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They say it’s not what you know, but who you know.

In the case of Chicago Schools Chief Arne Duncan, tapped today to be President-elect Barack Obama’s Education Secretary, you couldn’t have a more powerful network in your corner.

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Several of Duncan’s social and professional worlds overlap with Obama’s: The two men share a Harvard education and a passion for basketball, shooting hoops regularly (including an Election Day pick-up game); Duncan is a high-school chum of longtime Obama friends John Rogers Jr. and Valerie Jarrett; and he is close to Penny Pritzker, the billionaire Chicago businesswoman who was Obama’s national finance chairwoman.

All apparently helped him beat out the other top contenders for the education post, including New York City Schools Chief Joel Klein and Linda Darling-Hammond, a Stanford University education professor.

Not that Duncan, 44, who leads the nation’s third-largest school system, doesn’t have arguments on the merits.

Since Chicago Mayor Richard Daley picked him to head the city school district in 2001, he has gained a reputation as a reformer who isn’t afraid to challenge the teachers union and close underperforming schools. Public school students have gotten higher test scores on his watch, although they still lag behind the Illinois average.

He has also supported charter schools, performance pay-plans and other steps to shake up the status quo, including paying students for good grades.

“Chicago’s loss is the nation’s gain,” the Chicago Sun-Times declared today, touting Duncan’s efforts to shut down dozens of failing schools and replace them with 100 new ones.

Duncan, who grew up in Hyde Park where the Obamas now live, has been friends with Obama for years, advising him on education policy.

After graduating magna cum laude from Harvard in 1987 with a major in sociology, the 6-foot 5-inch tall Duncan bombed a tryout with the Boston Celtics, then moved to Australia for several years to play professional basketball.

He returned to Chicago in 1992 to direct the Ariel Education Initiative, a project sponsored by his friend John Rogers’ company, Ariel Capital Management LLC. The organization seeks to create educational opportunities for inner city kids.

In 1998, he joined the Chicago Public schools, and ascended to the top post three years later.

At a press conference today, Obama praised Duncan’s “deep pragmatism.”

“If charter schools work let’s try that,” Obama said. “Let’s not be clouded by ideology when it comes to figuring out what helps our kids.”

Obama also bragged that “we are putting together the best basketball-playing Cabinet in American history.”

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• Focus is on NYC charter schools – October 27, 2007
• Social Secretary Desiree Rogers is decades-old Obama pal – November 25, 2008
• Craig Robinson helped brother-in-law build connections off the court – November 12, 2008
• High-powered group, most from Chicago, plans Obama inaugural – November 26, 2008
• Obama’s short list may include Jarrett, Daley, Pritzker, Goolsbee – May 27, 2008
• Malia and Sasha to join elite student body at Sidwell Friends – November 24, 2008
• RNC creates BarackBook.com to showcase Obama’s ‘friends’ – August 20, 2008
• Warren Buffett does doubleheader to raise money for Barack Obama – June 26, 2008
• Chicago’s black business leaders play major role in Obama’s rise – May 28, 2008