Daniel Gastfriend

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On November 30, 2017, Daniel Gastfriend commented on Foxconn: Out-Foxing Protectionism :

Ultimately, it’s not possible to predict how the political winds will blow in the future. Given the long-term trend towards globalization and free trade, it seems plausible that the current protectionist movement won’t last, but I wouldn’t bet the business on that. It therefore seems prudent to establish a few footholds in different geographies to insure against a range of possible scenarios. Given that protectionism may die down, it’s worth maintaining Foxconn’s core assets in China. But it’s also worth beginning to expand in the U.S. Building out a U.S.-based team and an understanding of the U.S. market would facilitate a pivot towards producing in the U.S. in the future, if that turns out to be warranted. It may be worth doing the same in a handful of lower cost geographies for further risk mitigation.

On November 30, 2017, Daniel Gastfriend commented on For Some, Finding A Match Is About Life And Death :

Really interesting. I’d be curious how the relevance and feasibility of an AI sorting algorithm differs between organ types. Some organs have many fewer numbers of transplants per year than others and may lack the large datasets needed for machine-learning algorithms. It seems that AI could be a very useful tool, but not a panacea across the board – at least at current rates of donation.

I agree that we should also be working to increase the supply of donations, which would help solve the problem and also increase the value of an AI sorting algorithm. One simple fix would be to have an opt-out rather than an opt-in system. Many European countries use the opt-out system, in which citizens are by default treated as organ donors unless they choose to opt-out. By contrast, in the United States, you have to voluntarily opt-in to become an organ donor. The opt-out system leads to a much higher percentage of the population donating their organs – which ultimately saves lives.

An interesting model for India might be Bridge International Academies, a social enterprise that has been rapidly opening schools in East and West Africa. Bridge equips teachers with electronic tablets and has its curriculum team constantly monitor teachers’ progress, send curricula updates wirelessly, and conduct A/B tests in the classroom to identify which pedagogies are most effective. It is doing this for very low fees, and it has partnered with the government of Liberia to provide these services at a large scale. While India is massively larger than any of the countries where Bridge operates, India could look for private schools that have effectively used digital technology for models to borrow from, or for partners in designing its own solutions. All the same, implementing these technologies effectively in public schools will be incredibly challenging due to the organizational weaknesses in India’s education sector.

On November 28, 2017, Daniel Gastfriend commented on The MBTA’s climate challenge :

Great piece – interesting and important.

I wonder about the political economy here: what is needed to generate the political will to make these investments? Massachusetts had to cut almost $500 million in spending due to a budget crisis this year. Mobilizing additional resources for the investments you propose will require even more tough decisions elsewhere in the budget. Will Massachusetts wait until a disaster happens to invest? This seems common; Hurricane Sandy, for example, caused New York City to significantly increase its focus on resiliency. Or can policymakers in Massachusetts – a state whose voters care deeply about the environment, are concerned about climate change, and have a higher tolerance than most for public investment – beat this trend?

To do so, they will need to find the revenues – either by increasing taxes / tolls, decreasing spending on other programs, or gaining federal grants. The latter seems unlikely in this political environment, so let’s hope policymakers start working on creative solutions.

On November 28, 2017, Daniel Gastfriend commented on Amazon, Mexico and Trumponomics- Is the bet too high? :

Another important question to consider: how difficult will it be for Amazon to exit from its investment in Mexico if the policy environment makes operating in the country economically untenable? Given the global rise of e-commerce, it seems feasible that some company will eventually serve an Amazon-like function in Mexico, even if Amazon fails to capture the market. If this is true, Amazon may be able to resell its warehouses to domestic companies if it decides to exit. This option reduces Amazon’s downside risk. On the other hand, Amazon is surely anticipating the risk of a competitor capturing the Mexican market before it does – which would explain its decision to invest even in an uncertain political environment. Ultimately, Amazon faces risks both ways, and it seems reasonable for them to make a calculated bet to invest.

Really interesting article. I’m encouraged that Alaska Airlines is looking to build more fuel-efficient planes, but I’m not convinced this will be a solution to emissions from the aerospace industry. There are already a large number of planes in the market with long lifespans, and building a plane is a very energy and carbon-intensive process. Excluding the older generation of planes, I expect it wouldn’t make environmental or economic sense to replace most planes for the sake of fuel efficiency. (I would be happy to be proven wrong here.) However, it’s certainly a good sign that new planes will be meeting higher efficiency standards.

I also share some of the skepticism around biofuels noted in the other comments, due to their lower efficiency.

I see here a clear case for more regulation – for example, by imposing carbon taxes that encourage consumers to fly less. These policies could give a competitive advantage to firms like Alaska Airlines that are making emissions-reducing investments. Moreover, they would reduce the environmental impact of the airlines industry even in the absence of technological silver bullets.