⚡Warren
Good Morning! For anybody who missed yesterday’s newsletter, here it is. Let’s dive into everything.
Warren for Education
Former public-school teacher and now Democratic primary contender, Senator Elizabeth Warren finally released her K-12 Education proposal.
The promise. Quadruple federal funding for schools that serve low-income students, pump tens of billions of new dollars per year into desegregation, special education, bilingual programs, and mental health support, and increase federal oversight of racial and gender discrimination in schools.
Funding. Paid for by Warren’s signature wealth tax on people with net worths over $50 million.
Picking sides. President Barack Obama and George W. Bush supported the charter school movement and pushed to hold schools and teachers accountable for student test scores. These policies have become less popular due to parent and teacher activists who argue that charters draw tax dollars from traditional schools and pressure educators to spend too much time prepping students for exams. Warren hopes to end “high-stakes testing,” federal funding of new charter schools, and for-profit charters.
What’s at stake (politically). Everyone in the race is currently vying for endorsements from teachers’ unions.
What seems to be missing. Money. Or rather specifics on key teacher salary details. Every top-10 democratic candidate says America needs to give teachers a raise, but out of the mix, only Sanders has a salary floor of $60k and Harris an average raise of $13,500.
Our take. This plan has a lot of promise. However, we really, really want to see a rise in public school teacher salaries, both here and abroad — as we covered earlier, Bill Gates believes that public school teachers are the best way to actually improve education around the world
“Although it’s fine to look at innovative approaches, a well-trained teacher in a country that’s stable, where you’re culturally allowing the girls to go to school as well, you can get extremely high literacy levels.”
Of course, as always, we need to see what actually becomes a reality, should Warren even win.
Public Financing is a Successful Black Sheep
Public or state development banking could be vital to achieving the Sustainable Development Goals (SDGs). That probably sounds surprising, because they’re usually discouraged and eventually turn private. But, a new report argues that they’re just misunderstood.
What’s happening now. The World Bank is leveraging private finance via shadow banking by using public money to guarantee handsome returns managed by giant investment houses. This financialization encourages speculation at the expense of productive investments.
The solution. Public banks are different and will more likely serve the long-term public interest by investing in sectors and locations that private banks are likely to ignore. Public banks also help counteract the pro-cyclical nature of private finance, which typically fails to adequately finance small enterprises, infrastructure, and environmental projects needed to make economies more dynamic, inclusive, and sustainable.
But are they successful? Researchers have found that Public banks can be both profitable and efficient while being socially proactive. They’re generally successful, but under-appreciated. Public banks all around the world have been efficient instruments of national development strategies, helping overcome major “market failures.”
Misunderstanding leads to unrealized potential. The lack of love for public banks means they’re insufficiently capitalized. If we want them to be even more successful, we need to enable greater policy support for public banking.
Our take. Without the pressures associated with the private markets, public banks have a lot more freedom to focus on true societal objectives. They need to overcome their efficiency and capital constraints, but if done so effectively, they will be a force we can reckon with.
Too Many Frameworks
Impact investing, across both the public and private markets, is all the rage today. The Global Impact Investing Network sizes the market at $502 billion, and this will only continue to grow exponentially as more and more institutional investors set up sustainable investment funds.
Using the SDGs. Many of these investors are looking to the Sustainable Development Goals as a guiding framework for impact. Last month, the UN Development Program (UNDP) published a set of standards aimed at guiding fund managers towards achieving the SDGs. The recommendations cover how funds should conduct “impact due diligence” on investments in order to achieve more consistent implementation and comparable performance reporting and benchmarking.
This all should sound familiar. Yesterday, we covered the IFC’s own principles for managing impact impact investing. There seem to be many such frameworks popping up from different institutions. The UN alone has a ton — Principles for Responsible Investment, the Principles for Responsible Banking, Principles for Positive Impact Finance, and more.
Our take. There is absolutely no clarity as to how these frameworks work together. Different institutions have become signatories to different sets of principles. It begs the question of why we need so many. We wonder how politicized it is — each group is probably trying to set themselves up as THE framework for impact investing.
Short Takes
Dove commits to new environmental initiatives. The amount of virgin plastic Dove will save each year from this initiative would be enough to circle the Earth 2.7 times.
Antimicrobial resistance is key to the SDGs. Without progress on antimicrobial resistance, attainment of the SDGs will fall short; yet the indicators to track the SDGs have thus far failed to include tracking of AMR.
Trump’s refugee policies are getting even worse, as we covered yesterday. He’s even planning to force almost all future asylum seekers and migrants to provide DNA samples for a database.
Monday, October 28
Conversations on Plant-based Entrepreneurship: Vegpreneur is a global entrepreneurs community that is made up of innovators who are building a plant-based future and they’re hosting an evening panel on the state of plant-based entrepreneurship at General Assembly. Light snacks and refreshments will be served.
Saturday, November 9
92Y Food Summit: From spotlights on innovation and burgers once thought impossible, to balancing the thrill of the delicious with social responsibility, to how immigrant chefs are transforming American cuisine, to what you’ll be eating in 2020, check out this event for this tantalizing think tank for food lovers.
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