According to the Economist, in an article titled Middle Kingdom meets Magic Kingdom, Disney has ten English schools in Shanghai and five in Beijing. At first, I found that pretty surprising because it is such small small potatoes for Disney.Teaching English is like a classic cottage industry.
But I was reminded that we live in a time when nothing is considered too small if it makes money for the Mother Corporation. Maximizing profit is now considered the highest ideal. Banks charge fees for any service they can; including parking. The avowed goal of any company is to make as much money as possible. In 2007, before everything fell apart, General Electric made one and half times more profit in lending than any other GE division.
My childish fantasy is that – when I was young – General Electric made stuff, banks made loans, and Disney made cartoons and had Disneyland. Sure, they all made money, but that was a byproduct of their raison d'etre which was the service they provided. I think that this same childish fantasy was held by Obama, Geithner, et al when they bailed out the banks.
If they just got the banks – who were in trouble over their greed – some money, they would lend it to needy borrowers to get the economy going again. Of course, that is not what happened. The banks took the money and loaned it back to the government – in the form of safe government bonds – and started making even more money. This new, safe, profit was then used to pay themselves nice big bonuses.
Maybe Obama had that fantasy, but I doubt Geithner, whose mentor during his years at the Treasury Dept. was Robert Rubin, who went on to run Goldman Sachs, had any such illusions. Geithner was also president of the NY Fed, where he worked closely with Hank Paulson and Ben Bernanke, both long-time Wall Street insiders.
Also, our experience in Vietnam taught us that there is a lot of profit in the education business. Besides the schools themselves, there are software sales, and a huge number of possible merchandising tie-ins. In China alone, teaching English is a $3 billion business, then there’s South Korea, Taiwan, Vietnam, etc. And the market is growing every year. So if Disney is successful with this, it’s a multibillion-dollar line of business for them.