These major cities could afford a $10K per family basic income w/o raising taxes

There’s been a lot of talk recently about the pros and cons of a universal basic income.

There’s also been a lot of talk about how expensive this would be.

But, from my quick analysis, I actually think quite a few major cities could institute a child based basic income utilizing only existing tax revenues.

I. Numerous big cities spend over $20,000 per student

Getting accurate city per-pupil spending amounts can be a near impossible task, but nearly all sources I reviewed showed that Washington D.C., Newark, and New York City spend at least ~$18K a student. I think Boston spends around this as well.

And higher end estimates get closer to $25-30K per student.

For the sake of modeling out how to end child poverty, let’s assume ~$20K per student.

II. Giving $5K per student per year basic income back to families

Let’s say that starting next school year, each of these cities decided to reduce public education spending from $20K to $15K per student, and instead of giving this money back to taxpayers, provided a universal basic income of $5K per child back to families.

Assuming your average family has about two kids in the public school system, that’s $10K per family.

That won’t make any family rich, but it would probably get most families out of deep poverty.

III. A $5K per student spending reduction would likely not lead to major education losses

Dropping to $15K per student would still put these cities ahead of the national average of ~$10K per student. Even adjusting for cost of living differences, none of the cities would be that far off typical educational spending.

To get a taste for what cities are able to achieve with various students and spending, see below:

screen-shot-2016-12-05-at-9-04-47-pm

The above is by no means an accurate picture of school system effectiveness, as it’s based on absolute scores rather than growth; however, it provides decent evidence that schools systems that spend $10K-15K to student can still achieve relatively ok outcomes.

50% of the top ten adjusted scoring cities in the country are located in Texas and Florida, both of which spend very modestly.

Ultimately, the students in Washington D.C., Newark, and New York City are different than students in other cities, so we can’t make any claims with 100% confidence, but the experience of other cities suggests that spending $15K per student is enough to provide an education on par with other major cities across the country.

IV. What do you think parents would want?

Somebody should poll this question, but I expect families that have two children would rather have $10K in cash per year / $15K in education spending rather than $0K in cash / $20K in education spending.

For many of these families, $10K per year would be absolutely game changing.

It would be very interesting for an aspiring politician to run on this as a single issue platform. Or to take the issue to a popular referendum.

V. Trade off that no one explicitly made

Here’s the thing: every marginal $1K increase in education spending can be justified at the time. There’s always a compelling financial ask to be made when families in poverty are struggling to get a great education.

But, eventually, these marginal increases can lead to spending allocations that just might be out of line with what families want and what might be in the public interest.

My guess is that providing a $5K per student basic income to families – and reducing educational spending by the same amount – would increase the welfare of families in some cities.

 

Here’s how much I gave to charity this year

give

Every year I write a blog post about how much I gave to charity. I do this with the hopes of (ever slightly) increasing a culture of giving.

This year, I gave 8% of my gross income.

Some reflections below.

How much does it cost to save a life?

GiveWell makes rough estimates that the most effective charities save a life for around $1,000-$3,000.

That means most readers of this blog could save the lives of multiple people this year.

I hope you do so.

Where did I give? Why? 

I gave my money to GiveWell and told them they could allocate it across any of their preferred charities, save for Give Directly.

My giving is based on the following:

(1) I understand that peace, economic growth, technological advancement is what really matters most over the long-haul.

(2) I have no idea how to donate to charity in a manner that helps the above.

(3) There are many people who face acute suffering right now.

(4) I have some modest hopes that charities can help with this acute suffering.

(5) Giving internationally is the most effective way to ease the most acute suffering per donation.

The reason I do not give to Give Directly (direct cash transfers to poor people) is not that I think it’s a bad idea; rather I just don’t think we have enough evidence to prove that it alleviates suffering as well as GiveWell’s others recommend charities.

What worries me the most about my giving strategy?

I am open to the idea that making high-risk bets on existential issues (war, climate change, A.I., pandemics, etc.) will have more long-term utility than lower-risk bets that ameliorate current human suffering.

But I don’t trust myself to evaluate how to give to these causes, nor have I found experts that I fully trust that could guide my giving on these causes.

GiveWell is trying to mature this space with its Open Philanthropy initiative, but I don’t yet have enough confidence in their analysis to shift my giving.

Given the current turmoil in our country, why didn’t I give domestically?

I do think that the United States could do incredible global harm by starting an ill-advised war, radically reducing its commitment to climate change efforts, or erecting massive trade barriers that severely slow the global economy.

Because of this, I made political donations throughout the year (which I did not include in my charitable giving).

However, right now, I’m not really sure how to donate in a manner that would lower the risks of our government making any of the aforementioned grave errors.

If there is a way to do so, I will consider giving to these causes next year.

Should you calculate your giving rate based on pre or post tax income? 

I go back and forth in how one should figure taxes into this.

On one hand, about 10-20% of taxes go to the poor (I think, it’s very hard to get clear answers on this), which feels like charitable giving of some sort.

On the other hand, charitable giving is also tax deductible; moreover, I surely reap the fruits of living in a functioning country, and, in modern times, some form of welfare state is part of what creates domestic stability.

So I’m not sure that pre-tax is exactly the right baseline for calculation.

But I’ll stick to the hard line and calculate pre-tax: so 8% it is.

When should you use first principles thinking? When should you avoid it?

“First principles thinking”is a fairly popular phrase out here in the Bay – and for good reason: it’s a powerful mental tool.

Many of the most effective people I work with are exceptional first principal thinkers.

It’s also an area of growth for me. See below for some reflections on the idea.

What is first principals thinking?

The best description I’ve heard is that is it reasoning by root cause rather than reasoning by analogy.

Instead of trying to figure out how something is like another thing, it is more about keeping on asking “why” about the specifics of one thing.

For example, if I were trying to build a cheap rocket to get to Mars, I could look at the price reduction trajectories of other similar complex machines, or I could do a part by part analysis of each component of a rocket.

The first is reasoning by analogy, the second is reasoning through the specific issue at hand.

Yes, Elon Musk is a major proponent of first principles thinking.

Why is first principles thinking useful?

Thinking by analogy is useful in that it is efficient: it quickly allows us to make guesses about unfamiliar issues by comparing them to familiar issues.

However, thinking by analogy is also noisy: the things you are comparing – especially in the case of really hard problems – will never be truly the same. So you are inevitably losing information by making erroneous implicit assumptions.

Ideally, first principles thinking will increase the amount of accurate information at hand, which will help with sound decision making.

Why is first principles thinking dangerous? 

It takes a lot more mental energy to think down to the root causes of every issue you face.

Moreover, the ability to execute sound first principles thinking will most likely require some subject matter expertise. While it’s possible to get to root causes without being a content expert (this is what junior strategy consultants often attempt to do), I’m skeptical that you consistently identify all root causes without deeply understanding the content.

Often times, I catch people who pride themselves in first principles thinking making major mistakes. This is especially true when they are talking to me about education, which happens to be something I know a lot about.

The world is an ever complicated place, and if you don’t have a handle on research and a broad set of real life facts, you can end up with high confidence in first principles that aren’t anchored in reality.

When should you use first principles thinking?

My hunch is that using first principles thinking is most useful in areas where: (1) you have subject matter expertise (2) you have time to devote to thinking about the issue (3) you have external feedback mechanisms that will tell you if you’re right.

I think reasoning by analogy and / or trusting experts / or simply not having an opinion (an under used option!!!!) is best in situations where you don’t have the requisite expertise, time, or feedback mechanisms to conduct first principles thinking.

How can you getter better at first principles thinking?

I’ve been thinking about this a lot lately; here’s some suggestions:

1. Get into friendly arguments with people who are good first principle thinkers and watch them work through issues. I have 3-4 great first principle thinkers in my life and I’ve learned a ton from watching them think. If you don’t have them in your life, listen to podcasts and read blog posts by people who excel at first principles thinking.

2. Use thinking devices such as getting to root causes by asking “why” 5+ times before you settle on viewing something as causal or true.

3. Cultivate anxiety about not being a good first principal thinker. Whenever I’m confronting a thorny issue in education, I always pressure / chastise myself to take the time to do first principles thinking before voicing an opinion.

Good luck.

5 ways Facebook could help make us better

Before getting to the recommendations, some framing thoughts:

  1. It is impossible to tell how Facebook affected the election. There is too much causal density in who people vote for to point to one cause and say: that’s the thing that mattered.
  2. I think there’s a major danger in saying: “people voted for Trump because of fake news” instead of acknowledging that people voted for Trump because of a combination of cultural and policy beliefs.
  3. Liberals have plenty of fake news of their own. I’ve spent the past 5 years dealing with a constant stream of unscientific articles about New Orleans education reform in papers such as the New York Times.
  4. The research on how people form and solidify opinions is messy, and I think social media gives a chance to run a lot of new experiments rather than assume we know how opinion formation occurs.
  5. I think censorship is almost always the wrong answer, and the line between editorial scrubbing and censorship is very blurry when it comes to a communication platform like Facebook.
  6. Since the advent of advertising driven media, every medium has had to figure out how to balance revenue and legitimacy. Modern fake news has been a problem since the creation of the penny newspaper.
  7. In considering Facebook, I think the first solution set should be to try and figure out how to harness the power of social media rather than curtail it.
  8. Ultimately, it’s not Facebook’s job to make us better; it’s our job.

Recommendation #1: An Opt-In Intellectual Diversity Function

Facebook should create an opt-in intellectual diversity function that harnesses its algorithm to populate a user’s feed with diverse intellectual opinions. This could be done throughout the newsfeed, or opposing viewpoints could be tagged to specific articles.

Overtime, Facebook could track what types of opposing articles are clicked and viewed – and tweak its algorithm to place the most effective type of opposing arguments for each type of person or issue.

Recommendation #2: An Opt-In Share My Story Function

From what I understand, personal posts garner much more engagement than article sharing. And my hunch is they are more effective in making people explore other opinions.

Facebook should create a share my story function that allows a user to give Facebook permission to share a personal story with strangers who have opted-in to the intellectual diversity feature.

Facebook could then share powerful personal stories that provide different viewpoints to its users, as well as track what types of stories resonate most with people of different intellectual viewpoints.

Recommendation #3: An Intellectual Diversity Rating

Facebook should provide the opportunity for each user to see a feed diversity rating score, that gives the user some (imperfect) estimation of the intellectual diversity of her feed.

Recommendation #4: Alternate View Feed Day

Facebook should have one day a year where users can opt-in to receiving a typical daily feed of a user who shares opposite political views.

So for a whole days a user would see the news / articles / etc. that a user from the opposite political spectrum would usually see.

Recommendation #5: Livestream Beer Summits

Occasionally, Facebook could livestream a summit of two people with different political viewpoints engaging in a discussion / visiting each other’s homes / going to a bar / etc.

It could provide a model for what we should all be doing more of: talking to each other.

In Sum

I don’t know if the above recommendations would work or not. Perhaps they would backfire and create more belief anchoring and division.

My major point is that instead of trying to censor social media we should run a bunch of experiments to try and figure out how it might make us better.

Lastly, like most posts, this post was born out of an exchange with friend: thanks to Mike Goldstein for inspiring this post by coming up with recommendations #1 and #5.

Here’s a better framework for thinking about Trump

As I’m reading anti-Trump and pro-Trump commentary, I’m finding very few pieces that fully explore the different possibilities of a Trump presidency.

So I tried to create a graph to chart what I think are three dominant considerations we should be using to understand the president elect.

A Framework for Understanding the President Elect 

screen-shot-2016-11-14-at-9-55-18-am

This framework captures 3 primary spectra:

Social Liberalism: Does a leader have respect for people of all races, gender, sexuality, religion, and places of birth?

Economics: Does a leader lean more toward populist economics (which often involves trade protectionism and anti-immigration stances) or globalist economics (which generally leans towards free trade and more immigration)?

Rule of Law: Does a leader behave within the established norms of domestic democracy and international rule of law, or does she lead by greatly damaging democratic institutions and grossly violating international law?

To chart some historical examples, I spent a few minutes trying to plot the last few American presidents and Hitler. I was just aiming to be directionally correct but am in no way trying to argue that I plotted these perfectly.

Each Variable is Very Important, But I Think Rule of Law is Probably Most Important

You could make reasonable arguments for each variable being the most important consideration.

If I had to argue for social liberalism, I’d say that even someone who works within the rule of law can do terrible harm to minority populations.

If I had to argue for economics, I’d say that someone who wrecks the international economic system could unleash untold suffering on the poor of the world.

In arguing for rule of law, I’m mostly arguing from this recent historical fact that so many of the world’s major mass deaths have been caused by dictators, such as Hitler, Mao and Stalin.

This graph is illustrative:

dictators

I’d need to think harder before having stronger opinions on the relative importance of each variable.

The only thing I am confident in is that they’re all important.

When to Build Bridges, When to Join the Resistance 

I think both Trump and Clinton supporters have reasonable grievances about the world.

I don’t think that it’s in our country’s best long-term interest for each side to: (1) argue loudly about their legitimate grievances (2) not listen to the other side’s legitimate grievances and (3) not differentiate between policy differences and threats to the survival of the nation.

I think economics and immigration are policy differences.

I think respect for rule of law is an issue that gets at the survival of our nation.

And I think social liberalism sits between the two, in that it determines who receives the full benefit of the rule of law within our country, which in its most severe form can threaten the survival of our nation (slavery) but in other cases can be solved through the political process (gay marriage).

I think it’s worth trying to build bridges around policy and less severe forms of social illiberalism.

I think it’s worth considering more radical forms of resistance in cases of major threats to the rule of law and severe cases of social illiberalism.

In Sum

Our country is deeply divided about many issues.

It’s important to tease out the differences between these issues, both to understand ourselves and to understand the president elect.

I know that this is a rather unemotional way of trying to understand issues riven with deep emotions.

I’ve felt a lot over the past week – it’s been especially hard to hear stories of children in our schools who don’t feel safe – and I’ll continue to listen to these emotions.

But I also want to try and understand the way forward, and, for me, frameworks help.

Post election reflections

On this blog, I’m going to keep my post-election reflections focused on education, save for one thought: continued progress in the realization of the American dream is extremely important for our nation and the world as a whole, and I look forward to continuing to play a bit part in this vitally important endeavor. I hope you do too.

On to education.

#1: MA and GA Drive Home that Traditional Public School Support is Boosted by Populism 

In Massachusetts, a populist blue state, the charter school cap was not lifted because unions effectively portrayed this expansion as something that would harm traditional public schools.

In Georgia, a populist red state, a state takeover entity was rejected because opponents effectively portrayed the intervention as something that would hurt local public schools.

In populist politics, communications messages that focus on preserving local, traditional public schools appear to be very effective.

Interestingly enough, it’s not clear to me that these results demonstrate a significant antipathy toward charter schools; rather, they seem to indicate a deep protectionist instinct for traditional public schools.

For charters to be successful, we may need to communicate in a fashion that reduces fears that existing traditional schools will be harmed.

#2: In Cities Where Charters are Normalized, Elections are Producing Pro-Reform Results

In New Orleans, Indianapolis, and Oakland – all cities with 25%+ high-performing charter sectors – reforms either held or expanded majorities.

Generally, reformers prefer top-down quick wins like ballot initiatives; however, we have emerging evidence that, in cities with higher charter market share, elected school boards can tip into modestly sustainable pro-reform majorities.

This is more evidence that market share drives everything.

#3 What Will Ideological but Not Constituent Support Deliver? 

The federal government is now fully controlled by Republicans, a party that is highly ideologically aligned with choice and charters.

However, many Republicans represent states without large charter sectors. As such, there is not uniform constituent demand for more charters.

An open question to me is how much Republicans will use this moment to expand thoughtful, sustainable choice reforms.

#4 The Status of Within District Reform will Rise 

Given the populist rise of traditional school protection, reforms that disrupt within districts – such as technology – will likely see in increase in philanthropic support.

In Sum

There is much to be learned by listening to how people express themselves through voting.

It’s a noisy signal, but in a world of communication bubbles, it’s a signal nonetheless.

The ROI on voting, door knocking, and phone banking in swing states

I’ll be spending this weekend phone banking.

I encourage you to go knock on doors or phone bank as well.

This is a very important election and a very close election.

As 80,000 hours demonstrates, it’s well worth you time to both vote and encourage others to vote.

I. The Stakes are High 

Both in terms of finances and global peace, American elections are very important. 80,000 hours writes:

By this measure then, a single vote with a 1 in 10 million chance of changing the election outcome would be worth $300,000 to US shareholders as a whole. This also ignores effects on economies overseas, which in some cases seemed to be almost as large – or domestic impacts like unemployment.

On top of this, each four years the US President makes decisions affecting the immigration status of millions of people, and choices about wars that in some cases have resulted in 100,000s of deaths.

Speaking of war – imagine you think over four years with one candidate there’s a 0.1% chance of nuclear war, and 0.2% with the other. How valuable is it to vote for the safer one?

II. Swing States Matter

They note:

But if you’re in a swing state, like Florida, Nevada or New Hampshire, the odds are often around 1 in 10 million that your vote will change the outcome, and can be even better. In the closest state in an election with perfectly even polling, the odds could be as high as 1 in 1 million.

III. You Can Influence People in Swing States by Using Phones and Knocking on Their Doors

screen-shot-2016-11-04-at-7-27-56-pm

Every 38 people you call may change one vote in a swing state!

IV. Get to Work!

Over the next few days, there will be a high anticipated ROI for getting out the vote in swing states.