How To Become More Focused And Less Distracted

                                                Credit: newworldwow.com

There’s so much information out there. It’s a challenge that each of us grapples with. The Internet is simply massive in size, and continually growing. On just about every conceivable topic, one can locate a limitless amount of content, giving the World Wide Web a never-ending feel.

In one sense, this is a wonderful thing, because each of us can learn about, and go deep on, just about every topic out there. You can pick up your phone, open the Google app, and learn about everything ranging from the president’s constitutional powers regarding immigration, to the latest research around how practice makes perfect, or what makes Russell Westbrook tick. We enjoy access to an incredible array of knowledge, found on platforms ranging from Wikipedia to Coursera to the wonderful Farnam Street blog. As Barry Ritholtz recently noted (when discussing the power of Twitter): “Having the ability to follow many of the world’s experts in subjects of interest, is an enviable luxury unimaginable a mere decade ago.”

At the same time, it is all too common to burn countless hours aimlessly roaming the Web (in fact, thanks to the rise of smartphones, the average American spends more time online than ever). This has led to an epidemic of distraction, where we constantly check our cellphones (or if we are at work, attend to email and, yes, browse the Internet for pleasure).

These behaviors at a core level, appear to be rewiring our brains, and not in a positive manner. In his 2011 Pulitzer-finalist book The Shallows, Nicholas Carr explored how neuroplasticity (that is, the ability of our brain to reorganize itself, in response to new experiences or conditions) works (rather negatively), in the context of extensive Internet usage. Specifically, Carr considers how our long-term memory, which is where we store all that we’ve learned over the years, ends up being overwhelmed by the torrent of information we find online, while our working memory (the “bridge” between short term and long term memory), is also weakened. Ultimately, The Shallows is a rather troubling look at how the Internet is weakening our ability to effectively process and retain information, and what the long-term implications of this change are.

Setting aside the required use of email and Internet for professional purposes (Cal Newport does a great job of exploring these questions in Deep Work), let’s consider two competing priorities. On the one hand, there’s knowledge (defined broadly) that we wish to acquire. Yet, we understand what constantly perusing the Internet can do to our brains, and in particular our focus, and productive capabilities. What’s the best way forward?

Almost three years ago, I signed up for two free email lists: Jason Hirschhorn's Media REDEF semi-daily newsletter, and Maria Popova’s Brain Pickings weekly digest. I found both of these updates to be incredibly relevant and engaging, offering a range of fascinating content.

Perhaps just as importantly, however, both lists allowed me to better discover and organize desired information. I formed a sense of certainty, that I would receive important reads from these two sources, and so I prioritized reading each of them consistently. What’s more,  I knew I could look in a very specific place, for that fascinating article on 1980’s NYC hip hop, which I wanted to share on Facebook, or the insightful piece on neural networks, which I really ought to email to a few friends.

The thing is, outside of these two sources, I didn’t really make use of website/publication specific email lists, and my online behavior didn’t really change. I knew, for example, that I enjoyed a range of pieces in The Atlantic, or science website PhysOrg, and of course, Nate Silver’s FiveThirtyEight (and at least a dozen other Web domains).

However, rather than sign up for daily or weekly updates, I formed an unintentional habit of checking these pages, often as much as several times per day, trying to keep track of what new content might appear. When I was striving to complete concentrated work (at home or the office), I would make it a point to avoid random Internet usage, but other times, when I was just responding to emails, or heading to lunch, or maybe towards the end of the day, I’d spend time distractedly surfing the web, stumbling onto interesting articles, and skimming them superficially.

In late 2016, after reading Deep Work, I realized there had to be a better way, to ramp up my productivity, and wring all I could out of each day, while still keeping up to date on valuable information. At this point, in addition to Hirschhorn's and Popova’s newsletters, I had subscribed to maybe 5-6 other email newsletter lists.

I decided to add more of the publications which I interacted with regularly, to these email blasts. By doing so, I felt I would have less reason to browse online, which would allow me to build greater focus, and organize more of the information that I wanted to engage with, in one particular location. To date, I have added between 25-30 newsletter subscriptions, which I receive on a daily or weekly basis.

What’s more, I also consolidated each of these emails, into one single compilation, which I’d receive around 8:30 PM. The thinking was, I would be able to spend less time, throughout the day, opening and browsing through my inbox. When I did finally sit down to review all that I had received, I could do so in an organized fashion. In order to facilitate this process, I used the Unroll app.

Lastly, I was fully aware that I might not have enough time, to read everything that I wanted to, when I went through my daily Unroll email, In fact, with both the Brain Pickings and Media Redef lists, I often used to open and skim articles, thinking “That’s interesting, I’ll read it later.” Unfortunately, “later” never seemed to arrive, and ultimately ended up being forgotten.  

For this reason, I decided to start using Instapaper. Instapaper allows you to save articles, to be read later, from your web browser, Android, iPhone, iPad or Kindle. Basically, I could open emails from Unroll, click on those articles which seemed interesting, and really dig into them, when I had some more focused time.

Also, since I started setting specific times (usually on weekends, and an occasional weekday), to work through these pieces, I was able to really concentrate and absorb what I was consuming. To strengthen this process, I also started taking brief notes (around 1-5 sentences) to summarize the important takeaways of what I had read.

What have been the results of these efforts so far? Perhaps the most noticeable change, is that I spend far less time, aimlessly browsing the Internet. I’ve largely replaced that with a more focused, closed-end effort at taking in and making sense of information. This is gradually (change doesn’t come quickly) helping me to become less distracted, and more productive, in other areas of my life.

Admittedly this isn’t always easy, particularly on weekends, when my schedule is somewhat less structured, and I find myself spending a bit more time randomly surfing the Web. I’m still figuring out how to change that behavior. I suspect, just as with the weekdays, I’ll need to set specific times, for consumption of information online.

I have also become considerably more selective, in terms of what I read. If you spoke to me back in February 2016, I could have probably recited back to you, in gory detail, whatever was splashed across Page 6 of the New York Post, or the latest episode in the saga of the New York Knicks, or each Tweet of Donald Trump’s, in gory detail. Today, that isn’t the case.

One challenge I have faced, however, is that there are far more worthwhile pieces I’d like to work through, than there are hours in a day. On a typical weekday, I might save upwards of 15 articles for reading later, at least some of which are on the longer end (upwards of 8 minutes). As a result, I find it hard to really complete all that I’d like to, even when taking some extra Instapaper time on weekends. Still, thanks to the note taking, whatever reading I do get through, I find myself retaining much better. Maybe less really is more?

Ultimately, distraction and a lack of focus, isn’t mandatory. There isn’t a single one of us who was born maniacally racing through the Internet, unable to nail down a center of focus. We can choose to do better, in terms of how we seek out, digest, and ultimately make use of information, and how it affects our brains. The first two months of this year have really taught me that. I can’t wait to see what comes next.

 

A New Model For Online Publishing

Earlier this month, the CEO of Medium, Ev Williams, announced that his company would be making some major changes. Specifically, Medium was laying off 1/3 of it’s staff, mainly those who were focused on sales, advertising and business operations.

Williams noted that Medium’s readership grew by around 300%, from 2015 to 2016, as did the number of posts published . Yet, he also observed that when Medium was founded (in 2012), he and his team were striving to create a “new model for media on the Internet.”

More specifically, at the time, Williams believed that “the incentives driving the creation and spread of content were not serving the people consuming it or creating it — or society as a whole.” Williams goes on to state that writers should be “rewarded on their ability to enlighten and inform, not simply their ability to attract a few seconds of attention.”

Williams felt that Medium has not (yet) succeeded in this effort. He hopes to create a new revenue model, to reward Medium’s writers, and more effectively serve his company’s readership. Williams’ announcement arrives at a pivotal moment for online publishing.

As Paolo Gaudiano explained in a piece in Media Post last year, ad-based publishing is a “three party model.” Readers want engaging content, while advertisers desire “access to readers,” and publishers (an umbrella term, which includes writers) seek to sustain and grow their businesses. Guadiano argues that when media platforms are supported mainly through advertising, a publisher’s primary goal is to draw readers, leading to a situation where “content is to serve as bait, which lowers quality.”

In this situation, clever use of social media, and ad technology, can prove more useful than informative, thoughtful writing. Also, since an advertiser’s main goal is to draw traffic, quality of content means little. Who suffers in all of this? Readers, who suffer through the proliferation of tiresome advertising, and,an abundance of weak content.

Advertiser-supported publishing also faces another major challenge: Let’s call it the Google & Facebook Problem. From the first six months of 2015, to the first half of 2016, total digital advertising spending in the United States rose by over 19%, from $27.5 billion, to $32.8 billion. During that same period, Google’s ad revenues rose by 60% (to $17.4 billion), and Facebook’s intake increased by 43% (to $5.7 billion), while spending on all other web platforms decreased by 3%.

Clearly, advertisers see Google and Facebook as the optimal platforms to reach prospective customers, leaving others trailing in the dust. In this environment, fewer and fewer online content producers, will find (only) advertising revenues, to be a viable business model.

So, what’s to be done? Is it impossible to produce quality pieces online, while rewarding those who dedicate their time to their craft? Or, is there a better way forward?

First, let’s get something out of the way: People will have to pay for at least some of the stories which they find relevant. As mentioned, there just enough advertising dollars floating out there, to allow every worthwhile online platform, to rely purely on external funds. The phrase “You get what you pay for” has rarely been more applicable, than in the present context.

Still, there are some glaring issues with current subscription models, where we pay a monthly fee, to gain access to every story offered by a publication. One of the biggest challenges, is that few readers are likely to find every story, to be of personal interest.

Suppose you sign up for a New York Times online subscription, but are only really into domestic politics, followed by movies, music and the arts. For you, the value of the Dealbook page, or the Real Estate section, is rather limited. Yet, insightful articles about politics in the Washington Post, Medium, or the Wall Street Journal, might be very compelling, as would pieces on gallery openings in The New Yorker, or a Variety writeup, of a film screened at Sundance.

Many of us are looking for particular types of story, wherever they are found. In other words, we are somewhat publisher-agnostic. With this consideration in mind, what if we develop a cross-platform subscription model, where one pays a flat subscription fee, in exchange for access to a certain number of articles, across a range of publications? Let’s return to our earlier example.

Under this new approach, you would pay a fixed fee, say, $15 per month, and could read up to 50 articles, on your favorite topics. It wouldn’t matter whether a story appeared in the New York Times, Medium, Buzzfeed, or elsewhere, as long as a particular publication participates in the service.

Each user’s overall experience will be improved, as he or she can focus on more of what is personally most appealing, regardless of publication. This elevated level of customer satisfaction, will increase the public’s willingness to sign up for subscriptions, increasing the overall financial health of online publishers, and leading to continued creation of satisfying writing.

What’s more, problems of publisher, reader, and advertiser incentives being misaligned, will be largely resolved, as publishers are no longer so dependent on outside dollars, to make ends meet. They can focus more on crafting stories which their audience are interested in, rather than simply angling for clicks on inane headlines, or read minimally relevant articles.

Of course, let’s remember that old adage “In theory, there is no difference between theory and practice. In practice there is.” Making this model a reality, presents some unique challenges.

One of the biggest obstacles, is the nature of online media entities. While many of them might see the writing on the wall, major organizational changes take time, and often require considerable persuasion, especially with publications that are publicly held, or owned by larger corporations. Getting decision makers and owners/investors, to buy in, will be critical for the success of the aforementioned efforts.

Additionally, not all platforms are similar, either in terms of audience, or writers/journalists. The New York Times has been in print in for over 180 years (and online for 2+ decades) and likely has a somewhat different readership, than a website like Medium. What’s more, the Times is largely staffed by professional journalists, each of whom commands a salary, while Medium offers a more mixed group, with many creators for whom writing is not a primary source of income.

Given these differences, there are clear obstacles to the New York Times entering into a shared reading agreement with Medium. While the numbers can be made to work, this will require openness, creativity, and a lack of ego, on the part of all involved. Still, there are clear incentives for cooperation: The economics of media are changing, and those who don’t acknowledge these new realities, whether upstart websites or longtime print publications, will face serious challenges.

The good news is, something has to change. As mentioned, advertising dollars for websites not named Google or Facebook are shrinking, a trend which will continue. Yet, in a positive sign, the public has shown an increasing willingness to pay for what at least some of what they read, as evidenced by rising subscription numbers at major newspapers, and at some magazines as well.

Broader trends, in the world at large, bode well for those who produce effective content online. We are living through what military leaders describe as VUCA — conditions of volatility, uncertainty, complexity, ambiguity. Science and technology is reshaping society at a rapid pace, while a new sort of nationalist leadership, is gaining power, in disparate nations across the globe. People are looking to writers, thinkers and journalists, to help illuminate and interpret these events.

Here in the United States, early indications are that the new administration and the press, will have an adversarial relationship, at a time when the country is heavily divided in it’s opinion of the new president. As Jack Shafer, Politico’s senior business correspondent, noted, this will make for aggressive investigative reporting, which will help in “making journalism great again.” If the post-election jump in subscriptions at the New York Times and Washington Post is any indication, plenty of Americans agree with Shafer.

As citizen of nations across the globe, seek out incisive, hard-hitting writing, there’s an excellent opportunity for those who are great at their craft, to build a stronger readership, and grow their revenues in the process. However, achieving such success, will require a deeper understanding of how today’s reader actually engages with what he or she reads online. Ev Williams, as leader of one of the most powerful publishing platforms around today, is in a unique position to lead this transformation. Let’s see what he and his peers are able to accomplish.

Will We Still Know Each Other?

                                                    Credit: surveyingtech.weebly.com

2016 was a banner year for technologies that automate human tasks, by (largely) cutting humans out of the equation. Uber’s first batch of self-driving vehicles became available for consumer use in August (although a human handler remains present in the car), while in October, Google’s self-driving cars logged 2 million miles of street testing, making progress in navigating complex driving situations. On the regulatory side, federal officials issued guidelines which basically endorsed driverless cars as being safer than those operated by humans.

Last year, we also added a new buzzword to our lexicon: chatbot. A chatbot (essentially, a chat robot) is a computer program, which often makes use of natural language processing and deep learning, to allow human-like conversations between humans and robots. Since chatbots allow for increasingly individualized communication with many people at once, it is possible for businesses and nonprofits to scale more quickly, increasing their reach, while reducing customer service and sales expenses. In time, chatbots will all but eliminate most phone and email-based customer support functions. Since the start of 2016, we’ve witnessed an explosion in the use of chatbots, for banking, holiday shopping, voter registration and more.

Venture capital funding (and at large corporations) of artificial intelligence companies (including AI’s subdivisions of machine learning and deep learning), was incredibly vigorous in 2016. In March of last year, Google’s AlphaGo beat the world’s greatest human player in the ancient board game of Go. AlphaGo makes use of deep learning, where a computer learns to accomplish tasks in a similar manner as a human would, through the use of neural networks. Deep learning, along with computer vision and sensor fusion, are amongst the tools which Amazon implements in it’s new Amazon Go grocery stores, offering a shopping experience without cashiers or checkout lines.

Speaking of Amazon, in early December, Amazon succesfully completed their first commercial delivery by drone, to a customer in Cambridgeshire, England. The drone flew roughly two miles, to the home of a man known only as Richard B., dropping off an Amazon Fire device, and a bag of popcorn. In 2017, Amazon CEO Jeff Bezos and his team want to attempt drone delivery with more customers, though significant regulatory hurdles around drone use remain.

  

There’s no doubt that each of these advancements represents incredible technical progress. Yet, when assessing any new technology, it is also important to be critical. What sorts of new problems and challenges might present themselves, as a result of these changes?

With all of the aforementioned technologies, there is one underlying theme: A growing absence of real human contact. Writing in Quartz, Mike Murphy argues that thanks to the rise of Amazon Go and chatbots, not to mention food delivery and ridesharing platforms like Seamless and Uber, we “never have to talk to, or interact with, anyone that we don’t want to, both in person and online.” Ultimately, Murphy fears that “life may well get far more isolating as technology pervades more aspects of our lives.”

In order to better idea of what this new world might look like, Murphy lays out the day of a white collar work in 2021. We are woken up by an Amazon Echo, which reads us a curated batch of news. A self-driving Uber takes us to work (while we watch Netflix in the back). At work, much time is spent on online collaboration tool Slack. For lunch, we grab a wrap from an Amazon Go market, paying with our cell phones (no cashiers are present). Later in the afternoon, our boss makes a request of us (through Slack), and later book a vacation on TripAdvisor, by using a Facebook-based chatbot. To wrap up the day, another driverless Uber takes us home, where a delivery robot drops off some pizza. We see our children and spouse, and watch a movie (in 360 mode), and head to bed.

While Murphy acknowledges that this might sound like “fiction bordering on dystopia”, he correctly observes that in the aforementioned scenario, every piece of technology referenced, either exists today, or is currently being developed, for use in the  near future. In such a world, it is quite possible that we might only engage in face to face interaction with our coworkers (and even that is limited, thanks to Slack and other collaboration tools), and, to a limited extent, with our families and friends (of course, with various forms of electronic distraction, either taking center stage, or in the background).

Gone will be the friendly chat with the woman who works at the grocery store, to find out which aisle produce is located in, or with our taxi or Uber driver, bringing a slice of his life into ours. We won’t have be wishing our food delivery folks happy holidays, or smiling a request for extra ketchup (or whatever organic condiments you prefer) to the cashier at our favorite lunch spot.  

While there isn’t a soul on this planet who enjoys every single personal interaction, the reality is that human contact, even with relative strangers, can impact us positively. In 2013, psychologists Gillian Sandstrom and Elizabeth Dunn published a study which tested how casual social encounters, with someone whom we don’t know personally, impacts our sense of belonging.

Sandstrom and Dunn had people order a cup of coffee from a Starbucks barista (whom they didn’t know personally), and either personalize the interaction (that is, to engage with the barista, as they might a casual acquaintance), or to be polite but brief, just ordering coffee, and moving on. They found that those who interacted in a friendlier manner, later indicated a greater sense of belonging, and a stronger sense of positive emotions, than those with a more brief, businesslike encounter.

As the study’s authors point out, belonging, that is, a sense that we are a part of the environment and community around us, appears to be associated with overall feelings of happiness, although this topic is still being explored. Sandstrom and Dunn’s work follows a 2012 study which found that even mere visual acknowledgment (that is, eye contact, or a smile, but nothing more), from a passing stranger on the street, leads to greater feelings of social connectedness.

Of course, meaningful relationships with and closeness to other people, is critical to a fulfilling existence. A 2002 study from psychologists Ed Diener and Martin Seligman found that those who ranked highest in a mutivariate assessment of happiness, consistently enjoyed stronger social relationships; in fact, “good social relations were necessary” for those who ranked highest in measures of happiness.

Other studies have suggested that such relationships help provide people with considerable psychological support, which raises one’s chances of overcoming a deadly illness, while having “deep” substantive conversations, which is most likely to occur in a close relationship, is strongly associated with deeper feelings of happiness.

Meanwhile, social isolation and loneliness is closely associated with higher levels of stress,  and poses a long-term mortality risk comparable to smoking. As if all of this weren’t troubling enough, chronic loneliness has risen considerably, over the past several decades.

How is all of this relevant to our discussion of technological change? Let’s take a second look at Murphy’s hypothetical day in 2021. Consider how casual social interactions are increasingly being phased out, by the march of technology. Even more troubling is another question: what will happen to our more important relationships? I’m not suggesting that close friendships and family ties are going the way of the dinosaur, never to be heard from again. After all, at a core level, humans are social beings.

Yet we live in a world where virtual and augmented reality programs are increasingly ascendant, and likely to be become even more immersive and engaging in the near future. Smartphones make it easier than ever to stay in touch with those we care about, but are also redefining the rules of social interaction, in terms of being present and attentive, when we are in the company of others. These days, we text far more than we talk. In some respects, this is wonderful, because we can stay in easy contact with those in our lives, and communicate more quickly, but there are serious questions about what it means for our relationships.

Meanwhile, the impact of social media on our relationships, remains a mixed bag at best. While it is a great tool for engaging over various topics, and keeping broad tabs on our friend’s  loosely defined) lives, social media can also create a false sense of connection (as compared to the real work required to sustain relationships), and exacerbate narcissistic behaviors, which are often destructive to those close to us.

As we step into a future increasingly like that imagined by Murphy and others, it is more important than ever, to pause and think deeply, about how various technologies will impact our personal interactions and relationships. The currents of change are whisking us into a rapidly changing world. Let’s make sure that we are moving in the right direction.

Baby Bonds: An Investment In Our Future

Since the 2008 financial crisis, income and wealth inequality has become a prominent subtext of our national conversation. Politicians, ranging from President Obama and local city governments, as well as social movements, including Occupy Wall Street and the Fight For $15 (which has successfully fought for a $15 minimum wage in several dozen cities and states), have drawn attention to the nation’s highly uneven private monetary distribution.

Considering that in 2014, the top 0.1% of earners brought in 184 times the income of the lower 90% of Americans combined, while members of the Forbes 400 (the 400 wealthiest Americans, or just over 0.000001% of the population) held greater aggregate wealth than the bottom 61% of Americans, this debate is unlikely to cease anytime soon.

A range of potential solutions have been floated, including raising capital gains taxes (assessed on various types of investments), increasing the income tax on high earners, and reforming the estate tax (levied on inheritances of a certain size), to dampen the effects of the intergenerational transfer of wealth.

Each of these approaches is focused on altering the post-earnings distribution of income and wealth, through the use of taxes. There’s nothing per se wrong with that method; after all, tax policy is one of the primary mechanisms through which government can influence economics.

Yet, what if policymakers try to tackle this issue from a different angle, by working to shift the pre-tax distribution of income and wealth? Such a strategy would involve crafting solutions which empower those from families who make less money, and sit at the lower end of the wealth spectrum, to increase their incomes, and build wealth.

In the past several years, studies have shown that economic mobility, in terms of income, has not changed much over the past several decades. That is, the chances of moving up to the top 20% of earners as an adult, given a childhood background where one’s family was in the bottom 20%, has remained relatively consistent. Yet, the numerical odds are still rather low: only 8.4 to 9% of Americans will make this jump.

Much of this has to do with educational achievement. There is a strong correlation between education and earnings, yet just 5% of Americans whose parents did not finish high school (and are thus more likely to be clustered amongst the poorest 20% of the population), complete college. More broadly, of those aged 25–34 (in 2014), only 20% of men, and 27% of women, achieved a greater level of education than their parents.

An obvious reason for this unfortunate reality, is that children born into poverty face a range of disadvantages before they even begin school, including lower exposure to vocabulary and conversation, to malnutrition, and the presence of violence and drug use. These children often attend schools where fellow pupils also hail from socioeconomically challenged backgrounds, teacher quality tends to be lower, and an inequitable distribution of public funds leads to a lack of other resources.

As if all of this weren’t enough, those who do make it to college often face rising educational costs. A landmark 2007 study found that the impact of family income on college attendance, grew markedly from the early 1980’s to the early 2000’s. Why? In part, the study suggested, rising educational costs are harming those who are “borrowing constrained”, that is, less affluent students, who often must accept the maximum amount allowed from student loan programs (sometimes while facing other financial pressures, like assisting their families), also lack other sources of funding.This is an unfortunate Catch-22, since higher education is often required in order to escape poverty, yet, it often simply costs too much.

Now, let’s consider the wealth gap. The wealthiest 20% of American households hold just under 90% of all wealth in the nation, while the bottom 40% of households actually have negative wealth, that is, they actually owe more than the total value of their assets, i.e., such households are in debt.

For those on the lower end,of the wealth curve, breaking out of this cycle is even more challenging than outearning their parents (i.e.narrowing income inequality). Since so much wealth in the United States is transferred intergenerationally, even if someone from a poor background completes advanced schooling, and earns far more than his or her parents, he or she is already at a substantial disadvantage, compared to peers from wealthier families, whose families might have helped pay for school, provided the down payment for a home, or helped fund a new business. This chasm remains for generations to come.

Yet, wherever we face major challenges, solutions are never too far away. One of the most fascinating approaches to bridging the wealth gap, is the idea of “baby bonds.” This phrase, coined by late historian Manning Marable, came into prominence thanks to a 2010 paper, published by economists Darrick Hamilton of The New School and William Darity Jr. of Duke University.

Hamilton and Darity’s work sought to address racial disparities in the distribution of wealth. According to a 2013 study from the Institute for Policy Studies, the average white household was almost 7.7 times as wealthy as it’s African-American counterpart, and had almost 6.7 times the wealth of the average Latino household.

Why is this? Hamilton and Darity cite to a study by economists Maury Gittleman and Edward Wolff, which found that, once controlled for income, African-Americans and whites have similar savings rates, eliminating one source of this wealth disparity. However, inheritances play a large role in raising the wealth levels of whites, relative to African-Americans. This effect is so pronounced that the median wealth of an African-American household headed by a college graduate, is lower than that of a white family whose primary earner dropped out of high school. Hamilton and Darity also note that lending and housing policies have been disproportionately harmful to African-Americans, which has an added impact on wealth creation.

Thus far, we have established that the wealth gap in the United States is direly large, stems largely from the passage of wealth through inheritance, and has a significant racial component. So, what does all of this have to do with baby bonds?

As Hamilton and Darity see it, the “post-racial” narrative, which argues that racism and discrimination are no longer major factors in holding back African-Americans, has become increasingly prevalent, particularly since the election of President Obama. Under this view, African-Americans must assume greater personal responsibility for their social and economic conditions, rather than looking to the larger society, or the federal government. Advocates of post-racial politics also believe that African-Americans ought to focus on supporting programs designed to uplift Americans of all races, rather than racially focused remedies.

While Hamilton and Darity aren’t swayed by claims of post-racialism, they seem to acknowledge that these arguments have gained considerable traction, such that there is unlikely to be much support for “race specific social policies” to bridge the racial wealth gap, or other disparities.

Here’s where baby bonds offer a solution. Around 1990, a few small pilot programs were established to narrow the wealth gap. Amongst these was the Savings for Education, Entrepreneurship and Down-payment (SEED) initiative, which funds Children’s Development Accounts (CDA), basically, savings accounts to help children build wealth, starting at birth.

Hamilton and Darity argue for widespread implementation of a program like SEED. Under their approach, around 75% of American newborns would be allocated an initial principal amount, based on familial wealth (rather than income). Children born into the least wealthy households would recieve a larger allocation (perhaps $50,000 to $60,000), while those from wealthier families, who are capable of passing on greater wealth, would recieve progressively smaller amounts (babies from the wealthiest households would recieve no baby bonds, given their not-insubstantial existing wealth). Overall, Hamilton and Darity foresee around 3/4 of children born every year, participating in this program.

These funds would be placed in federally managed accounts, with a guaranteed annual return of 1.5% to 2%, such that by the time a child from one of the poorest families turns 18, he or she would have $78,000. This money would then be directed towards a “clearly defined asset enhancing activity,” that is, an avenue which will empower recipients to build wealth. Examples offered by Hamilton include financing (partially) debt-free higher education, investing in a business, or purchasing a home (given housing costs in much of the country, probably by just providing a down payment).

While bond holders have their choice of how exactly to allocate these funds, monies must be spent on some sort of activity which builds long-term wealth. As Hamilton noted, in many poorer families, relatives often need financial assistance, to cover various expenses. Such uses, however commendable, will not be permitted, since these funds won’t strengthen the long-term finances of bond beneficiaries. Additionally, vigorous regulations would be implemented, to ensure that beneficiaries are not defrauded by those who see a young person looking to improve his or her life, as an easy target for theft.

Of course, whenever a proposal for government spending is offered, the inevitable question arises: How will we pay for this? In their paper, Hamilton and Darity projected that the baby bonds program would cost about $60 billion per year. Assuming costs have stayed fairly consistent (a reasonable assumption, given birth rates), this amount is just over 10% of the yearly allocation to the Department of Defense (which is already rife with bureaucratic waste) . It is also less than the considerable tax revenue lost yearly to the mortgage interest deduction, a largely ineffective. policy. Funding baby bonds is possible, if lawmakers are willing to make some reasonable fiscal adjustments, for a program that holds considerable promise.

Ultimately, it will be possible to finally lessen a yawning wealth gap, which stems in major part from decades of wealth transfer between generations, rather than uniquely meritorious behavior, of those who possess (often, inherit) wealth . Baby bonds can directly impact the college completion rates of poorer Americans (recall the aforementioned discussion of borrowing constraints), given that promising students (based on test scores) of lesser means, complete college at about the same rate as wealthy youngsters with considerably weaker academic skills.

What’s more, those baby bond recipients who do complete college, will be graduating with a lighter debt load, and greater earnings potential, than their counterparts who did not finish school. This will not only reduce income inequality, but allow baby bond program participants to build (and bequeath) wealth at a faster pace. Over time, this virtuous cycle will (partially) offset unearned differences in wealth.

Baby bonds are not a panacea for the complex challenges we face, in terms of wealth and income inequality. Changes to the tax code, better K-12 schools, strong antipoverty efforts, improved financial education, can all play important roles in overcoming these challenges. What’s more, in an era where technological innovation (specifically, artificial intelligence, machine learning, deep learning and robotics), will replace lots of blue collar as well as higher skill jobs, inequality will likely remain an issue for decades to come.

Yet, we must make an earnest effort to build a fairer economic system, one where the birth lottery does not play such a large role in determining one’s income and wealth, not to mention that of future generations. Baby bonds are a clear step in that direction.