison. No less than eight of the bubble barons on our list have made substantial donations to the foundation, contributions totaling well over $10 million. The Prostate Cancer Foundation boasts more bubble baron donors than any other organization in our database, aside from politicians like George W Bush and Barack Obama.

Upon researching Milken and Prostate Cancer Foundation further, rjgwood took note of a controversy surrounding Milken’s networks and a new prostate cancer drug. Rjgwood posed a question to the LittleSis community: “Are bubble barons like Michael Milken using charitable foundations as stock manipulator laboratories?”

LittleSis analyst WileECoyote responded to the question by observing that Milken’s way with charity was fairly standard:

Michael Milken is not alone in advancing financial, political or ideological objectives through philanthropic organizations. His ability to attract the best and the brightest to events staged by the Milken Institute has been on of the keys to his public redemption, IMHO…..

Indeed, the more one researches the bubble barons, the more it becomes apparent that the bubble barons’ philanthropic activities are designed to achieve strategic objectives and reinforce their world view.

Take the Robin Hood Foundation, an anti-poverty charity in New York City. Aleinad, leia and I all linked bubble barons to Robin Hood: Paul Tudor Jones as founder, Ray Dalio as donor, Steve Cohen and Stan Druckenmiller as board members. Robin Hood describes itself as a “nonideological organization” while championing a world view that is so Wall Street-oriented, so bubble baron, as to be almost farcical.

“By applying sound investment principles to philanthropy, we’ve helped the best programs save lives and change fates,” its Web site proclaims, above a four-step plan that reads “100 percent,” “Attack the Source,” “Add Value” and “Get Results.”

The foundation’s obsession with metrics means it only makes grants to organizations that measure results. Perhaps such practices will soon lead to the creation of ratings agencies which assign reliable, AAA ratings to non-profits based on the metrics they provide.

Sound familiar?

Bubble barons heart charter schools

No philanthropic cause elicits the collective drool of the bubble barons like the charter school movement.

Bubble baron Carl Icahn co-founded a charter school in the Bronx (it’s named after him). Paul Tudor Jones founded a charter school in Brooklyn. Julian Robertson’s son, Spencer Robertson, started a charter school in Brooklyn called PAVE Academy. Druckenmiller chairs the board of Harlem Children’s Zone, which has founded several charter schools. The list goes on.

Diane Ravitch, a former Bush administration education official who has established herself as a leading critic of charter schools, has called the charter school donor network a “billionaire boys club,” and her allegations were certainly borne out by our research. One such billionaire is bubble baron John Arnold, a natural gas trader and a major donor to YES Academy in Houston. Last year, Arnold told Forbes why he liked the charter school movement:

“Education is not a natural monopoly,” he writes in an e-mail. “If these charter management organizations continue their trajectory of success, and do so at scale, then school districts will be forced to take notice and improve their product to protect market share.”

School districts as markets, students as “product” — this is a radical vision for education in America (inspired by Pink Floyd?). But it is one the Obama administration is embracing through its “race to the top” program, which delivers grants to states that establish competitive education reform initiatives. Ravitch has observed that the program is wholly in conflict with Brown vs. the Board of Education, which stressed equal opportunity education as a core principle of our democracy. But the idea has powerful backing; Arnold and his wife, for example, have given over $60,000 to Obama.