Hello and welcome to this session in which we will discuss the different types of taxes We're gonna break down the taxes in the United States under different under three different categories Hello and welcome to this session in which we will discuss the three different types of taxes in the United States Which are property taxes transaction taxes and income taxes Now when you think of taxes the first thing you think of is income taxes Which is taxes that you pay on your income on your earnings whether you are an employee or a self-employed individual But there are many other taxes that government state local and federal impose on us such as property taxes Transaction taxes in this session we will focus on property taxes and transaction taxes and Property taxes will be taxes on personal property based on the value at Valoran like property and personal Under transaction taxes. We're gonna look at various federal state and local excise taxes Estate taxes, which is kind of part of excise taxes as well as gift taxes sales tax and use tax The main course is about income taxes. However, we do cover the state taxes and gift taxes in separate chapters So we're gonna start by discussing property taxes. Let's go ahead and get started Before we proceed any further I have a public announcement about my company farhat lectures comm Farhat accounting lectures is a supplemental educational tool That's gonna help you with your CPA exam preparation as well as your accounting courses My CPA material is aligned with your CPA review course such as Becker Roger Wiley Gleam Miles my accounting courses are aligned with your accounting courses broken down by chapter and topics My resources consist of Lectures multiple choice questions true false questions as well as exercises. Go ahead start your free trial today Property taxes. What are property taxes property taxes also known as Ed Valorum? It's means based on the value. It's a form of a wealth based tax It means the higher the value of that property wherever that property happens to be usually when we think of property taxes We think of taxes on property on homes that you own Property taxes are levied usually on buildings homes and land also. That's property and in some state proper ad Valorum, which is taxes based on property is also subject to Personal property which is other than land and building and that's very important It's not an old state and it's very important to determine whether the tax is a Ed Valorum property tax. Why because it is indeed a property tax based on the value of the asset Then it could provide you a deduction for the federal income taxes Well, when you pay taxes on your home, you can get a deduction on your schedule a itemized deduction You can if you happen to iconize now in some state if you pay Taxes on certain personal property based on the value of that property. That's also deductible Now, why do state and local government use this type of revenue this type of taxes It's a form of revenue and usually what they do is they use this revenue usually the finance the school district So property taxes finance the school district and it's a major social source of revenue for many cities counties in the United States What are the property the property taxes real property taxes generally encompass real estate? So when we think of property taxes, you think of real estate building and fixtures Which are items so integrated into the property that Removing them can cause damage. So when we think of loud property It's something that cannot be moved from one place to the other a car You could always move it from one place to the other a home an office building cannot be moved For example a built-in bookcase and installed electrical wiring are fixture But a movable fix bookcase is not so if you have a bookcase if it's in the wall Fixed in the wall and you cannot move it if you move if you sell this house It's part of the property If it's a bookcase where you can move if you happen to sell the house and move then it's a personal property And how assets are defined again matters for taxation Especially in places without this add valorem tax on personal property because if it's not add valorem It's not tax on value then it's not deductible So in some states you do have add valorem tax on personal property that could apply to vehicles boats That are owned by individuals So when you pay your taxes on the vehicle that tax is deductible as long as it's based on the value of the asset Let's move now to transaction taxes transaction taxes applies to various transfers. It's transaction something happened At a manufacturer level wholesale level and retail level is basically when there's a purchase and a sale between two parties It's a transaction also the government can level can levies Transaction taxes and any government level can do you pay federal taxes? You might pay state and you might pay local based on transaction Usually these taxes are calculated as a percentage of the value of the of the transferred property So for example 6 percent 5 percent of the transaction So we're going to look at these type of transaction taxes One type of transaction taxes is excise tax and the federal government imposed this excise tax This tax is usually imposed on tobacco fuel gasoline and air travel Most of these taxes not all the aim of them the goal is to influence social and economic behavior for example Taxes and tobacco. They don't want you to smoke. It's not good for the healthcare system. Therefore they impose taxes Gas gas gas lure tax well encouraging you to buy a car that's fuel efficient And for manufacturers to produce fuel efficient car Now for example gasoline tax is also to encourage you to use public transportation But it's also to maintain the highways and air air travel for example for safety State and local excise often mirror federal federal ones So basically if the federal government imposes taxes on tobacco and fuel The state and the federal the state and the local government will go ahead and impose taxes as well So all state they have tax gasoline liquor and tobacco, but the rate between each state is different So in certain state they might they might Tax the tobacco at 50 percent or 40 percent at a high rate another state that might be 20 20 percent For example, they might add on every gasoline gallon of gasoline, you know 30 pennies or 20 pennies or whatever Now because of this i'll tell you a story Some people what they do they move they they go to one state Which is illegal buy tobacco from that state transported back and sell it in their state where the Where the taxes are higher for example, if you live in new york to give you an example and let's assume They the the excise tax on tobacco for the sake of simplicity 20 percent. I don't know how much it is I'm just making Making up numbers What what what some people will do they will go to another state Where the their the percentage on the tobacco is like 3 percent or 5 percent They will buy the tobacco there They go to the new they go to new york and they sell it for less than what other people are selling it because They were able to save some money. Well, that's illegal, but nevertheless I'm just telling you that's that just fyi from the real world Certain counties charge transaction tax on document recorded property transfers And most counties at least where I live in pennsylvania So if you buy a property and you want to transfer that property into your name The county will transfer the property will will register that in your name And what you do in the in where I live you pay 1 percent of the value of that property Other state and local excise taxes recently what was happening They are imposing a lot of taxes on hotel occupancy rental car Why an airbnb why well think about it why because these people that stays in hotels and their end car are not local people That what they called transient occupancy tax tot transient occupancy test Tax because what they do they go there they stay for a week for a few days Basically as a tourist or they're going by and they leave So if you pay tax if you impose taxes on them they cannot vote they cannot vote you out So they take advantage so when you go and you purchase a hotel be careful if they told you the room is 250 Well, I would say add 20 to 30 percent in taxes to that 250 because what what happened is the hotel is only required to quote Their price the room price But it's it gets quite expensive after you add all the state local taxes in the area occupancy test and especially a lot of taxes on airbnb These these taxes target as I mentioned non voting visitors transient people funding project like invention centers or sports arena For example, houston's hotel tax total 17 percent broken down by state city county and sports authority charges I'm telling you in some places. It's even higher than 20 percent. I know in canada, which is outside the u.s The additional taxes is approximately 25 to 30 percent of your bill of your hotel bill Let's move to general sales tax. That's also a transaction tax as the as the word suggests It's a sales tax when you buy something When you buy something from a store, for example, you buy something for a hundred dollar in pennsylvania Well, you have to add six percent to it And you have to pay 106 dollars 100 is the item price and you pay six dollars for the state now General sales tax differ from excise tax in scope because it applies to everyone. It applies to everyone that make a purchase While excise tax apply to specific transaction like 18.4 percent per gallon On the gasoline. So if you don't buy gasoline, you know, we don't have to worry about this tax General tax apply broadly general taxes apply broadly Such as five percent for example in pennsylvania at six percent and it differ from state to state Because there's no federal sales tax. The sales tax is a state level and there's in some cities There's a state tax and city tax. For example, new york and seradelfia However, this distinction can blur some state exempt some groceries Or drugs from sales tax because they think they are essentials And if you buy groceries to eat they should not charge you and this rate can vary with special rates like items like agricultural equipment prescription drugs or automobiles and within the The sales category they have different taxes in some state. For example, they might Tax more or less agricultural equipment prescription drugs the same thing Or automobile depending on what's what's the purpose? What do they want to do? They want to encourage you To spend money on this item or not Use tax is very similar to sales tax, but it's it's a compliment the sales tax And use tax became very prominent when I left practice. I left practice in 2010 I believe in 2010 what happened before 2010 2007 2008 2009 we were going through the great recession And states were desperate for money. So what they did they started to implement this use tax because what happened is this What's a use tax a use tax it applies to goods you purchase something outside your state But you live within the state prevent and Prevent a new from paying sales tax. I'll give you a case a case in point If you live in pa and next to pa the state of Delaware There's no sales tax There's no sales tax In the state of Delaware. There is a six percent state Sales tax in pennsylvania. So what some people do if they're living right on the border and I live right on the border I'm like 10 my 10 minutes away from the The state of Delaware what people would do they'll go the state of Delaware purchase something like an item a car For example, if you purchase a car if you're talking about a 30 000 dollar car And you have to pay six percent in pennsylvania. That's approximately 1 800 dollars not approximately 1 800 dollars Well, if you go to Delaware, you don't have to pay the the the sales tax If you live in pennsylvania, you have to pay the sales tax So what happened is some people will go to Delaware buy the car. So what state started to figure out that hold on a second We are losing a lot of money A lot of money with this use with people going outside the state and buying stuff. Well, what they did They imposed this Use tax where they send you a form with your taxes say well if you purchase something from outside the state report and pay the sales tax This this got very very bad where people new yorker people from new york They will order their it's they were especially from apple store They will order their computer from an apple to an apple store in Delaware And what they would do they will ship it to the to the apple store and they will drive It will be cheaper for them to drive from from new york to Delaware to pick it up Or they ask the Delaware office to mail it for them It would it would still be cheaper than paying the sales taxes in new york And also another example of this is new yorker. I remember 10 Longer than 10 years ago 20 years ago before the internet became prominent If you go to those shopping centers in pennsylvania those what they called They called them outlets outlet stores. You would see two three buses from new york You know bringing people to shop because new yorkers They would come to pennsylvania and pay less tax It will be worth it for them and they will spend the whole day in pennsylvania, which will be like a Something to do on sunday You would see those buses not anymore because people can buy online Now collection methods differ per state some let individual pay the Pay with their state income tax and in pennsylvania. They send you a form It's called the use tax and you'll have to fill it out Alaska Delaware and Montana as I told you Delaware I'm very familiar with because it's next to me Don't have any sales or use tax and there is no federal sales or use tax So if you if you live in Delaware, you don't pay any sales tax Because every time you go to the store there's no sales tax And there is no income tax for that matter, which is good to know no state income tax Severance tax are transaction taxes on extracted natural resources like oil or coal Rooted in the idea that the state had a stake in its resource And that's a major source of revenue in states like texas and hawaii where natural resource Is is abundant Taxes on transfers at that which is basically when the person Dies there's an estate and inheritance tax inheritance is doesn't apply to the federal level Related to property upon death Categorize also as a form of estate tax of x-i taxes estate taxes Now there's the estate tax estate tax is charged on the person that passed away on the decedence estate So when you pass away, well, what happened is they look at everything They look at the value of your property stocks bonds, whatever you have left and They they could charge a tax inheritance tax If one person passes away They pass the property to another individual the individual receiving the property on the federal level There is no inheritance tax. So inheritance tax applies to people who receive the money inheritance tax only Available on the state level and in some state estate tax tax and the Person that passed away the property of the person that passed away is a federal tax So the federal government don't have an inheritance tax So the federal government only enforces an estate tax Some state imposes inheritance estate or both states like florida and texas Don't have any of these taxes.  It was introduced in the Revenue Act of 1916 And the reason they did this is to what is to break wealth concentration because if you're Extremely rich, then you pass your All your wealth to your kids and grandkids then that wealth will be concentrated Well, what they did is they impose taxes. So if you're extremely rich and we're going to see what extremely rich This tax is not imposed until you are multimillionaire. This tax only applies to few people and its success is debated There's always the the discussion that you we should we should eliminate this federal estate tax Now estate taxes can be minimized minimized. It means reduced through tax planning.  They plan ahead They do some tax planning. They pay lawyers and accountants and CPAs to help them plan Property is valued. It's either at the date of that or six months after So, how do you know what's the property value of the decedent of the person that died? You'd look either at the fair value at the date of that or six months later and we'll have a whole chapter about this Now you can deduct funeral cost that charitable transfer and sometimes the marital deduction for the amount passed to a surviving spouse so if husband and wife The wife passed away Everything goes to the husband or vice versa Then there is no taxes because the transfer between the two is You know executed from taxes, but if they pass this property to their kids, then you have taxes After determining the taxable estate and adding gifts given during life because also the gift tax is included with the estate tax The tax is computed now. Don't worry. We're gonna talk about gift taxes and estate taxes later. This is just an overview But keep in mind there's a credit There's something called the unified transfer credit and this credit is in millions are subtracted So after you kind of figure out what's your estate minus all the cost minus charitable transfer Then the government gives you a large credit and whatever is left after the credit. It's the taxable amount again Only applies to people with multimillion State taxes on transfers and that some state taxes impose Inheritance and estate taxes. We already talked about these state taxes. What's the inheritance the inheritance when the money goes to you The person that's surviving State and her intense often characterize hairs based on the relation to the decedents Close relatives usually pay lower rate Or have a higher exemption Okay, many state exempt amount transfer to a surviving spouse from taxation Same thing as federal if this money going to the spouse husband or wife Then it's exempt just like the on the federal level Gift taxes what's gift taxes a gift is an excise tax on property transferred made during one lifetime So basically if estate taxes is when someone passed away They give you a i'm gonna quote a gift, but it's after they pass away This is what the estate taxes. So the person the donor the person that's giving you that gift Well, the estate the state will pay taxes on that Gift taxes is when someone gives you something when they're still alive Now again, the donor here is responsible for the taxes the doni if you receive the gift you're not responsible for the taxes This tax was introduced in 1932 the federal gift tax compliment the estate tax again They are connected together and you'll see how later Preventing tax evasion through a lifetime gift. So what they the gift tax is imposed for the reason of for example before you die You gift everything And that's it then the people that receive the gift don't pay any taxes So they want you to avoid from paying taxes Because when you die they look at all of your estate all of your asset and if you gift everything Then there's no tax therefore what they do they keep track of your gift Throughout your lifetime and they add it to your estate taxable gift are those exceeding the annual execution Minus the marital deduction you can again gift Husband and spouse they don't count the gift between them But what happened is you can gift for example a certain amount for the sake of illustration for the year 2023 You can gift any one seventeen thousand dollar without any Consequence to you or the donor or the doni So if I want to open the phone book and give everyone seventeen thousand dollar Well, guess what I don't have to worry about gift taxes I don't have to and the obviously the people receiving this money Don't receive any gift taxes. So in my class I always sell my students if I give each one of you Whatever that amount is that's going to change in 24 25 26 so on and so forth But there's always an annual exclusion. I can give you can give seventeen thousand for any individual Just you stop someone on the street here seventeen thousand dollar to you There's no tax effect to you the donor. There's no tax effect to the doni Let's assume you gave them For the sake of illustration you gave someone thirteen thousand dollar you stop someone at the street and say, okay Here's thirteen thousand dollar a gift from me to you. Well, here's what's going to happen Minus seventeen what's left is thirteen thousand now you keep track of this gift You say I gifted thirteen thousand Why do you keep track of it because you have to add all your gift the access of the exclusion Okay, and add them up when you pass away to determine whether you Exceed the limit or not don't worry about this. We'll talk about this later. I'm just giving you an idea Now you can give another individual thirty thousand as well. Then you subtract seventeen and what's left is thirteen So the first seventeen thousand to any individual is basically no tax consequences Now married couple can elect the split gift letting half from the donor And half, you know half from the donor spouse What's going to happen is and the other half from the other spouse Then you can double the gift the annual execution is doubled Let's take a look at this mcq multiple choice questions from farhat lectures All the following are taxes imposed by various government entities except So three are imposed And one is not a tax imposed The severance taxes is that imposed by By a government entity and the answer is yes. Remember some states Imposed the stacks severance tax. This is usually taxed natural resources oil cold So a is out b occupational fees. You remember we talked about occupational fees hotels local and state government they they love those taxes because Attacks transient Occupant so they don't care because these people are not staying there. They are leaving. They don't have they cannot vote them out Therefore it is a tax imposed the inherent in stacks. Well, is it the inherent in stacks? Well, the federal government don't impose inherent in stacks But the state government do so be careful A state tax you have the federal and maybe the state When it comes to the inherent in stacks, there is no federal inherent in stacks, but there is In some state state inheritance tax therefore see this is a tax is imposed D. Well by process of elimination D is the answer the export duties. Be careful Here they are confusing you. Do you know what export duties? Because tariffs is a form of income you could you know a form of tax It actually we did not even discuss tariffs But tariffs also is a form of transaction tax when you buy something from it's so small now that no one Worries about tariffs tax tariffs is when you buy something from another country and you try to bring it in They impose taxes on you. It's a transaction tax. The government imposed transaction on you. Well Export duties. It's when you export something when you sell something To to outs to to outside your country for example in the u.s If you sell something to canada to mexico to europe or to any other country Well, there's no taxes imposed on that the government loves it when you sell when you sell Your prop your your goods and services outside the country because you're bringing money to the country So this is not a tax imposed. So the answer is the Not because here have all are except That's not not the federal not the state not the local government impose this Export duties. What should you do now? You should go to far hat lectures. Look at additional mcqs true false questions That's gonna help you do what learn your income tax course better invest in yourself. Good luck study hard and of course stay safe


Aaron Powell And joining us today is our colleague, Jason Bedrick. He's a policy analyst with the Cato Institute's Center for Educational Freedom. Welcome to Freethoughts. Jason Bedrick Thank you for having me. Pleasure to be here. Aaron Powell We're going to talk about school choice today. But before we talk about school choice, let's talk about what it's responding to or what it's attempting to solve, which is namely the problem with our current tried and true public educational system that has some problems, but I mean, I'm a product of the public schools. I turned out mostly okay. So what's wrong with the way that we give people education in the country right now? Jason Bedrick Right. So Milton Friedman didn't invent the idea of a school voucher, but he was certainly the one to popularize it and he was the one who made the strongest early case for it about 50 years ago. And his view was that public institutions don't have a feedback mechanism like a market does and so they're inherently inefficient. He noted that there was a strong case economically, there was a strong case to have public financing of education because of the spillover effects. If you have an educated populace, that's sort of something that we think is necessary for representative government and if you have an uneducated populace, there's all sorts of problems, not just in terms of civics, but also in terms of crime and just low economic output and things like that. So since there are low-income families that couldn't afford a quality education for their kids, again, according to Friedman, therefore there is an economic case for intervening and the government providing the financing. But his next move was to say, but it does not therefore follow that there's also a case for the government to actually run the system. And you can think of this in terms of, let's say, medicine, right? For all its flaws, Medicare and Medicaid are superior to the county hospital system or for that matter, the VA system where the government is actually providing the service and you've got these long wait lines and veterans are literally dying while they're waiting to get care or, for example, in housing. It's much better for somebody to have a Section 8 housing voucher and go out into the market and purchase housing than it was to have these government-run projects which ended up becoming decrepit or in food, much better to have a food stamp where somebody goes and they shop at the same grocery store as everybody else than waiting in line to get the notoriously inedible government cheese. So that was essentially Friedman's case that you would have a much more efficient system if you had multiple options and there was competition among the providers of education. But I think the question still that lingers in my mind is, well, like Aaron, I had a pretty good public school education, went to high school up in New Jersey and seemed to serve me pretty well. And why can't the response be, well, why not just mimic what good schools are doing right everywhere else? And we might have the argument that, you know, there's not enough competition, but when something works, why not just go with that? Yeah, well, I mean, we don't know that there's this one best way of education. You know, I also, for eight years, was in a public school system and I'm happy my parents were able to afford to live in a town that had a good public school system, but we see that there's a large disparity among public schools and that those people who are more low income that can't afford to live in a community with larger, more expensive houses that has a higher performing district school or can't afford private school tuition end up stuck in communities where their zoned school is not high performing. And so it would be much better for those students to get a voucher or a tax grant scholarship or an education savings account and be able to go out into the market and purchase the same sort of education that people in other communities are more fortunate to be able to afford in their own. Is the difference between, say, the public school that Matthew attended and the public schools that a poor rural community has access to, is it money? Is that what is causing his school to be better and so we could alternatively pump up funding for education or is there something else going on that prevents those public schools from being as good as the ones in Princeton? Right. There's nothing else going on because in many cases the schools that are lower income are getting more money than some of the higher performing schools. For example, in Washington, D.C., a few years ago, it turned out that the schools were getting about $30,000 per pupil per year, which is more than double the national average and yet these schools were the worst in the nation on the NAPE, the National Assessment of Educational Progress, which is sort of, you know, it's called the Nation's Report Card. So if resources automatically determined or if there was a very strong link, let's say, between resources and outcomes, then you would expect the Washington, D.C. schools to be far outperforming instead of being in last place when compared to all 50 states. Even internationally, there's what's called the PISA, which is this international exam. So if you look at their math exam, the United States comes in around 30th place out of all the industrialized nations. But if you were to map out performance on the PISA on one axis and on the other axis you were to look at their spending per pupil, you would find that almost all of the industrialized nations are spending less per pupil and outperforming the United States. So I'm not going to say resources have no role to play. They do, but the evidence suggests that it's not really resources that are the determining factor. When I hear these cross-country comparisons like the European countries and the Scandinavian countries, you know, are way outperforming us, are we comparing, so their average, they're much more homogenous societies than we are and... Less so than they used to be, but... And we have this big spread. And so are we comparing kind of the average to the average? How do the parts of the U.S. that socioeconomically look like those countries compared to those countries? Yeah. So Harvard put together a really nice map where they actually broke out all of the states. And you know, Massachusetts does pretty well. I mean, Massachusetts is the state that performs the highest, and it's a rather homogenous state.  They do quite well, but they're still, you know, like, I forget the number, but they were, you know, between 10 and 20, you know, they were not close to the top. You know, and Canada is also a large and rather diverse nation. They outperform us as well. So it's not just this ethnic homogenization. That's not the defining factor either. Well, let me play devil's advocate a little bit, because when I see results like this, the international comparisons, the cynic in me thinks... But a lot of these countries in Western Europe and other developed countries have less school choice than the United States. And someone might say, when you look at the United States, a lot of the motivating factor behind school choice and behind homeschooling are religious people who are perhaps skeptical of some sort of science. So is there an argument to be made that school choice encourages poor education? Well, certainly a lot of those countries have less school choice, and a lot of them have more school choice, particularly a number of the Scandinavian countries, even in Canada and in Britain, where they're, you know, directly subsidizing certain private schools. But what you really want to do, if you want to hone in on this argument, and there are other arguments for school choice besides this efficiency and, you know, increasing test scores, but if you want to hone in on this, what you want to do is have a randomized control trial. Right? Unfortunately, we've had about 20 of them. There was a study, a meta-analysis, a study of studies that was released last week that compiled all of the random assignment studies. The random assignment is the gold standard in the social science research, right? It's sort of like what we do in medicine, where you take a group of people, you randomly divide them into two, half you give the treatment, half you don't, and then you compare the outcomes. And the only difference between these two groups is random chance and the treatment, and therefore, you know, you can reasonably conclude that the treatment is what caused any difference in these two groups. So when you have a voucher program, a number of voucher programs, if there's oversubscription, then there's a lottery. And so you can compare the people that applied for and got the voucher and the people that applied for and didn't get the voucher. So you have an apples-to-apples comparison, and then you look at their outcomes years later. So the great thing about this study, this meta-analysis from the University of Arkansas that came out last week is it looks at 19 different randomized control trials in the United States and elsewhere, and finds positive effects for both reading and math exams. So I mean, there's very strong evidence that these programs are actually improving student outcomes. And there's a lot of other research, you know, some randomized control trials as well, that show that students are more likely to graduate from high school, they're more likely to enroll in college. So there's a lot of evidence out there that these programs do actually improve student outcomes. What is the best argument against school choice that you've come across? That's a good question. I mean, there is a concern that if you had school choice, then, you know, given the status quo, that what you're going to see is people fleeing the public schools, and the people that are going to leave first are the people that are the most well-informed, and that have the, you know, if the voucher doesn't cover all of tuition, it's going to be the people that can make up that difference. So even if they're, you know, not wealthy, because wealthy people already have that choice, but middle-income families as opposed to low-income families, and the parents that are most interested in education and the money's going to follow them, so what you're going to do is you're going to leave the least well-off left in the public school system, which now has fewer resources, has lost a lot of its best students, and this is just going to be the perfect storm that's going to leave the least well-off even worse off. And that's, I think, that would be a legitimate concern. Again, we've got more than 20 studies that have looked at the effect of competition on public schools, and all of them find either neutral or positive effects, which is to say that when students leave the public school system, these public schools are responding in some way to that competition, and that student outcomes actually increase after a school choice program is enacted. In particular, some of these studies measure differences among schools, so if, you know, how close is the nearest private school that is competing with the school, how many private schools are, you know, in a five-mile or 10-mile radius of this public school, and find that the greater amount of competition there is, the more improvement that those students see. Particularly what you see is these schools are responding to competition, so even the students that don't actually exercise the choice end up benefiting because they have access to that choice, and the school knows that they have access to that choice as well. When these schools improve because of the competition, even if the students are leaving them, how are they improving? I mean, are we talking like they're saying, oh, no, people are leaving, so we're going to actually get serious about this and fire bad teachers and hire better ones, or are the individual teachers working harder, are they changing the curriculum, but curriculum is often set at like a district level, and so the teachers don't have a lot of wiggle room there. So what are they doing in response? That's a good question. I mean, unfortunately, when the types of journals that are publishing these studies tend only to look at the quantitative analysis, and you don't have in, you know, just the policy world, you don't have a lot of journals that are publishing things that combine qualitative research with quantitative research. So we've got a lot of research that shows this is what's happening, and then the authors speculate exactly the sort of things that you were saying, but we don't have yet, and I would really like to see people that go into the schools in these areas and conduct surveys, conduct interviews, and say, what did you do differently in the last few years? I mean, anecdotally, we do know that those sorts of things are happening. I mean, I can tell you a personal example, when I was in grad school, you know, for public policy, we had a seminar where we had to have an outside client, and there was a woman in my class whose outside client was a public school, and there was a charter school that had opened up nearby a few years ago, and a lot of the public school students had left and gone over to the charter school, and so the public school had lost money. Now, that school wanted to know why, because the charter school's test scores were no better. So why were all these parents leaving? And what she found in her research interviewing parents was they said, when we would come into the public school, we had a problem that we wanted addressed. We couldn't get ahold of anybody, you know, they would tell us, they would get back to us, they wouldn't, they would send us over to some other person who also didn't have an answer to our question, and they just weren't responsive to us. And when the charter school opened up in town, you know, I got a flyer in my mailbox telling me to show up. I came to the school, the principal gave me a tour, gave me her cell phone number, you know, anytime I go in with an issue, they immediately address it, and I knew that they cared about my kid and they cared about, you know, us as a family, and so really it was like a customer service issue, right? I mean, they were, the charter school knew that if we weren't taking care of this family, they were going to go somewhere else. The public school, up until that point, knew that their families didn't really have anywhere else to go. And so once the public school realized, OK, we're now in competition with those people down the street, we now need to be more responsive. We need to make sure that there's a receptionist at the front. We need to make sure that if a parent calls, we get back to them. But, you know, she didn't address what actually goes on in the classroom. But, I mean, you can imagine that, you know, if there's fat to cut and suddenly you're in competition, you're going to say, OK, we're going to start focusing on the essentials and we're going to, you know, we're not going to, you know, if I have a choice between spending more money on some administrator or spending more money on, you know, another teacher, maybe I'm going to hire that other teacher. And actually, that is a very serious problem because we see in, you know, the last 40 years, there's the number of teachers have, the increase in the number of teachers has outpaced significantly the increase in the number of students. But the increase in the number of administrators is like eight times the increase in the number of students in the last 40 years. So we're spending a lot more outside the classroom than we are inside the classroom in terms of, you know, new dollars. That was my wife taught at two different private elementary schools when I met her through when we moved out here to D.C. And the really striking thing about those private schools was the number of administrators, like the number of people who were above her as a classroom teacher at each one, you could count on one hand. And I think in one of the cases it was two people. And it worked very well. And it was just its night and day compared to the public schools. Right. I mean, I recently did a review of a book called The Prize by Dale Russikoff, which was about the New Work, New Jersey school system. And again, I mean, these are some of the war schools in the country and they were spending north of $20,000 per pupil. And they said that she was pointing out how the corruption in the central office and how even clerks had clerks and just how much incredible waste there was there. And unfortunately, I mean, Mark Zuckerberg poured $100 million into the system and there was $100 million in matching grants and it got entirely eaten up by the system and there was almost no change whatsoever. I mean, if he had just spent that money providing scholarships to students to go to the school of their choice and the system had more competition, maybe you would have seen more improvement than what ended up happening, which was more than half of the money went to back pay for teacher raises that they claim they should have gotten that they didn't get and most of the money just was sucked up by the system and didn't actually change anything, unfortunately. So we've mentioned or you mentioned, I should say, that DC were looking at $30,000 a year and Newark, New Jersey, it sounds like $20,000.   Because my bird's eye view of this is it sounds like a lot, but what's the reasonable price that we should be paying? And in these voucher systems, what is a normal voucher figure that we can look at? So what should it cost? I have no idea. I mean, that's the beautiful thing about a price system is nobody can know in advance what something should cost, you know, and prices themselves provide information. And unfortunately, we have a system that doesn't do that. I can tell you that the national average is, you know, a little over $12,000 per pupil at the public schools. But, you know, as far as how much the vouchers give, I mean, that varies considerably from state to state. So in some cases, it's about half of what the public schools are getting. In other cases, it can be even less in some, you know, several states do something like 80 to 90 percent of what the state kicks in. But then the state portion varies from like one-third to two-third in some of its local. So it's really hard to say. But I would say that, you know, vouchers tend to be in the range of like $4,000 to $8,000. And then, you know, special needs vouchers can be much higher. For example, the education savings account in Arizona, it's 90 percent of the state portion that you get. But students with special needs, they can be getting, I mean, let's say a typical student is going to get somewhere in the range of about $4,000 to $5,000. But a student with special needs could be getting around 20, depending on what they have. And a lot of them are getting between 10 and 20. We've got, we've talked about vouchers, but vouchers are not the only way that we advance school choice. So there's some other terms that get thrown around other programs. So there's charter schools. And so there's, are those a form of school choice? Yeah, I mean, they're school choice in that, you know, you have to opt into them. But the charter schools are public schools. They're entirely publicly financed. And they have a lot of, you know, they have fewer rules and regulations than the traditional district schools. But they, for example, they can't have a religious affiliation. They can't have their own admission standards. They have to accept every child that shows up and have a lottery if there's oversubscription. And they have to usually give the state test. So there's, and sometimes, you know, in some states they say, well, you know, 50% of your teachers have to be traditionally certified, even though a report from the Brookings Institution a couple of years ago showed that there was no difference in effectiveness between traditionally certified, alternatively certified, or even non-certified teachers.  It's just a barrier to entry that doesn't actually end up, you know, at least in this case, having any impact in terms of outcomes. So, but they're a form of school choice, but I would say they're pretty weak tea. Then what about, we've got, so what, education tax credits and also education savings accounts? Yes, so the education tax credits or tuition tax credits, tax credit scholarships, they've got a bunch of different names. There's really two forms of those. There's the personal use education tax credit, where, you know, you would get a credit on your taxes for every dollar that you spend on your child's tuition up to a certain amount. Those are usually capped.  Anywhere, usually from 50 to 100% of their donation, they just reduce their tax burden by that amount. And those non-profit scholarship organizations then give a scholarship to usually low or low and middle income students to attend the school of their choice. So functionally, they work very similar to a voucher, but they are privately financed. And this is actually an important constitutional distinction. The U.S. Supreme Court ruled more than a decade ago that vouchers don't violate the First Amendment because the ACLU and other groups had sued a voucher program in Cleveland because they said that if these students were using it at, let's say, a Catholic school, then this is public subsidizing of religion and that this shouldn't be allowed. And what the Supreme Court said is, no, it has a legitimate secular purpose and the only entanglement with religion is indirect and incidental to the choices of parents. So we give money to the parents and say, go buy your kid an education.  And if they choose a Catholic school, that's their choice. I mean, just like if somebody takes their food stamps and goes and has Passover dinner, that doesn't violate the First Amendment. But a lot of states have what's called the Blaine Amendment. Give a brief background on that. In the late 1800s, when the nativist movement was very prominent before the resurgent nativists today, there was a lot of anti-Catholic sentiment and public schools in those days were de facto non-denominational Protestant schools. So they would teach the Bible and they would have school prayer but in a way that any Baptist or Episcopalian or Congregationalist would be satisfied but not Catholics, to a lesser extent, not Lutherans as well. So Catholics started coming to this country, a lot of German, French, Irish immigrants, Romanism and rebellion, right? There was this fear that they started to ask for their own schools. They said, look, you were paying taxes to your Protestant school, like we should also have our Catholic schools be publicly subsidized. And the Protestant establishment said, no, no, no. You, we are running common schools for everybody. You're running parochial schools. And so they tried, the senator from Maine named James Blaine tried to pass an amendment to the US Constitution. It failed but almost every state constitution, about 40 states ended up adopting the Blaine Amendment which says that public loans can't be used at religious schools. And the tax credit programs, because you're dealing with private funds, I mean, the donation is entirely voluntary. It goes from a private citizen to a private charity to, you know, private parents to give their kids education at a private school. It has been consistently upheld against Blaine Amendments around the country. And so that's one option. And then the education savings account usually publicly funded, it doesn't have to be, but usually it's the government, if you choose not to send your child to a public school which means a district or a charter, then you will get a savings account worth about 90% of what the state would have kicked in. And you can use it not just like a voucher, which is a coupon that you use entirely in one place at one time. They give you a savings account that you can use in multiple places. So not just for private school tuition, but also for tutors, textbooks, homeschool curriculum, online learning, and you can even save it from year to year for later expenses, later expenses including college. So it sort of works like health savings accounts in that sense. So those are sort of the three main types of school choice. The main advantages of the educational savings accounts are that you're moving from school choice to educational choice, right? We're recognizing that not all education takes place in a traditional classroom. So you've got a wider variety of options and parents can really customize their child's education. And two, there is this fear that vouchers, first they create a price floor, right? If you have a $5,000 voucher, nobody's gonna provide tuition that's less than $5,000 and can also fuel tuition inflation like we've seen the Pell Grant has done in higher ed, Pell Voucher for that matter. But with the education savings account because you can spend it in multiple places and roll it over from year to year, you don't create a price floor and you've got some more downward pressure on price. So your discussion on the religious side of this reminded me of a question I had when I was thinking about this podcast, which is some people might say against school choice that there's a social cohesion argument here, which is what we're just going to allow people to segregate themselves so that people in different religious communities and people who don't value athletics or some people that do value languages and some people who don't really care about science will be able to segregate themselves and children will be educated in an environment amongst people who just agree with their parents, basically. Is this a concern that's legitimate? Is there any reason to think that the proliferation of school choice will lead to a more segregated society? Yeah, we haven't really seen that in other societies from Canada and England and the Scandinavia nations and Chile and whatnot. We haven't really seen that that has been a problem. I mean, the alternative is, well, one of the reasons that the Protestant establishment didn't want the Catholics to have their own schools was precisely for this reason, because we want them to send their children to our schools and we are going to Protestantize essentially, right? So the alternative to having a diverse system is to have this melting pot system of assimilation and you come in and we're going to teach you our values. So I think any libertarian or any liberal who values pluralism should find that to be very problematic. But the interesting thing is actually has been a lot of research on this question and not just that, but civic values and things like that which you're more likely to learn in a public school is the theory. Patrick Wolf from the University of Arkansas had a literature review a few years ago called the civics exam and he looked at all of the research on these questions and found that actually private schools and school choice systems tend to outperform the public schools when it came to civic knowledge, civic values, and even respect for pluralism. So actually one of the interesting studies that they've replicated multiple times is they ask students if they give them a list of different groups and they say, which of these groups is your least favored group? You'll be happy to know that the KKK is the highest ranked, the least favored group out of all these groups. But among Hispanic students, the least favored group was LGBT activists.  Should they be allowed to have a march or a parade? Should they be allowed to run for office? Should they be allowed to be a teacher? And what's interesting is that students that attended private schools were statistically more likely to say yes to those questions than students that attended public schools. And even among the Hispanic students, those who attended Catholic schools, which you might think, given the Catholic Church's teachings, you might think that they would be less likely to give political freedoms to LGBT activists. The opposite was true. If a Hispanic student went to a Catholic school, they were more likely to express tolerance toward this disfavored group than if they had gone to a public school. So I mean, if we value pluralism and we value freedom, we should have a school system that reflects and respects that pluralism and that freedom.  It's a zero sum game, right? So if you have several different groups that have differing values and you put them in a system where only one of those values is really gonna be reflected in the school, then you are forcing them into conflict. I mean, then there's a long history of this. I think Neil McCluskey came on this podcast a while back and was talking to you guys about the Philadelphia Bible riots where there was literally bloodshed in the streets over how the Bible was going to be taught in class. It's a much more peaceful system to let parents send their children to schools that reflect their values. And I respect that you send your kids to that school that reflects your values.  And then we can live together instead of fighting over whose values are going to be expressed. Can we take that too far though? So with a voucher, there's the concern that gets raised. They could use this money on really religious schools that are teaching stuff that we as a society think isn't quite right. But still they're like, you have to give it to a school. But like the education savings account, if I think that buying the best way to educate my kids is to buy them all of the Star Wars novels and read them. So we have a real solid understanding of the fall of the Old Republic which is important stuff to know about. I agree. Is there anything that can stop me from doing that? Like there's still, who gets to draw that line of what counts as education spending or not? Yeah, and so you're right, the line has to be drawn somewhere. I don't believe in the current systems that the Star Wars novels would count. Usually textbooks are in- I'm gonna agree to disagree on this. So they, well, I mean, it might be educational but it wouldn't count for the, as an approved expenditure, right? So there's textbooks count but your average run of the mill novel is not going to count. I mean, you can certainly buy it and use it as an educational tool but not with education savings account money, right? And there is an accountability mechanism in these programs where in some states you have to submit your receipts but in others they give you a debit card and you can only use it for approved purchases. You can't just like go to a casino and use it. It's a restricted use debit card. But yeah, I mean, the lines do get blurry at the edges and I would prefer to have more freedom than not but even without the education savings account you could have parents homeschooling and doing the exact same thing. I mean, I guess the question is, do we, there's no perfect system, right? Nobody is promising utopia. The real question is not comparing school choice to some, or educational choice I should say to some imagined ideal that probably we can never achieve but to compare to all of the reasonable alternatives. And so when government bureaucrats make a mistake that affects tons of children, right? I mean, when a state decades ago adopted whole language as opposed to phonics you can talk to teachers and high school English teachers and they can tell you the year that the kids who switched over from phonics to whole language got to their classroom because there was a market decline and their ability to spell and put together sentences and things like that. So if a parent makes a choice like that and chooses poorly, it affects their children and that's a terrible thing but the question is who is more likely to make choices in the best interest of their children is it the parents that are the more likely ones to make those decisions wisely or are bureaucrats whose own children aren't necessarily subject to the system more likely to make wise decisions. And I think that we should, for the most part, trust parents. They're gonna make mistakes sometime but I would much rather put my faith in parents than in a political system. Is there a concern though that if school choice or educational choice shifts a lot more than the decision making to the parents that the benefits that come with it are going to flow disproportionately to those parents who maybe themselves have the education to better make those decisions or have the time to better make those decisions or don't face language barriers or whatever else and so we're not gonna see as much help for the poor uneducated parents who can't make those good decisions. I think it's actually the opposite. I think those parents are already in the current system advantaged but that a lot of the low income families that aren't as active in their school or seem to be as interested in education, it's a rational ignorance because there is, they don't have other options, right? But again, going back to Patrick Wolff, he had a book, The School Choice Journey which looked at the Washington DC system and it was a qualitative study where actually went in and did interview a whole bunch of families and whatnot and found that when these families were in the public school system, they were not doing a lot of interacting because they couldn't make any changes or anything like that but once they were given options, these same families were going and doing tours at multiple schools and they were reading up and asking friends, what do you think about this school or that school, right? They were getting in touch with their social network to figure out which school is best for their kid and they were even becoming more politically engaged when the Obama administration tried to cut funding for the DC voucher program. They came out in force and they were rallying and they were writing to their congressperson, their pseudo congressperson who doesn't have a vote and writing to the president and actually becoming more politically engaged as well so we see that, yes, there's this image that low income families are not as engaged but I think, again, the reason that they're not engaged is because in the current system, it doesn't make sense to be engaged because they can't change anything but if you give them choice, then there's a reason for them to be engaged and they actually do. I was wondering if you could speak a little bit about the competition among syllabi or curriculum in the educational choice movement because I think a lot of people might think, well, this will be a nightmare because there will be tens of thousands, not hundreds of thousands of different schools or teachers who will be arguing for different books to be read and different textbooks to be used but then I intuitively think, and I could be wrong about this, that there must be competition among curriculum and there must be competition amongst syllabi and textbooks and do you see that in people who have chosen to opt out of the state education system? I mean, there are definitely more options out there. I mean, one of the issues with our current system, we had like 50 states that each sort of had their own system and the major textbook companies were trying to appeal to them so most of them either appealed to Texas or California because those are the largest markets and then they would make minor tweaks if some state had some idiosyncratic thing and then some of the big textbook companies fell in love with Common Core because they were like, well, I can just call my book Common Core approved and then every state almost is going to, this is gonna appeal to them which I think is highly problematic as well because we don't know that there's one best way to teach students so I'd actually like to see a diversity of options and we don't know, some methods might work better for some kids and some methods might work better for others, right? But there are definitely options. I mean, just in math, I mean, you go out there and you find there's Saxon math, there's Singapore math, there's Japanese math, there's all different, people saying our system is better or our system is better, I think that's great and parents can go, select one, if it works for their kid, fantastic, stick with it. If they find it's not working for their kid, they can go with something else which again is another reason for school choice. I mean, earlier we were talking about, this efficiency argument, but even at a school that on average is very high performing, right? For some kids that are assigned to that school, it just might not be the best fit. So let them go somewhere else where they have, instead of a traditional classroom, it's a more Montessori style or they're able to work online and go at their own pace. So more choice the better. You mentioned the online learning and the Montessori and that raises question I had about how much a real market in education would change the way that we get education and think about education because we do have a lot of private schools in this country, but by and large, they look like, structurally they look like public schools. It's the same sort of show up in grades and yeah. And so is, why is that? And are we, is that because that's the system that actually works or is there something that's preventing all of these really out there models from establishing themselves? It's a good question and I can't answer it. I mean, we have to see what the market would produce. We have no idea. Maybe this would be the system. I think a lot of the, one of the main reasons that the alternatives looked a lot like the public schools were that the main alternatives for a century were essentially the Catholic schools and some Lutheran schools. And the argument that they were making was, hey, we are going to provide the same exact education as you're going to get in the public school system. So we're going to look just like them. The difference is we're also going to be teaching you about the Catholic faith and that's what parents wanted. So I mean, now you have more and more parents are saying, well, I want something else. I want a heavier emphasis on STEM or in the opposite direction. I want a heavier emphasis on arts and drama and literature or I want great books. So if we had a, right now, the school choice programs that we have by and large are very small. They're dealing with sometimes less than 2% of the population, maybe up to 5% to 10% max. And excluding charter schools and that, which basically look for the most part like public schools. But if we were to adopt a system of school choice, we have no idea how that is going to develop over time. You know, that's one of the beautiful things about the market. I just look at the iPhone, for example. The iPhone is a platform for innovation and there are tens of thousands of apps on there that Steve Jobs never could have imagined. You know, same thing with the education savings accounts. I know some of the people who were involved in creating the first education savings account in Arizona. And they will tell you that they were surprised at how some families were using it, especially when it came to special ed. For example, educational therapy is one of the approved categories of expenses and the state approved equine therapy for students with cerebral palsy.   And there's a video, I think the American Federation for Children put out where there are parents of a child with cerebral palsy in tears describing how this worked for their child and they wouldn't have had it without the system. So, I mean, that's just one example of the special needs child, but we have no idea how what the market is going to create to fill the needs that parents have. In countries that have more school choice than we do, do we see a wider range of educational styles? Well, none have adopted the education savings account yet. I mean, that was an American invention. So most of the other systems either are directly subsidizing private schools like they do in Britain and Canada or they have a voucher system. But like in Chile, for example, their voucher system mandates the national curriculum and there are lots of regulations that go along with it. And so, yes, there's choice, but I mean, you know, you can choose among all of the McDonald's in the world, but you have to choose the McDonald's, right? And, you know, the private McDonald's might produce a better or more consistent hamburger than the publicly run McDonald's, but you're essentially, you don't have that much choice. But, you know, so, yeah, that's nice. It's helpful. It's an improvement over the status quo, but we would like to go much further. I mean, the Milton Friedman gold standard idea of a voucher was a system that didn't have controls over price that the government wasn't dictating what the curriculum was going to be. It wasn't dictating, you know, what type of test that the students would have to take. To that, we haven't tried yet. What stands in the way of public choice then? Is it, we often blame the teachers unions. Is that accurate? Are they the biggest hurdle in moving us in this direction? They're definitely one of the bigger ones. I mean, there's a number of lawsuits around the country and they're involved in most of them. Either directly or, you know, this is basically front groups that are trying to block school choice and legislatively the unions, but also the sort of the public school establishment, you know, the superintendent's association, things like that, are the ones that are usually fighting it in the legislature. But that doesn't explain fully why we don't have school choice yet. I mean, depending on how you ask the question, you're gonna get, you know, if you ask, do you support sending students to private school at public expense, then you're gonna get in the mid to high 40s. And then if you ask, you know, should we give students more options or something like that, or should we give students, you know, should the state provide students with a scholarship to go to the school of their choice, then you're gonna get, you know, north of 50%. But I think a lot of people, you know, they're used to the system that they grew up in. It worked pretty well for them. And so anything that might be considered threatening to that, they're not going to like. But one of the more recent studies by the Friedman Foundation surveys broke it down by age cohort. And the interesting thing was that younger Americans, like between 18 and 35, it was, you know, north of 65% support, whereas in their survey, Americans that were over age 65 were, you know, just about 50% support for school of choice options. So why is that? Why are younger people more likely to support choice? Well, it could be, you know, if you were to ask them, would you like to raise taxes to increase funding for your local public school? You might see a similar dynamic. Those, you know, people who are in the age cohort that have children in the school system are more likely to say, yes, I want more money for the public schools. Those whose kids already raised would say no. But I think that doesn't explain it fully. I think a lot of it is that the younger generation has grown up with the, you know, things like the iPhone, right, they're used to customizing every single aspect of their life. But there's this one area where you're assigned to something based on the home that you can afford. And so when you say, well, do you think that you should be able to customize things? They say yes. I mean, even talk to like your typical Bernie Sanders supporter, they're using Uber and they're using Lyft. And this is, you know, they don't see that as a political statement. They don't see that as yes, I support the market over the establishment and the taxicab union or whatever. I'm a pro-market person. They just, no, this isn't about the market. This is about choice and customization in my own life. So to wrap up our chat here, I give us an idea about the state of affairs and where we're going as far as school choice goes and if you're optimistic about the future. I am very optimistic about the future. Right now there are 31 states to have some sort of private school choice program. So again, scholarship tax credits, education savings counts, vouchers. I'm not including charter schools on that. But again, most of them are very, very small but maybe it is the camel's nose under the tent.  And their neighbors are going to say, well, hey, why don't I have that? And the answer is like in Maryland, they just passed a program. Great, it's the first voucher program that Maryland has ever had and people didn't expect that Maryland would get it for a while but it's limited to like 1,000 students. So I mean, that's less than 1% of the population. That's not going to create a dynamic market for school choice. It's going to fill some empty seats at some existing private schools. But over time, as these programs grow in terms of popularity, then they're also going to grow in terms of the number of students that are participating. Some of them even have automatic increases year after year like in Florida, where next year there's going to be over 100,000 students that are participating in school choice programs in Florida. More and more people are going to say, hey, I want that choice for myself. I mean, it's like if you were to go into a city and say, okay, only 10% of the population is going to have access to Uber. Other people might very soon be clamoring for access to Uber as well. And politics is downstream from culture. When people decide, hey, we want choice in our life, including how we educate our children, the politicians are going to come around. The interesting thing is in states like Florida, for example, where there was vociferous opposition, especially on the left, which the unions are a very important part of their coalition. So that's understandable. Once the school choice programs are enacted, you actually see that the politicians start to come around. For example, they had a rally right after Martin Luther King Jr. Day this year with Martin Luther King III leading about 10,000 mostly black and brown people in a rally for school choice because the teachers union is suing the state. There's over 70,000 students participating in the program right now. And the teachers union wants to eliminate it. They took it to court. And the message of the rally was drop the suit. And the NAACP is actually a party to the lawsuit, but former NAACP presidents and a number of leaders of black churches have been pressuring the NAACP to drop out because they're saying, hey, most of the participants in this program are our people and they're benefiting from it. And we want to give these kids a better future and they're getting that at the school that they've chosen as opposed to the school that they were resumed to. And so I think we're already seeing on the left that there is a breakup in their coalition, right? So low income minorities recognize the benefit of choice for them in a very visceral sense. And over time, I think that's gonna overpower the vested interest of the teachers unions. And we will see within probably 20 years, I think we're gonna see a large percentage of the population are participating in school choice programs. Thank you for listening. Free Thoughts is produced by Evan Banks and Mark McDaniel. To learn more, find us on the web at www.libertarianism.org.


Hi, this is Nita Strauss from the Alice Cooper Band, here at Blackstar hanging out with you. Well, the Series 1 is an awesome amp to use on the road for a couple reasons. You know, playing in the Alice Cooper Band, I need a lot of versatility out of the amp, so it's got that really nice clean sound, it's got the great high gain, you know, really classic high gain sound for rhythms, and it's got that really tight punch for leads. It's got a lot of distortion, which I love, and it's just a great all-around versatile amp. I use it live, I use it in studio too, it sounds great on record, and I use the IDCure all the time to warm up. It's perfect for having the dress room so portable, you can kind of take it around anywhere, and it's got all the sounds and all the effects styled in, so really it's kind of the best of all worlds.


So, hello everyone, I will be presenting my package called Roger, it aims to facilitate web scrapping in R. Before that, a few words about myself, my full name is Mohamed El Foudal I am a PhD candidate in economics and I tweet under Mo Foudal. So let's dive into an example right away, here you can find the link to a web page that ranks the highest revenues in the cinema industry. First I'm interested in extracting this information, all the titles of the movies in this web page. In Roger you only need two elements, two inputs, so you need to take the link, web page link and the HTML or CSS element that references the needs information. So in this case, the titles. So what we can do, we can for example inspect and look for the tab or we can just use a great tool called selector gadget which gives you using a click, which is quite amazing, I mean the CSS selector that you need. So you click here, you can see the highlight, you just have to copy this field and paste it into the Roger function. So the most basic function in Roger is a scrap, it takes at least two arguments, the link of the web page and the node. So we have copied the node here, we have seen how to do that, the web page and we use a scrap link node and we got our 200 information. Just to check out, I made the head data so we can see that we have Avengers, Avatar, Titanic which corresponds. Why did we get 200 observations? Because the web page displays only 200, suppose I want to for example extract all the titles like from one to 1000, it's possible and it's quite easy to do so, you just have to find a pattern in your link here, so like so suppose I click next page, you can see that I have 200 here which states that the web page displays movies after 200 and then if I click next page I got 400, 600, I think until 800. So each web page increments with 200, the number of observations, we can just using the scrap function in conjunction with the past function or the glue package, we can just replace this variable element with a vector and we got the four links and we can scrap all the website. So here you have an example, I have used the glue package, I have modified the changing element with a sequence of numbers from 0 to 800 with an incrementation of 200 of course and I have run it in scrap, I got 1000 elements, so it's that easy, you don't need to use any map or for loop or whatever, so we can also use a function in a Roger called table scrap, you can just provide the link of the web page where there is an HTML table and you get it, it's that simple, but now suppose we have a website but the table is not in HTML format, here for example if you go to the EMDB website you want let's say to extract the title of each movie, his rating and the release at year, but of course you want to do that in a tabular format like you want a data frame with the first column let's say the title, the second column the rating and the third column the year, you can extract with Roger a table directly from a website using the tidy scrap function, so what it does the tidy scrap function is it takes a vector of CSS or HTML elements and the corresponding names and it will extract directly a table for you, so that's quite interesting, I think I'm running out of time, so thank you very much and if you have any question please feel free to reach out, don't hesitate to check out the documentation, there are many other functions that can be helpful when scrapping data, thank you again.


And one of the things that I want to stress today is that crisis and policymaking, they're very related. Countries in development as usual, as I call it, policymaking in these countries, it's very different from countries coming out of crisis. It doesn't matter what type of crisis. Now the other issue I want to emphasize is that for the first time I heard Rachel some years ago. I don't like the term fragile. In part because I was a risk analyst and I think the risks involved in countries coming out of conflict are very different from those coming out of other fragility. And the main objective in conflict countries is to make sure that you don't go back to conflict because the propensity to do so is very, very high. In a recent study I did for the 30th anniversary of Wyther, I look at operations in which the UN has set up multidimensional operations that is not only peacekeeping but also in the political, economic and social aspects of the transition. And looking at those 21 operations, looking at the first decade after the operations were set up, I found that 57% of them went back to conflict. So I mean that is a very, very high risk, over 50% risk of returning to it. And for me that should be the objective. So let me just mention first of all, I don't want to go through this very carefully because I have written a new book that it's coming out soon and if you are interested I can send you chapter eight with all the premises for effective reconstruction of the economics of peace. So I don't want to go through this in great detail but basically countries in this transition they go through a multidisciplinary transition that has political, security, social and economic reconstruction aspects. But the issue is that we have, and I think one of the big failures is this silo approach that somebody was talking about. I think Rachel and Tony the first day, this silo approach, security people, especially in the US, the security people talk to the security people on the issues in Afghanistan and sometimes they have some contact with the political people but they never meet with the people working on the economic reconstruction, the economics of peace and on national reconciliation which is the social transition. So the first problem for me is that this has been done in a silo with a silo mentality and not in an integrated way. And in fact the West Point tried to do this. In the case since David mentioned Afghanistan so much, in Afghanistan what happened was the same as in Iraq that the military and the civilians actors were working together in these provincial reconstruction teams. They were working together and then that led to something called expeditionary economics which is basically economic reconstruction done by the military and it was a big disaster because it was extremely expensive and very ineffective and it was very difficult also to gain the hearts and minds when you were bombing at the same time. So it didn't work out. So the efforts of West Point to put these things to ensure that we were looking at this double causality between these four sectors did not prosper very much but I think it's something we should focus on. The first thing that when I started working in the secretary general's office in the early 90s our first main challenge was the reconstruction of Afghanistan where the UN had been involved in the peacemaking, in the peacekeeping and also in the monitoring of the agreements. And there we thought country coming out of war at very low, of civil war at very low levels of development this is something we can leave to the World Bank and the UNDP and it was a big disaster. First of all, because these development organizations have a mandate to collaborate with governments so they are not adaptable or they cannot really at least they are not perceived as impartial by their former insurgent group, in this case the FMLN. So after a few months we realized that this was not development as usual something that the World Bank and UNDP resisted very much. For instance, we tried to involve the World Bank in the land program. There was an exchange of arms for land and we tried to involve the World Bank and the World Bank said, well we can't do that because there are 300,000 cappesinos without land and we can't give credit to a few who were related to the war when there are so many others in the same need. So these things made us realize that this is not development as usual. First of all, the economic transition takes place in the midst of the other transitions, the political, the national reconciliation and the security transition. National reconciliation in countries coming out of civil war is really a must because these former combatants usually come back to the same villages in Afghanistan and elsewhere and they have to live with each other. So national reconciliation is essential for this process to succeed and it's a very expensive process. So basically, when I said that the economics of peace of economic reconstruction is not development as usual means that the political in this, it's an intermediate phase between the economics of war, the economics of conflict resolution and the economics of normal development and during that transitional period, the political objective should prevail over the economic one, which means that optimal economic policies, financial policies which are sometimes even imposed by the IMF and the World Bank are not desirable or even attainable. So this has been a major factor when you look at these operations and why they fail, this has been a major factor. The other thing I want to mention is that policymaking in crisis situation, I hear I'm including financial collapse and I'm including natural disasters is completely different from normal development. Development economies usually have the luxury to think in terms of the medium and the long term and design their policies accordingly. This does not happen after a crisis. After a crisis you have to take measures and sometimes you know they are distortionary and you know you are going to regret it later on and you have to do it. And one of my worst experiences was in Kosovo when I was the economic policy advisor to Kushner and in August we knew that the people living on the top of the mountains whose roofs had been destroyed by the war that they would have snow and we had to do something about that. And because of restrictions with the European Union that we couldn't buy local materials and things like that, we ended up buying something like, it was like a kit with a plastic to put all around a room so people could sleep there over the winter and then in the spring we had to start the reconstruction seriously. But we knew this cost a lot of money and we knew it was going to be wasted after the summer they had to be destroyed. But these are the things you have to do and you have to do after a crisis. The other thing that it's very difficult in terms of policy making is that and the normal development you have stable and low flows of aid. And during this crisis there is a spike in aid and you have to be very careful how you use that aid so you don't create the high degree of corruption and you use it as effectively as possible which doesn't mean that you have to delay it until the country has the capacity. This is something Collier says and I'm totally against. He says, well you should delay aid until the fifth or six years when the country has higher absorptive capacity by then most of these countries have gone back to war. So you have to balance these things. It's not as easy. In theory, yes you should wait but in practice you shouldn't because the chances of going back are very high. The other thing is that and it's very difficult for the World Bank to accept but finally over a decade later they accept it that you have to make a apply the reconstruction principle rather than the development principle where you treat every group with the same needs equally. Here you have to make either after a natural disaster you have to help the people that are most in need even if there are others with the same needs elsewhere. And especially after war the people that have suffered the war most seriously you have to do something about them particularly those that have the guns and that have gone to conflict to start with because you know that if you don't give them a way of living they are going to return to war. The other thing, well there are other issues involving the international community. I mean in the crisis I work in Latin America if you had that degree of interference from foreigners countries would be very upset but here countries like Afghanistan that got 55% of GDP in aid every year for the first 10 years after the military intervention you have to deal with the international community whether you want it or not and then the issue is whether your policies whether you're going to have any ownership at all of your policies and you have to have ownership countries have to have ownership for policies to be sustainable. So there are other premises and I want to go very quickly over them because as I said you can look at them in detail but basically one of the big problems in Afghanistan was that Ghani and here people like to blame the IMF and the World Bank but here it was Ghani now president but finance minister at the time who created this absurd perfect macroeconomic framework that countries like Uruguay and Brazil don't have with total independence of the central bank and things totally absurd in a country that needs the flexibility and the simplicity of having a very low skilled civil service. So this has most of the aid in Afghanistan something like 80% of the aid that has gone into the country has been to support foreign experts into the ministry. So this is something that conflict countries cannot afford. They have to have a simple macroeconomic framework that which they can work with the people they have. And the other thing is that the more complex the framework the easier it is for corruption to take place because people don't understand how it works and then the premise for is that the private sector has to be effectively engaged and one of the problems is that at the UN for instance the UN gets into the mediators team they get experts on gender on human rights on this and that but they don't get economies. So the issue is that whatever you put into these peace agreements whatever they have to be implementable and in many cases in the economic and social area they set up arrangements and programs that are not economically feasible in this economy. So it's very important that peace negotiators have the economic capacity to work out with the private sector what the private sector can provide and is feasible in the post-conflict period. The fifth premise has to do with the impact of aid that it has to be not only maximized through effective and integrated and sequenced and non-correct practices. What we have at the present time is totally fragmented aid which is mostly in the case of Afghanistan again but in the case of Liberia and in the case of Haiti for instance it mostly channeled according to donors' preferences outside the national budget and that has several problems. First of all there is no ownership on the part of the government but also if it's channeled outside you are not building the capacity in the public sector that you need to build in these situations. And besides I mean in addition you have that channeling aid outside the national budget is much more expensive. I mean there are all kinds of studies about that how much more expensive it is. The other issue is how you move from aid to foreign direct investment. The bank and the fund had made incredibly optimistic projections on how much aid was going to come. They talk about all the minerals in Afghanistan and all that. The issue is that foreign direct investment peaked at 4.5% in 2005 and since then it had dropped to 0.3% despite all the minerals and despite all the... And when it peaked to 4% it was mostly in construction and services for the international community that was in Afghanistan in Kabul at that time. So I mean so they haven't benefited at all despite the resources they haven't benefited at all on FDI. And this is where I've been doing a lot of work because I've been doing no reconstruction zones where the foreign investors come and work in a win-win project with the communities. Up to now in Liberia some work I've done for you and you are in Liberia. Foreign investment, particularly in plantations and in mining, they displace the communities, they ruin the livelihoods and then they are in confrontation with the communities. The issue is how the communities can provide security to the investors so that they can be productive investment in all these resources that most of these countries have. The use of resources has to be fair because otherwise you are creating a new conflict. And also you have to compensate the spoilers because like in Angola, if you take the diamonds away from the insurgency you have to give them something in exchange otherwise they are not going to be supporters of the peace process. Premise seven is that growth is not enough. I mean, the IMF and the World Bank complement each other all the time about the 9% growth in Afghanistan, the 9% growth for the first decade in Liberia and all that. The issue, the truth of the matter is that 80% of the population has not got any benefit from that growth. Most of the infrastructure is built for the domestic elites and the foreign investors and there is no level playing field for the 80% of the population that lives in the rural sector. And in fact, I wanted to mention to Rob Boss today because he mentioned the need to increase the productivity in the rural area. And you know, one thing that it's very clear and there are lots of studies is that of that 80% that lives in rural areas in these fragile states, over 40% are women. I mean, 40% are women but women represent more than men in the rural labor. And the difference in productivity between men and women is tremendous. So if you want to increase productivity, give inputs to the women and that's the easiest way to increase the productivity. I mean, everybody talks about it but they don't do it. At the UN there is lip service about gender rights and all that but you have to empower women if you want them to have any rights. Finally, because this is so different from development as usual because reconstruction in countries coming out of war or rather a large crisis is so different, you have to use a different yardstick. For instance, if we judge the arms for land program on economic or financial criteria, like we would do a normal rural reform, I think it was very bad. But it was very good in the sense that it kept, you know, the ceasefire was a perfect ceasefire and not even in Mozambique there was a perfect ceasefire. So we have to use a more qualitative measure and the basic, during this period of, during the reconstruction period, the measurement, the yardstick should be to ensure that the country does not reverse to war. It's just to end. I don't agree Mozambique was a big success. I was doing some work on Mozambique and a country that if you believe in the human development report, which I do as a good measure of human development, you know, Mozambique, first you don't compare a country from a period of war to reconstruction. You should start from a period where there was no war because otherwise you are really distorting the statistics, but most importantly, I think that Mozambique after two and a half decades in peace, the improvement in human development has been nil and even negative. In 92, in the human development report, it was at the bottom 10% and now it's worse. So we have to be very careful how we measure success in these countries. Thank you.


Okay, so this is how we play. I'm going to give you 15 games that are either going to be ad agencies or Indy 500 winners, and after each one you're going to say whether it's an ad agency or an Indy 500 winner. Are you ready to play? Yes, let's do this. Okay. All right. 30 seconds on the clock, and away we go. Weber-Sanwik. Indy. Incorrect. Gordon-Johncock. Ad agency. Incorrect. Jongvon Matt. Ad agency. Correct. Takuno-Sado. Indy. Correct. Dave-Sallan. Agency. Correct. Forrestman-Bottom Force. Agency. Correct. Gilda Farron. Agency. Incorrect. Saint-Ziombre. Agency. Correct. Daria-Rusta. Indy. Correct. Emerson-Philippoli. Agency. Incorrect. Hunt-Adkins. Keep going. Keep going. Agency. Correct. Crispin Porter. Agency. Correct. Lou Burnett. Agency. Correct. My wrong, Farron's enough to win. You win a prize. You win a what? You get a signed celebrity copy except it's signed by Robin Sales. Oh my God, thanks, Rob. Here we go. Okay. Jay Walter-Thompson. Agency. Correct. Owen Kessel. Agency. Correct. Wilbur Shaw. Agency. Incorrect. Cole McAvoy. Agency. Correct. Bill Bukovic. What was the other option? Indy. Indy. Indy. Correct. Red Tatimer. Agency. Correct. Mark Donahue. Indy. Correct. Dawson Pickering. Indy. Incorrect. Mercado McCann. Agency. Correct. Jacques Villeneuve. Agency. Incorrect. Duval Guillaume. Indy. Incorrect. Alexander Rossi. Indy. Correct. Did she get enough? You are a big winner and we have a special prize for you. It's a Scott Rogowski ad-wee cover and it is signed, but it is signed by Timo Finance. Okay, great. Thanks. I love that either way. Congratulations. Thank you. Enjoy it. Oakley Mayther. Agency. Correct. Carmichael Lynch. Indy. 500. Incorrect. Rick Mears. Indy. 500. Correct. Sid Lee. Agency. Correct. Ryan Honore. Agency. Incorrect. Tracy Locke. Indy. 500. Incorrect. Boonelett Oakley. Correct. Parnelli Jones. Agency. Incorrect. Rufus Leonard. Indy. 500. Incorrect. Roger Ward. Indy. 500. Correct. Mortimer Harvey. Agency. Correct. Campbell Ewald. Say it pronounced that again. Campbell Ewald. That's an ad agency. Correct. Did he get enough? Sorry, you did not get enough. Well, sports fans, RGA's brightest minds were mostly headed towards the winner's circle because they could tell the difference between Indy 500 winners and ad agencies. For the Ad Week Sports Minute, I'm James from Fleming.