J

Jason

12252 karmaJoined Nov 2022Working (15+ years)

Bio

I am an attorney in a public-sector position not associated with EA, although I cannot provide legal advice to anyone. My involvement with EA so far has been mostly limited so far to writing checks to GiveWell and other effective charities in the Global Health space, as well as some independent reading. I have occasionally read the forum and was looking for ideas for year-end giving when the whole FTX business exploded . . . 

How I can help others

As someone who isn't deep in EA culture (at least at the time of writing), I may be able to offer a perspective on how the broader group of people with sympathies toward EA ideas might react to certain things. I'll probably make some errors that would be obvious to other people, but sometimes a fresh set of eyes can help bring a different perspective.

Posts
2

Sorted by New
6
Jason
· 1y ago · 1m read

Comments
1353

Topic contributions
2

SBF also claimed that he could have raised enough liquidity to make customers substantially whole given a few more weeks, but was under extreme pressure to declare bankruptcy. I think there's a good chance this is accurate [. . . .]

 

This seems unlikely to me. The books were just in too bad of a shape for anyone conducting even a minimum amount of due diligence to fork over the needed liquid assets. Selling the illiquid assets would have taken time, and in many cases doing so quickly would have depressed the value of those assets. Moreover, suspending withdrawals until liquidity could be obtained would have been the death knell for FTX's enterprise value. So, contra the earlier situations in which investors poured money into FTX, the potential upside would be fairly limited for accepting the risk of whatever landmines might be buried in FTX's financials.

The estate hopes everyone can be made whole as far as recovering the value in USD on the date of filing, but that is based in part on appreciation in the value of crypto and to a lesser extent on use of the trustee's muscular powers in bankruptcy (such as clawing back ~$30M from EVF, getting out of expensive sponsorship deals, etc.).

Finally, even assuming it was possible to get FTX into shape to attract liquidity, that would have involved massive effort. The universe in which SBF hires an army of forensic accountants to untangle FTX's disastrous accounting very quickly is a universe in which a lot of outsiders now have proof of very serious fraud. Those people are not likely to allow SBF to hide the extent of the fraud from would-be saviors.

Could you say a bit more about the ~$6,300 figure? I have 547 lives saved from the annual report (p. 5) and about $9.5MM USD in expenses from the financial statements. Admittedly, most of this is related to the establishment of a "Children's Hospital at Wolfson" -- but it's not clear to me that these costs should be excluded. I suppose that the organization is doing its current work without said hospital existing yet, but the presence and magnitude of that expenditure makes me wonder -- at a minimum -- whether they have room for more funding at ~$6,300.

By rough analogy, it wouldn't be appropriate for an organization to fundraise separately for bednets and for distribution costs, and quote a cost-effectiveness figure to distribution-cost donors of (distribution costs / total impact).

Why do you think there is currently little/no market for systematic meritocratic forecasting services (SMFS)? Even under a lower standard of usefulness -- that blending SMFS in with domain-expert forecasts would improve the utility of forecasts over using only domain-expert input -- that should be worth billions of dollars in the financial services industry alone, and billions elsewhere (e.g., the insurance market).

I don't think the drivers of low "societal sanity" are fundamentally about current ability to estimate probabilities. To use a current example, the reason 18% of Americans believe Taylor Swift's love life is part of a conspiracy to re-elect Biden isn't that our society lacks resources to better calibrate the probability that this is true. The desire to believe things that favor your "team" runs deep in human psychology. The incentives to propagate such nonsense are, sadly, often considerable. The technological structures that make disseminating nonsense easier are not going away.

Great example of malnutrition - although in that case there might well be a good argument you are better off funding more RUTF or better malnutrition centers.

I think there's a real difference in funging risk between your intervention and funding ready-to-use therapeutic food (RUTF) or malnutrition centers.

If we donate to RUTFs or malnutrition centers, some of that may be offset by big NGOs and governments giving a little less. That's pretty undesirable, given the relatively low value of what many of them would do with the extra money.

If we donate to the nine-month old's family, there is the possibility that the $100 for transport would have been raised by the family and the surrounding community. But unlike in the NGO/government scenario, your added value in the scenario in which the family/community raised the money is hardly ~zero. There's now counterfactually $100 more money in the pockets of (presumably) poor individuals, which is a good thing and is probably roughly equivalent to the impact of GiveDirectly distributing $100. Moreover, in that hypothetical, the infant's family has probably exhausted its financial resources and gone into debt -- factors that may reduce the risk of successful aftercare and a good ultimate outcome. So even the scenario where your donation was 100% subject to funging is not such a terrible outcome.

Cancer treatment in Uganda is very poor and expensive. The obvious factor which made situations far less cost-effective even if they were cured were just age, life saving treatment in kids.

My lay understanding is that successful treatment of pediatric cancers often allows for a ~normal lifespan and life, while even initially successful treatment of adult cancers often carries a significant 5-10 year mortality rate[1] and involves significant continuing morbidity (e.g., residual pain, lymphedema). So initial successful treatment of a pediatric cancer seems to be a more good result than initial successful treatment of an adult cancer, even if one disregards years of life saved.

In this case it was actually easier in a way, we were being sent cases of sick people that we never actually told we might helpe, so we didn't actually have to refuse a personal cry for help.

I think this touches on another probable advantage to your model. I've read and heard that Westerners have to be careful doing relief work, lest their actions disrupt the processes the community has developed for mutual aid and support by instead leading everyone to look to the NGO to fix the problem with their money. This problem seems much less likely to develop under your system, as you had no application process to attract candidates, a large catchment area for selecting beneficiaries, and a very low rate of selection.

  1. ^

    I'm assuming that most of the cancers identified were not early-stage cancers due to limited levels of medical care and specialized diagnostic equipment.

Orthogonally, I think most people are willing to pay more for a more legible/direct theory of impact. 

"I give $2800, this kid has lifesaving heart surgery" is certainly more legible and direct than a GiveWell-type charity. In the former case, the donor doesn't have to trust GiveWell's methodologies, data gathering abilities, and freedom from bias. I've invested a significant amount of time and thought into getting to my current high level of confidence in GiveWell's analyses, more time than most people are prepared to spend thinking about their charitable donations. 

And I think most people -- including myself -- have a prior that projections and analyses of all sorts tend to be overinflated in comparison to reality. How many building projects come in on time and under budget? How many IT projects? The less complex the theory of impact, the less the lightly-researching donor will end up implicitly discounting the organization's claims on account of their background skepticism of projections and analyses.

Jason
2d18
6
0
1

I suspect the limiting factor on scalability here may be having people in-country who have the technical skills, access to information, and mindset to pull something like this off. I'm sure that saying no was excruciating. Potentially, one could scale (at some probable tradeoff for cost-effectiveness) after a while with algorithms. For instance, you might determine that providing transport and ancillary supports for moderate-to-severe malnutrition cases up to $150 is cost effective if the treatment was unlikely to happen otherwise.

Conditioned on who the likely donors are, I think using the GiveWell bar is too demanding. As you mentioned, this project hits the fuzzies hard. It's quite legible to non-EA donors: identifiable beneficiary with a story,[1] very understandable theory of change. The amounts at play are small enough that a donor who gives $50-$100 would feel like a significant part of potentially changing that child's life. This feels like an easy thing to share with people who are not EAs or even sympathetic to EA principles.

If the counterfactual is that the donor would have given the money to a big NGO, to almost any charity in their own country, or would have spent the money on non-charitable purposes, then the cost-effectiveness for this program would not need to be particularly high. So I'd be interested in hearing a little bit about cases number 4 through 6, which may give an idea of how much the cost-effectiveness might drop upon broader scope.

  1. ^

    In many cases, you'd need to fund the treatment out of reserve funds and fundraise retroactively, but I don't think that would be a major problem if transparently disclosed. Doesn't seem to hurt the disaster-relief charities' fundraising right after a natural disaster.

I'd caution everyone that discussions with peers would be potentially discoverable in litigation. I do not mean to imply the possibility of discovery is a sufficient reason not to have those discussions, but I think people do need to be aware.

If I were a smaller grantee, I'd be considering the possibility of seeking joint representation with similarly-situated individuals/entities, and perhaps giving the attorney permission to seek a aggregate settlement of all claims against those grantees. It's clear to me that the least desirable place for the monies to end up is in the pockets of lawyers -- either your own or the estate's. Off the top of my head, I'd be cautious about joint settlement involving people/orgs who (had significantly different grant sizes or atypical defenses) and wanted to pay as little as possible.

I want to be really careful not to give legal advice here, both for the usual reasons and because this is a complex multijurisdictional bankruptcy affair. 

I think I had the explainer written by Open Phil's outside counsel shortly after implosion in mind, but it doesn't contain a citation. 

This is definitely one of those cases where you should obtain legal advice (perhaps jointly with people in a similar situation) before giving the monies away. 

I suspect it will be a long time before we know "the FTX debtors are paid back," especially since so much of the asset base is highly volatile. Thankfully, interest rates are good at the moment, so you can ~preserve the power of the donation by putting the funds in short-term Treasuries (or equivalent) while you wait.

I'm rooting for the depositors here. Their deal with FTX was that they owned the assets in their accounts, so the increase in value of that crypto morally belongs to them. I don't even think "would have held their assets in crypto since the crash" is a prerequisite. SBF forced them to involuntarily bear the risk that their assets (once recovered and distributed) would be less than their November 2022 value, so the upside to that risk (post-November 2022 appreciation) belongs to them as well.

Simplifying, my general moral priority list for recoveries is vaguely like: depositors (up to their November 2022 values), non-investor unsecured creditors (e.g., trade creditors), depositors (up to FMV of their accounts at time of distribution), investor unsecured creditors (e.g., hedge funds), [1]innocent transferees (e.g., EA and political organizations), equity holders guilty of at most ordinary negligence (if any), forfeiture to the government,[2] recipients of sketchy transfers, including those who were paid way over FMV (e.g., those paid sky-high valuations for vaporware biotech firms), my fireplace, SBF and other insiders. 

  1. ^

    Lower because they had an opportunity and access to do due diligence, and assumed the risk. I am more sympathetic to vendors and other non-investment unsecured creditors than this group.

  2. ^

    Standing in the place of SBF, who morally deserves to forfeit any equity interest he might have. Only after all innocent parties have been fully compensated.

Jason
8d24
6
2
1
1

I’m more concerned with the community not engaging enough with the problems raised in the post.

Experience teaches that there are (at least) two types of postmortem analyses when something goes wrong: a type that is more focused on questions of blame, and one that is focused on root cause analysis / lessons learned / how to improve / etc. These types of inquiry struggle to coexist in the same conversation, because the former creates an adversarial tone regarding the persons against whom blame is being considered. 

Now, that is not to say that blame-focused inquiries are bad, and the other type is better as a matter of course. But the title and tone of your post placed this discussion clearly in the blame-focused camp, and it's hard for the non-blamey type of conservation to form out of such an environment. 

I suspect most community members felt that the proffered evidence does not sufficiently make out a case of deception (i.e., intentional misrepresentation) and are thus disinclined to participate in discussion of downstream philosophical issues that only come into play if they reach a conclusion that deception was present (vs. making a mistake).

If you're interested in learning more about the second type of analysis, I'd suggest reading more about just culture in fields like medicine and aviation. 

Load more