This entire story is just so heart warming and I don't know if the title/discussions right now are doing it justice.
1. The fact that this donation is 100% going towards tuition. My university has a few B's in endowment, but those money are most definitely not going towards making the tuition fees lower lol. Hopefully this will allow them to select some candidate that are struggling the most financially...
2. The donor being a 93 year old doctor/alumni of that school that studied "learning disabilities and developed screening protocols".
3. The money was from her late husband's "whole portfolio of Berkshire Hathaway stock". And before he passed, he told her to "do whatever you think is right with it" and the article ends with her saying "I hope he's smiling and not frowning". Makes me cry a little.
> ... I don't know if the title/discussions right now are doing it justice.
I grew up and did my education in Denmark. Here we have another sentiment on philanthropy than the anglo world has. Generally I don't like when a single person decide the destiny for many people, as in this case. It as anti democratic and concentrates power.
Stories like these are heartwarming indeed, but they also help keep status quo. In a more fair world a person should probably not be able to amass more than USD 1B by making the right bet on the stock market. That wealth is build in this way is anti-meritocratic.
Stories like this highlight an interesting paradox of the anglo world: The relationsship between democracy and large scale individual impact and the relationsship between allowing people to make their own wealth while the really rich people are merely early, passive, investors.
(It is hard to write critical comments like this when "The donor being a 93 year old doctor/alumni of that school that studied "learning disabilities and developed screening protocols"." - I hope you can forgive me.)
> In a more fair world a person should probably not be able to amass more than USD 1B by making the right bet on the stock market. That wealth is build in this way is anti-meritocratic.
It's anti-meritocratic for someone to invest their money intelligently in the stock market?
How do you determine the threshold where on one side they're entitled to the wealth they earned, and on the other side their wealth is unfairly earned?
> It's anti-meritocratic for someone to invest their money intelligently in the stock market?
I like how you threw in the word "intelligently" like this investments was planned and thought out from the beginning ;)
Thresholds are are not that hard to decide: It is about taxation that takes macro-economic behaviour and targets into account.
We have a political party that wants to reduce capital gains tax in Denmark (currently 27%/42%). However, analysis shows that this would benefit only the wealthiest 2% so the consensus is that this is a bad idea from a macro economic perspective.
The value of money is relative. Your 1 million dollars are worthless if everyone else has 10 million dollars. The second people act upon and realise that, we can start to build good economic systems.
If you really don’t believe that it’s possible to invest intelligently, better than others that’s just wrong. There are many people who have done that. Like there are 10000s of investments and over any long period of time, some will so far far better than others. Some of those will be public companies or otherwise be investments that are open to all people.
I do believe that. But your choices has diminishing effects over long term. And also, in a meritocracy the "profit" needs to be congruent to the merits.
I think there is a broad consensus that talent won't make you a billionarie in the stock market, otherwise we had seen many more people become billionaires in the stock market.
If you really believe that that the person in question got billionaire on the stock market by their merits that’s just wrong.
Macro-economy shows that EU is doing wrong as US companies outperform EU companies.
Wealth/power concentration isn't due to capitalism but due to human nature and society scale.
Even if success greatest factor is luck it still requires merit. By punishing success you're punishing people that put money into savings, that attempt to innovate and improve human society, that invest in promising areas. In the long term society will be stagnant. And I doubt that in the short term society will be more equal because forced distribution of wealth historically increases inequality.
Maybe companies, but they are not what should matter. As far as know the amount of poor people in the usa is also way higher than in Europe. If we take that into account i'd say that Europe is doing just fine.
> As far as know the amount of poor people in the usa is also way higher than in Europe. If we take that into account i'd say that Europe is doing just fine.
That's all included in the article, which admittedly is behind a paywall. He goes into great detail, including purchasing power parity, means vs medians, etc.
And the conclusion is the US generates more wealth for the middle class than Europe does.
Wasn't it just last year that the richest man and the richest woman in the world were both French? A statement at "Europe" level is far too generic, especially when it comes to economic policies or quality of life. Europe includes both Norway and Moldova and the variance in the quality of life is much higher than Massachusetts vs Mississippi.
I'm not North American, the intention wasn't to polarize. I don't know what to answer. It feels like you don't like to have your beliefs questioned, so no point in talking.
I am sorry about that. please question my beliefs! I am just a bit in doubt on what belief you question?
you can derive from my statements that I don't think the current landscape in the US is entirely meritocraric or democratic as a single person can amass serious influence by investing in the stock market.
you respond that at least the US is richer than the EU, which is probably right. But I don't understand what belief it challenges? That it should justify a less democratic or meritocratic system?
It's about putting an upper limit to the amount of resources a single person is allowed to amass and thus control.
We agree that we don't want a dictator. A single person with too much wealth can be almost as powerful, hence there are good arguments in favor of setting such limits.
And yet many people have far more actual power over people's lives, for example many elected and/or appointed officials.
If a cop in my city wants to ruin your life, there's a chance it'll be easier for them to do so than it is for a rich individual, not to mention the mayor of the city.
And unlike a billionaire, who'd have to spend money to actually "control people's lives" and is therefore limited by some constraint , an elected official gets to control people's lives with no constraint at all.
What if the cop wants to ruin the lives of a large group of people? How about if it's a group people living in the next town over, can he get away with it? If he does manage to ruin the lives of people, will he get voted out or dismissed?
Bill Gates improved the lives of countless people around the world. He could as easily made the lives of countless worse if he wanted to or as an unintended consequence of his projects.
> He could as easily made the lives of countless worse if he wanted to or as an unintended consequence of his projects.
As an unintended consequence, sure, but that's more true of scientific/technological progress specifically than what Bill Gates did, which was closer to business and tech popularization. If a scientist invents a super-virus that kills everyone, then yes, obviously, they've made the world worse, but that's not really tied to money.
As for "as easily" making countless lives worse in other ways - I kind of disagree there. He made countless lives better because people voluntarily bought his products. He didn't coerce people, they chose to do it. There's no analagously easy way to spend money to ruin people's lives, and especially not if you consider the kind of scrutiny and backlash he'd receive.
Yes, of course. I made a pretty books statement with no support.
My friends who work in public health research despise the foundation because they are absolute gatekeepers on what can and cannot be funded. If you are trying to do research that is not part of the foundations priorities, good luck, they say.
The Foundation is essentially only accountable to themselves and can have global impacts on health research distribution. A recent example is that their whims affected the speed and distribution of COVID vaccines.
I think most people will agree the threshold to be in the few millions. Some will argue for 5 and few for 50, but nobody can produce $1B of value. Take control of it, sure, but produce, no.
> I think most people will agree the threshold to be in the few millions. Some will argue for 5 and few for 50, but nobody can produce $1B of value. Take control of it, sure, but produce, no.
That is just, on the face of it, false. Did Stephen King not produce millions and almost a billion in value? Despite writing books that have been read by millions of people, have turned into super successful movies, including some movies considered some of our best art?
If I charge $1000 with a 90% profit and sell 10m units, can I claim all of that as having "produced value"?
If my movie budget is 300m but 200m of that went to high priced actors (think JD, RDJ getting paid 50m~) did that movie produce that amount of value?
Corporations have perfected consumer value extraction, allowing them to pay themselves more and bid higher against the competition, further increasing prices to consumers in an endless loop. It produces nothing of value for us, but we're too dumb to boycott this behaviour.
> Corporations have perfected consumer value extraction, allowing them to pay themselves more and bid higher against the competition, further increasing prices to consumers in an endless loop.
This flies in the face of most economic theory, and also flies in the face of reality. How many corporations are out there with 90% profit margins? Very few, if any.
> If my movie budget is 300m but 200m of that went to high priced actors (think JD, RDJ getting paid 50m~) did that movie produce that amount of value?
I'm not sure what the high-priced actors have to do with it, but the amount of value produced has nothing to do with the budget - it has to do with the tickets you sell. If your $300m movie tanks and no one ever goes to see it, you've in some sense created 0 value. If everyone in the world goes to see it and you make billions of dollars, you've created billions in value, as decided by actual people choosing to vote with their wallets to giving you money for your art.
The budget only figures into it in the sense that you need to subtract it from the revenue to decide on the actual profit.
Apparently they can by giving it to the right entity at the right time.
What we could do (besides taxing it away) is configure a limit to what they are allowed to do with it.
I also see room for special titles with cosmetic privileges if someone accomplishes to pay the enormous tax.
It will be hard to find the right privileges. Something like a medal or an outfit is obviously doable. An annual fancy dinner for the group doesn't seem over the top. A daily 30 min slot on the TV for them to bid on exclusively, or each their own slot annually. Can grant 3 lectures in any university. It gets slightly dubious if we add special construction permits for locations no one else may build in.
The funniest I could think of, at 10 bl+ we seize all of your money and assets, you are forbidden to participate in the financial system. You get a robe and a cloak and a card with which you can eat any place, stay at any hotel, buy cloths, do shopping, take a taxi and take any flight with a maximum of 3 guests + partner and kids.
> Apparently they can by giving it to the right entity at the right time.
I want to understand this. If I buy a Novo Nordisk share on the market I never gave novo nordisk a single krone. My counter part is the seller (who rarely would be the company itself).
Generally I would say that investors provide liquidity to the market. Ie. the action of buying and selling are the ones that provide the value. Not holding.
You can conclude that a person holding onto a share for 30 years did not provide any value. That person was merely a rent seeker based on other people providing value by doing the asset allocation – In Denmark these people would be punished by the progressive capital gains tax, while the people trading ones in a while would benefit from a lower tax bill.
If I give Novo directly $125 for a share of their stock, sell it 30 seconds later to you, who gives me $125.01, and you hold those shares for 30 years, which one of us really invested in Novo? Does your opinion change if we've agreed the night before that you'll buy the share from me?
I believe the long-term holders of equity investment are the true investors, regardless of whether they bought the shares in an initial offering or a secondary offering.
The initial offering market doesn't exist without the secondary market.
I am talking about the value you provide as an investor - regardless of where you got the share. I agree that it is indifferent whether you buy it from the company (in an IPO or in later emissions) or on the secondary market.
My point is that the value provide is liquidity. Ie. the property that owners of a stock con transfer that stock into money to use on other ventures. People that merely hold a stock does not provide liquidity. You need to have an open order on your stock to do that.
Now, please oppose me! My question is: What value to does term holder provide in virtue of them being long term holders?
All of your questions can easily be understood by a few minutes of investopedia. Start by reading about "Capital Markets" and then risk transfer.
You start the thread saying what people ought to do with their money and presumably having it forcefully taken with little understanding of financial markets. This is [one reason] why nobody takes these suggestions seriously about personally wealth.
> All of your questions can easily be understood ...
Then you should be able to make a well informed comment on the matter, as you clearly understand it.
> This is [one reason] why nobody takes these suggestions seriously about personally wealth.
What suggestions? Capital gains tax? I only know of very few industrialised countries not enforcing capital gains tax. So that idea is most certainly taken serious.
> You start the thread saying what people ought to do with their money and presumably having it forcefully taken with little understanding of financial markets.
Can you expand on this? Having money "forcefully taken" is a core feature of modern efficient markets whether you like it or not.
They have (transitively) provided the company the original $125 to use in their operations.
In that example, you provided the money; I was just a middle-man.
Except as it pertains to employee/executive comp and future fund-raising, the company doesn't care about the secondary market liquidity. They care about the money they used over that 30 years to grow.
> They have (transitively) provided the company the original $125 to use in their operations.
But that value already existed as an intrinsic property of the company (eg. NAV). What the market did was to unlock these money for the company to use - Ie. they provided liquidity.
Example: I have a company that is worth $1000, but I need to spend $200 in R&D. I sell 20% of the company in the market for 200$. No value way produced, but the market transformed my 200$ from company to money - ie. liquidity.
Value that only happens when people trade, and not when people hold. So back to my initial point: Long term investors does not provide value.
> I have a company that is worth $1000 / that value already existed as an intrinsic property of the company (eg. NAV)
Upon what is this based in a world where no long-term investors exist?
Even in the "DCF of dividends plus NPV of terminal enterprise value" model, the last is dependent on long-term investors. (For the high number of tech and high-growth companies who pay no dividends, the first term in the valuation is $0.)
I certainly don't understand but there is no need. The mechanism (provided it is legal) isn't really important.
We need work, to earn enough to survive and have some quality of life. It must feel like you've contributed something useful and society rewarded you reasonably for it. Others will have to do work for you or it wont work. If there is no money for that it cant work.
This reminds me of ancient Athens. The rich would all compete to pay taxes, because your social status was based on your taxes, and you had special perks if you paid enough. It became a bragging opportunity to showcase your wealthy.
If you funded something with your taxes, you could hire the artist that made the sculptures. Say you build a new civic center with a theater. You have an incentive to hire a good artist to make the place in your preference, with your image, which means the city has more art. If it was an ugly building, it’d be an ugly building with your name on it. The rich during times of war would be separated into those that could fund a whole battleship and those that didn’t. If you shirked your responsibilities during war, you were viewed as a traitor who was so greedy they’d let the city fall.
Maybe we need to stop chastising the rich for building things in their names, but instead give them more opportunities to do so. Additionally maybe we should make all tax payments public, so you can see if your friends and family avoid taxes. Maybe people would become embarrassed to pay less taxes than their employees if everyone could look it up.
I would love to see the itemisation and deduction for this. In particular, how did you decide how much value was due to the publisher, movie studios, etc. vs. her?
We can safely assume that she would have produced absolutely no value, had there been no publisher.
Maybe the publisher produced $1B of value and JK Rowling produced none? They did after all select her over other authors.
> Maybe the publisher produced $1B of value and JK Rowling produced none?
You are actually right that publisher produced most of the value... though only in the beginning when she was a nobody. I am sure publishing industry knows that too and read somewhere that their deals with new authors reflect that reality.
After the first 3 books when the series started gaining traction and people talked about lining up for the 4th one? It was absolutely the author who was producing the value. Publishing house couldn't have conjured up the remaining 4 books at the same quality - they are good at publishing, not good at creating. (Just ask HBO / Game of Thrones showrunners how it went after GRRM didn't write the last 2 books).
> It's anti-meritocratic for someone to invest their money intelligently in the stock market?
Absolutely. To achieve such results you need so much luck and such a headstart that any merits you might additionally have are drowned in everything else that contributes to "your" "success".
> How do you determine the threshold where on one side they're entitled to the wealth they earned, and on the other side their wealth is unfairly earned?
Rule of thumb. About $10 million.
But it's not about who deserves what. It's about how much influence can society safely let a single random primate have.
The actual number will be determined by the political process. It's a number that seems sufficiently unachievable for 51% of people so that they feel safe to vote to heavily tax those who hace that much.
Current barriers to that is that the very wealthy own the culture and they are selling poor people the illusion that everybody can be the rich and what they are doing is actually building value not extracting it despite the fact that trillions of dollars have been extracted from the control of democracy and market and placed exclusively in their hands.
> But it's not about who deserves what. It's about how much influence can society safely let a single random primate have.
You are severely overrating how much influence $10m buys you, and very severely underrating how much influence you can have without personally having $10m dollars.
And please feel free to have $10 million. Above that it's starting to look like you aren't into it just to secure yourself but rather control and impoverish others.
There are various ways of attaining influence. Money is just the easiest and least controlled. Morally and practically. So let's plug the biggest hole first then worry about the rest.
And why success should not be punished? Do you think people will voluntarily stay poor just because they might be taxed more if they reach 10 million?
And even if that would be the case. It's still good because inequality harms vast majority in the short term and everybody in the medium to long term so any disincentive to people getting rich at the expense of poor consumers is a win.
How would you solve the problem of wealth concentration in free-markets without incurring in greater wealth concentration under a closed-market?
> And why success should not be punished?
Because generally we want to reward and incentive the betterment of society.
> Do you think people will voluntarily stay poor just because they might be taxed more if they reach 10 million?
Maybe. It must be depressing to live in such a place. If you punish success, you reward mediocrity. But the thing is that those that reach 10 million or plus will always have the option to move their fortunes abroad, so it's the middle class that ends up paying the heavier burden in countries ruled by this mindset.
> How would you solve the problem of wealth concentration in free-markets without incurring in greater wealth concentration under a closed-market?
I'd have free market with punishingly progressive taxation and redistribute proceeds of this tax as a basic income.
> Because generally we want to reward and incentive the betterment of society.
Financial success is intrinsically rewarded and it's orthogonal to betterment of society. Tou can't really tell if a rich person improved society or damaged the society just by looking at their wealth. No additional rewards are necessary. And some pubishement would be advisable if the scale of this success causes harm to the system that spawned it.
> But the thing is that those that reach 10 million or plus will always have the option to move their fortunes abroad, so it's the middle class that ends up paying the heavier burden in countries ruled by this mindset.
The mere presence of those who have more than $10mln is the cause of the system collapsing. They price out the middle class out of the real estate that they hoard for investment purposes. And of other limited resources as well.
Rich are more than welcome to leave. Their leaving improves lives of everyone else.
Owning money just means that society owes you some goods and services.
If you move out and request that some other country pays this debt to you then the country of your origin is better of.
Wealthy can be beneficial to capital starverd countries because their people can trade the wealthy low tech services to amass capital necessary to buy technologies from abroad.
So to help african countries we shouldn't be sending them food. We should cast away our billionaires there.
The response is context dependent. If it is a non-response to you it is because you lack the expected knowledge. I was lazy as I'm gaining nothing from this. If you think his argument is better it's your right and fault.
I can't think of any case in history where a brain or capital drain would be a positive think. Historically the US benefited greatly from European drains. Such an absurd idea requires a fantastical level of evidence supporting it.
While I agree that capital starved countries would benefit from additional capital, it is a tautology, there's a reason why those countries are capital starved in the first place. Corruption, bad to make business, etc. Capital moves quickly when there are favorable conditions. Also any billionaire can live at country A, B and C while paying taxes at D and investing in E.
Also it's very simplistic and wrong to put all the blame of home shortages on billionaires. It's more complex than that. Demand is high but why supply is low?
Algorithmic trading produces nothing of value and yet we allow it for some reason.
It actually detracts from the entire purpose of a stock market.
It has also created our poisonous modern environment where companies chase record profits every year, endless unsustainable growth with the added side effect of ass-covering for all their bad investments.
A lucky investment like this guy is probably fine but the truth is that the system is set up so that wealth begets more wealth; the wealthiest people have so much money that they don't have to be careful with it, look at how much Musk spent on Twitter as a toy for him to destroy, it doesn't matter because record profits and valuations ensure that dumbfuck CEOs and investors are bailed out of their dumb decisions.
Meanwhile we live in a biological society where our evolutionary path has made it exceedingly easy to manipulate people to hate based on sexuality, gender, race, etc ignoring the class war going on. We're too apathetic and ignorant to vote together, we could all share in our species' accomplishments but no, the suit and tie ruling class can have all the Bentleys they like so long as I get to vote for the guy that'll let me hate the people I want to hate.
It doesn't matter how you determine it or what you end up determing nearly as much as doing it at all by any means, and working out good procedures and results over time.
Currently, we have nothing at all. A sub-optimal limit, a downright wrong limit, derived from sub-optimal, downright wrong methods is better than none at all.
The Bezoss and the Musks of the world are not doing anything we need done badly enough to be worth what we give them.
Those people who like to run big projects will still be full of themselves and still seek to be in charge of everyone else and will still command the same resources even in a world where that isn't expressed as personal private ownership of the resources.
If the change in incentives changes anything, if there are people who currently became billionairs and produced Amazon and Facebook, who would not have bothered if they couldn't own it all, I am prepared to call that only a win.
We'd still get anything that was actually valuable to us rather than just valuable to the owner.
The only problem is needing to incorporate enough ownership and capitalism so that there is any motivation for excellence. If everything is purely communist and no one owns anything, then all products and services suck. There does need to be some sort of reward for making the electric car and the charging network actually good, and some anti-reward for not making it available to everyone. Patents and copyright need to be somehow quite different. Maybe they still exist and confer some sort of benefit, but nothing like now. Rewarding people for inventing or improving things only to let them keep it for themselves, and even retain ownership control through drm and software over products that were sold more than nullifies the value of getting them to invent the thing in the first place. More than merely negates. Their existence suppresses everyone else who might have done it differently.
Where is the line and how do you determine it is no conundrum at all. It's nothing but some boring policy grunt work to hash that out.
I'm from Switzerland / Germany, and thought exactly the same. It's like, great in this specific case that she did this, but boy, are you fucked as a country if you rely on the good will of multi-billionaires to fix your problems.
What are the behavior goals? Do you mean forcing her not to be to good of a musician, so that other musicians can compete with her or to simply limit her creative output?
Sane semilinear tax algorithm (rather than brackets where the upper most bracket only affects the lower middle class at best, the rich have successfully lobbied themselves into not being taxed) with a 100% tax wealth cap after a certain amount (let's say $10m annually).
Ofc everyone hates this idea, idk y'all think you'll be billionaires one day, or otherwise think that someone deserves to make more than $Xmn a year, in a way you're right, because nothing will change, we'll never actually tax the rich properly...so I suppose that means you win.
Isn't it inevitable that one person will decide the fate of many ? If we get rid of billionaires through wealth tax, then politicians will have more power to decide the fate of many.
The US seem to choose their presidents not based on policies or track record but rhetoric. That doesn't seems better than capitalism.
Again, as an EU citizen, the two party system seems to be wildly un-democratic. In Denmark we have 10 parties represented in the parliament (in a country of 5.5million people). This forces decision making to be compromise seeking and represent more real opinions.
Politicians go through a voting process. People needs to agree to be ruled by them.
To become a billionaire you just need to be lucky enough to purely mechanistically attach yourself to a market phenomenon and drain it. Noone needs to agree to that.
And none ever voted in someone because they had to not because they wanted to.
It's common for people to vote in candidate B because they don't want candidate A to win and while they dislike B it is deemed as the lesser of evils as he is the only alternative with a good chance of winning. AFAIK this is the universal case in every representative democracy.
In democracy you can also abstain. In the market for food, shelter and clothing it's not possible without serious harm to your health.
Also vote costs you nothing and oa the same for all people and your voting power in the market is directly proportional to how much money you can spend.
Not really. You can abstain from voting but not from paying taxes. And if you abstain from voting you will still will be subject to the authority of whoever get's elected and it will probably not be in favor.
> In the market for food, shelter and clothing it's not possible without serious harm to your health.
You can grown, build and craft your own. It's not always practical but you have those options. e.g. I cook my own food and grow produce in the backyard. And we all have way more and better options for food, shelter or clothing than we have for president, governor or mayor.
> Also vote costs you nothing and oa the same for all people and your voting power in the market is directly proportional to how much money you can spend.
I don't know in which world do you live but that just ain't true. Elections are super expensive. In Brazil public funding for political parties is a 10-digits figure. Money win elections. Rich rent-seekers "donate" massive amounts to candidates legally and illegally to later receive favors.
> It's not similar. At all.
Free market is the purest form of democracy. Representative democracy is garbage.
Of course not. I identify cronyism as an inherent characteristic of representative democracies but I don't advocate for it. I follow the non-aggression principle so no matter how rich or how poor nobody should have rights over others or their property. I'm in favor of going towards anarcho-capitalism and stateless societies.
I'm neither, but you first call voting with wallet the purest form of democracy, but if democracy actually worked like that you call it cronyism. That's really curious.
Can't vote with your wallet if you have no choice.
Remember, umbrella companies are buying up multiple competing brands for ages now. Rather than shutting them down, they just make money from all of em.
"Fair" has many meanings. If there are 2 brothers, one super intelligent and the other retarded, should the smart one keep all his money for himself and the dumb one die from starvation since he is not capable of sustaining himself? The smart one got his gift for free and although maybe he didn't waste it while he could have, the retarded one didn't have equal starting ground.
The difference I see between US/EU worldview is that in US the biggest emphasis is in what "YOU" did, disregarding luck, chance, environment factors etc. "Bill Gates created the wealth himself". People like feeling like there is a chance for them to become super powerful and important and that there is no system holding you back, even though they never actually do it but the hope/idea is very important for you. I can see this in Eastern Europe where large percentage of people dream of winning the lottery; I guess that is something from which people here draw hope of power and influence, while the same people are ok with strong social measures, high taxes, free healthcare etc. while I feel in US all these social benefits are perceived to prevent people from achieving astronomical results and hence shouldn't be.
This is unfortunately an uninformed opinion that pollutes the debate.
An example you probably should should think about: Who owns money and their value? What happens when the central banks decide to raise the interest rates to 20% and you loose everything? Just a shame? On the contrary, what happens when the central banks employ quantitative easing and that makes you rich? How does this interact with large-scale projects the government starts to create employment.
Not always are fiscal and monetary policies aligned. This creates either severe depressions or economic bubbles.
When an opinion is funded an understanding of to what extend the greater society defines the value of things it will have gravity. Until then, it is just noise.
So, if someone says, billionaire is bad, that is an informed opinion, but when someone else says, billionaire is good, it is uninformed? Thanks for the fish.
You pay for stuff in the supermarket, you get a product. No strings attached. I would be surprised, if people like the idea, that if one buys a piano, that for each song being played, one has to give a dividend to the piano manufacturer. Usually the transaction is closed. Though, such deals can be made. Maybe you get the piano for free.
You pay a worker that what you think is needed to make a piano. If one worker makes a billion pianos, you pay him a lot. And if you sell pianos a billion times, you become a billionaire. And if your worker can buy stocks, he will also get dividends.
The idea that billionaires have to give a share is nice and good, definitly good for hackernews stories and their socialistic readers, but that the billionaire has already given societies wealth manyfolds, well, afterall people bought their stuff to improve their lives, that made him a billionaire, that is silently forgotten.
As usual, it is play with envy and greed, how dare someone has more than me!
Ah yes, lobbying the government with monetary kickbacks is fair. Not paying local taxes and hiding in tax havens is fair.
Hell, mining blood diamonds is fair because the local authorities allow it, mining oil from under the impoverished residents of a corrupt country is fair, skirting monopoly laws to create conglomerates is fair.
Nothing is illegal for these guys, it all gets shoved under the rug. Remember the Panama papers? What came of those? Nothing.
So, if a billionaire behaves good, you leave her alone? No way, Jose. For me it is playing with cliches, it is as old as humans amass things and can stop showing up for work while you and me can not. And we look with envy at this kind of freedom, which we lack. And it produces the worst in us, anger and lust to strip her from her wealth. I guess, thats why envy has identified as a sin by religions.
(While others have identified religion as a way of avoidance, to not question the status quo. Ha!)
If I take over your country with guns and bloodshed, I suppose the wealth I gained from doing that is legitimate?
There is not a single billionaire who has made all that money fairly; wages do not rise with inflation, environment; tax dodge; etc costs are carried on to the consumer as well. What sort of world do we live in when people like you think it's okay for things to be like this.
I don't have a problem with people being successful and accumulating wealth, but I do have a problem with the ilegitimate and corrupt practices involved in accumulating billions and trillions.
I do agree that in a more fair world there shouldn't be billionaires, but at the same time it is curious that from all the stories posted on this website - where billionaires are making uncountable decisions that have a massive impact in our society - this is the only one where commenters would come to express their discomfort towards this fact of capitalism.
> this is the only one where commenters would come to express their discomfort towards this fact of capitalism
Don't conflate an in-equal system with capitalism. That would be untrue and un-wise.
Most people agree that a free market needs to exists in order to uphold a capitalistic system (what is ownership if you can not transfer it?).
You can make free markets that are regulated in a way that ensures that participants are, roughly, equal - in fact there is an argument that a market is not free unless this is the case.
When participants of a market can increase their profit margins it is usually a sign of an ineffcient market - a participant has an advantage that other participants can not compete with.
When facts go against the narrative that billionaires are bad some feel the urge to rectify. If this story didn't hit the front page they wouldn't care. All is propaganda.
I've currently reading Warren Buffett's biography, The Snowball by Alice Shroeder and "Sandy" Gottesman frequently appears. When I saw 2, I thought that sounds awfully like someone I read about in Buffett's Graham group. After 3, it was definitely someone in the Graham group I've read about.
The Graham gatherings that included Buffett and Gottesman had fine gentlemen, at least one of which has championed a similar cause in the past, whether that was Gottesman or another one of his peers, my memory fails me. While it's sad to see someone I am still reading about pass away, it's heartening to know that he ended on a high note and that he continues to leave a positive impact from beyond the grave.
As someone who studied/follows finance, but doesn't work in it, BH is about as 'The Good Guys' as it gets in the investing business. Pick stuff that matters & works, fund it, don't sell it.
"if you decide to die poor, a great many things can be done with your life". Heard it from a friend whose thesis advisor loved to say it occassionally.
It only works when first you accumulate some resources (knowledge, money, wisdom, strength, whatever) which you can then spend on others.
Just staying poor and spending your whole days on searching for food (or a drink, or a dose) does not provide one with many opportunities to do interesting things with their life.
Giving is what makes a life great. But you have to have something to give first.
Yes, not necessarily a financial success. Success or resource of any kind, taken widely. Prince Gautama did not share his inherited riches, instead he shared the information about the path to enlightenment. William Shakespeare was apparently tight with money, what he shared was his mastery of English language. Etc.
Those who champion federalism will often say that they believe that government power should be spread as widely as possible; that local control is best because it gives power to those closest to the problems. I see no reason why that should be limited to government; a billion dollars is a lot of power for one person to wield.
> Those who champion federalism will often say that they believe that government power should be spread as widely as possible; that local control is best because it gives power to those closest to the problems.
The counterpoint to this is zoning rules. Sometimes you actually want the people who are furthest away from local problems to set policy. There's no new housing in major metros because wealthy landholders vote in people who set policy to prevent construction. After all, more supply means lower home prices. Setting that policy at the top allows for global optimization - nobody in DC cares that a building throws a two inch shadow over your park for half an hour during the vernal equinox.
The reality is both approaches have pros and cons.
Ditto with individual direction of funds. There's no reason to think all individual directions of funds are local let alone globally optimal. An individual or two can use their money to halt progress like the Kochs do, and the Murdochs do. This one is great. However, one data point doesn't make a trend, and there's no reason to think this individual act is representative of directed contributions.
That said this is a lovely gesture and I appreciate it.
> wealthy landholders vote in people who set policy to prevent construction
This is a problem specific to a type of federalism where wealthy people have more political power than regular people. If each renter had equal political power to each landholder, the landholders would be a political minority and would not be able to influence policy in this way.
When we talk about theoretical improvements to our political systems, it is often useful and I think usually necessary to consider that more than one change would occur at once. If people like where these changes would get us, we can then bring them in to one policy platform and advocate for the change needed to achieve those goals.
Sure. It’s not a complete solution, and there could be schemes to deal with this. But much of the issue with NIMBY-ism comes from the outsized influence of land owners in the political process. Even if outsiders can’t vote, regular renters are more likely to favor building extra capacity than landholders are. But I also believe in other schemes, not pure local politics, which would address these issues more completely.
Pretending that “those who champion” is somehow better than “so you’re” is just the height of elitism and condescension.
Additionally, this comment is also disrespectfully condescending, using the third person, euphemism, and innuendo doesn’t make it any less rude, in fact it makes it worse, it shows you know what you’re doing is wrong but you’re gonna do it anyway and be insulting at the same time.
Why not actually address the argument instead of impolitely calling me gauche.
I disagree - I think this act was amazing and great but it only happened because of one person's personal decision. Plenty of billionaires chose to spend their money in other ways and, while we could afford to freely educate everyone if we worked together, education is currently the source of a lot of financial stress.
There's the old Churchill quote "Democracy is the worst form of government, except all those other forms that have been tried from time to time." Autocracy is extremely effective in some circumstances and absolutely atrocious in most. The public should have some say in expenditures of this size - and if our current government has grown too corrupt to be trusted with that expenditure than that's a separate problem that we also need to solve.
There will always be inefficiency and corruption - but the more eyes and transparency we have the more we can combat that corruption.
My problem with relying on philanthropy is: What happens when the donor is not so wholesome, and instead donates their $1B to a terrible or deadly cause, like a group bent on hate, discrimination, erasing people's rights, ethnic cleansing or some other evil? Is that just as OK from the "let people do what they want with their money" point of view? What if a billionaire donated their fortune to a cause that would result in your suffering?
> Because our elected officials have been shown to be fantastic stewards of our money?
Compared to the billionaires who currently steward our money? Absolutely. For example, I just flushed a toilet and I'll never have to think about that shit again, except perhaps to marvel at how it may one day fertilize shade trees in my city.
I think the counter argument is, sometimes it is absolutely necessary for a single individual to decide what to do with the money. Elected officials will only spend money on things that get them re-elected and stay away from spending that is unpopular. Which means, things that actually improve lives but people are split on it because the issue is politicized, will never get the funding. E.g. Free public transportation
I don't follow this argument. The amount of money is fantastic and its effects enormous but I don't see why it should be out of the reach of any singular person.
The issue of effectiveness shouldn't come into play at all. In a society with any modicum of freedom, I should be able to decide what to do with my resources. Why should I (or anyone else) get to weigh in on whether she gives her money to this college or goes to Vegas for a (really amazing) party? As long as she pays her taxes, she should be free to use the rest for whatever she wants. If the issue is whether she pays her taxes, then by all means we can tighten whatever loopholes exist but after all is said and done, people should be able to do whatever they want with their wealth.
Also, legislating billionaires out of existence is impracticable. People would simply put their resources into other vehicles that shield against the law. We would end up in a cat and mouse game that used up resources with dubious benefits.
I follow it partially -- in that when several individuals hoard the majority of money, it leaves less for everyone else, which is profoundly undemocratic in a society that aspires to be market-driven.
Money supply is a zero-sum game - yes, you can print more, but that devalues what exists in circulation, so the have-nots remain the have-nots, and the haves remain the haves.
I think the existence of billionaires is absurd, and a giant red flag indicating that this in fact is a broken system. No single person should have command over such a disproportionate amount of resources, if only because not a single person can possibly choose well how to employ such resources.
Money is violence (in that it compels people to do what they otherwise wouldn't) and billionaires are grotesquely mega-violent individuals.
> when several individuals hoard the majority of money, it leaves less for everyone else
I don't agree with this. Wealth is created everyday. If I start a SaaS business and grow it to become a billionaire, there does not need to be an equivalent loss of wealth anywhere else in the society.
> not a single person can possibly choose well how to employ such resources
What supports this assertion? Maybe they do, maybe they don't. My argument really is that how you spend your wealth is none of my business after you have satisfied your obligations to society (which we collect through taxes).
> Money is violence
Hard disagree. Violence is violence. There are lots of ways to compel people to act that are non-violent. Famously, Mark Anthony foiled a coup with a speech. The Pope has enormous influence without having any tanks, etc. I am really against the use of language to make unfounded logical leaps in argument.
That said, this is he most compelling argument I can think of ie that billionaires have enormous influence over society. It undermines the concept of "one man, one vote". The counterargument is that this concept has never really been true (and cannot be true). All societies have people of influence and that influence is gained in many ways (religious standing, military prowess, good works, hereditary ties, oratory, notoriety, skullduggery, etc). These are intrinsic to human society and cannot be removed. Those people with influence will always have disproportionate impact on the direction of society. I guess it comes down to a value judgement of whether we want money to be one of those things that generate political advantage (for example, most western democracies have removed the ability to wield physical violence as one of those factors that provide a political advantage)
Money supply is a zero sum game... If you only view the game instantaneously.
Wealth grows, production increases the wealth of everyone around you. If a few people hoard all of the money, they're not putting that money to useful work and those that do do this will make all the returns (which is why people don't really horde money, it's all being used in the form of investments in businesses).
I don't necessarily disagree with the notion that no individual should hold "THAT" much power. But I haven't read/heard of a way of implementation that actually sounds like it can work. Since most of the asset is in stock, does one tax ie - Mr. Bezos on his Amazon stock? Would Amazon shareholders want that?
>Because I don’t think it should be up to an unelected individual what to do with this kind of money.
Take that to its logical conclusion: where is the line? Are you not allowed to donate $50 to a charity of your choosing because The Government knows better? There's plenty of reasons to hate billionaires but this one doesn't seem sound.
- 1B in donations at 5% APR conservatively invested will yield 50M every year.
- At yearly tuition rate of 59K the earned interest is enough to pay for 850 students without drawing down the invested principal.
- Albert Einstein college of medicine admits about 150 freshmen every year and medical school is 4 years long. So at any given time there are 600 students studying medicine at this school.
It seems to me that simply earned interest on this donation should be enough to allow students to attend this school free of tuition indefinitely.
Well, given the numbers in the parent comment they should have a surplus of $14.7 million yearly, so they could just let the surplus go back into the endowment and that would help keep up with inflation
There is no risk free 5% yearly return. The current interest rates may be temporary and there is inflation that erodes the 50M and the Principal amount.
On a large scale a 5% average return is very conservative. No interest rates won't stay where they are, but no one would invest an endowment just by putting it a HYSA.
> On a large scale a 5% average return is very conservative
Any return above GDP growth is not conservative. On average, real world GDP has grown at 3 to 5% per year since 1964 [1]. (We use real GDP because university costs will increase with inflation.)
600 students would have paid $35.4mm in tuition a year at $59,000 per year. That's a 3.54% drawdown per annum, right in line with real GDP growth. A 4 to 5% real return target is doable, but not conservative and certainly not a figure with a lot of margin for error.
Growth is a useless indicator. The whole point of Piketty's argument is that the return on capital tendentially outstrips the rate of growth, and that large investors have access to especially high return assets. The OP is right that a 5% average annual return is conservative.
> Growth is a useless indicator. The whole point of Piketty's argument is that the return on capital tendentially outstrips the rate of growth
I'll sidestep that Piketty measures wealth and calls it capital. Because that observation says nothing about how risk is distributed across those returns.
> large investors have access to especially high return assets
$1bn doesn't make for a "large investor" in institutional terms.
> OP is right that a 5% average annual return is conservative
No, they are not.
There are objective measures for this. I've worked closely with endowments the world over. A manager pitching a 5% target return on a fund with a 3.5% annual drawdown as conservative would be fired. A banker pitching the same would be subject to professional sanctions.
> you don't substantively respond to the core point
Yes, I do. Even if capital returns well in excess of growth on average, that doesn't change that the returns on assets in that excess regime are riskier than those below it. (This actually being formally provable by way of seniority.) Excess returns are never achived conservatively, let alone very conservatively.
Piketty's work has been seriously challenged. It makes good points. But it also contains bad ones, including a couple really sloppy and unsubstantiated assertions. His conflation of wealth and capital being germane to your argument.
> Any return above GDP growth is not conservative.
That would be true if additional GDP was distributed equally. But the rich capture majority of it in their investment vessels. So for a person with capital I think double of GDP is still conservative as long as inequality grows.
“As of October 2023, Harvard's endowment has an 8.2% 10-year return. In fiscal year 2023, endowment returns averaged 7.7%, with smaller endowments posting larger returns. Institutions with over $5 billion in assets have historically had higher 10-year average returns of 9.1%.”
Trailing 10 year performance is a standard reporting metric used to facilitate risk-and-return decisions in an uncertain world.
Here it serves to simply add weight to an argument that expecting a 5% annual return for invested endowment funds is reasonable and supported by historical evidence.
If things do not go as well going forward - all it means that principal will erode over time.
“As of October 2023, Harvard's endowment has an 8.2% 10-year return. In fiscal year 2023, endowment returns averaged 7.7%, with smaller endowments posting larger returns. Institutions with over $5 billion in assets have historically had higher 10-year average returns of 9.1%.”
It's enough not only for that, but to gradually expand the number of students they can afford to admit tuition-free into the future (strictly on interest), as well, should the desire to do so ever arise.
I don't think that's accurate. From my research, the bottleneck is residencies, whose funding is determined by Congress [1]. The AMA has supported laws to increase residencies, such as "H.R. 2389/S. 1302, the
Resident Physician Shortage Reduction Act" [2].
The paper "Physician workforce in the United States of America: forecasting nationwide shortages" [3] mainly blames an aging population and too-slow growth in the number of "residents and fellows".
edit: Found a dissenting view here [4], its main reference seems to be [5].
Med students don't have a lot of money, and hospitals are actually there (from their perspective, at least) to make money. The AMA doesn't have a lot of extra money either.
>> hospitals are actually there (from their perspective, at least) to make money
> Aren't most hospitals non-profit?
"Non-profit" is not referring to how the company operates. "Non-profit" refers to the owners extracting profit. Of course there are extra pieces, such as regulated transparency, but "non-profit" as a category are not wholly the donation-supported organizations that first come to mind.
In other words, if you are the owner of a successful non-profit, you'll have to simply pay yourself a market rate (TM) salary for such a successful executive as yourself. Instead of buying lavish Christmas presents like all those executives at greedy "profit" companies, your family members will only be able to get lucrative positions at your non-profit.
> So hospitals won't pay to train their workforce because... they can save money by forcing Congress pay for it?
They wont train their workforce because they would lose money doing it and can always hire people already trained. It's a tragedy of the commons which is why congress had to step in to subsidize.
> Aren't most hospitals non-profit?
Technically yes, but most are part of massive systems that are run by MBAs like traditional corporations.
They don’t have a lot of money yet. They have a very high amount of lifetime earning potential compared to their peers in other countries (yes, even after debt service and malpractice insurance.)
Are you seriously asking residents to subsidize their own training working 60-80 hours a week [1] and being paid maybe $20-25/hr for 3-7 years while the hospitals make money from their services?
If that were the case, then the only ones who would put up with such a system would be those who have rich families to back them up.
I came from a blue collar background and my family could not help subsidize my training and I could not afford to live, make rent, or afford food if I had to pay for my training as well.
There are so many other things that you are completely glossing over including annual income between generalists vs specialists, pediatricians vs non-pediatricians, reimbursement inequality from Medicare (has not kept up with inflation and is ~40% below inflation), Medicaid pays at best 10-15% on the dollar, and so on.
American physicians also work almost teice as many hours as their European counterparts which would increase their incomes.
[1] it’s considerably more because if you report it then the program can be in danger and lose its credentialing
> American physicians also work almost teice as many hours as their European counterparts which would increase their incomes.
I’d be curious as to where you got that. I was personally suprised to discover that in Germany, doctors in university hospitals can work up to 80 hours a week.
US doctors are among the richest people in the entire world, have an involuntary unemployment rate that rounds to zero, can live wherever they like without serious impact on pay and yet somehow are also the most oppressed and put upon if you ask them. Go figure it out.
It’s inappropriate to link once dissatisfaction with one’s income.
There are multiple reasons why US doctors are unhappy about their profession. I’m not sure where you get being oppressed as being the titular complaint.
I was an engineer before going to medical school and have an outside perspective as well.
I have complaints with medicine as to how it has changed over the last 10 years and not for the best. I have the right to complain to make things better for my patients and my work-life balance. That doesn’t mean that I am oppressed.
You have the right to complain and I have the right to point out that your industry, along with the housing and education industries, has stolen the entire productivity gains of a generation of Americans. I’m not concerned with your work life balance.
Your complaint should be directed towards the hospitals, for-profit insurance companies, and others who profit massively on the backs of patients.
My "industry" is only myself as I am beholden to my patients. I work and am paid by each patient who I treat and receive reimbursement by 50% of them at best.
If you don’t care about my work-life balance and lump me in with the rest of the healthcare system, then there’s nothing much to discuss.
Doctors also massively profit off the back of patients. They make far more and live a far more lavish lifestyle than doctors in other countries. I have multiple doctors in my family, they all work less than 30 hours a week and make more than 300k. And theyre not even in the lucrative specialties. Most are family physicians which Im sure you know is the worst paid doctor.
Doctors are paid by the patients that they treat. As an emergency physician, I treat 20-25 patients per shift on average and I am paid by approximately half of them due to not having insurance or money to pay for my services. I am paid roughly $120 per patient. Is that excessive in your opinion?
I would say that doctors in other countries are not paid accordingly and are UNDER-paid. See the UK NHS strikes as an example.
You should be complaining about is the excessive charges and reimbursement that hospitals receive for the care that they give. It gives me pause that despite having multiple physicians in your family that you do not understand the difficulty of their practice or work environment.
Most white collars jobs including doctors, engineers, and administrators make multiples of our European counterparts. I would say that Europe underpays its workers.
Again, I am a highly paid worker just like the rest of you. If I don’t work and treat patients then I am not paid anything whatsoever.
I would be further much ahead financially if I had stuck to being an engineer 18 years ago and not have put off earning an income for 7 years and going into massive debt. This was a risk because I come from a blue collar, lower middle class background without a safety net.
Yes $120 per patient is excessive. Yes the rest of the medical industry is even more of an excessive rip off. I dont think being a doctor is easy, I just think doctors are taking advantage of the government limited supply of their profession to negotiate salaries that are much higher than they would be if we had enough doctors. Doctor salaries are 9% of medical costs in the US, you cant just brush that off as insignificant.
Health care cost disease in the US has little to do with doctor salaries or demand for doctors. Unfortunately, as that would be a relatively easy problem to solve. The data I've seen indicates physician salaries adjusted for inflation are relatively flat or have even declined since the 1970s.
I agree you should be paid properly. But I don't understand why, if the US has a privatised healthcare system, hospitals are not paying to train their own labour?
US hospitals are almost all nominally non-profit. In practice, they are partnerships run for the economic benefit of controlling employees but the scam the tax code by pretending otherwise.
They do to a degree but most of the money comes from the government to subsidize costs. I’m not privy to the amount or percentage but they do cry about it when the residency union (CIR) asks for inflation adjusted salary increases.
> subsidize their own training working 60-80 hours a week [1] and being paid maybe $20-25/hr for 3-7 years while the hospitals make money from their services
That sounds like an apprenticeship. Many other industries do exactly that. Why should doctors be different?
But why must medical residency require 60 to 80 hours per week of work? AFAICT, it's because residencies are competitive, because there aren't enough of them, because nobody wants to pay for them. (But you can't make them unpaid, because, by circular logic, they require 60 to 80 hours per week.)
As an outsider, the whole system seems completely bizarre to me.
> [AMA president] Dr. Richard Corlin has called for re-evaluation of the training process, declaring "We need to take a look again at the issue of why the resident is there."
Why single out a particular private individual or his publicly traded company when you could simply pressure the institution itself to make tuition free?
Sure, but surely you'd have to dispose that much bitcoin over a really, really long time to not seriously move the price down... People might be disappointed at the amount of real money actually flowing around the cryptocurrency markets...
Or another way to look at it, you only need $50m a year to be the "equivalent" of a billion dollar endowment, and $50m a year is the budget of a smallish county.
There would seem to be about 10 countries with a budget of $50 million or less and most of those are islands you've never heard of with a population under 2,000.
Wow, the Albert Einstein College of Medicine is about to immediately be the most competitive medical school in the US. I wonder how this will affect the number of doctors graduating from the school and how many will go on to practice in NYC / the Bronx.
When UC Irvine launched its law school, they made tuition free for the first graduating class (and perhaps gave discounts to the next couple years — I can't remember). They are now ranked #35 in the USNWR, which is pretty good for a school that's about a dozen years old.
My guess is that having free tuition for all students forever will have a much bigger impact. I believe Princeton's policy school is similarly endowed, [1] and it's basically the top choice for anyone getting an MPP. Of course, it also has the prestige of Princeton associated with it; I could imagine some student choosing Harvard over this school, which doesn't currently have the same name recognition/prestige. But surely that will grow as a result of this announcement!
Irvine did that as an enticement to attract students for the first years, because the school couldn’t be accredited until the first class graduated. So the folks who enrolled for the first three years were taking a risk.
A degree from an unaccredited college/university is not as worthless as you might think; in fact, if the education is at least middling, it can be quite a steal.
Hard to find them, however, that aren't just scams.
In CA, you don't even need to attend an accredited law school to become a lawyer! There are some additional hoops you have to jump through, but at the end you can take the bar just like anyone else. However, if you wish to ever practice outside of CA, there is zero reciprocity (except DC) so you are treated as if you never went to law school.
To be clear, very few people become licensed lawyers in CA taking this path. The vast majority can't pass the Bar and the state often goes years without a single person passing via the apprenticeship track.
Oh sure, I was referring primarily to people who attend non-accredited law schools. There are several law schools that are not ABA-accredited but that are CA-accredited. There are a few more that are not accredited by either. The apprenticeship track is probably less popular than either of these routes, although recently it's been made famous by Kim Kardashian.
Sure, but studying under a lawyer or judge would look very different from law school. I have wondered if a prestigious lawyer would ever open up a few slots of paid apprenticeships, a la Thiel Fellowships. I don't know what the rules are regarding paying apprentices, but anything beats $60k/year in loans! If you can get some bright students who want to learn, they could probably work 10 hr/wk in the first year, 20 hrs/wk in the second year, and 30 hrs/wk in the last two years, while being more than prepared for the bar exam (especially since it has been 2x made easier in recent years).
And WI lets you practice law with only a degree (diploma privilege) so I think (somehow) there must be a way to go to school in WI and be a lawyer in WI and CA .... ;)
Some states do have a way to become barred without starting from zero if you are barred in CA. For example in WA you still have to take a test, but it isn't a full three-day bar exam.
He definitely would have had a path to apprentice, pass the bar, and then practice law. Lying about being an HLS grad would have presented some challenges for his character-and-fitness assessment by the bar, if he had tried to go that route first.
Yes, it ended up being a pretty good deal for the first students! They recruited some great people from all over (including a couple of my friends, which explains my unlikely knowledge of any of this…).
There are plenty of lower-ranked schools in CA, including several unaccredited ones. UC Irvine SoL leapfrogged all of them, partly because UC tuition is lower than privates. But being located in SoCal isn't a guaranteed of top talent — just ask University of San Diego SoL (#78) or Southwestern SoL (#141).
If interested, another medical school in NY that offers free tuition is NYU. They write, "1st medical school to offer Full-Tuition Scholarships for all students" [0].
Interesting! Does anyone know how this affected their application numbers, selectivity, or ranking?
> We award Full-Tuition Scholarships to all current students and future matriculated students, regardless of merit or financial need, that cover the majority of the cost of attendance, provided each student maintains satisfactory academic progress in accordance with NYU Grossman School of Medicine’s Satisfactory Academic Progress Policy
I wonder what it means to cover a "majority" of the cost of attendance. Does this mean they cover tuition, but living expenses (which are not trivial in NYC, but which are less than tuition) are not covered? Or are they just referring to their own fees?
Nobody likes leaving money on the table so they will start charging additional fees. Not tuition but some other things, obligatory insurance, mandatory auxilary premium fee, whatever, anything that plausibly falls outside of donation agteement.
I just hope they have enough decency to delay it till the donor dies so she doesn't have to witness it.
Kaiser Permanente has something similar for their med school in Pasadena. In 2019 they announced free med school tuition for the first 5 classes (through 2024). Unsurprisingly this attracts top talent, and there don’t appear to be any sort of strings attached (eg, stay employed with Kaiser for X years once you finish).
Their acceptance rate was 50/11,000 applicants last year (0.45%).
I'm not opposed to free tuition, but I kind of question the utility of a grant like this.
It's not like there's a requirement here that the doctors are going to work in the non-profit sector. It's not going to make the field less overworked and toxic. The students at this school have the same demographics as every other medical school.
Given that nearly all of the students who graduate from a medical program end up in the top 10% of wage earners, this seems like a temporary alleviation of financial problems for a very small cadre of well-to-do.
I am happy Dr. Gottesman felt such an affinity for her former employer, but it kind of strikes me as an ... uncreative(?) deployment of a billion dollars.
Doctors who graduate without loans have more leverage when deciding their next position. They can immediately go for research or volunteer work that otherwise wouldn’t recoup their costs.
My wife is a physician, and of the friends we made when she was in medical school, only one went to serve underserved populations. A big part of the reason he did so was because they would pay off his loans!
So maybe this will actually lose an effective lever at getting doctors to serve those populations?
I don't think money is entirely the reason that doctors don't serve underserved populations. Many states with underserved populations like Missouri already pay more due to supply shortages [1].
The reality is doctors have the ability to practice anywhere and tend to choose desirable places to live like NYC, LA, etc because they are humans with wants and needs, too. Anecdotally, living in NYC, many doctors and dentists tell me they could make more elsewhere, but they love living in the city.
Kinda, the big thing is residency which pays peanuts..
But there are tons of programs that will pay off your medical student loans if you go work in an undeserved area. Some states offer free tuition if you promise to work in that state for a few years after. The hope with that is that the person will establish roots and not leave.
Not to mention the 10 year Federal forgiveness for working in a qualified institution (aka nonprofit hospital/academic)
> Not to mention the 10 year Federal forgiveness for working in a qualified institution (aka nonprofit hospital/academic)
Public Service Loan Forgiveness requires 10 years of making student loan payments.
> Some states offer free tuition if you promise to work in that state for a few years after.
for example, the Georgia program offers up to $25k per year for up to 4 years max [1]. It requires application and takes into account health outcomes, specialty, debt, etc so it seems its not automatic acceptance. With an average medical school debt of over $200k this is not free tuition.
> They can immediately go for research or volunteer work that otherwise wouldn’t recoup their costs
So why not structure it so the tuition is completely forgiven if someone does this rather unconditionally free?
I don't see why someone who goes to this medical school, only to become a cosmetic surgeon who ultimately makes millions a year doing discretionary procedures should have free tuition.
There seems to be some shift going on in society. Like we've acknowledged a world with "haves" and "have nots" is unavoidable, so we might as well just focus on diversifying the "haves" and give everyone an equal shot at winning the lottery.
I guess that's better, but it's a sad thing to settle for.
They don't have to though. It would have been nice if they did something like it's free if you go work in an inner city/rural area/volunteer/etc etc but if you go into plastic surgery in Beverly Hills we're going to ask you to repay your tuition
My view: unless other top schools follow along, the donation will immediately and uniquely make Einstein interesting to top applicants who never otherwise would have considered it. The prospect of top students makes it more interesting to potential research staff, and the combination of top students and staff makes it more interesting for foundations and capital. Einstein right now is a circa top 50 medical school. Were there a futures market for this, I would bet in 10 years it will be top 25.
At the very least it will provide a really good real-world case study on deploying large sums of money to solve problems in society with seemingly no thought given to second and third order consequences. Definitely appears praiseworthy from first glance - really one of the major themes of our times.
Seriously. I wonder if a billion dollars could have been used as a small step towards unfucking the byzantine middleman parasitic corrupt insurance-centric healthcare system instead.
Diminishing returns based on outcomes you can change in elections to put reps into Congress who will fix healthcare legislation. Sometimes you can, some races/districts you just have to wait out demographics.
Michael Bloomberg spent almost $1B trying to become president, and didn't even move the needle. That's capital inefficient; you want to target spend for maximum outcome return. This is a win, enjoy the hope for a moment, it's a long slog ahead.
The wealth came from David “Sandy” Gottesman’s investments, the most prominent of which was an early investment in Berkshire Hathaway. Gottesman was a friend of Warren Buffett, served on the board of Berkshire Hathaway, and also founded his own firm First Manhattan.
It is a great gesture, but if someone gets to have a spare billion to donate, makes me think that it could be the case to increase taxes and make institutions as vital as school be funded publicly and consistently by governments rather than random act of philanthropy
It’s mad that someone accrued billions and students can’t get 60k for free to study
I consider this kind of events more as a proof of the inadequacy of the system rather than the contrary
For each individual perhaps not, but there is a right to healthcare and out of this arises the need for physicians. And I for one would like the talent of the candidates to be the deciding factor, not their or in most cases their parents’ bank accounts. I’m a physician myself with an upper middle class background but if I lived in the U.S. I most probably wouldn’t be because of how cost prohibitive med school is over there. And this leads to all kinds of downstream effects like exorbitant physician later salaries on that render healthcare unaffordable for many and are detrimental to society.
I would also try to spark a thought about the effects that high debt might have on the decisions of doctors, to think that maybe if people weren’t buried by med school debt there could have been a different approach to oxy prescriptions or other pushes from pharma companies
Have countries with public universities suffered the same amount of opioids prescriptions epidemic?
Call me a dirty European, but my first reaction to this is "This is why you're meant to have a working tax system". I agree that tuition for doctors shouldn't be usurious, but is this really the best use of $1bn? Imagine how much better we could make things if all the people who got rich off Berkshire Hathaway put their money towards good causes and we actually focused that spending on the best outcomes for everyone rather than just helicopter money for random pet causes. It's just such a weird system.
as a dirty third-worlder, there are far worse ways to spend that kind of money. like someone else posted here, you can earn insane amounts of interest by sitting that money around somewhere. with that, it would have been possible to instead provide scholarship to select students every year for like perpetuity.
but this one relieves the donator from the responsibility and at the end of the day, a very selfless work. i would not judge it any beyond that.
Yeah don't get me wrong, it's definitely a better thing to do with the money than some of the alternatives. It's just difficult to look at the system as a whole and go "Ok, so Xmillion kids in the US are going to go medical schoool this year, 99% are going to go into hundreds of thousands of dollars in debt, but these lucky 10,000 are going to get it for free".
Meanwhile, you look at that wealth and trace it through and think "Hang on, that's an incredible amount of wealth accumulated over decades. I wonder how much tax revenue that resulted in? $0.
Of course you can do worse. You could buy weapons, and pay mercenaries to kill people and destroy infrastructure with them. The point is you can do so much better than let generation hoard this much of economical power and wait hundred years for some of them accidentally do something benficial with it.
I keep seeing this note about the European System.... if that system is so great then why aren't the best Medical Universities in the EU?
From my quick search a majority seem to all top-ten be in the US and UK. #16 gets you Karolinska Institute but even then they are followed by more US Medical Schools.
Without any cynicism, I am curious what sort of negotiation and terms go into a donation of such size. As all the founders here can attest, taking money requires agreeing to a complex array of terms.
For example - what kind of protections are in place to preserve the donor's intent? Is there a board of directors for the donated funds that provides oversight? Could the med school 10X the salary of administrators and raise tuition equally? Could the med school hire 10X more staff? Could they relocate the med school to a 5 Star hotel?
People do funny things when vast sums of money appear.
"I wanted to fund students at Einstein so that they would receive free tuition," Dr Gottesman said she immediately realised. "There was enough money to do that in perpetuity."
I have never heard of a school getting this lucky from there alumni/faculty and even hearing there students getting something out of it so it touched my heart I have always had a toxic opinion about my teachers. Perhaps this could turn into an example for the rest of Americas medical schools in the coming decades.
Medical school debt and physician insurance. Some specialties have just wildly high insurance.
My wife is an OB and has to pay $140,000/yr per year for tail insurance in my state. So she literally needs to make, after all other costs of the practice, $140k just to break an even $0/yr.
And people wonder why it costs so much to have a baby.
If she is still working as an OB, what would be the difference in premium to renew her claims-made policy with prior acts coverage?
I can't imagine (but do not know) that it is more efficient to pay claims-made AND tail, versus claims-made with prior acts (unless of course your employer is paying the claims-made).
For those not in the medical field, tail or ERP (extended reporting period) coverage is liability coverage for when the original policy has ended - i.e. you were insured for 2024, but in 2025 a malpractice suit comes to you for an incident in 2024. In the auto/general world, this is fairly well accommodated, but in the medical liability world, insurers say it is because of the preponderance of claims that may arrive significantly later than coverage.
However, many insurers absolutely ream providers on it. Tail insurance is typically double the actual claim premium, i.e. insurers are saying that your insurance premium is only covering 1/3 of the claims they expect to pay on your behalf. I ... have doubts ... on that number. And I also suspect that there is a bell curve happening where certainly, complex malpractice claims may take time to be built out and filed, and that may extend beyond coverage, but then at a certain point, you can relatively confidently assume that the incoming claims are asymptotically approaching zero.
Additionally, I cannot exactly remember if malpractice insurers are required to abide by MLR - profit restrictions - like the 80/20 rule, but in your wife's case, the insurers as a whole (claims-made and tail) are implying that they expect to pay out $168,000 a year for her liability.
Why is insurance just a flat rate? Shouldn’t it be per procedure or something else better correlated to risk?
(Sure, charging precisely for risk would just result in some patients/scenarios being avoided, but per case or a percentage of billing would make much more sense).
Doing more procedures exposes a physician to more risk, but those who do a lot of procedures generally are better at them. I'm an anesthesiologist, but I don't do infants or cardiac cases, and I haven't done them in long enough that I wouldn't want to do them without someone around to get me back in the groove.
Someone who does one vaginal delivery a month is not going to be as good at doing them as someone who does two or three a day. And they certainly won't be as good at cesarean sections. Delivering just one baby costs a hell of a lot of money in insurance, which is a major part of why family doctors in rural areas don't do that anymore.
By contrast, people who drive more miles - even if they are excellent drivers - are at higher risk of being in a collision because they have to deal with other people on the road, who may be terrible drivers.
It isn’t flat, that’s the average of the last two years. It does adjust for a lot of things, like any insurance. It is higher than avg in the state for my wife right now because she is only a few years out of residency.
Mid career, she should only expect to pay about $120k/yr…
The cost of insurance is outrageous because settlements in medical malpractice lawsuits are outrageous. Tort reform is necessary to control medical costs - it is opposed by Democrats in the US. Trial lawyers are an important and generous lobby.
Paretto rears its ugly head as well. 20% of the bad actors are 80% of the lawsuits.
There are patients that make a living going around doctor offices and suing them. I know 1 patient in particular that went around suing doctor offices because they would not cater to his blindness. He would threaten a lawsuit without setting a foot in the doctor's office.
He would browse the doctor's website and complain it was not blind-compliant. And start from there.
I once worked on a legal case management database. One of the clients was getting sued over breast implants, and they used the database to catch scammers who sued fifty times (once in each state) over implants they never actually had.
> The cost of insurance is outrageous because settlements in medical malpractice lawsuits are outrageous. Tort reform is necessary to control medical costs - it is opposed by Democrats in the US. Trial lawyers are an important and generous lobby.
Why assume the problem is the legal system and not the doctors? Maybe their performance is the problem.
For example, last I saw, hospital error was a leading cause of death in the US. Until recently it was hard to get doctors to wash their hands between patients, or follow checklists to ensure quality. There are stories of an omerta-like rule of silence about surgical errors.
But how much does she make? 140k per year if you make 150k is of course not a lot but if she makes 900k or something like that. It's worthwhile. Although I do agree that sounds awfully much for just insurance.
that seems unusually high. I've seen 20+ quotes for doctors in very litigious states, and its not even 1/2 of that cost.
Full time doctors.
Try shopping around insurance or go with a mutual, or perhaps go with a IPA ?
NOTE: This rate is CERTAINLY valid if the OB has a long track record of attracting litigation. All insurers will ask for your "run rate" of claims. So, you can't escape a bad record. If you have a history, insurers will charge accordingly. You can't escape a poor record.
Were the quotes from dermatologists, radiologists, and psychiatrists? Or from gen-surge and OB? What state?
This is OB in the state of Illinois, it’s roughly the same cost ans all of the other OBs we’ve talked to here. She doesn’t have a litigation history at all yet.
the quotes were from multiple specialties with high-injury risk / high claim value, down to PCP.
I've seen many Northeast, more expensive states quotes, and West coast. I do not know about IL. So if theres some kind of special racket there, i could be ignorant of that.
No surgery. No facility /ASC . Straight up MD offices with FT coverage for malpractice.
It's also why OBGYNs are fleeing red states and some labor and delivery departments at hospitals (see Bonner General Health in Idaho) are shutting down. Not only is it insanely expensive from an insurance stance to begin with, but when you add the possible malpractice lawsuits from doctors being unsure what their legal standing is on a potentially life threatening issue, many would rather just move to a place where that isn't an overriding concern.
> It's also why OBGYNs are fleeing red states and some labor and delivery departments at hospitals
I feel like you're conflating 2 separate issues:
1. You are correct, one of the biggest concerns for physicians is malpractice risk, and thus a big draw for physicians (especially in high risk specialties) is states that have low caps on max malpractice damage awards. I'd say there is a tendency of red states to have lower caps, but it's really a mix. E.g. Texas has some of the lowest malpractice caps, while Wyoming has a constitutional provision prohibiting caps.
2. When it comes to the risk of obgyns, the main fear is not really the cost of malpractice, but it's simply that extremely restrictive abortion laws make it impossible to give proper care. Lots of people, and politicians especially, like to see the world in absolute black and white, but obgyns know more than anyone else that there are a whole host of issues that can cause a fetus to be nonviable, or dangerous to the mother, and laws that protect the fetus above all else are not rationale. Obgyns can fall anywhere on the political spectrum just like the populace at large, and there are plenty of conservative obgyns who are against abortion for moral or religious reasons, but they also know the realities of pregnancy and that many of these laws are simply unworkable.
It doesn't matter that some states have caps on malpractice payouts. That's only half the matter. It's the number of times that a doctor has to be sued FOR malpractice, because a lot of those costs are going to be attorney fees. If I were a lawyer in Texas, I'd be posting billboards about specializing in suing doctors for not providing care. When women realize they can win a windfall in court for being denied care with life threatening conditions, they're going to start suing. And winning. Juries love giving away insurance company money.
More suits, higher premiums. Since that risk is spread across the state, so is the insurance rate. Most conservative OBs still understand, know, and respect the science. If Texas or Idaho or Alabama gets too expensive, especially given how absolutely garbage the standard of living is in those states, they're gonna haul ass political affiliation be damned.
> If I were a lawyer in Texas, I'd be posting billboards about specializing in suing doctors for not providing care.
This is a fantasy, it has never happened, and it's fundamentally not how the law works. Show a single instance where a doctor has been sued for refusing to give care due to risk of running afoul of restrictive abortion laws.
Canada has managed to undertrain its own people domestically for med school for a while with many going to the US/caribbean/europe for training at full rates.
We’ve had to change our terminology from “international medical graduates” to “foreign medical graduates” because a lot of those trying to get foreign credentials recognized are locals.
Probably a tough slog upon return to pay back the debts but net-positive in the long-run (unless interest rates go up, uh oh).
Is it necessarily the case that median physician pay must go down for a single-payer system? I would hope that we could have savings if the total payments to actual care providers was similar, but billing, and insurance parts of the system were dropped out of the picture.
The numbers I can quickly Google for US are ~15-30% spent on administration, not that those zero out under single-payer.
It's not just the physician/surgeon aspect of US healthcare that's expensive, it's all of it.
I'm on the Canadian side, and drugs have never been single-payer outside of a hospital, but that leg of the system is still much cheaper (on average) in Canada.
It's not just tuition. There are so many issues with the workforce and their education:
- We cap the number of residency students per year, creating an artificial limited supply.
- We don't allow immigrant doctors to transfer their credentials, creating an artificial limited supply.
- Med school is expensive, limiting the pool of applicants.
- Nurses and nurse practitioners are extremely close to the action on a daily basis. There should be a path for them to graduate into doctors, perhaps by attending night school and then some form of on-the-job residency.
I for one am glad we don't just let foreign doctors transfer their credentials - the education and standards are not always the same, and not really sure I want to go see a doctor that moved here after taking a accelerated/minimal set of courses at whatever country happens to have the easiest/cheapest graduation requirements. Certainly there are some countries that probably have similar course of study and requirements as the USA, but I think you would need to approve transfer's very carefully after serious review of the sending countries education and training requirements.
NP vs MD education is not even close to being similar - that is why their is no easy path from one to the other - a typical NP will graduate having done ~600 to 700 hours of patient care hours. A typical MD will have had 12,000 to 16,000 hours of patient care experience before they start practicing - there are plenty of things were seeing an NP is more than enough - but you can't just give a few months of extra training to bump an NP to an MD - their education and knowledge is not even close to comparable.
There is a place for both in our health care system - but they are not the same job.
I don't disagree, but its a good thing that we can buy Ferraris and Kias and let everyone decide what's best for them.
I think foreign doctors could fill a niche there too. I don't know why we have people going bankrupt due to medical bills when we have foreign doctors that could drive prices down significantly so that the poorest or underinsured could benefit.
Do what you like, it's your life, but as a physician I've been stunned on occasion by some of the misunderstandings of very experienced nurses.
They don't have a medical education. They have a nursing education. They are different things. A good doctor relies on experienced nurses for what they are good at - which is recognizing someone who's in trouble, because they have spent a lot more hours at the bedside than we have and have superb spidey senses. If a nurse asks me to look at a patient, I will. If it's an experienced nurse, I'll come running.
(also an MD) I've always conceived of it as a good NP will have been around long enough to know you usually do X when Y, but they don't know the reasoning for X or the pathophysiology underlying Y, and they don't always know when you shouldn't do X.
That said, especially in primary care, give me an NP over a PA anytime. Primary care is a numbers game and NPs roll the dice better. Specialty PAs are great; I learned some of my best ortho from ortho PAs. But generalist PAs scare me and have been the source of some horrific consults in the past.
"Good" from our perspective is not always the same as "good" from a patient perspective. Some of the best doctors I know have the bedside manner of a chunk of midsummer roadkill. And some of the worst could charm anyone.
The best friend to have is an OR nurse. She knows which doctor is on cocaine, who cannot stop shaking when handling the scalpel, who cannot bother with a prep checklist before a surgery.
If you are doing surgery for a loved one, consult an OR nurse. They will tell you what's up.
Best of all, nurses all talk to each other, so chances are someone in their group will know that Dr. Charming over at hospital X is nicknamed The Undertaker by in-the-know staff...
Oh, if you want the best neurosurgeon around, and you don't mind someone who's about as charming as a bedpost, I've got your man. Technically, he's a god. Personally, there's nothing there. But if I needed neurosurgery, that's who I'm seeing.
The problem is the Zero-to-NP programs that have an "Accelerated RN" component.
One (not all) aspects of the NP program was similar to your comment, building off career and professional experience, and using that as one basis for knowledge.
These programs are not even giving you the RN -student- nursing experience (let alone post graduation), they're skipping that entirely.
Looking online:
"Become an NP in 20 months". "NP in 27 months".
From HIGH SCHOOL.
In EMS, there is a push to make paramedicine at least an associates, if not a bachelors degree (there are programs with all three, certificate, associate, bachelors).
Paramedics are the advanced version of when you call 911. The invasive side (versus EMT which is - largely - non-invasive). Cardiac arrest and dysrhythmia management (ECG interpretation, manual defib and pacing, approximately a dozen cardiac drugs), airway management and intubation (including sedatives, paralytics and analgesia), childbirth, trauma, burns. In my area we can give approximately 60 different meds IM, IV, IN, IO from fairly benign to quite acute (adenosine, atropine, etomidate, rocuronium, etc.)
The push for this is for at least two years of school, if not four.
But yet you have schools pumping out NPs in as little as a year and eight months? With zero field supervision (for better or worse, and with varying degrees of intensity, PAs ostensibly operate under physician supervision/direction).
This is going to cause a huge problem, I expect. Not the concept as a whole, but our YOLO attitude to these things, and schools seeing dollar signs.
For us programmers it is a bit like why you don't let the new kid push straight to prod. But an older engineer may have a key to do it. ;) There is some wisdom that comes with the grey hair.
Yes, it is similar skill and effort for an np who got a one year online degree that took 15th/wk of studying and a doctor who spent 80hrs per week of studying for 4 years to complete med school, then did 4-7 years of 80-100hrs per week of intense residency.
Do you really believe this when a loved one’s life is on the line?
I actually do like the idea there should be more ladder and less silo. Im not sure how it could be implemented tho. I’m just reacting to the idea that mid levels are anywhere near as skilled (meaning training) as most physicians.
The hurdles I see are: There’s a reason doctors have really intense study time before residency, and you’d have to replicate that. There’s also a reason residency is so intense, you’re not going to get anything like resident experience doing ordinary mid level work.
You’d need to hybrid model, but who is going to agree to something like: instead of working as a nurse 40 hours per week, you’re going to work 40hrs/wk and study 40hrs/wk, for 8 years, and if you pass the tests you’ll move on to the next level. This could work but basically sounds like part-time med school.
Part time residency would be even less appealing, it would take you like 10+ years to get the amount of cases a resident has if you were only doing it part time
The bridge is "apply to, be accepted at, and graduate from medical school". Offhand, I personally know at least four physicians who were nurses first, and they certainly worked occasional shifts as nurses during med school for extra money, but it's hard to describe just how big of a torrent of information medical students are expected to absorb. There's very little overlap in the education, although former nurses usually have better simple-procedure skills (IV's, catheters, etc.) and superior skills at dealing with difficult patients early on in clinical education.
The problem I see with that is, a typical medical student is going to have to do study and clinical rotations across all disciplines - even ones they don't end up practicing - i.e. pysch, derm, emergency medicine, surgery, ortho etc - i.e., they will get training in all those areas.
Compare that to an NP that went from their 18 month NP class, to work in primary medicine/family practice office - and lets say they work there for 10 years, so great, now they are an experienced NP in family medicine (and someone I for one would be perfectly happy to see as a patient for most routine things) - but what they don't have is the experience in all those other areas that matter - even if they are not practicing it.
There is just no shortcut without putting in the time - thousands and thousands of hours of study and patient facing experience under the supervision of an experienced MD.
There is nothing wrong with being an experienced NP seeing patients (and that is mostly who I end up seeing) - but there is simply no reason to somehow 'promote' those people to doctors - they don't have the same skills or the same experience, and doing so doesn't solve any problem.
>>> There is just no shortcut without putting in the time
What do you think is 10+ years of experience as NP in a busy office setting, exactly ?
>>> thousands and thousands of hours of study and patient facing experience under the supervision of an experienced MD.
You mean, the hours that you were cognitively impaired and mostly a blur due to sleep deprivation ? Or the hours of time you will not get any feedback whatsoever because the patient went home and you will never ever see him/her again? (as opposed to a NP, who's always 1 one call away and has a direct feedback loop to the consequences to her/his actions?)
It will be 10+ years of seeing a variation of the exact same type of scenarios that they have seen before - which is very different then getting education and training across all disciplines - which is my entire point.
Primary care NPs are good at what they do, but what they do is very limited - most of them will admit it. Anything they haven't seen before comes along, first thing they want to do is call an ambulance and send them to the hospital or a specialist - or they will pull in an actual MD to ask them what they should do.
So if an NP has 10 years of experience working in a primary care facility - what problem does it solve to somehow 'promote' them to an MD based on that experience? Will they magically now be able to see more patients per hour? How does that solve any systemic health care system issues? It doesn't - it simply allows them to get paid like a real MD, when they aren't - so if anything, drives up costs.
I think you are grossly underestimating the power of incentives. A magic promotion means they now have incentives to open their own practice. Or work at another practice at a promoted level. Or they can simply develop further into a specialty. It simply opens doors where the need is more need and gives them rewards for doing hard work.
Getting motivated people moving up in the pipeline opens more avenue for care of patients, relieving the stress on the existing system. The fact that you think it drives up costs actually goes against the rules of reality. If you have more supply of something, it simply lowers the cost of that supplied.
The problems we have in healthcare in USA is not one of quality. People from all over the world go to USA, seekign help.
The problems in healthcare are related to access and cost. Both of which, this is a magic bullet for.
Why would you keep someone hostage at an underpaid role where they have no way of advancing unless they bend the knee and pay tribute to the powers that be, even though they are perfectly qualified to the role and have more experience than virtually all applicants?
If you are concerned because you had to pay your way thru med school, think of it this way:
1) MD paid in dollars and sweat equity to afford that BMW at age 32.
2) NPs will pay in opportunity cost to afford to promote into an MD at age 32. No BMW yet either.
I agree. The donation is a pretty great thing - but without increasing the number of residency slots per year it seems like it may just shift people that would go to another school to go to this one.
There will always be bad people and outliers but most people are not behaving like that. There's many countries where "free" education and healthcare (In the sense that most of the cost is abstracted away in taxes) work.
It's definitely also cultural as you can see in many Asian countries where public infrastructure (parks, public workout machines, public toilets) are treated well and are in good shape compared to other places (My point of reference being Berlin).
One way to have skin in the game is to pay a considerable sum of money to join medical school. This reminds me of the Commitment and Consistency chapter in Cialdini's book Influence. In part it says we stick with things more after we exert effort and especially so after public effort. With free tuition we take away some of the skin in the game, but students will still have to expend considerable effort to achieve high enough grades. That probably fosters commitment (and might explain why people with scholarships still tend to value school). In any case, we already have doctors whose parents paid for school, so even when free schooling does reduce commitment (and it probably will sometimes), at least this evens the playing field.
How is this very different than applying for and accepting a scholarship? Wouldn't this have approximately the same downsides as people that get full ride scholarships to University?
I trust the medical school admission process to select good students for their program. I'm sure with free tuition they'll have more than enough promising candidates.
I can be one of those of people, but I can also tell you there’s a bevy of other people in my life who never fail to annoy the crap out of me calling me out for leaving the lights on, using too many napkins, etc. Don’t lose hope, for every person that like me, there’s many more who are not
people pay insane amounts of money and yet don't respect their degree to the extent you'd expect. just see how many people take up a course just for the sake of having a degree.
Right. The marginal cost to the customer for leaving the lights on is literally zero, so they have zero care about it.
This is why modern hotels have you put your room key in a slot that enables the lights to go on. When you leave the room, you take your room key, and the lights go out.
Evidently, people leaving the lights on is expensive enough to justify these key light switches.
The freshman classes could be swamped by people who aren't serious about getting a med degree. And why should they be serious? It doesn't cost them anything. Heck, they could have a good time for a semester and never attend class. Caltech was a pretty fun place to be.
If people are halfway through, a motivating thing to keep them going is the money they've already invested in it.
I bet you'll see a significantly higher dropout rate with free tuition. Like we see in public high school.
I’m French and here overwhelmingly the best engineering schools are free with heavily subsidised housing. Admission to those schools is very competitive and students once admitted work hard at it and definitely value being there.
Private engineering schools tend to be seen as schools for those who couldn’t get in public schools but have parents with enough money to pay the fees.
So I disagree with you, keep in mind that there’s a significant barrier of admission to get accepted.
So in France, it's complicated because we have a very selective system and different system for certain majors like engineering. For engineering, you need to do a 2 years preparatory class (heavily focused on mathematics and physics) and after that you can sit in a ranked examination for the engineering schools of your choosing. Only the x highest ranked students can get admitted to the school. Those examinations tend to be hard and scored such that it's impossible to score 100%. For the highest ranking engineering schools (polytechnique, ENS, mines, sup telecom), only 5% of students trying to pass the exam get admitted. It's significantly harder to get admitted to public engineering schools with this exam compared to private ones.
From the stats I could find, there's a drop out rate of around 20% between the first year and second year. Then 85% success rate in getting in an engineering school.
Once they are in an engineering school, the drop out rate is very low (both for private and public schools).
There are some engineering school that include the preparatory classes (we call that integrated prepa, an example is the National Institute of Applied Sciences INSA my alma mater) during the first 2 years, in that case the drop out rate is around 20% during the first 2 years and then less than 1% after that.
For both type of preparatory classes (integrated or not), students who drop out change major to something else and get to transfer credits to their new major.
For medicines, it's different. Until 2020 everyone could do the first year of medicine but only 20% would go on to the second year. Students were allowed to redo it once and then had to change major. There are no private medicine cursus in France. This has now changed and I'm not familiar with the new system.
With majors like liberal arts, etc... University is free and the drop out rate seems to be almost 60%. So yes, for majors with easy admission and free tuition (very little skin in the game) drop out rates are high.
But for highly selective programs where admission is difficult, there's very little drop out once students actually get in.
Unlike those in public high school, students who aren't serious about medical school won't have earned the entrance grades. So at least in first year, most students will have a serious attitude. Are you suggesting that someone will bust their ass for four years, only to start slacking once in medical school? Or that medical school entrance grades don't require serious study?
I can see what you mean about the halfway point. Maybe undergrad came easily, and at the halfway point, the student realizes that medical school simply isn't a good fit, or it's more work than they thought it would be. So they drop out. This is probably a good thing, to prevent people becoming doctors who don't have the chops or the attitude for it. Unfortunately, the school does lose some money on a candidate they ought to have filtered out in the interview.
Happily it's an empirical question, and we can circle back in a few years to see if the drop out rate increased or not. Maybe the drop out rate increases at first, and then the entrance interview becomes more stringent.
> The freshman classes could be swamped by people who aren't serious about getting a med degree. And why should they be serious?
This is not what medical school is like from the people I know.
Nobody has a bigger stick up their butts about how important their work is than medical students. Computer programmers (despite what reading comments here on HN would make you think) are at best a distant, distant second.
Yes. I worked a side job to pay my way. You bet I wanted to get the value out of what I was working and paying for.
Another effect we see these days is the government education loans encourage people to sign up for expensive and useless degrees, and then they are apparently shocked that they have to pay back those loans. Hence the push for loan "forgiveness".
Without these loans, I bet there would be far less demand for these degrees with no market value.
Worse? No. But people who are more willing to drop out? Sure.
True, it was possible (barely) at the time to work part time during the school year and full time during the summer to pay the bills. Borrowing money still (at least used to) means you had to pay it back.
Universities today give out free rides to various groups of students for various reasons. I'd expect their dropout rate to be considerably higher.
BTW, I was offered a free ride by ASU. I couldn't escape the feeling that because it was offered for free, it wasn't worth as much. It's just human nature at work. I am sadly amused by all the people that deny these effects.
You obviously use it to build the Basilisk. That's how I interpret the instructions, neverminding the fact that this would make the Basilisk smile upon me.
FWIW, if an AI "satan" wins and becomes the hyper-advanced intelligence that rules our galaxy, it could just reverse simulate the light cone and torture each of us for all eternity anyway. It doesn't matter how good you are or which god you worship or how many "Hail Mary"s you say. We could be in that simulation now -- at any moment fire could erupt from beneath us.
Probably the donor specified that those funds MUST go towards tuition-free education.
No way school managers would come out with this idea from their own volition.
We actually already have many loan forgiveness programs for doctors - for example, they can choose to work at an understaffed clinic in a historically underserved area of the country and get huge amounts of their loans forgiven, on top of making a big salary. A lot of these clinics fully depend on this pipeline of doctors needing loan forgiveness. I'm not saying that this an ideal situation, but the loans can sorta encourage many doctors to practice where they are most needed.
Loan forgiveness like other tax incentives merely distort the market. Just pay the doctors what it costs to get them there, we are probably over paying by giving loan forgiveness.
And you think it's justified for others to subsidize the lifestyle of those who live in rural environment?
This is about government funding - it's not a free market solution, it's about the government being honest in how much it is subsidizing different areas. If the total cost was visible perhaps people would say - hey maybe people shouldn't live there.
For all those speculating about the impact, NYU Med School went tuition free in 2018. This isn't the first school to do it. It would be interesting to read what the actual impact has been to NYU.
Not many investors would assume a long term return of 10% over inflation. If they target 7% instead, it would almost exactly fund that enrolment level.
10% interest seems like a stretch in today’s environment. 5% interest from US Treasuries would be a more reasonable baseline: yielding $50,000,000 per year total, or $40,000 per year for each of the 1,250 students.
Assuming 10% interest is not realistic. The inflation-adjusted rate of return of the S&P 500 is 6.8%. Plus, the inflation rate of what it costs to train doctors has gone up at a much higher rate than the overall consumer price index.
How about expanding admissions to more students rather than making it free. With the earning power that clinicians command, they won't have trouble paying off the fees. But patients deserve more doctors and more talent deserves the chance to become doctors.
Yes, "tuition" is the act of teaching, which I hope was not eliminated. Someone does not pay tuition, they pay "for tuition", Americans seem to have dropped the for.
Linguistic divergence is not a new phenomenon, perhaps we will have two completely different Englishes in a few centuries?
Just thinking through everything this implies. Would it be safe to assume this means some people if not entire departments will be laid off? Not as much need for financial aid, bursar's office, etc.
Overall it's a great thing, a more lean administration and better efficiency, but it's a small peek into what would happen if the U.S. ever gets single-payer healthcare (as I fully hope we do).
On a different note, if things like this became more common, with fewer new doctors having massive debt, that would pull down salaries and medical bills. How you view that depends on if you're a doctor or a patient.
They may do something to keep all the bureaucracy around, like structure things so they take money from one of their pockets and put it in the other, such that a staff is still needed to fill out paperwork and move money from one ledger to another. They might keep student loan administrators around to "loan" the students money, paid off by the endowment, securing the jobs of all the people doing all the overhead.
Couldn't other Universities follow suit? Harvard sits on a $50B endowment fund, though maybe these funds are contractually obligated toward different causes.
There is a way to be declared an "emancipated minor" or equivalent, but it can be a pain in the ass (because otherwise all parents would decide not to fund so the kids can go free).
Does the US let you forego capital gains taxes on unrealized gains when you donate stock, along with whatever benefit you get from donating money?
As a salaryman, I wish I got to donate pre-tax amounts! I get some credits, but if your income is high enough, it doesn’t even cover the taxes already paid.
Yes, donating stocks does not trigger a taxable event (YMMV, consult your tax attorney, etc). Not sure if it is possible to figure out how to donate pre-tax income (vs pre-tax gains). If you do, please share your knowledge.
> Not sure if it is possible to figure out how to donate pre-tax income (vs pre-tax gains)
Tax-efficient to get employers to donate money to charities of the employee's choosing in their honor maybe? Probably some opportunity for a startup here.
But I can see some employers not being too happy being linked with some of the choices, or employees being unhappy some of their favorites aren't on the list.
This only works for the first dollar after the you stop taking the standard deduction.
For most people, the standard deduction is freaking huge now due to the changes under Trump - for married couples in 2024 it will be $29,200.
So you have to have deductions that equal almost $30k before they start to "matter". If your itemized deductions would be about $10k (mortgage interest, perhaps, SALT, etc) you would have to donate $20k before you would start to see some effect from the donations.
There are still some ways to do pre-tax donations even without that, but you may have to involve estate-planning trickery.
Yes. You deduct the FMV, not the basis. There are some limits on deductions, especially when giving to foundations you control. But you can be sure that the donor has been well-advised on matching up this enormous deduction with similarly-sized realization events (i.e., selling other assets and generating taxable gains).
Yes, donating stock means you avoid capital gains. But even more relevant in this case is that she likely inherited the Berkshire stock from her husband which also resets the cost basis which means she wouldn't have had to pay capital gains even if she had sold the portfolio instead of donating.
I don't know enough about US tax law, but I think it's more likely the donation was somehow done without triggering a huge capital gains tax bill. We're talking about a nonagenarian billionaire that founded an investment house.
Their death could be no surprise and the accountants/lawyers on speed deal would be limitless.
Surely they had their books in order, unless they wanted to pay tax.
Curious what kind of provisos come attached in arrangement like this. Surely it's not just the cynical that now expect a bit of bloat to appear, salaries to increase, wastage, etc. In 3 years time, $59k/y becomes $79k/y, obviously "due to inflation".
It's not enough that governments use my tax money to subsidize my competitors and enable them to monopolize industries. Billionaires (who themselves are the beneficiaries of the scheme) are now also giving free money to my competitors.
I understand that the intent is good, but the effect is mostly negative. It's about cherry-picking one set of people and giving them an unfair advantage over everyone else.
The irony is that those who are in a position to be engaging in some kind of charity or philanthropy are the only ones who don't understand that the economy is a zero-sum game, by their own hand! It's a zero-sum game for everyone else except them.
The private school in my town with a $1B endowment is still one of the priciest west of the mississippi, and spent last week with no internet, because of a cyber-attack. I guess it mainly matters what their priorities are.
Not always - 3 of my kids got awards that paid for their entire 'tuition' at a good state school in New England (USA). The 'tuition' was $1800/year - the fees added on another $14K, and then the housing and food added another $10K on top of that -
The state kept advertising how kids could get 'free tuition' if the met the academic requirements (combination of testing high enough and overall GPA) - but in reality, it worked out to less than 10% of the actual cost of attending this in-state, public university.
Was still nice to get the $1,800 off the bill, but it was hardly 'free tuition'.
PS: Not criticizing this medical school plan - just pointing out that the definition of tuition can, and does, vary - even in the USA.
Tuition = the money you pay for your schooling, I.e., credit hours.
Fees = Costs on top of tuition like registration fees, application fees, and other miscellaneous charges that aren’t represented in the per-credit hour price of school.
If you told someone in the US that their school was eliminating fees they’d take that to mean that they were getting a small discount on a still-very large cost. Think in the realm of $30-100 per semester.
American English has basically detached the word “tuition” to have anything to do with the teaching.
1. The fact that this donation is 100% going towards tuition. My university has a few B's in endowment, but those money are most definitely not going towards making the tuition fees lower lol. Hopefully this will allow them to select some candidate that are struggling the most financially...
2. The donor being a 93 year old doctor/alumni of that school that studied "learning disabilities and developed screening protocols".
3. The money was from her late husband's "whole portfolio of Berkshire Hathaway stock". And before he passed, he told her to "do whatever you think is right with it" and the article ends with her saying "I hope he's smiling and not frowning". Makes me cry a little.