Ladies and gentlemen, a man who understands that education is so much more than what a child does on a test score, Mr. Michael Sandel. Well, thank you, Michael, for that warm introduction, and thanks to all of you for being here. I want to begin. You just saw an excerpt of an experiment that Harvard did in working together with WGBH Boston, using the justice class as an experiment, opening access, free and open global access to the Harvard classroom, online and on public television. And I want to give a special thanks to Bridget Sullivan, who is the vice president of WGBH for educational programming and the WGBH team, some of whom are here today, for all of their steadfast support in enabling us to pull off this experiment. Thank you to Bridget, and I want to say that some of the most gratifying responses I've had to this series, which is also available online. It's on YouTube and iTunes and at a site we created with educational resources surrounding the videos. It's called justiceharvard.org. Some of the most gratifying responses are letters I get not only from college and university colleagues, but also from teachers who have used the material in their classrooms. It's more than an experiment in using new technology to open access to the classroom. It's also a modest attempt at civic education broadly conceived. If you look at the way we discuss politics in this country today, it's not a pretty picture. Too often what passes for political discourse consists of shouting matches on cable television and talk radio, ideological food fights on the floors of Congress. I think we can do better. And the way we can do better, I think, is to get in the habit of engaging more directly with the big ethical questions, including questions of justice and rights, the meaning of citizenship and the common good, big philosophical questions, really, that lie just beneath the surface of the arguments we have. As you may have glimpsed even in that excerpt, we debate in the classroom questions which many people say can't be debated. They're too fraught to be debated on university campuses. I don't think that's true. We debate affirmative action and same-sex marriage and income distribution and civic obligation with students who have very disparate views. And what we aim for is to develop the habit of listening, not necessarily agreeing, but listening to engage with the big ideas and the big principles that lie behind the convictions that students and, for that matter, citizens bring to public life. I think two things have been happening in American life in recent decades. One of them is the impoverishment of civic discourse. That's what we need to elevate. Another thing that's been happening, it's gotten perhaps less attention, is the reach of markets and market thinking into spheres of life traditionally governed by non-market values. And this has been happening over roughly the last three decades, a period you might almost call a period of market triumphalism, a time when there's been a growing faith in the idea that markets are the primary instrument for achieving the public good. I think these two developments are not entirely unrelated, are shrinking from substantive engagement with big ethical questions in politics and the era of market triumphalism. Before I try to explain why, what I would like to do here is to see whether we can have a discussion, we're an intimate group, a discussion about the role of markets and market incentives in one sphere of life that is rightly governed by other values, but where there are public debates about where exactly markets belong and where they don't, where they can help and serve the public good, and where they shouldn't go, education. So let's see if we here can engage in a debate on what I know are contested questions. People will disagree, I suspect, and see if we can engage in reasoned discourse, even argument, about things that we care about. Are you ready to give it a try? All right, let me put to you a question about the use of money, financial incentives, to try to improve the performance of students, especially in tough schools, in some school districts across the country. There have been in recent years a wave of experiments offering financial incentives, money to school kids to try to motivate them to show up for class, to do better on tests, to do their homework, and in some cases, even to read books. Under one program, third graders were offered $2 for every book they read. People have different views about paying students to get good grades. I'd like to hear what you think. So let's call up our first question, and as was announced at the beginning, you can first give your view, register your view, through a polling device using your cell phone. So take out your cell phones if you have them, and we'll put up the first question. Should schools try to motivate students by paying them for good grades or to read books? Take up your cell phones and vote yes or no, Y1 for yes, N1 for no, and text it to the number you were given. Do we remember what that number was? Someone, is it up there? 555-111. From the heavens came the answer. So let's see what people think. Take a few minutes, and we'll get a sense of the range of opinion in the room. Has everybody had a chance to vote? Who needs more time? Well, you see the results there. One quarter, roughly one quarter of the group say yes, and three quarters say no. So let's have a discussion. Let's hear first from someone in the minority, someone among the roughly, well, 27% who say yes. What would be your reasons? Why do you favor the use of financial incentives to improve the performance of students? Who will raise his or her hand and tell us why? How many in this audience would go to work if they didn't get paid? Uh-huh. All right, well, so I take it that's a rhetorical question. Tell us your name. Bob, Greenberg, yeah. I teach second grade. You teach second grade. And have you tried it in your class? I've used the thing. I've given candy, pizza. Well, candy and pizza. All right, what about money? Cash. Cash. I've spent a lot of my own money in my class. Well, I don't mean out of your own pocket, but suppose a foundation came along and said, we'll give you cash to motivate your second graders. Would you give it a try? Yeah, I've actually given them money, you know, not large money, but sometimes I'll say, I like the way you're sitting, and I give them a quarter. And boy, you see how fast the rest of the class sits up. And I empty my pockets of change. And what if the foundation came along and said, for the entire school year in your class, you can give $2 for each book each student reads. You give it a try. OK, thank you. Who disagrees now? Who disagrees with Bob and would not like to use money? Yes. Stand up, and we'll get you a microphone. As they may, there'll always be children who can't read for any amount of money. So I wouldn't want to penalize them when they just can't do it. It would be too frustrating and unfair to those who can't do it. Absolutely. And what about, tell us your name. Jeannie. Jeannie. Jeannie, not every child can read a book, so the motivation would just be a source of frustration. What about paying them for something else, for attendance or for good behavior? Would you be in favor of that? No. OK, so you must have a further objection. Tell us about that. Some children don't come to school because their babysitting or doing something else and their parents won't let them come. So what about that child? So I wouldn't want to pay that child. And I don't remember what else to do. So you don't want money to motivate children? No, because there's always at least one child who wants the money but can't do what the money is being offered for. And you're penalizing that child. And I wouldn't want to do that. OK, thank you for that. Anyone else who's against the use of money who has a reason we haven't heard yet? Yes. Go ahead, toward the back. Stand up. We'll get you a microphone. Yes. Over here. Yes, OK. I think the teacher should be able to motivate children, period, without using money. All right, while you explain and I have a follow-up, let's get the microphone here back to Bob and we'll see what Bob says to these objections. But tell us, say more. Well, if a teacher can't motivate a child to just do their work and be a good student, then they're not a good teacher. Well, all right, you've got a mixed response here to that. That's all right. And what grade level do you teach? I'm in sixth grade. And you don't want money for doing well? I think that children should just do well on their own without having that sort of motivation. But what's wrong with it? Bob says people are paid to go to work. Why shouldn't, now maybe all students are not as conscious, but tell us your name. My name's Lily. Lily, maybe all students are not as conscientious as you are. Maybe you can, maybe you're very well motivated, but what about for those who would get a boost, who would work harder if they were offered money? What about them, Lily? Well, I think that kids, if they're working hard only for the money, then they're not really actually learning very much. They're just kind of only doing it for a certain reason. So they're learning for the wrong reason. What about that, Bob? I guess I'm going to work every day for the wrong reason. Why do? Well, let's see about that. Why do you go to work every day? I love it. But I still have to. Wait, wait, wait, wait, wait. You go to work because you love it. You love what you do. Right. I could retire. I'm old enough. I have enough years in. Right. But I haven't because I love what I'm doing. But I still have bills to pay. And as far as what Lily says, I mean, Lily, did you ever get an allowance? Yes. Did you have to do anything for it? Or did your parents just give it to you? I have to do stuff for it. Why didn't you just do it? I was doing it. And my parents said, because you're doing it, I'll give you money for it. All right. All right. So I would say here that between Lily and Bob, we've got to draw. Thank you both. Now, what this discussion brings out are two different objections to the use of money, market incentives, financial incentives, in education. One of them is about fairness, Jeanine's point, that it's not fair to those who can't succeed. And it will therefore be a source of frustration. And then there was a second reason that goes beyond the fairness concern that has to do with what are the right reasons to do something, to read a book, or to strive as a student, or to go to work. The second objection suggests that the point of education isn't only to get children to read books and to score well on tests, but to learn to love reading books, or doing well. A friend of mine gives, we were talking just now about allowances, Bob challenged Lily on that. A friend of mine pays his young kids $1 for every thank-you note they write when they get a gift or someone's taking them out to eat. I've received some of those thank-you notes. And I can usually tell that they were written under duress. Now, my wife and I look at scans at the paid-the-bought thank-you notes. Because we wonder, now there are two scenarios you could say. It may be that when these young people grow up, having been paid to write thank-you notes, they'll get in the habit of writing thank-you notes and keep on writing them when they're older, even when they're not paid. That might happen. Or the opposite could result. Maybe the lesson they'll learn is the thank-you notes. Writing thank-you notes is piecework for which you're paid. And when the money stops, so do the thank-you notes. And in that case, the monetary payment, though increasing output in the short term, might actually dampen their ability to learn the virtue of gratitude itself, which is, after all, the point of getting children to write thank-you notes. It's not just to please the recipients. It's to teach the kids to be grateful and to express it. So something similar may be at stake in the debate about paying schoolchildren for good grades or reading books. Bob suggests that, well, it's the kind of motivation that takes place in the workforce. And in life, they may as well get used to it. Others argue, well, maybe it's actually inculcating the wrong lesson, even if it increases output in the short term. Let's turn to a second question, not entirely unrelated, but also to do with financial incentives. This time, though, not to do with paying students, but teachers. Should schools pay teachers bonuses? You've heard this question debated before. Should schools pay teachers bonuses based on their students' performance on AP exams or other standardized tests? This, too, is being experimented with in various school districts around the country. So let's see what people think about this question. If you think, yes, school should pay teachers bonuses, well, keep voting. Don't look until you've voted. I don't want you to be swayed by the early exit polls. Why one for yes? I'm sorry, why two for yes and two for no? We'll see what people think. Are we ready? Everybody done voting? All right. Now here, it seems that paying teachers bonuses for the performance of their students is even less popular with this group than paying the students. Only 16% say yes, 84% say no. All right, let's hear the arguments on both sides of this one. First, I want to hear from someone who voted yes. Please, we'll get your microphone. Hi. So I think that if testing and scores are seen as a part of an overall evaluation for teachers, and if teachers, as a whole school, are evaluated based on all those criteria, then you can envision a system wherein which you can give a bonus to an entire staff for a lot of different factors that go into evaluating whether your school is successful in a given year. And tell us your name. My name is David. David. David, now I've got to be careful. Are you a teacher? I'm not a teacher. And tell us what you do. I work at a place called the Equity Project Charter School where we pay our teachers $125,000 for middle school teaching. Our teachers teach four classes a day and also lead the school and whole school service type of roles. And that's what we do. So after a second year of teaching, you qualify for up to $25,000 of bonus based upon how the entire school does. Everyone earns the same bonus. Based on school-wide bonus. Based on results, though. Based upon results and our report card by the city and our surveys that are given by parents and students and the teachers' evaluations. Good. OK, thank you, David. Now, who disagrees? With the use of bonuses. Yes? Hi, my name is Gloria. To me, teaching is a personality. And my personality won't change, depending on how much income I get. Furthermore, I think that I would not work any harder where I could get more money for what I do. So no, I don't think teachers should think about getting more money and, therefore, producing more and better work. No. And why is it, Gloria, why you say you wouldn't work any harder, you don't think, if you were offered a bonus for the results of your students? Why is that? Because I'm working as hard as I can now. Yeah, all right. And do you think the idea of pay for performance implies that teachers are holding something back? What it implies to me is that there are people who respond to get more money and somehow think they are doing more. Right. All right, that's good. Who disagrees with Gloria and would like to reply? Who's in favor of bonuses and has a reply for Gloria? Yes? No? All right, someone who disagrees with Gloria and would like to reply? My response is just this. If you are already working as hard as you can, why do you object to being paid more money for that effort? And tell us your name. My name is Emily. Emily, and Emily, are you a teacher? I'm a teaching artist. I work for a nonprofit as an independent contractor in several different schools in New York City. OK. Yeah, the person in the back, yes? I'd just like to call out that it's very interesting that the two people who were supporting it are not teachers. Well, wait a minute, but let's take two reasons. We'll see if there are teachers who would like to speak to that view. But what do you think? You're against? I am against it. And why? I think it will perpetuate cheating. Wait, and it'll perpetuate cheating. Why exactly? Who will do the cheating motivated by the money? The money is going to be based on standardized tests and student achievement. Standardized tests are set up in multiple choice ways. Teachers are going to have to cheat to make their kids succeed because those kids that we were talking about earlier, the students who can't do as well, or the English language learners, or the students with interrupted formal education, there's a whole series of categories of people of students that are not going to be able to achieve as well as their native-born counterparts. All right, now let's see. All right, so you've raised an interesting question. There are a few brave teachers who voted in favor of the idea of bonuses, who will speak and give his or her reasons. Way in the back. In the back. Go ahead. OK, so yes, I am a teacher. My father was a school superintendent who did some incredible things. And my question is actually, are you just saying that merit-based is just on performance? Because there's a lot of different definitions that people have for merit-based pay that is not just based on student test scores. What are the other factors that you would include? Well, because this is the gray area part. Because ideally, I think everybody in this room should be paid for doing an incredible job. Because we're all working our hard. We're here today on a Saturday. Like, we're amazing. Should we won't take a poll on that proposition? So the thing is that the problem is that there's really no way to measure how one teacher is better than another. Of course, I think it would be great to be paid more, because you're a better teacher. But how are we measuring that? If we're only measuring that based on student test scores, well, then I would join the no. But if there's no one solved it yet, no one's been able to figure it out yet, how we could take from those teachers, like yesterday, they were talking about how the scores that came out in New York City was just devastating. And you cannot measure what teachers did for 9-11 when the kids, they took those children under their wing and Katrina. That's not measurable. However, that nurturing part of teaching is something that we all should inculcate, which all have. Right. OK. Thank you for that. Is there anyone else who would like, now, the majority, the clear majority, are against paying teachers bonuses for the test performances of students? Is there anyone who has a principled objection to that that hasn't been raised yet? All right. Yes. Sorry. Well, that's not true. I have a principled objection, especially to what was in the question about standardized tests. Specifically, I'm assuming they're talking about the SAT, the ACT, and the AP exams. Well, there would be others, too. There are other standardized tests that can be the basis of this. I'm a college counselor, so I suppose that's what I think of right away. And there have been numerous studies that show specifically that many of these tests have inherent biases. They don't actually measure what students are learning. And I just thought back, we're administering an SAT course right now. And I have no interest in giving bonuses to our instructors based on our students' scores, because our students are coming from so many different backgrounds, we can't actually track how much it is that they're learning based on these tests. So I think the big question is, are the tests actually measuring learning? And I think the answer is generally no. But if they did, but if they did, then you would be fine with paying teachers bonuses. It's just that the tests don't measure accurately. All right, but that's what I'm trying to get at that. When I say I'm looking for the principled reason, beyond skepticism about the accuracy of the tests at measuring true achievement, is there someone here who hasn't spoken yet who would like to address that? Yes? Thank you. My name is Mary Beth, and I teach middle school in the Bronx. I feel that teachers are best when they collaborate, and that when you incentivize teachers to disvalue the inherent gifts of their students and encourage them to grow in areas that are measured by whatever someone with a clipboard thinks they are measured by, then you are preventing us from engaging in the very thing that makes our society strong, democracy, and the growth as a group. So Mary Beth, what's your objection is quite independent of skepticism about what the tests really measure. And it has to do, if I hear you right, with a certain understanding of what teaching is all about or should be, and you think that introducing a bonus, a monetary incentive to individual teachers would corrupt teaching properly understood, given its collaborative character as you see it. Do I have you right, Mary Beth? You have me, and more so is that the very nature of rewarding some means that others are not rewarded, thus singling some people out as being superior to. And that means that I'm not working as a group. I'm not working with other people whose genius is in a different area than mine. And it lowers the water for all of us in the boat, and it shouldn't be like that. And let me just add this. When those test scores came out, I'm in the 99th percentile, and I am organizing 99thers to come out against the data, because it hurts all of us. All right, thank you for that. Thanks to all of you who express views on both sides of this question. I want to take one last question. It'll be question four for the people in the control room. It's a question that has come up in many school districts. Should parents in affluent communities be able to donate funds to hire extra teachers in the schools their children attend? This comes up especially in times of budget cutbacks, where parents who can afford it go to the school and say, look, we will pay for the music teacher, for the theater arts teacher. How many favor parents in affluent communities being able to donate funds to hire extra teachers in the schools their children attend? If you think they should be able to do this, text Y4. If you think they should not be able to do this, text N4. I want to make sure everybody has a chance to vote on this. Now, give your opinion without watching the pie chart. At the moment, it's teetering right on the valence. So if there's anyone who has not voted, you're not allowed to vote twice. And you're not allowed to sell your vote. All right, are we done? It's teetering back and forth. This is pretty evenly divided. All right, there we have it, 50-50. All right, let's hear the arguments on both sides. See what you think. Let's first take those who are against, who don't think that this is a good idea. Tell us why you think so. We'll get you a microphone. Hi, my name is Pat, and I'm totally against it. It has actually happened. I have heard of other schools, parents getting together, and hiring teachers. Once again, the affluent communities will be able to get the most teachers for their bucks, will get the brightest teachers, thus creating the greater disparity that we already have in this city, the haves having and the not ever getting. It'll be ridiculous for us to perpetuate this situation that already exists. It already exists. We already know this. There is no equity. There is no equality in New York City as it is now. This will just worsen the situation. And what about students who are not part of the affluent community? Won't those doors be busting? Because everyone will get in there. They want to get into that school. They want to get into that school. They want to get into that school. And what will happen to the schools where there are the poorest people? That I am totally against it. And anybody who thinks it's a good idea, I want to hear from you. Thank you. OK, I'm glad I wasn't quite sure how you were going to end that sentence. I'm relieved. All right, it's Pat. All right, Pat's going to stay here. And I'd like to hear now from someone. The house is evenly divided. I want to hear from someone on the other side from Pat, explaining why you think yes. Why you think that it should be permitted. Hi, my name's Kristen. I teach in a Title I school. I teach high school mathematics. I actually was wrestling over this question a lot when it was asked. And then it kind of occurred to me the number of people that are in my school every single day. I have city year kids.  And I have tons of people from different parent organizations that come into my school to help my kids and to be an extra body in the classroom and all these different things. And I think that they're great. But I know that they're not in affluent schools. And that's also equity, right? And the fact that we say this is a low income school and so these people can come in and help my students, but they're not going into every school. They're going into high school. Do you think there's a difference between having an influx of high powered parent volunteers and affluent parents paying money to hire teachers? Is there a difference between those two contributions? I mean the government is paying the city year kids. So someone's paying them. But I'm sorry. In your case, the financiers and so on, they're coming in to teach themselves or are they hiring teachers to come? They're not teachers. So it's like a part of AmeriCorps. These people are being paid by the government to come in and assist my children that need additional help, which I think is what you're saying, or you're saying an additional teacher. Because we have government hired arts programs also that are in this school. No, I'm talking about something more specific, more targeted, where the parents of kids in this school say we don't want to lose the music teacher. We don't want to lose the theater arts teacher. So we, though these are being cut district-wide, we will pay for the salary and benefits to retain the music teacher or theater arts teacher in our school for this year or for the next three years. That's it. Right, well, we, I guess. Is that all right? Yeah, no, I agree. I think that they should be able to do that because the people that are paying the art teacher in my school and the music teacher in my school, while it's not their parents, there are these parent organizations that want to help my students because they're lower income students. All right. That's not being paid enough fluid. All right. Yes, what do you say? We work at a small urban school, and our budget keeps going down. So morally, I think it's wrong. But if parents want to help out, we'll take the help wherever we can get it. Wait, wait, wait, but you said, tell us your name. Maria. Maria, you said, morally, you think it's wrong, but we need the help, so we'll take it. No, I think it shouldn't have to happen. It shouldn't have to happen. It shouldn't have to happen. The budget should get passed by the communities who love our school, but they're not. So we had a music program cut, and a parent said, I'll fund the summer program, and she wrote a check, and we took it. And the kids were able to have the program. So I think it's sad that it has to happen, but parents want to help. I'm sorry, tell us your name again. Maria. Maria, Pat, what do you say to Maria? You're talking about Title I students who are getting gifted, or are you in an affluent community now? We're talking about affluence. We're talking about affluence. That's what it says. If you're in an affluent community and the parents are willing to put money forward to that school, are you in agreement with it? Well, from where I live, we have just one school. So we are not an affluent school, but we're a rural school in the Adirondack. So if you're trying to pit a poor school against an affluent school, that I've changed your mind then. No, I know my perspective of where I come from. Hold on there. We have someone else who wants to. You're in favor. You're in favor. OK, I'm a teacher, and I teach in a Title I school. And my name's Ed. And both of my children, we live in Brooklyn. And we live in an affluent neighborhood in Brooklyn. And both of them went to a public school. And the PA raises over $100,000 a year. And they use that money to hire extra teachers often, or to bring in programs and things like that. And I guess my question is, because I live in an affluent neighborhood, because I'm comparatively affluent, and because I live next to lots of doctors and lawyers, why should you tell me that I can't do the best for my children? Why should you penalize me? And that's what I think is, and I understand the whole thing about equity. And I also agree that Title I schools get huge amounts of money compared to my school. Go to private school. This is the public school. We were talking about public schools, affluent communities, where taxpayer dollars are being spent to educate our students, to pay the teachers, to keep the buildings going.  But he's speaking as a teacher also. Are you not? So it's not a question of where he. Let me answer. All right, go ahead.  Talk to me, I know. Except I'm lucky enough to have moved into a neighborhood that became very affluent. So I'm just kind of on the lucky side. But I guess the thing really is, what do you gain by penalizing me? It doesn't make your school any better. It just makes my school worse. Why would you want to do that to my kids? I'm not clear. What do you mean? Who's penalized? My kid is getting penalized. You're telling me, and then let's take it to the next level. You're saying, because I live in a fairly affluent and educated community, you're saying that not only will you not allow me to donate money to my school, but then you could take it to the next step and say, oh, look, my parents aren't educated, and they can't come in and tutor the kids, because they are all working hard, and they're not educated. But because you live in a community where people are educated and where maybe mothers are at home and can volunteer in the school, you would then take it to the next step and say, no, you're not allowed to volunteer in that school because that gives you a bonus. But you can put it as a question. You're not sure she'll say that. Why don't you say that? Would you say that my affluent, that the mother who lives next door to me, who bought a house for $1 million, who's at home, that she's not allowed to volunteer in the school because that's unfair to your poor kid? What about that? Volunteerism is welcomed everywhere. I don't see where it's different than money. Are you volunteering to teach right now? I teach every day. What do you mean by volunteering? All right, all right, wait, wait, wait, wait, wait. All right, add Pat, add Pat. Thank you, thank you, and thanks to all of you. All right, I want to step back. We've discussed three issues. These are controversial questions in our society, not only in schools. And I want to see if we can notice a few things about the arguments we've just had. First, we've actually been engaged just now in what really isn't the crux of civic argument. And as these exchanges have shown, often, public discourse about things that matter can be fraught with passion and with disagreement. And because of that feature of genuine public discourse, we tend to shy away from it. We tend to say, let's not bring our moral convictions into public life. Let's try to keep that to one side. But when we do that, when we do that, those questions are decided one way or another. But they're decided away from public view. And our public life becomes given over to technocratic and managerial talk. And truly, public discourse becomes sidelined. So part of what I suggest is that our public life would go better if we engage more directly with the moral convictions citizens bring to public life. There's a second thing worth noticing about all three questions that we discussed. Those who worry about bringing money and markets into education have two different worries. One of them is about fairness. Is it fair to poor communities who can't hire the extra teachers? And then there's a different worry. Will the use of monetary incentives or bonuses for teachers or for students corrupt or degrade the activity, the norms that education is all about? That's a second kind of worry. So if we're to have a more morally robust debate in this democracy of ours, we have to be willing to engage more directly with the moral principles and the moral convictions that are often lie beneath the surface. And to do that, we have to engage more directly in a debate about the proper role of markets, where they can serve the public good, or in this case, the good of education, and where they may undermine it. I think one of the worries, and it's a legitimate worry, lying behind affluent parents, hiring more teachers, tempting though it is, I think one of the worries is that we live in a society where money can buy more and more. And the more things money can buy, the fewer the occasions when people from different walks of life encounter one another, bump into one another in the ordinary course of life. At a time of rising inequality, the tendency to put more and more things up for sale, or to have them governed by money and markets, means that people of affluence and people of modest means lead increasingly separate lives. We live and work and shop and play in different places. We send our children to different schools. Democracy does not require perfect equality, but it does require that citizens share a common life. What matters is that people of different backgrounds and social positions encounter one another. And schools have traditionally been, in the history of our democracy, class mixing a class mixing place. And so the danger is that we're losing that essential element of democratic life. And so in the end, the question of markets and money and education is really a question of how we want to live together. Do we want a society where everything is up for sale, or are there certain moral and civic goods that markets do not honor and that money cannot buy? Markets can be a very valuable tool for promoting prosperity and organizing the production of goods. But sometimes an education may be one such place. Sometimes markets can crowd out values and norms that are central to what we care about in the classroom and in our democracy. That's the question that we need to debate, not because we'll agree, but because our disagreements, if they're like the ones we just had here today, our disagreements will teach us maybe better to respect one another, to learn from one another, and will make ours a healthier democracy. Thank you. Thank you. Thank you. Thank you.


Hello, and welcome to the session in which we will discuss if we have a highly effective hedge And why do we have to know whether we have a highly effective hedge or not? Here's the reason very simple Derivative instruments are risky are very very risky financial statements So that's why we want to know as accountant whether our hedge is an effective hedge And if it is an effective hedge, it will qualify for hedge accounting now. I said very risky I didn't say only risky. I said very risky matter of fact Warren Buffett called financial derivatives as Weapons of mass destruction What does that mean? Well, it means they are risky business Warren Buffett is the best investor of all time He once called those instrument Financial weapons of mass destruction because they were part of our financial crisis What happened during the financial crisis of 2007 2008? Many companies had had derivative instrument without understanding the effect on the financial statements So find remember derivatives instrument can be used for speculation which we talked about this or it can be used for hedging So if it is for hedging Show me it's for hedging because if it's used for speculation, it doesn't qualify for hedge accounting I hope I make the point here So the point is if you have a derivative derivative instrument and the purpose is hedging you're gonna have to show me It's for hedging you're gonna have to show me mean the company will have to show the users Therefore they would qualify for hedge accounting. Otherwise you otherwise you are misleading the users You have weapons of mass destruction inside your financial statements That could explode and destroy the company's value actually in 2007 2008 those derivative derivative instrument Destroyed the whole economy not a particular company the whole system almost went down So to qualify for hedge accounting which is hedging it means to protect your hedge whether it's a cash flow or a fair value Must be effective Otherwise your speculator and if your speculator you need to let us know you that your speculator investors want to know How do we know that the hedge is effective? Well the hedge item and the hedge instrument must be effective. What does that mean? It means they have to be negatively correlated. Well, what does that mean? It means if the hedge item if we're trying to protect oil or gasoline that we have From a plunge in value if they do indeed plunge the hedging instrument go up If their value goes up then our hedging instrument goes down. It means they are negatively related How negatively they have to be we'll see what's the what's that level now in all my examples I show you it was a perfect hedge now. That's not that's not true So for example, you could have you cannot for example say i'm hedging my oil prices With a contract of coffee. Well, those are not related to each other They have to make sense So the hedging instrument and the hedge item has to have to make sense under those circumstances That's that's basically mere speculation. What's what's the relationship between the oil prices and buying a future contract of coffee? Whether it's a put or Or call it doesn't really matter So fast be required that companies assess the effectiveness at the end of each quarter when they publish the financial statements Here we are dealing with publicly traded companies. They must document basically the effectiveness explain themselves Now not at the time They don't have to do it at the time at the inception of the contract by by the issue date They have to do it. So now we're going to have to learn How how do we measure effectiveness of that hedge? Before we proceed, I would like to remind you whether you are an accounting student or a CPA candidate to take a look at my website farhat-lectures.com I don't replace your CPA review course nor your accounting course My motto is saving accounting students and CPA candidate One at a time by providing new resources for various courses Lectures multiple choice through false that's going to help you understand the material If you're studying for your CPA exam, my material is aligned with your becker, rager gleam wiley Or your favorite CPA review course. I also give you access to 1500 Previously released AI CPA questions in their original format with detailed solution If you have not connected with me only then please do so Take a look at my linkedin recommendation like this recording share it with other connect with me on instagram I'm trying to grow my instagram followers facebook twitter and reddit So how do we measure whether it's highly effective or not? Well, the first thing I need to tell you The relationship does not have to be 100 to be effective For example, if we have a hedging instrument and it went up in value and the hedged item went down in $100 in value Well one divided by one is negative one in this example. We call this is a perfect hedge. It means they are perfectly correlated Really what's going to happen if you look from an income statement perspective if you add 100 reduced by 100 the net effect is zero It means really there is no effect and you are protecting the item you are trying to protect Now how about if the hedging instrument went up to $110 in value And the hedged item Went down by $90. What do we have to do under those circumstances? Let's compute. Let's compute our relationship 100 divided by 90 is 1.22 or 122 Well, is this still considered effective? What is the limit? What's the boundary? Well, here's the boundary As long as you you are between 125 On the upper side and 80 on the lower side, then you are good. How do you measure this? Simply put you will take the dollar change and the hedging instrument The dollar change and the hedging instrument relative to the dollar change and the hedged item Just relative means you take 110 divided by 90 one's going to be positive one's going to be negative So the slope will be negative obviously although I don't you know, I did not put you you know I did not mention it here. It's negative 1. 1.22 it's a negative slope But as long as the slope is between 125 and 180 then it's considered highly effective. Simply put if it's more Then really this is not you're not you're not entering into this transaction for for hedging purposes You're entering into this transaction for speculation purposes, which is the accounting will change the accounting will change Okay, so if higher or lower than the boundary then you cannot use hedge accounting as long as you're within that boundary Also, companies could use Software to do this use and regression to compute that boundary limitation if they have many hedge instrument if it's complicated Also, some companies they don't have to do this computation If they can show that the that the that the hedge is effective at the inception of the contract Then guess what they don't have to do this quantitative assessment You may think this is easy the quantitative assessment But if you have many hedging instruments and those hedging instruments are changing in value of there's sometimes There's no fair value for them Then it's a lot of work for the company So they would like to show if it's effective so you don't they don't have to do all this work There's a shortcut method for example If you have a perfect interest rate swap agreement For example, if you have if you have a loan with a variable interest rate Then you can get another loan and a swap agreement with a fixed interest rate The loan balances are the same the interest rate are exactly the opposite of what you want Then it's a perfect hedge. Then you're good to go. This is called the shortcut method Sometime you could use also something called the critical term match method. Those are methods used to To not to not go through all the computation For example, if you have a forecast the transaction and you can show there's a perfect hedge between the two So the point I'm trying to make here is The hedge has to be highly effective to be highly effective The boundary has to be between 125 and 80 percent now You have to disclose everything that we said remember the users must understand your risk Why because we are dealing with weapons of mass destruction and that's not me. That's Warren Buffett That what would the company will have to disclose the objectives of the strategy What is their objective from the hedging they have to spell it out? What strategy are they using to reach that objective? What are you are using calls options futures? What are you using tell us swaps if it's a fair value hedge explain the income statement item Give us the detail how how things are listed on the income statement reconcile them If it's a cash flow hatch explain the oci or any reclassification needed that leaves oci to the income statement Simply put for disclosure purposes explain to the users So they understand the risk that they are taking And how you are managing those risks how you are managing those risks through derivative instruments Which are what weapons of mass destruction if not disclosed or used properly? What should you do now go to farhat lectures dot com and work multiple choice questions to reinforce those concepts If you're an accounting student take your education seriously if you're a cpa exam make make an investment in my in my in my course It will help you tremendously along your cpa review course. Good luck study hard and of course stay safe


It's nice to be back to WIDER and make a presentation which links up to the kind of issues that WIDER is usually involved with. This is a work which is nearing completion and we would like to thank the project Dranties, which is the South Asia Network on Development and Environmental Economics, which gave us the funding to do this kind of work. This is of course part of a five country project that we are looking at and trying to link up with the variability and migration via the agricultural route. So the question that we are asking is how do we really try to analyze this and this is the method that I am going to use, that we are going to look at the context and the objectives of the study and how the migration patterns are in the Indian context and that in some sense sets the stage for how we are modeling and how we are looking at the analysis and then of course the methodology and the final results. So if we really look at the linkage between climate change and agriculture, there has been substantial amount of evidence to show that the two are linked in the sense there are adverse effects and if you see the first graph out there which is basically trying to link up the case of the South Asia where you can see that without climate change the blue part is basically showing increases in per capita calorie availability and the two scenarios are for 2050 and we start with 2000 and you see that the 2050 availability is lower in the presence of climate change scenarios, two different scenarios depending on the cases. If you look at the focus on just the two Indian examples, they are done by my co-author for this particular paper as well who has done substantial work for India and you do see that the proportion of people in the bottom two expenditure classes in the rural areas that's the bottom poor is actually increasing depending on the intensity of the climate change. These three are different scenarios for climate change and this gives the most intensive scenario of climate change over the period of time and you see the effect is more severe in the rural than in the case of the urban population. There is also some interesting study that was subsequently done in 2011 about last year where there was scope for adaptation that was basically trying to bring it through the modelling of spatial autocorrelation which shows that without spatial autocorrelation there is a higher decline in the net revenue from agriculture as a percentage of the 1990 base value when you allow for adaptation. So this kind of brings us to two interesting linkages that there is an impact of climate change on agriculture and that some of the impact does have a lesser effect when we give scope for adaptation and in this sort of literature is where the migration comes in and so there are several reasons why migration can happen. One of them is this most standard literature that we know of coming from the Lewis model or the Aristotle model which is basically that the process of migration, the process of urbanization brings with it a certain amount of migration but what is also important to notice that the pace of migration is somewhat lower for the kind of growth rates that these regions are showing. So people are not moving as much as they should for the kind of overall economic growth that they are showing but they also see that there are a lot more shocks that can happen in these regions through cyclones, droughts and floods which are also exacerbated by the climate change events and migration can happen. Some of it can be short term, some of it can be long term. There is also a short term migration that is increasingly being recognized particularly in the Indian context due to the distress in agriculture and rural livelihoods because of the kind of investments that are taking place or the lesser productivity that agriculture is bringing in. If we focus more on climate change and migration then there is substantial amount of literature that has been coming in since mid-2000 looking into the migration as an adaptation strategy to climate change in the sense that people want to move out of the kind of distress that they have and that becomes a kind of adaptation strategy and if you look at the particular work that came out in 2011 by Black et al. it largely synthesizes this kind of work into different sub-heads of migration due to environmental conditions, migration due to social, economic and demographic reasons and sort of puts the climate stress as one of those environmental reasons. And if you look at the kind of the way the studies have been looking at it, we can say that migration could either be a cross-country movement like from Mexico to the US or from the Asian countries like the Philippines to the other nations as well as within-country migration. So the migration is discussed in the sense from both perspectives and the migration can also be either planned which means there is a very clear framework which says that there is inundation going to take place and there can be a planned migration or there can be an autonomous migration where people just migrate in an immediate response to a distress or a shock. And coming to the more focused issue of this particular topic that we have here, I think the tone was set in by the paper in 2010 by Feng et al. which was looking at the link between the impact of climate change through its effect on maize and betelis and the emigration from Mexico to the US and they sort of used a certain methodology which to some extent we are also going to follow and we find that there was in their study that there is some amount of a weak connection between these three linkages. Then they subsequently came up with a more recent work early this year linking it up to the US case where they then talk about internal migration within the US on the impact of climate change productivity in certain parts of the US and its impact on internal migration. Then again you see another recent work that basically looks at the sub-Saharan region and in fact it very nicely splits up the migration into two levels. One is the intra-country migration and the other is the inter-country migration. And they very nicely summarized their work from the rural, the migration that happens from the rural to the urban areas caused by largely the economic reasons that is the more productive regions tend to draw more people while they are moving but there are also there is what is called as also the amenity channel in the sense that once people move to these better off regions within their own countries they also want to move to even better off regions once they are better equipped in terms of their skill sets and so on and then they tend to emigrate. And here the weather plays a slightly different role whether directly has an impact on emigration whereas in the case of the rural urban migration they find that the weather agriculture and then migration is the kind of linkage that they are able to show and this is again a very large macro study that they have conducted in the sub-Saharan region. Apart from that we also have a few micro studies which are basically linking up looking at the household level data and particularly look at a panel data looks at agricultural risk and it's linkage between weather variability and migration only focusing on one country that's Nigeria and these are of course largely the econometric models that one is more commonly familiar with but we also have simulation techniques which are basically looking at forecasting approaches where in the case of the Brazilian study they look at the influence of agriculture cost by climate change impacts and in turn how it influences migration. A very very recent study about a month back it was just published which doesn't use an econometric model which doesn't bring in agriculture directly but sort of looks at it through the shocks and finds that there can be about 3 to 10 million internal migrants that is within the country people can move in the next 40 years within Bangladesh. So that's the kind of tone that we set to this particular work that I'm bringing into and understanding very well that there can be several reasons why migration can happen and being a developing country there can be several triggers to migration we are basically trying to focus on the weather variability induced migration operating through the channel of agricultural productivity changes so that's the large question and focusing on the nature of information that we have we have this very specific objective which is to look at interstate migration that's at one level states are provinces in the Indian context they are administrative boundaries which actually are distinguished on the basis of the languages that are spoken in different parts of the world and at a second level we also look at districts within each of those states that's where we sort of look at it at an interstate level because there's a larger variability in the information that we have and we also bring in a certain difference in the kind of results that we have on the kind of crop choices that are made in this particular case and I'll just tell you why it may be interesting to have a crop choice very shortly. So how does a migrant get defined? A migrant as far as the data said that we are using is based on the national census the country level census that is conducted every 10 years and in that case the question that is asked is when they go to a particular household the question is is the place of enumeration different from the place of last residence and if the answer is yes then you are a migrant but then there is also another interesting angle to that in terms of how long and what is the duration you've stayed in and that question is also added along with that so even if you have been staying in a place for 30 years sometimes you can be called as a migrant for the simple reason that you were born somewhere else and so on so there is a little bit of issues in terms of how the migrant is exactly defined and some of it is discussed in a little bit more detail in the paper and the migrants are then further classified into these 405 categories some of which we will be using for our analysis durations of stay this is what I was just mentioning how long a person has been in a different place of enumeration and the gender issues are important in the Indian context then you have the source and the destination whether you move from rural to urban or rural to rural within the state between the states and so on and then there is also a very interesting category in the Indian context that when because of the practice of what is called as exugamy and endogamy that is people marry within families and people marry within their own villages as well as there are several parts of the country where people marry outside their village and so on so the question of have you migrated also very strongly affects the reason for migration so you will find that a large number of women call themselves as migrants though they are actually for migrating for social reasons so there are several reasons and some of which is not directly relevant to our study and we will be using that for our analysis this is where I just said that there has been some amount of interesting patterns that are emerging if you see the dark line out there that is the all India migration rates that you see there across the 4 census years that we have used the data for our analysis and you see that the migration rates for men is just about a little around 10% but it is kind of declined whereas for the women the migration rates are higher at about 16% and the difference is largely because of the reason for migration that women tend to give which is not only for employment and other reasons but also for marriage but what you also see is that there has been a decline more in the case of male migrants than in the case of female migrants you expect that less to happen here but the fact that it has still happened is also a puzzle and there is not much work going on there but what has really bothered the people who are working on the migration literature is that why is it that when the base of urbanization has been somewhat good when the economic growth has been fairly high the migration rates have actually declined over the years and that people are not moving as much as they should for the level of development that we are having here so that's the kind of debate that's still going on and figuring out and we are still our latest 2011 census data has been collected but it's not yet collated and put out for information and here when we start splitting it up into the source and the destination the first letter R or U stands for the source and the second letter U or R would stand for the destination so the possible ways for us to classify the data set is to look at rural to rural urban to rural and so on combinations we would largely be focusing on rural to rural and urban to rural analysis in this particular case for our work and what you see is that there is also another pattern overlaid on top of that whether they move within the district boundaries which is a sub level of the administrative boundaries within the states where they move between districts so these two are within the provinces or within the states and this is the third category that you see is between states so the reason for looking at between states is because there's a lot of difference in the levels of development across the states and you do see that there is quite a bit of variation in the economic growth rates as well as the rates of industrialization and so on so that kind of pans out in the result that we are seeing for the men is that the rural to rural migration bar that you see which is the first bar is actually declining in numbers so though the migration rates have been declining the numbers of rural to rural migration is actually declining and that to some extent is responsible for the decline in migration rates but what I would like you to observe is that the rural to urban migration is actually picking up and by 2001 it's been quite substantial what is also substantial to note is that this colored bricklayer mark that you see there which discusses about the interstate movement is also actually picked up in the case of men so two things have changed for men one is that more and more of men are moving from rural to urban areas and that it's mostly interstate movement while in the case of women you can see that it's predominantly rural to rural that is what is increasing whereas all the other categories of migrants are very small in number so what we see is that if you really again go back by the reason of migration you will see that marriage still dominates us about something like 90% of the women would report marriage as the only reason for migration so that's how it's also important for us to choose what form of migrant we are trying to look at and while we also try to look into the case of another data set which is not coming from the census but called as the National Sample Survey Organization or NSSO which recently was able to collect data on what is called as long term migrants and short term migrants and here you can again see a very clear difference of what we call as the monthly per capita consumer expenditure deciles so this is the poorest and this is the richest decile here and you can see that anyway women dominate when you try to look at them in a long term sense but what we also see is that this one is the urban male so the people who have migrated among men to the urban areas are largely from the return sections that means the most skilled have been able to make use of the transitions that have taken place during this period and when you look at short term migrants this is predominantly male migrant and they are mostly from the poorer sections so there is also an issue of how the migrants are or what kind of backgrounds they come from and what kind of migration that they undertake a short term migrant is one who stays away from his place of residence for less than 6 months whereas the long term migrant is one who has moved away from his place of residence for any time beyond one year that's how they try to classify these two groups so having said the tone for this data that we are trying to look at and we know that there is quite a bit of issues in terms of understanding what could be the reason finding out whether induced migration could be somewhat difficult for the information base that we have and we are looking at it through both these channels that was discussed in the literature that's the agriculture channel and the amenity channel and so what is the data set that we have as I said we have two levels of analysis carried out the first one is the state level and that looks at interstate out migration rate that is somebody moves from one state to the other state we have three years of data but within those three years of data we have what is called as durations of stay so between any two census year we have somebody who said I have been here for the last one to four years and I have been here for the last five to nine years and using that we sort of classify our information on the past so somebody who says in 1981 that he came five to nine years before to the place where he gets enumerated then the person must have come between 1972 to 1976 then we have similarly somebody who says one to four years and the person would have come between 1977 to 1981 so we are able to splice the information that is given in the census to further get more data sets over time so we are able to create about six time points which cover these five years I do not know individual years so I have to work with these periods that we are looking at but we are able to work with 15 large states in the Indian context and we exclude people who say marriage as a reason for migration as well as people who say place of birth as a reason for migration because that is another social issue when the mother while delivering her child tends to go back to her natal home and the child gets registered in the natal home rather than where the child is staying so we have to exclude these two cases of reason for migration when we come to the state level the challenge is slightly different in the sense that we do not know the source of migration we do not know where the people came from but we know where the people are getting into and we also are able to work with only one census the advantage of this is that we have a panel data with about 90 points that is six years, 15 states whereas here we have one census with two years of duration but a whole lot of districts about 500 or districts that we have in the country so you can see that the variability in the data set is likely to be different between these two contexts and because of the district level we do not have reason for migration given we have done one estimation for total migration rates and one for male migration rates so that sort of very quickly tells you the way we have to organize our data set the temperature and rainfall was also not an easy data set to work with but luckily the Indian Meteorological Department gave us very detailed data sets made it available to us and one of our co-authors I mean one of the co-authors in another work was actually working on this data set and we are happy to have the data set that he provided to us and we sort of updated that to correspond to our years the agriculture data set has been taken also at two levels in the sense that one we look at the net state domestic product for agriculture which is per capita and which is the value added from agriculture and then we look at two crops separately that is rice and wheat which are the predominant crops that we have in the Indian context that people tend to grow the econometric methodology as I said follows a very simple simultaneous equations model approach so the first, the main equation of focus is migration influenced by yield and there is no other explanatory variable or any other variable directly in the model and all of the remaining variables are assumed to be either in the fix effects across cross section or the fix effects across time so we basically do a test and find out that that's the kind of model that fits in and then we test for whether the yield is endogenous meaning it's correlated with the error term in which case the yield equation is to be explained by the temperature variables that are sitting here and we have this kind of relationship in the framework that we have here so that's the large model that we have there if you look at the state level the interstate out migration rate and use the value added from agriculture we actually do not find any evidence for endogeneity which essentially means that we cannot estimate it as a two equation framework the weather is largely insignificant in the migration equation but the yield has an impact on the migration in a very small amount, very small rate that we are looking at in the particular case if we shift to particular crops that is the wheat and the rice you will see that there is a fairly strong relationship of endogeneity compared to what we had earlier more stronger in the case of rice than in the case of wheat which means we can use a two equation model that we are referring to but while we are doing that the weather in the rice equation is actually insignificant but overall we find that the yield has an impact on the migration two very quick observations is that the magnitude of this case in the case of wheat is lower than in the case of rice in the sense that because rice is more cultivated in larger regions rice is also more labor intensive so we expect the coefficient to be larger but you can see that the significance level is also not that high as one would have expected it to now we move on to the district level and in the case of the district level I would very quickly expect you to understand one thing which is different from the earlier case so what are we trying to say that if the yield declines then the migration rate would go up so therefore that's what it basically means or in other words if the yield increases then the migration rate would decline so there is an inverse relationship between yield and migration you can also see that the kind of variables that affect wheat and rice the temperature variables are also different and that's important from the perspective of policy which I'll come to towards the end when you move to in-migration data now we have to slightly look at the results differently that when somebody comes into a particular region they would only come in when the agriculture is doing well so in the case of the in-migration we would actually expect a reverse sign that is a sign that when yield goes up more and more people would come into a particular district and we would expect a positive correlation between the two so therefore there is a linkage that would change when I'm working with in-migration data but what is also important to note is that there is a mix of what is called as intra-district movements and inter-district movements which kind of affect our results so if you look at the wheat case there is endogeneity in both whether we look at total migrants or whether we look at male migrants there is a positive sign which sort of goes with what we look at that is if a district does well in the yield it draws in more migrants and people tend to move more within that particular region and you can also see that the weather variables are kind of mixed what you see here is that this is the impact of the suing temperature this is the impact of the harvesting temperature so you can see that if the suing temperature goes up then you have a different impact the harvesting temperature goes up then the yield declines so that's the kind of results that you see here and you can also see that the percentage of male migrants is always higher than the percentage of total migrants the emphasis is that wheat rice results are completely in contrast to what we see there the first contrast is basically in terms of seeing that the endogeneity is much stronger in the case of rice we see that the coefficients are also far more significant but they are negative in the sense that if a district does well in its yield in its yield of agricultural rice yield or it has a much higher productivity in rice yield then the mobility tends to decline that's the kind of results that we are finding which is in contrast to the case of the wheat case but what we also find is that the district level results also show a much better linkage to the temperature impacts so just by summarizing this we would basically say that there is some evidence of the kind of changes that you see on the migration and the patterns are also dependent on how we are trying to look at the linkage if we just do a simple hind casting exercise rather than a forecasting exercise we find that there is a moderate change in the migration rates that would have declined had there been a 1 degree centigrade temperature lesser increase in the last 30 years of that we are looking at so in another sense if the annual temperature were 1 degree more than what it has been in the last 30 years we would have seen about 0.44% increase in the migration rates than what we are seeing here and as you can see we had to choose the particular temperature and so on because the models were a little more complicated so just to summarize we do have a weak evidence if one were to look at it but it is largely depending on how the agriculture is showing up as androgynous we also see a very small migration rates but yet we find that there is some amount of linkage between the migration rates affected by the changes in crop yields due to the climate change so we see that there is we have sort of set the tone and this is for the first time in the Indian context we are able to organize this information base to this extent to be able to pull out the kind of information that we are trying to get and there is quite a bit of work that we need to do to take it forward particularly in the context of what it means for a very high proportion of rural to rural migration thank you so much


All right, let's let's do a first couple shots with the new sprinkled armory echelon full disclosure They did send me this pistol to review and to put on the channel.  Oh my gosh crisp break Okay, hold on hold on. Oh my gosh This gun has so many features that I love. Oh, man Oh, that is gnarly Oh, man, I know I keep laughing but oh boy. Oh boy sound like goofy. Oh boy. Oh boy That is gnarly. That is pretty close. I mean Just the overall feel it feels a little bit better than a glock 17 I mean that feels smooth crisp that trigger. I mean is That's a big like that's a thick trigger My pat the pat of my finger is on it fully and it's oh man. I don't know how to explain it. It's just It feels so good. Gosh There's there's a thin wall that you come up to and when you break that wall, it's a crisp trigger.  No way just get out of here One of my favorite things about this gun right now is that the slide release Is kind of protruded out, okay Usually they're kind of side to side with the slide, but this one's just a little bit out It's got a little nub my thumb rests on it and it's an easy that is just beauty That Let me tell you I've not been this excited about a pistol in a while and a full-size duty pistol I'm in love with it. I do like it a lot I actually was not I was not expecting it to be That good of a shooter right off the bat But man, I like that So overall The echelon Quality pistol in my opinion. I've only shot about 600 rounds through this I wanted to shoot a few thousand more just to see what it actually feels like what it actually takes Uh when that many rounds go through the gun now will this replace my Glock 17 duty pistol I mean, it's close. It really is just because I love the feel. I love the way it runs There's been no malfunctions on the echelon and I've been out here for the last four hours Like no malfunctions whatsoever, which to me has a huge plus You know, I know Glock has been tested tried and true But as far as like Glock killers and Glock comparisons The echelon may be it It just Everything about it. I love everything about shooting it as it just screams home to me It feels like it's a part of me and my shooting hand. Which is weird to say, but it's a real thing I especially love the rear you Site which allows for the red dot to appear even more as well as the atrium front sight So I like that. I also love the grip. I mean, there's a ton of grip on this gun With my support thumb and support hand I can rest my thumb on these grips by the slide here, which that That helps immensely. I mean, I love that so much. So It's great. I love it. I love it this far


This is St. Tech, Hawaii. Community matters here. I'm Marcia Joyner and this is Cannabis Chronicles, a 10,000 year odyssey. So tell me news of that plant of many resources, which wondered far and wide the ancient plant of food, fuel, fiber, cultivated for millennia. As we venture through the past 10,000 years, we will explore and discover the plant from which cannabis derives, the many uses of the plant, hemp, cannabis, ashes, cannabis and religion, cannabis and medicine, cannabis and dear old Uncle Sam. And so our odyssey begins. Today, our odyssey is not long ago and far away. It is current and in progress. It is needless to say an old dance with Uncle Sam. So here we are with a new generation, new thoughts, new ideas. Christopher Garth, who is on the verge of a whole new way of looking at cannabis, of dealing with cannabis, of cannabis as an industry in Hawaii.  Please do. Christopher Garth. And let me read this so I get it right. The Hawaii Dismantry Alliance is a 501C6 membership organization that brings together Hawaii's patients, dispensary, related businesses and local communities. Did I get that right? That is correct. So, well, thank you for being here. It is such a pleasure. It is my pleasure to be here. Thanks so much. So tell us about Christopher. So I am Kanaka Maoli, Hawaiian, Chinese and Holi. I grew up in Charlotte, North Carolina, but had the great fortune of coming over to Hawaii two or three times a year as I was growing up from two months on until I relocated out here in 2004. My youngest sister is a Kamehameha grad. She was a boarder and came out to see her graduate and stayed, stuck around. It was time to come home. Yes. So now, and the Hawaii Dismantry Alliance is? Is exactly as you pegged it. It's a 501C6, a trade association, if you will. A trade association. Yes, ma'am. And as a trade association or a Chamber of Commerce, we're trying to pull together all of the varying interests around cannabis as an industry, as an opportunity for help or industry for business, and then ultimately encouraging the legislature to engage appropriately to green light this new industry. So many of the legislators are afraid of Jeff Sessions, the little elf. Well, he is. Come on, the little elf. You're like a shmigel, if you will, out of a golem. Yes. Out of the rings. Yes, a golem. I've got to remember that one. Well, no, we might have to apologize to the golems. Anyway. They may be offended. Absolutely. But now in 2006, the U.S. Supreme Court said that states have rights. By now, that hurts me to say states' rights. But states have the right to regulate their medical industry. Okay. So that's what they did in creating medical cannabis. But there are still legislators that are afraid. They're scared to take the next step. They don't understand what the Supreme Court gave them. How can you do that? How can you get them to understand, here is the law. The U.S. Supreme Court overrides Jeff Sessions, even if he doesn't know that. And yeah, we do have to apologize to the golems. Anyway, so how do you, because that's what you can do as a lobbyist.  I don't think that we need to apologize to the lobbyists. I am a lobbyist. No, I don't mean that. I'm just talking about the golems. But to get them to understand that they don't have to be afraid, that's the big issue. So, Marsha, that's a really good question. And as we, as you, as our allies in this fight for decades, have been attempting to encourage these legislators, oftentimes it falls on deaf ears. We provide them with the right information. We provide them with the right tone. It's all at their disposal, whether or not they have the time or the desire to read these resources or engage. No, I don't mean they can't. There were 3,000 bills presented to them this session. There's no way to read 3,000 bills. So if you're saying we gave them stuff to read, that can't happen. That's true. I don't want to make excuses for them. I'm just saying that realistic. I totally agree. So the 3,000 number is a bit of an exaggeration. 3,000 bills came through in this biennium. And to say that 3,000 just in this session is... No, the two years together. The two combined. That's correct. So we had about 94 cannabis bills collectively between the two sessions. And some of them were companions between either chamber. And some of them were strong bills. Others were for studies. And they ran the gamut. But in the end, as with every topic, legislative topic, we only see a few of them come through. How do we ensure that they're good bills? Or how do we ensure that the progress is there? Or how do we ensure that the progress reflects the rights that the state had been afforded? We've been doing our best. You've been doing your best. Our allies have been doing their best. But maybe depending on them to do the right job is no longer an option. There's an opportunity in this year with bringing the con con to the table. Constitutional convention could call for and allow a year-round legislature. That would make too much sense. It would, wouldn't it? Yes. Now, I'll give our legislators credit. They do the best with what they have. What they have. Yes. Absolutely. Absolutely. But the best with what they have in such a short amount of time, the 60-day sprint, doesn't do justice to their title, to their constituents, to the job that we demand. Like I said, we've been with this medical aid and dying for 20 years. That's the conversation you and I had in the phone yesterday. Absolutely. 20 years. And medical cannabis for going on 18. Yes. So we're just a hair behind. Yeah. That's simple. Either way, it is. And perhaps if we had gone for a full year-round legislature, we could have done this in maybe a third of the time. Who knows? Okay. Either way, we do have an opportunity with the Con Con to bring the discussion of a year-round full-time legislature to the table. Is the Con Con on this year's, to vote on this year? It is. It is. Every 10 years. That is correct. Is the Con Con going to be, is it going to be on the ballot? It will be on the ballot. It will be. Our Hawaii voters, the 40% of registered voters that go out every election, plus more hopefully will be encouraged to vote in the affirmative for a Con Con. Okay. What I'm saying is that, and my audience who knows this, of the 51 House members in the last election, 30 of them ran unopposed. And then you wonder why nobody shows up, why people don't vote. What is there to vote for? So the question for me as a political junkie, will you, because you've got something, a stake in this Con Con, will you be actively recruiting people to show up to vote, to be a part of this? Because that's the only way it's going to happen. I completely agree. And yes, we will. So not only do we have the Con Con though, there's another opportunity. We can, Hooli, 2018. And that is a slogan that is provided by, again, one of our partners. By Hooli in 2018, we can get new leadership in. And we've started the role towards that by creating a super PAC. What you four responsible cannabis use, or high four can, in short, is a super PAC dedicated to getting the right legislators attracted to the conversation. So. Are you talking about existing legislators or new people that are going to run for? Well, let's convince those that are currently in office that cannabis is a necessary platform consideration. And at the same time, let's bring new blood to the conversation to say, yeah, you know what, the incumbents position is valid, but it's not strong enough. So by creating this conversation, by demanding that the populace engage, that they ask their, the incumbent or their representative. How are you going to fund your project? How are you going to make my schools better? Where's that money going to come from? If it's not from cannabis, where is it going to be from? And by asking that one question, it gets in the candidate's mind. And the candidate hears over and over again. Adult use or therapeutic cannabis access is vital to me making Hawaii a better place. Now, one of the things I've learned from the people that have been in your chair right there is that cannabis is the best antidote, I guess it is, for the opiate addiction. That it is the simplest way to bring a person down from their addiction. And one guy told me it was the medication they gave him to kick the opiate addiction was worse. It was horrible. So if we really put a lot of energy into allowing people, the legislators in all to know that here is an antidote. Here is an opportunity for a lot less money than buying all of those drugs that we can assist our population to come off of that, the opiates. Sure. Yeah. Absolutely. And at the same time, if we could provide cannabis for therapeutic reasons, not just for medical, strict medical reasons, but for therapeutic reasons leading up to an event where someone is injured, there's significant value to that. And in the end, that would lead to a patient or an individual to not have to go on opioids in the first place. Exactly. So we're able to, in one course or another, avert engagement with opioids. And that's kind of the crux of this conversation. It doesn't need to be about medical, but what if we have therapeutic, what if we have availability through an adult use program? Because right now we have so few people registered as patients because of the limit of qualifying conditions. But if everybody wanted to try cannabis for X, Y, and Z, they should be allowed to. Well, what if you had arthritis and you had a cannabis or CBD or whatever that you could just as a topical, not ingest, but just for the arthritis? I mean, instead of buying all the heavy drugs for arthritis, if you could just... I completely understand. Unfortunately, access to those products is not allowed to the general public because of the strict legislation that has been passed by our delegation. I understand that there was an incredible push to maintain public safety. That makes sense. That's fine.  And to keep people who could use cannabis for an arthritis situation because they don't have rheumatoid arthritis is unfair. It's exclusionary. We need to take a break. And when we come back with Christopher Garth, which is an interesting young man. Oh, God, I love young men. We will be right back. This is Think Tech Hawaii, raising public awareness. Ted Rawson here, folks. You're a host on Where the Drone Leads, our weekly show at noon on Thursdays here on Think Tech. We talk about drones, anything to do about drones, drones, remotely piloted aircraft, unmanned aircraft, whatever you want to call them, emerging into Hawaii's economy, educational framework, and our public life. We talk about things associated with the use, the misuse, technology, engineering, legislation with local experts as well as people from across the country. Please join us noon on Thursdays and catch the latest on what's taking place in the world of drones that might affect you. And we're back. And I am talking with a gorgeous young man. Ah, that's an old lady's hard good. Christopher Garth. And yeah, you can blush, that's all right. The old ladies get to do that. Making a brown man blush over you. Yes. But Christopher is the executive director of the Hawaii Dispantry Alliance. And they are doing lots and lots of work to promote medical cannabis, recreational cannabis. Is that the right word? Let's go with adult use. Adult use. I like that better than recreational. Adult use. Okay. Yeah. Let's do that. So, tell us about the organization and the educational component of your organization and if people want to join, how do they do that? Sure. Absolutely. So let's talk about the educational process. Okay. Well, education comes across in a number of different ways with a new industry. We're carving out a niche, so we need all of the professionals to engage and be knowledgeable about the industry, about the issues. We want to make sure that the doctors know how to register with the Department of Health. Right. We want to make sure that the doctors understand the health benefits of cannabis. Let's make sure that the doctors recognize the legality of engaging with cannabis and what they can do and what they shouldn't do. At the same time, Hawaii Dispensary Alliance was integral in allowing the attorneys in Hawaii to engage with cannabis licensees or attempted licensees back when the registration opened for applications in 2015. The Office of Disciplinary Counsel, the ODC for the Hawaii State Bar Association came out with a ruling that attorneys couldn't engage because it was a schedule one drug and therefore in violation of the Constitution. But we challenged the Hawaii Dispensary Alliance, challenged the ruling of the ODC, and ultimately we were able to shift their perspective and get rules changed that would allow these attorneys to engage. So providing this professional at the white collar level, professional information in education, the white collar level is something that we do. At the same time, encouraging maybe the green collar or the blue collar to engage by letting contractors and plumbers and electricians recognize the value that they hold in building out these cannabis structures or grow facilities or even the retail facilities, not to mention the production or manufacture facilities. Blue collar and green collar has a very critical role in making a successful cannabis industry. Beyond that, we want to make sure that those who actually touch the plant are engaged and know the information. One of our members is a trim ready, a group called Trim Ready, where they teach individuals how to properly trim cannabis, how to break it down, what to do with it, and what the laws are regarding the Hawaii's cannabis program. But then we even have to go further than just the professional or institutional education and impart knowledge to the general public that A, cannabis is safe. Maybe there's opportunity for them to get a job, but see that investing in a cannabis program at the state level, just by mere sentiment, greenlighting it, giving acknowledged credence to the program, that it has incredible return for their home or their streets, for their school, for their infrastructure, for their children's education. And then we can go even further and provide information on the medicinal or therapeutic value that cannabis can provide. Well, the CBD, I think that the state of Hawaii has 330,000 people on Medicaid, which means that every time the ambulance shows up, we pay for it. Correct. Just think of how much money they could save if they were allowed to use CBD on open wounds, which heals. I completely agree. How much money would they save? How much money would they save by using these inexpensive products? Well, they're not quote inexpensive, but when you look at what the ambulance has to carry and all of these items and what have you, which is why it's $1,000 per trip. Right. And that's what we pay. Taxpayer. Correct. Well, we're paying that for 330,000 people on Medicaid. If they were allowed to use these topicals, I'm not talking about ingesting anything, just topicals. Now, I recognize that the aging of Hawaii is going to see that number increase. But also let's consider that of Hawaii's patient population with respect to medical cannabis, 61% of our population, of our patient population, is over the age of 45. And that number is growing steadily. So our baby boomers and our seniors, while their recipients of Medicaid or perhaps Medicare continue to grow, they're already recognizing the value of cannabis. Now, interestingly, there was a study in Georgia that looked at numbers from states that had medical cannabis programs, thriving, robust, big business cannabis program, state-sponsored. And they found that on average, a state that had a well-regulated, well-rounded, rounded and robust medical cannabis program, that that state would save $150 million annually on Medicaid and Medicare costs. So why not open this up to more people? Why do we have to limit participation as a patient in this medical program? Can we not shift it to something more therapeutic? Can we not break down that stigma and that limiting factor that keeps people out? Now, at the same time, I ask, why can't we break down those barriers that allow other businesses to engage? To put out a different product, to put out a different quality or a different strength of product, to put out a different form of product from a different cultivar. The idea of taking this industry, Hawaii's medical cannabis program, and making it therapeutic or adult use, and not being so stringently vertical, tilting it on its axis and going horizontal, allowing for different retailers, processors, manufacturers, and growers to engage would severely benefit the cost. It would lower the cost and allow other patients to get what they need. Well, in North Carolina, there is a hemp university, and I hear from them regularly. Fantastic. Because it's exciting. They teach growing hemp from scratch, that's part of it, but they have the science, the technology, and all of these things in the curriculum. It's a regular accredited university, and that whole state is thriving because of it, of all of the exactly, and just think, if we had something like that, our students could think that they could grow into scientists and farmers and architects and all of these things, and then they could stay home. They could. They could stay. And that's just hemp. Imagine if you could open that up to hemp and cannabis. And cannabis. Absolutely. And they could stay home. We wouldn't have a brain drain. Brain drain. We could, and we have got to look at, since yesterday's over. Correct. It's over. We have to look beyond. And we have to go forward. The day of people just under a cloud of marijuana is over. The state in its infinite wisdom changed the word from marijuana to cannabis. Absolutely. Wonderful. All right, let's go with that. Let's keep going. Let's keep going. Let's keep going. That should just be a stepping stone along the way. We need to build the highway. We need the freeway. We need the express lane. Yeah, so we need a university. We do. We do. We do. We need to think that these children can grow with this industry. That they can think that I don't have to be changing beds in somebody's hotel. I don't have to be a bellhop or a tour guide. I can be something that I can dream. I can grow with the industry. And that's the beauty of creating this new marketplace. We have this wonderful opportunity. But I think that the transition starts at the ledge. Making sure that the right people get elected. That the community is having that conversation. That cannabis is integral. And that's why we're pushing hard for high four can. A way for responsible cannabis use the super PAC. Let's encourage our legislators to recognize the value of cannabis. Because your generation and my generation are already there. But it's the legislators. And I'll say this. It's the governor at the top who's holding us hostage. We need the right leadership in all of these political seats to make sure. Well, we've got three candidates for governor now. We do. We do. So I'll say that one of them. One of them is going to win. But so we need to nail each one individually, collectively, each one of them. We had, we need to know where they are and can they see. Not just the use of cannabis, but the industry. Can they see the long term and the impact it will have on the economy. I don't know the answer to that. And you're absolutely correct though. We need to test them. But I think that in. Throughout the tenure of this standing governor. We haven't seen the development or the progress that we've demanded that the public has needed that the program itself. Has needed with the Department of Health. There's been no backing. There's been no backbone. And because of that, we can only look up to the top. Well, yes. And I am.  But if we with. Governor E. Gay. Is. Dr. Pressler. They are joined at the hip. So if we can get rid of him, she goes and maybe the department looks better. I don't know. I don't know. I don't know the answer to that. I don't know the answer. But I know. I both know that we need a change in 2018. Change in that department. Because that's been the problem. With cannabis. You're correct. Absolutely. And not only that, but the attorney general at one point or another was providing information to the ledge, to the governor saying, we need to watch out for Jeff Sessions. And you and I both know, but that's not the reality. No. And so Doug Chen is a friend and he sat right there and I grilled him on. You know what the Supreme Court said. That overrides Jeff Sessions. Yes, ma'am. So, but he was okay. He was bless his heart. I'm going to miss Doug. We've been friends for a long time from city council days to now. Anyway, he's a nice guy, but what can I say? He admitted to his own bias that his parents said that it was a gateway drug. And he said, I have to admit that that's my own bias. But he sat right there and said it so everybody could see. And I said, well, we have to deal with your bias. But we do. We have to clean up his mess. Unfortunately, the Supreme Court says that the state has a right to do this. You're right. As well as the, the spending bill. Yeah. So, yeah. So now, Breloom and our is given credence to every well regulated state medical cannabis program. And yet we're still held hostage. Well, again, thank you so much for spending this time with us. And you will come back. Yes, ma'am. I will. It's an honor. I know that we've been trying to schedule this for a while. So thank you. Thank you. Aloha, and we'll see you next week.