On a childhood trip to the Panama Canal with her family, Nicole-Hadassah Valdez had her first introduction to international trade. Watching the boats, she found beauty in this intersection where, as she described, “cultures come together because of capitalism.” This firsthand observation of trade sparked an interest in economics and inspired her to pursue research here at UC Berkeley.
A self-proclaimed data geek, Valdez leads a team of student researchers under Professor Emeritus Robert Edelstein. Using econometrics, they measure the impact of globalization on the U.S. economy.
As the only person on her team not majoring in economics, however, Valdez says she also tries to address a broader perspective beyond the data-oriented nature of the research.
“We’re grounding our (work) in the quantitative to predict what will be qualitative as far as changes go in the next 10 years,” Valdez said.
Part of the qualitative aspect includes understanding who suffers as a result of of economic shifts and policy changes, in order to propose the best possible suggestions for improvement. “In essence, any sort of change would have to take into account those that are lacking. And so far, we don’t have a system for that,” Valdez said.
Valdez is a campus junior double majoring in interdisciplinary studies — taking classes in the School of Information, the business school and economics — and rhetoric, with a focus on public discourse. She’s also half Filipino and half Romanian. Valdez carries this conglomeration of interests and identities with her throughout the process of data analysis, which has motivated her to apply a multidimensional approach to her research.
This method has proved itself to be particularly valuable as Valdez and her team work through their most recent project.
This semester, they were tasked with analyzing the most recent tax reform, which President Donald Trump rolled out just this past December. They have looked at the impact on metropolitan, rural and medium-sized communities. Approaching the project from all angles, her team is also looking at the the consequences of reducing the U.S. deficit (which the plan claims it will do through economic growth), provisions of the reform and loopholes for corporates.
They began their research process by looking at predictive articles to get an idea of what they would be working with, then, using data from the Joint Committee on Taxation, they applied metrics to various theoretical scenarios to play out possible outcomes.
But while the predictive part of the process is exciting, the data presents its own set of challenges. Valdez noted that numbers, while traditionally a form of statistical authority, are also “a form of aesthetic authority”— because of the weight numbers carry, people are less likely to question statistical data.
In the case of the “crafty verbiage” of the tax plan, Valdez says this means that from the data, “whatever is translated is not only translated (into the presentation of the tax plan), but it’s translated in a dialect,” which is what makes it “ethically difficult for numbers to account for the (whole) truth.”
She emphasized that this doesn’t mean that the numbers are skewed. Rather, her disheartenment comes from the disparity between the claims of the plan and the detailed statistical predictions drawn from her team’s research. The tax plan is marketed under the guise of “economic growth”— which, Valdez said, is technically the truth. The issue lies in that only a very specific demographic benefits.
“This tax reform privileges family as opposed to the individual. … (It) penalizes individuals for staying individual,” Valdez explained. She cited the tax placed on the stipends of graduate students as an example. She interprets this as “a penalization for producing knowledge.”
And as if that weren’t alarming enough, she revealed that “by 2027, those with annual incomes under $50,000 will be experiencing an increase in tax.”
This also suggests that the tax plan may have more profound effects on marginalized groups and individuals of color, as the national median income for these groups rests in this tier of earnings.
Another point of the plan includes tax breaks for those purchasing homes more than $1 million, and for private institutions. Because private corporations and universities receive private funding, this will reinforce the benefits of the tax plan in a very “make America cyclical again” fashion, Valdez explained. She also added that the public and private spheres will further diverge, as the public tries to “maintain some sort of wingspan.”
To further explain this phenomenon, Valdez used an analogy to social media. This tax plan — both in its effects and its nature of shaping data to serve its objective — is a “reinforcement tunnel.” Like the Instagram algorithm, it aims to show content based off of what has been liked in the past, rather than the most recent material.
Nevertheless, Valdez tries to envision some positive outcomes. One small benefit that could arise from the plan, she conceded, would result from its aim to increase national production. The tax plan offers tax cuts to corporations that relocate their production to the United States.
While she said that this wouldn’t likely have a significant impact on gross domestic product growth, one possible advantage to this plan is that if the United States were to be a producer again, goods would increase in price.
“I think that might force consumers to be more thoughtful in their process of purchasing,” Valdez said. “I’m very much so hoping that there could be a higher quality and a reduction in consumption that could still strengthen GDP and, at the same time, lower debt.”
The detailed understanding of the tax plan that Valdez and her team have acquired has provided another reason to remain hopeful. She is excited by the leadership opportunities this project has presented for her and her fellow researchers — because the tax reform is so new, the team has the chance to be at the forefront of the research surrounding it.
Valdez and her team also hope to make this economic knowledge more widely accessible. Not only do they aim to “forecast” the possible effects of this tax plan, but also make the details of it more “digestible” for the general public. Illuminating the specifics of the plan could allow those who are most impacted to better navigate the potential implications of these changes.
Even with this small amount of optimism, Valdez upholds that the nature of the tax plan is misguided. She explained that one of the major issues the country is currently facing lies in Social Security; because of the large number of baby boomers, the United States is quickly running out of money to provide future generations with this same stipend. Conservatives hope to find that revenue in the new economic growth generated from the tax plan.
“We’re predicting (the tax plan) to work regarding growth,” Valdez said, “but it’s a very particular kind of growth.”
It’s a kind of growth that, as Valdez’ research shows, also emphasizes a very particular set of American values.