The Case for Evidence in Government – Doug Criscitello

Doug Criscitello, Executive Director of MIT’s Center for Finance and Policy

Doug Criscitello, Executive Director of MIT’s Center for Finance and Policy

From Government Executive

Although the U.S. government presides over what collectively must be one of the world’s largest data repositories, its capacity to use that data to build citizen trust and make informed, evidence-based decisions is severely constrained. As explained in an enlightening report recently issued by the bipartisan Commission on Evidence-Based Policymaking (CEP), the mere existence of data is a necessary but not sufficient condition for creating empirical evidence to inform decisions throughout the full lifecycle of public programs—enactment, funding, operation, reform, termination.

The digitization of many facets of various activities the government funds through its $4 trillion annual budget has resulted in a data explosion at federal agencies. But that data needs to be synthesized into actionable information to satisfy taxpayers’ demands for better results and greater transparency. The CEP report makes clear that much remains to be done to achieve that goal and provides a comprehensive plan to improve access to federal data, strengthen privacy protections and expand the public, private and academic research communities’ capacity to analyze data.

CEP provides an insightful list of recommendations such as establishing a National Secure Data Service to enable and leverage capabilities across government, addressing statutory impediments that obstruct smart data use, and streamlining processes used to grant researchers access to data. The report appropriately emphasizes strong privacy protections and advocates for comprehensive risk assessments for publicly released data and for the use of better technology and greater coordination across government. To prioritize efficient evidence building, CEP points out the need to coordinate statistical activities, evaluation and policy research within and between departments and across levels of government.

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The GOP plan to turn students into Trump voters – Michael Whinston

MIT Sloan Fellows Professor of Management  Michael Whinston

From Boston Review

Much has been written about who the likely “winners” and “losers” are if the Republican-controlled Congress is able to pass a version of its tax bill. The middle class: losers; the wealthy, who own nearly all of the stock in U.S. corporations that isn’t owned by foreigners: winners. Those whose income comes from wage earnings: losers; those whose income comes from “passive” ownership of businesses: winners.

It has even been suggested that several geographic distinctions in the legislation may be “payback” for how California, New York, and other coastal blue states voted in the 2016 election. Taxpayers in high local and property tax states such as California and New York, for example, are losers in the GOP plans while Texans and others in low-tax “Red” states are winners.

If that seems like an overly sensitive reading, consider this: under the GOP plans, the ability to deduct personal casualty losses from wildfires and earthquakes would be phased out. The deduction for damage from hurricanes and floods, however, would be kept. As California State Senator Mike McGuire, a Democrat whose district includes areas ravaged by wildfires, told the New York Times, “. . .it’s hard not to think that Congress has their sights set on the Golden State.”

But the aims of this legislation are more politically ambitious than mere retribution, and nowhere is this more evident than in the House bill’s assault on higher education. If enacted, three provisions promise to have a devastating effect on college students, graduate students, and higher-education institutions. First, the House bill eliminates the deductibility of interest payments on student loans—a deduction that more than 12 million people used in 2015, according to the New York Times. Next, it taxes the tuition grants given to graduate students, grants that enable them to forego entering the workforce and instead pursue a Masters degree or PhD. As a result, a typical graduate student on a $20,000 stipend and a tuition waiver could end up owing nearly $10,000 in additional tax. And finally, it taxes the endowment investment income of roughly seventy universities and liberal arts colleges, reducing the funds available for undergraduate and graduate scholarships.

While these changes will help offset the massive tax reductions for the rich, they are a pretty small drop in the bucket towards that goal. And it is strange that pro-growth and pro-investment Republicans would sign off on something that so harms those who want to invest in human capital. So why then did the House pass this bill? The answer can be found by looking at the 2016 election results. Read More »

Trump and transforming capitalism: making our movement see itself – Otto Scharmer

MIT Sloan Sr. Lecturer Otto Scharmer

MIT Sloan Senior Lecturer Otto Scharmer

From Huffington Post

“Trump is America’s wake-up call” I heard a visitor to the United States say the other day. True. Trump’s first year has been a wake-up call heard around the world. But are we really waking up? And who is “we”? And what, if anything, is the new awareness that we are supposed to wake up to?

This column inquires into these questions, and announces a major initiative that blends the news and social media power of HuffPost with the online-to-offline movement-building capacities of MITx u.lab.

Over the past few months, having attended events and grassroots gatherings in various parts of the world, I’m encouraged that such a waking-up and movement building process is well underway. I’ve seen firsthand a new landscape of initiatives focused on transforming the foundations of our economies and our social structures that is emerging. At the same time, social media movements such as #MeToo have shown how quickly latent and necessary changes can be catalyzed in our current moment. While there is still much more structural and systemic work to be done, it’s increasingly clear that as our old economic structures and civilizational forms hit the wall of our planetary limits, a new world is taking shape that focuses on bridging the three major divides of our time: the ecological divide, the social-economic divide, and the spiritual divide.

This awakening process is not only happening in grassroots movements. It’s equally observable among many, particularly younger, leaders working inside our traditional institutions. Everyone knows that we live in a moment of profound disruption. An old order is about to end. And something new is about to be born.

Last week, I was running a session at the European Central Bank in Frankfurt. During the discussion, one of the senior management attendees said: “The problem you describe is not totally new. The destructive dynamics of prejudice, ignorance, hate, and fear have been around for a long time.” And then he asked, “But why is it so much worse today? What is actually different now?”

What a great question. It prompted me to deepen my own sense making.

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Financial regulation calls for 20/20 vision – Antonio Weiss and Simon Johnson

MIT Sloan Professor Simon Johnson

Harvard Kennedy School Senior Fellow Antonio Weiss

From Bloomberg

One of the central pillars of financial reform, the Financial Stability Oversight Council (FSOC), is under political attack and at risk of coming undone.

In the past, the balkanized U.S. financial regulatory system has consistently failed to address risks that took root in its jurisdictional gaps. The FSOC was created to solve that problem, bringing regulators together to make sure they have the tools to protect the economy from financial crises. It is already making an important difference.

Unfortunately, earlier this month the House Financial Services Committee passed the Financial Choice Act (CHOICE Act), which threatens to reverse that progress. It would, for example, all but eliminate the FSOC’s ability to prevent the regrowth of an unsupervised shadow banking sector that might once again threaten our financial stability and economic resiliency. At the same time, the administration of President Donald Trump has signaled that it may use the council to pursue deregulation, rather than its core mandate of financial stability, and to reverse or limit its ability to designate systemically important non-banks for enhanced supervision. Meanwhile, MetLife Inc., the largest U.S. life insurer, recently asked the courts to delay ruling on an appeal filed by the Obama administration seeking to reinstate the firm’s designation as a systemically important institution requiring prudential oversight by the Federal Reserve.  The Trump administration has agreed to put the appeal on hold.

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Taking steps to reduce foreign social-media meddling in our elections – Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

From Huffington Post

One could almost pity the executives from Facebook, Google and Twitter as they were grilled on Capitol Hill earlier this week by senators upset about Russian meddling in last year’s presidential election, via the posting of cleverly worded propaganda ads and messages on social-media sites.

After all, how do you detect – let alone stop – a small group of determined foreign nationals manipulating and taking advantage of what’s supposed to be open, free-flowing Internet platforms idealistically designed to allow billions of people across the globe to voice their thoughts on everything from world politics to the type off pigeons in Trafalgar Square?

Of course, the Facebook, Google and Twitter executives at the Senate hearing earlier this week bowed their heads, expressed remorse and vowed to do better in combating the threat of foreign interference in our democratic elections.

But the question is: Can they do better? Is it possible? Remember: Facebook alone acknowledges that it received only about $100,000 in paid ads by those it later learned were tied to various Russian groups, but those ads were still seen by about 10 million people, according to media reports.

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