Monday, October 26, 2020

Evidence-driven education policy, money, and influence (Michael Simkovic)

I recently discussed research debunking claims that law school and business school are only worthwhile for those privileged enough to gain admission to elite programs.  Press coverage has been curiously oblivious to social science research using high quality data and well-established methods. 

Why might the press overlook high quality information sources while instead elevating the views of less reputable sources of information like think tanks and advocacy shops?  Experts proffered by such sources often have questionable credentials, use dubious methods, and rely on opaque sources of funding.

Anti-education narratives have become increasingly prominent in press coverage since the Gates Foundation and its partners began sponsoring news coverage and affiliated charities at a vast number of publications including the New York Times (see also here), NBC, BBC and its affiliated charity, NPR, PBS (see also here), The Guardian (see also here), Gannet (which owns USA Today), the Hechinger Report, The Atlantic, the Texas Tribune, the Financial Times, and the Chronicle of Higher Education, among many others. 

The Gates Foundation and its partners have also funded education policy analysts at many think tanks and advocacy groups, as well as groups like the Education Writers Association that connect the press with education experts and award prizes to journalists and editors. Gates has reportedly spent more than $250 million on press sponsorship—which is more than enough to outright buy several newspapers. 

Gates has not only funded advocacy and news coverage of that advocacy, but also new approaches to measuring the ripple effects of news coverage to ensure that his organization gets a good return on investments in influence.  The echo chamber created by Gates-funded press, quoting Gates-funded policy advocates, packaging and promoting minor variations on Gates’ personal views—all the while concerned that layoffs will be even worse if another round of funding does not materialize—can make it difficult for dissenting voices to be heard.

The Gates Foundation is controlled by technology billionaire William H. Gates III ("Bill Gates"), the scion of William H. Gates II, a prominent law firm partner at K&L Gates.  (Mr. Gates Senior recently passed away). Warren Buffett also sits on the Gates Foundation board, and often invests alongside Mr. Gates.

The younger Mr. Gates dropped out of college after two years at Harvard to focus full time on entrepreneurship.  He built his fortune through hard work, business acumen, ruthlessness, and his parents' connections.  Specifically, Mr. Gates' firm bought, polished, and relicensed software such as DOS and PowerPoint, imitated successful ideas from competitors such as Apple and Netscape while undercutting them on price, and also developed leading products in areas such as office productivity software and console and PC gaming. 

Riding high on his success, Gates reportedly remarked at a dinner that he had as much power as then President Clinton.  This may be too modest with respect to health and education policy. Mr. Gates’ authority is not subject to term limits or popular election outcomes or impeachment or constitutional limits or the APA or civil service protections for employees or mandatory transparency through FOIA.

But Mr. Gates’ reputation as an innovator was badly damaged by a Department of Justice anti-trust case against Microsoft and an infamous deposition of Gates (taken by David Boies).  The evidence convinced many that Mr. Gates leveraged control of operating systems to make it harder for competitors' products to reach consumers and to sabotage competing products’ functionality. 

Mr. Gates’ subsequent, heavily-publicized philanthropy has largely succeeded in rehabilitating his image.  Among other things, the Gates Foundation helped to fund efforts to eradicate polio with expenditures equal to approximately 2% of Gates’ net worth. 

But numerous critics point to mounting evidence that Gates philanthropy could often be a form of tax-subsidized, profit-generating lobbying for policy changes that will increase the value of Gates’ and his partners’ portfolio of investments (see also here).  Indeed, some grants are clearly made to lobbyists (see also here). Moreover, critics allege that the technology-heavy policies Gates pushes are often more expensive and less effective than evidence-based alternatives.

Mr. Gates famously claimed that all of higher education can be replaced by $2,000 worth of online videos, without any need for social interaction.  Gates has invested heavily in education technology companies to try to make this vision a reality. As a graduation speaker at Harvard, Gates quipped that had Harvard invited him to orientation, he would have convinced more of them to drop out.

Complementary to Gates' Ed Tech investments, groups funded by the Gates Foundation have advocated for reforms to education that would increase the education sector's technology spending.  There is little evidence that these alternate modes of delivery provide comparable education benefits at lower cost than traditional education.  Extenuating circumstances during COVID have led many to adopt online education as the least bad option available.  The resulting shift to online education and mounting dissatisfaction with it has made online education's deficiencies salient.

Mr. Gates claims that traditional higher education has become unaffordable.  But increases in higher education earnings premiums and life expectancy show that this is demonstrably false.  To the contrary, it is for-profit online education that may not produce enough benefits to pay for itself.  And while a few individuals will inevitably have bad outcomes, education investment risk can be mitigated through progressive income taxation for those who succeed and income-based loan repayment programs with debt forgiveness for those who suffer misfortune. 

Mr. Gate's grantees have repeatedly sought to undermine and cut such risk-spreading programs.

In a strategy that echoes Mr. Gates' efforts to prevent competing software from reaching consumers, recipients of funding from the Gates Foundation and its partners have advocated policies that would make traditional education more difficult and expensive to finance.  In particular, they have sought changes that would make federal student loans less available, more expensive, and riskier for borrowers.

Many Gates Foundation grants apparently call for recipients to advocate for pre-determined changes to higher education policy, not to study issues and identify the best solutions based on careful empirical research and consultation with subject-matter experts and stakeholders. For example, the Gates Foundation has publicly disclosed a summary of a 2012 grant to the New America Foundation "to make the case to key audiences that federal financial aid reform is necessary now and that aid programs must go beyond ... funding access to a higher education ...."  Some additional examples of ostensibly similar grants to numerous advocacy and policy shops appear in the footnote below.*

Many of the arguments that have resulted from this Gates-funded advocacy spree are dubious or outright nonsense.  Some of the arguments depend on clear math errors.  Some masquerade as egalitarian proposals while effectively pitting less well-off groups against each other in a battle over public funding that is scarce only because taxes are low.  For example, Gates grantees have suggested that the only way to increase funding for Pell Grants is to cut funding for student loans to graduate students.  This is wrong--and indeed, obviously wrong--considering that all higher education funding adds up to around 3% of GDP and federal student loans to graduate students are highly profitable for the government.  There is ample room to shift more resources to education to make Pell Grants and Student Loans both more generous. Indeed, such investments would likely pay for themselves over the long run.  

Mr. Gates has compared progressive taxation, which could help fund a better quality of education for those born into less wealthy families than himself, to repressive human rights abuses "like [in] North Korea."  (The full interview is fascinating).

Mr. Gates subsequently clarified that he is willing to pay slightly higher taxes. Mr. Gates garnered effusive praise from media organizations for this ostensible progressivism. 

But the Gates Foundation—which spends hundreds of millions on advocacy annually—has spent virtually nothing advocating for progressive taxation and increased public investment. 

If Mr. Gates in fact opposes taxation to increase public investment, his views would be fairly typical of wealthy individuals.  Such views would also be at odds with the preferences of the overwhelming majority of Americans.  Given Mr. Gates and Mr. Buffett’s funding priorities, they may have more in common with other billionaires—for example, Charles Koch— than their popular portrayals would suggest.  Indeed, Microsoft-co-founder Paul Allen’s foundation funds organizations that distort legislative budget scoring and thereby bias the legislative process against taxation and public investment.

To the extent that Mr. Gates and those like him prevail on fiscal policy, we can expect suboptimal outcomes with respect to inclusive economic growth and representative governance.  It may be tempting to delegate policy making to the wealthiest among us on the assumption that their success in business—and the philanthropic power it affords them—proves their moral and intellectual superiority in all areas of human endeavor. 

But if we forget that people are selfish, that positive press coverage can be bought, and that being good at one thing does not make one good in all things, we may find ourselves basking in the reflected glory of our leaders’ ever larger palaces as we struggle to cope with emaciated and ineffectual services.


* Similarly, a grant to the Third Way Institute was "to facilitate advocacy efforts to [change] existing higher education policies, support development of advocacy capacity across key partners, and increase demand for [policies favored by the Gates Foundation]."  A grant to the Aspen Institute, which is affiliated with the Atlantic and Washington Monthly, was "to support decision makers and advocates in working together to [change policy] in K12 and education beyond high school."  Numerous education grants call for an emphasis on "innovation" which may be a euphemism for increased technology spending.  

Similar education policy grants have been made to the American Enterprise Institute, the Manhattan Institute, the Brookings Institute and the Center for American Progress, among others, as well as to regranting organizations like New Venture Fund and Rockefeller Philanthropy Advisors. Regranting organizations like NVF are used by wealthy donors to anonymously and indirectly make donations both to well respected groups and to groups that use controversial tactics.  Regranting organizations are sometimes referred to in the press as "dark money slush funds."  Among other things, NVF has reportedly funded attacks on Google, a Microsoft competitor.

It is impossible to know with certainty what the Gates Foundation expects of its grantees without full, complete and unfettered access to their grant contracts and communications with grantees, and the selection process by which they decide what to fund. 

The information that is publicly available is disconcerting.

Guest Blogger: Michael Simkovic | Permalink