A knot of parents and teachers–some clutching children, others clutching protest fliers–huddled outside Hostos Community College one frosty evening last February. The forty or so Bronx residents had crisscrossed the borough for the rare chance to mix it up with the New York City schools chancellor in a public forum.

A guard met them at the door. No more room, he said, leaving the agitated parents, quite literally, out in the cold. They had hoped to hear Joel Klein explain why he was scrambling the school system’s signals for the second time in five years. Inside the Grand Concourse annex, Klein was winding down his pitch to the hundred or so in the audience who had made the cut. “We are enacting these reforms so we can make sure whatever your skin color, wherever you live, your kid will get the education he needs and deserves,” Klein shouted into the microphone.

Klein may have appeared an awkward headmaster in his Wall Street suit, but he was on familiar terrain, wrapping his arguments for corporate-style school overhaul in the ethos of civil rights. He is driven by the noble pledge to “finish the job that Brown v. Board of Education began.” His path to racial equity, however, employs the efficient tools of business–top-down decisions, marketplace incentives and a belief in private sector solutions to public school problems. Instruction is “data driven.” Academic results are “granular.” It is a technocratic vision of education, in sync with big-moneyed foundations, at odds with most classroom teachers and many parents.

In the calculus of the moment, each of the city’s 1,450 schools is considered an independent franchise. Like a bank outlet or a RadioShack store, any given school is a “key unit” in Klein’s new Department of Education. Schools are headed by branch managers, or principals, whose jobs have been reconfigured as CEOs rather than as educators. Principals are expected to contract out for nearly every core service, from testing to professional development to their own support team. Quarterly returns flow out in the form of tests four times a year. Schools must compete with one another, at their peril. The lowest performers on the bell curve may be sanctioned or shut down.

Thomas Sobol, the former New York State education commissioner, believes the battle lines have been drawn between democracy and corporatization. “The arrogance, my God, of saying because we know how to run Kmart, we know how to educate children,” said Sobol, professor emeritus at Columbia University’s Teachers College. “It represents a giant defeat of democracy.”

In Klein’s view, “corporatization” and “privatization” are meaningless phrases used to detract from the real revolution underfoot. “There is nothing less public about public schools,” he insisted during a recent interview at Department of Education headquarters. His reforms are about strengthening the top in order to bring equity to the bottom. A lone public employee, Klein has nearly unfettered control of 1.1 million schoolchildren and a $15.4 billion budget. “In the end it is my responsibility to say, I think this is the right policy,” Klein said. “I need to be prepared to make the tough service delivery decision. The mayor holds me accountable, and the city holds the mayor accountable. We should not have ‘shared decision-making.’ That’s what marks all unsuccessful school reforms.”

A lot is riding on Klein’s record–including the political future of Mayor Michael Bloomberg, which may include an independent run for President. He was the first mayor in thirty-three years to be authorized by the State Legislature to directly pick his own chancellor and who has wagered his mayoralty on the fortunes of the city’s schools. Urban school systems across the nation are watching the radical overhaul in New York City. If the plan succeeds, it will mean a triumph for advocates of mayoral school takeovers and a boon for the new breed of CEO superintendents committed to business solutions for public schools. Mayoral control has already taken hold in Chicago, Boston, Cleveland and, most recently, Washington–whose mayor replaced the school superintendent, at Klein’s recommendation, with 37-year-old education entrepreneur Michelle Rhee.

If Klein’s plan falters in New York, many will argue that the demise was made inevitable by keeping teachers, parents and communities at a yardstick’s distance. No matter how competent and committed the players at the top, public-sector reforms on this imposing scale may be doomed if the people most affected are left outside.

It certainly felt that way at the Hostos forum, where a faint chant filtered through the closed windows into the room: “Let the parents in!” As irony would have it, Klein’s Bronx appearance was part of a five-borough mission to persuade the masses that the mayor’s latest structural overhaul was the best thing for every child. The Bronx parents inside weren’t buying it. “No science. No history. Only tests,” one mother bellowed, shaking her finger at the chancellor. Applause thundered across the linoleum. “Welcome to the boogie-down,” another mother said, followed by more hoots and hollers. “We’re real here.” She then criticized a recent citywide busing fiasco that left one of the chancellor’s corporate consultants $16 million richer and scores of children wondering how they would get to school.

Finally, a statuesque woman from the South Bronx took the microphone, choking back nerves. “I saw a guidance counselor pulling a kindergarten child across the floor like an animal,” began Rosa Villafane tentatively. “The principal won’t do anything. She’s an empowerment principal,” Villafane said, referring to one of the chancellor’s key reforms that offers the city’s principals greater authority to make decisions in exchange for more accountability. “If she won’t listen, where do I go?”

The chancellor had a standard reply for her, the one he employed after nearly every appeal that night: “E-mail me,” he said. “I’m accountable.” He did not follow up the offer with his e-mail address. He then slumped into his chair, chin in hand, looking as if he wanted very much to be somewhere else.

A Harvard-trained litigator and former deputy White House counsel to President Clinton, Klein is many things, but he is not a man to boogie-down in the Bronx. Raised in a working-class family in Bensonhurst, Brooklyn, Klein graduated from William Bryant High School in Queens, class of ’63. That’s where his connections to most children in New York’s schools end. After graduating from law school in 1971 and launching his own DC law firm, he served as an assistant attorney general with the Justice Department, where he prosecuted the government’s antitrust case against Microsoft. His most recent job was as CEO of the German-owned global media giant Bertelsmann.

It’s an unlikely résumé for the head of the nation’s largest public school system, but one with obvious appeal to the then- Republican mayor. Bloomberg had begun the systemwide makeover before Klein arrived by putting up a For Sale sign on the Soviet-style Board of Education headquarters at 110 Livingston Street in Brooklyn, an address synonymous with bloated bureaucracy. Redubbed the Department of Education, it moved its offices into the elegantly appointed Tweed Courthouse in the shadow of City Hall. Old faces were replaced, while old ways of doing business were rapidly brought under tight, centralized control.

As soon as Klein took over, he hired private consultants and installed a cabinet of mostly noneducators making six-figure salaries. Fresh young principals with minimal experience were brought in from outside New York to replace the large number of those who left or were forced out. The thirty-two old school districts were scrapped and refitted into ten regions. New Yorkers tend to love rat-a-tat changes. Few mourned the loss of a bureaucracy everyone had derided. “I thought mayoral control was a good idea at first,” said Noreen Connell, head of Education Priorities Panel, a research and advocacy group. “It was good when they broke through the facilities funding logjam.”

Klein and Bloomberg worked in tandem to cash in their corporate and celebrity connections, hauling in piles of money and a star-studded cast. Caroline Kennedy was hired at a dollar a year to attract philanthropy money into the administration. Former General Electric chair Jack Welch was brought onto the advisory board of the $70 million principal’s academy to train the new managers. Klein’s former adversary Bill Gates ponied up $51 million in 2003 to help create small schools. Gates’s foundation would later increase its investment to more than $100 million. Next came “managed instruction,” as Klein would call it, with standardized math and reading curriculum, and the promise to create fifty charters and 150 small schools.

But it became painfully clear early on that the public would have little to no role in the rapid changes in the classroom. Bloomberg entered the re-election season in 2004 taking on the politically irresistible problem of “social promotion”–the practice of moving kids up through the grades whether or not they had learned much. He tested third graders (later adding fourth and seventh graders) and held them back if they didn’t make the grade. The approach went before the new Panel for Educational Policy, a thirteen-member appointed board that had replaced the old seven-member Board of Education. Two Bloomberg appointees and a Staten Island borough president appointee were set to join the five parent members to vote against the measure. The mayor swept in and replaced all three renegades on the eve of the vote, a move the tabloids dubbed the “Monday Night Massacre.” Klein still counts “ending social promotion” as one of his administration’s accomplishments, citing increased numbers of score-based promotions as evidence.

Contracting Out

New Yorkers still seeking solutions to the woes of public schools were sorely tested on a bitter cold day in midwinter. On January 29 yellow school buses barreled out of their garages onto new, reconfigured routes. No trial runs. Within hours, hollers could be heard from eastern Queens to the North Bronx. Children as young as 5 were cut off from their usual bus routes and issued subway MetroCards. Others were left waiting on cold street corners for an hour or more, arriving late to school. Some children were sent across hectic Francis Lewis Boulevard in Queens to catch their bus.

“No New York adult would cross Francis Lewis Boulevard,” said Betsy Gotbaum, the city’s public advocate. “They certainly wouldn’t send their children across it.”

The chaos was caused in large part by the financial consulting firm Alvarez & Marsal, an outfit the department hired without competitive bidding at $16 million to find $200 million from the department’s budget to divert directly into the schools. Its first order of business was to streamline the city’s school bus routes. The net savings for all this grief: $5 million, far less than what was originally estimated.

The head of an independent citywide parent group said the parents had warned officials about the impending debacle two months earlier. “They ignored us, as usual,” said Tim Johnson, chair of the Chancellor’s Parent Advisory Council.

That debacle spotlighted a flurry of outside contracts signed by this administration, many of them without competitive bids. City comptroller William Thompson Jr. was alarmed to find that the Alvarez & Marsal contract allowed one consultant to charge the city as much as $450 an hour. A subsequent investigation found that Klein’s office had signed an estimated $270 million in outside no-bid contracts after Klein took the reins; several contracts had serious problems. Platform Learning, for example, was hired for $7.6 million to tutor city school kids over a five-year period. After three years, Platform had earned more than $62 million, nine times its contracted amount, with two years remaining.

“There is no accountability, no oversight, no transparency in this administration,” Gotbaum said. “New Yorkers deserve better.” The chancellor claimed that $250 million had been redirected into the classroom. Thompson’s office could find only $140 million in savings, and no evidence that any of it had ended up in schools. “At a time when Tweed is demanding more accountability from our superintendents, our principals and our teachers,” Thompson said, “we are demanding accountability from them.”

The chancellor disputes his critics, saying his administration provides more information and transparency than any in the past. Still, the busing crisis crystallized into public disenchantment with many of the vaunted reforms.

Size Matters

One of the most promising reforms was the creation of new, small high schools. New York already was home to one of the first small-school movements in the nation, promising democratic, grassroots antidotes to large, factory-size institutions. So it was fitting, even thrilling, when the new chancellor embraced small schools as a linchpin of his revitalization plans. Variety and innovation were encouraged.

But in a short time, critics say, the Department of Education turned the mission on its head. An astonishing 200 schools were launched in five years, with more than $100 million in funding from the Bill and Melinda Gates Foundation. Some of them are, without question, excellent environments. Overall, however, the movement has become a mass production of top-down, privately subsidized schools, said Michelle Fine, a City University of New York education professor, that have little to do with their social justice-minded ancestors. Quality has been sacrificed for speed.

To counter these charges, the administration cites comparisons between the small schools and the large ones they replaced. For example, the large South Bronx High School had a 48 percent graduation rate in 2001; five years later, three small schools that replaced it averaged an 83 percent graduation rate. Evander Childs High School in the Bronx graduated just 31 percent of its students in 2002, compared with 93 percent in 2006 for Bronx Aerospace, a small Junior ROTC replacement school.

But these small schools were admitting students who were more likely to succeed, according to a survey of the first fifteen small schools conducted by the United Federation of Teachers (UFT). Their entering ninth graders had higher state test scores than those at large schools. The schools also had far fewer special-education students and non-English speakers and in some cases more money per student. The union found that Bronx Aerospace had half the number of special-education kids, nearly four times fewer English-language learners and spent about $5,000 more per pupil than its host school, Evander Childs.

Moreover, a recent study by the New York Immigration Coalition and Advocates for Children found that non-English speakers are not given “full and equitable access” to the small schools. Small schools were allowed to exempt special-education and English-language learners from their first two start-up years. New incentives are in place to help the small schools serve a fraction of these high-needs kids. But large concentrations of these two populations have been shuffled into the remaining large, ill-equipped high schools. The Citywide Council on High Schools has filed a discrimination case with the US Education Department’s Office of Civil Rights.

In the end, the small-school initiative exhibited the contradictions of this administration. “They are mass-producing unique schools,” said Leo Casey, a top UFT official, “and destroying them in the bargain.”

Totalitarian Testing

Nothing has more impact on education than attempts to measure it. Generally, educators believe teacher-generated assessments work best as an organic part of classroom curriculum. CEOs believe company-produced tests administered on a centralized schedule create a more equitable education. “Data collection is part of instruction,” Klein told the City Council education committee last January, when questioned on the hours of instruction time lost to test preparation and paperwork (up to two days a week, according to a 2005 UFT teacher survey).

Klein’s metaphors tell their own story. The chancellor sometimes refers to children as cars in a shop, a collection of malfunctions to be adjusted. Teachers need to “look under the hood,” he says, to figure out the origins of the pings. The diagnostic information is then made available in pie charts and color bar graphs, child by child, as the year rolls along.

“You get granular information this way about a child’s strengths and weaknesses,” said James Liebman, Klein’s chief accountability officer and a Columbia University civil rights law professor. “And you get instant return on the data. We are providing a lot more tools to give teachers the capacity to look at a child and see what they are doing.”

The 2001 federal No Child Left Behind Act emphasizes state standardized tests to measure each child’s level of proficiency. The city’s system ratchets up that process, measuring each child’s growth from one year to the next rather than his or her ability to hit or miss a single standards target. In may be fairer to use multiple instruments, but it requires millions of dollars and an army of additional tests.

Liebman has designed “progress reports,” issuing a grade of A through F for each school in areas of environment, performance and progress–with 85 percent of this information deriving from state standardized tests. “Quality reviews” are conducted yearly by a team of evaluators hired by a British company, Cambridge Education, which charges $16 million a year. The team visits schools to see how well they are using all the data to improve learning. A new “robust” IBM data-management system called ARIS will keep track of every grain of information collected on each child. Cost: $80 million.

The most controversial policy is something called periodic assessments, popular with business models. These are standardized tests, on top of the once-a-year state tests, given to kids every few weeks for additional feedback. The administration had already signed up Princeton Review (owned by Bertelsmann) as part of its $21 million contract to administer math and reading tests for grades three through eight, three times a year. That commitment was scrapped. CTB/McGraw-Hill was hired as a replacement, for $80 million over five years. Starting this fall, the tests will be ramped up to five times a year. High school students will be added to the cycle four times a year. In June Klein appointed Harvard economist Roland Fryer as the department’s “chief equality officer.” Fryer’s main proposal offers cash payouts to students for perfect scores on the McGraw-Hill tests–$25 to fourth graders and $50 to seventh graders. Principals who agree to this experiment will receive $5,000 for their schools.

Statistical disputes aside, the basic disagreement is over what constitutes an educated child. Is it someone who can demonstrate “grains” of isolated skills or someone who has the capacity to think and explore with a sense of wonder and depth? So far, the grains have the upper hand. “This administration is preparing children to do these small tasks, stripping education down to its parched bones,” said Tom Sobol. “The soul of education is left at the door.”

The public is losing faith in the New York schools revolution. In March a Quinnipiac University opinion poll found that 58 percent of those surveyed longed for an independent elected board at the helm rather than the mayor. Klein’s surprise announcement of a new overhaul last winter–a sort of decentralization in drag, with tighter control at the top over more empowered principals at the bottom–triggered even more outrage. “There is no evidence that your first reforms improved kids’ learning,” chided a visibly peeved City Council education chair Robert Jackson in January.

The truth is, the evidence is mixed at best. Klein points to improved academic achievement, higher graduation rates and a greater number of high-quality school choices since the mayor took over in 2002. He claims that 60 percent of ninth graders graduated four years later in 2006, an 18 percent hike. During the same period, math scores rose 20 percentage points, meaning that 57 percent of students in third through eighth grades met or exceeded standards. Reading scores rose 10 percent, to 51 percent. This spring an eight-point hike in math scores across the grades, to 65 percent, meeting standards, and a 5 point rise in reading scores, to 42 percent for eighth graders, was cause for celebration–even though reading scores for third and fourth graders dropped an average of four points.

But the numbers are hotly contested. Diane Ravitch, a former education official in the George Bush Sr. White House, questions why the chancellor counts 2002 as his starting point, when the initiatives did not kick in until January 2003. Test scores can be volatile instruments. The recent eighth-grade reading scores were up all across New York State this year by eight points, from 49 to 57 percent, an indication that the test itself was likely easier. The graduation rate is another bugaboo: The state calculates a 50 percent graduation rate for the city (not 60 percent), because it figures GEDs, English-language learners and special-education diplomas differently from the city. Overall, the radical overhaul seems to have produced modest improvement rather than landmark progress. “Their gains are respectable, not historic,” Ravitch told a packed crowd at St. John’s University last March.

Perhaps the most notable development has been the mobilization of opponents from among disparate city groups. An overflow crowd of 1,000 angry New Yorkers descended on Manhattan’s St. Vartan’s Cathedral in late February to protest the latest round of changes. It was a rare coalition of forces, angry enough to set aside their individual agendas to unite against the Department of Education. Here were City Council members, elected officials, activist groups like ACORN, the Working Families Party, labor unions, an immigrant coalition and citywide parent groups.

The most powerful group, and the one that gave this assembly its institutional clout, was the UFT, which has more than 100,000 members. Its legendary statewide political power was forged in the 1960s by black and Latino community groups battling for control of the schools. In recent years the union had made peace with its past, creating real ties to parent groups. In many ways Klein and Bloomberg helped create this assembly by cutting off channels once used routinely by the too-powerful union to influence policy. The effect was to alienate both teachers and parents, pushing them together. “No administration has been as hostile to the union as this one,” said the UFT’s Casey.

The mayor’s response to this historic show of unity has been to dismiss it as a small collection of parents influenced by powerful self-interested groups. But he may be ignoring this group of pols and parents at his peril. Rumblings that February night at Hostos called for an end to mayoral control. The measure is up for renewal by the New York State Legislature in 2009.

Few New Yorkers have any appetite for returning to the old school board days. But most would like to see some democratic checks and balances built into what has become a two-man show. An independent elected board could oversee budget, contracts and policy decisions, and the selection of future chancellors. The input of seasoned educators is needed again at the highest decision-making levels. Regional boards could help return a sense of community to the city’s schools. At the classroom level, school-based teams of teachers and parents should be given some real clout. As for testing, department officials would do well to emulate the Republican state of Nebraska, which has invested in teacher-created assessments (now threatened by new legislation) that do not choke curriculums.

Americans tend to hold only a few big ideas sacred. One of them is the promise that its unique public school system can offer every child a crack at the American dream. Ironically, the top-down corporate solutions popular with CEO superintendents like Klein wrest control from the people they claim to serve. “Public schools are the cornerstone of our democracy,” said Irving Hamer Jr., Manhattan representative on the last Board of Education. “If we let them quietly slip through the public’s hands, we are breaking the covenant of civic participation in this country.”