A plan so crazy it just might work. That’s the essence of the pitch for a universal basic income. And it’s starting to sound reasonable to conservatives. They hope it will make welfare more efficient, but that’s its biggest problem.  

You get your Trumpbux yet? That would be the $1,200 guaranteed to every American making under $75,000 as part of the record-shattering $2 trillion coronavirus relief bill Congress passed last month.

Even those who make too much to qualify for the payments are excited about them. The universal basic income, UBI, now has its foot in the door. Economists and academics who have been pushing this idea, for decades in some cases, are finally having their day in the limelight, as its popularity grows.

A Rasmussen poll this month found 40 percent of likely voters favor a UBI provided by the federal government. That’s a monthly payment for some 300 million Americans. In August 2011, the same poll found only 11 percent favored such a program.

Unsurprisingly, a recent University of Chicago survey found 51 percent of 18-36-year-old Americans support a UBI of $1,000 a month. Additionally, 35 percent of young Americans support a “public option” healthcare system, the survey determined.

How likely is it that voters, and politicians frankly, will choose to set aside their universal health care wants in exchange for a universal basic income program?

Sadly, conservatives and libertarians are perpetuating this myth that the UBI will replace the overgrown welfare system, or serve as a substantial alternative. Worse still, it is said that UBI makes the system more efficient.

Efficiency was the guiding light for Milton Friedman, the Chicago School economist who advised President Richard Nixon to advocate for a guaranteed annual income. The idea was quite similar to UBI, providing a minimum base of money through the income tax system.

This was Friedman’s “single most disastrous influence,” wrote Austrian School economist Murray Rothbard in 1971.

“More efficient, perhaps,” Rothbard said, “but also far more disastrous, for the only thing that makes our present welfare system even tolerable is precisely its inefficiency, precisely the fact that in order to get on the dole one has to push one’s way through an unpleasant and chaotic tangle of welfare bureaucracy.”

The circuitous nature of government welfare protects the taxpayers by disincentivizing use of the system. In other words, it incentivizes work over the dole.

This is the heart of the matter, the twisted perspective and logic of the so-called conservative advocates of UBI. On the altar of efficiency, they sacrifice prudence.

To be clear, the type of prudence applied in government welfare schemes is a Bizzaro version of the kind private charity exercises. Nonetheless, means-testing and other processing of welfare applicants is a reflection of what charity is supposed to do.

Imagine a private charity dropping any interest it has in character and community development, so that in the names of “equality” and “privacy,” it hands out cash and favors willy nilly. Who would donate to that?

There is another catch, a big one, that comes with trying to optimize welfare spending this way.

The annual cost of sending $1,000 per month to every American adult, as former presidential candidate Andrew Yang sought, is at least $2.6 trillion. That’s more than half of all of the government’s 2019 spending, Hoover Institution economist David Henderson found.

Henderson calculated that a $1 trillion deficit would result if taxes weren’t raised by 73 percent. Yang proposed a consumption or value added tax (VAT) of 10 percent to pay for it, but Henderson found the tax would have to be 20 percent.

How are the new taxes paid? With money that otherwise would have produced more goods and services, or higher quality versions. Less money would be invested in capital that makes workers more productive.

New welfare checks would then chase fewer goods and services, driving prices up, triggering clamors for a higher UBI.

Consumers could save their UBI, but as the system is a never-ending guarantee, there wouldn’t be much incentive for long-term saving. Plus, remember that taxing consumption is the funding lifeblood of the UBI. More saving means less taxes to prop up this utopian project.

In order to arrive at the conclusion that a UBI makes sense, one begins in a state of confusion.

Antony Sammeroff, author of Universal Basic Income – For and Against, bemoans Yang’s premise that only UBI can address the challenges of automation and mass job loss.

“[Yang] talks like this happened in a state of nature, where there’s no other factors involved in stopping these people from getting work,” Sammeroff said on an episode of the Tom Woods Show podcast.

Are payroll taxes, the minimum wage, licensing laws, mandatory healthcare plans, and other regulations to be ignored? Or, perhaps less politically correct, might we ask if people are managing their money as well as they should be?

If the need for UBI is so imminent because resources are so scarce, why allow money to be wasted on a program that includes recipients already well off?

None of these questions are asked as the perfect storm for UBI forms.

The Covid-19 panic, growing frustration with the status-quo, and a noble yearning for belonging and unity at a time of great division make UBI irresistible.

On top of all that, the Trumpbux will have a psychological effect on the people.

“They’re going to scratch their chins and say, wait a minute, why don’t we just do this all the time?” Yang told the Wall Street Journal.

Clear-thinking conservatives and libertarians, whoever is left among them, must show this emperor has no clothes. Unfortunately, this could be a losing battle. Money talks, and bullshit walks.

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Andrew Yang Talks Project100: $100 Million Planned Of Universal Basic Income During COVID-19

Morgan Simon, Forbes, April 21, 2020

https://tinyurl.com/y8ja444c

Today, the US witnesses the launch of Project100: a $100 million effort to rapidly send $1,000 in direct cash payments to 100,000 SNAP (food stamp) recipient families, who have been hard hit by the COVID-19 crisis.

Recipients include individuals like Maureen — a recently unemployed mother of two looking for housing and grieving the loss of her 39 year-old husband, who passed away due to COVID-related complications on March 6th. She signed up for the $1,000 gift (after overcoming fears it was a “free money” scam) via technology company Propel’s Fresh EBT app, and received the full amount in a matter of hours. “Antiquated government technology has delayed assistance for tens of millions of families. We all need to pull together and serve as many families and children as we can reach” said Stacey Abrams, one of the many conveners of Project100.

In addition to Abrams, the project is backed by Andrew Yang, Julia Louis-Dreyfus, Ariana Grande, Halsey, Chris Meloni, and the NFL Players Coalition, among others. Piloted by the nonprofit GiveDirectly and Propel, the effort has already exceeded half of its donation goal with the help of the Schusterman Family Foundation, Blue Meridian, Flourish Ventures Partners, Google.org GOOGL , Rihanna’s Clara Lionel Foundation, Blue Haven Initiative, and The Late Show with Stephen Colbert, among others.

While this is the first effort of its kind, the idea may ring a bell: universal basic income (or UBI) was a policy idea vocalized by former Democratic Presidential Candidate Andrew Yang, to get guaranteed cash out to Americans. I (virtually) sat down with Yang to learn more about the Project100 launch, and why rapidly getting no-strings-attached cash out to families is so important at this moment.

Project100 is set to support 100,000 low-income families struggling during COVID-19. What has been failing in America at large to make these families so vulnerable in the first place?

We have been clinging to the idea that the economy today works the same way it did in the 1970s — where if you had companies that were successful, they would need to hire lots of people, give them benefits, and invest in their local communities. That created a virtuous circle — what was good for businesses, was also good for the economy writ large, and people, families, and communities.

Unfortunately, that relationship has become less true over the decades, and financial insecurity is now totally normal. Seventy-eight percent of American say they are living paycheck to paycheck, and over half can’t afford an unexpected $400 bill. Policy makers are decades behind the curve in understanding how the economy is working for most Americans.

This initiative really resembles your UBI proposal while campaigning for president — albeit this is a one-time payment of $1,000 for some, rather than the monthly $1,000 to all Americans that you proposed. What do you think we can learn from this program about what UBI could potentially do for American families? 

I see this as a form of UBI: this is a direct payment to individuals who will use it to put food on the table, put a roof over their heads, and give them more confidence about the future.

One approach to trying to solve the problems of poverty has been to build a new infrastructure and set of programs that may or may not work: but what we know would work, would be to put money into people’s hands. It’s the easiest, most straightforward way to get people the ability to get through this crisis, yes, but it would work after the crisis as well.

We have the ability to lift millions of people out of poverty, just by coming together as a country and by saying this is the right thing to do. Putting money into peoples’ hands is an idea whose time has come, and I’m thrilled that Project100 is making it happen for thousands of American families in a time of desperate need.

What other policies like UBI could the next administration use to better secure the welfare of families in the future? 

Most Americans know that we’ve had record high corporate profits and stock prices over the last number of years, but we’ve also been setting record highs in mental health problems, depression, anxiety, substance abuse, drug overdoses, even suicides. This is even as we set records in GDP… our life expectancy has been declining.

We need to define how we are doing, based on how our people are doing, not on GDP and stock prices. We started using GDP 100 years ago around the Great Depression, and even the inventor said it wasn’t the right metric for society — we need to now start measuring our economic progress based on mental health, environmental sustainability, and “how our kids are doing.” We would see that we’re facing a very human crisis in communities around the country. It’s hard to solve a problem if you don’t understand what the problem is.

We’ve had a measurement problem for decades. If we measured it properly, we’d get better outcomes.

So what should we use instead of GDP for measuring American wellness? How about Gross National Happiness, like in Bhutan?

We should use, for instance, average purchasing power — essentially an index of affordability and financial security. When you look at student indebtedness or other indebtedness, wages haven’t risen whereas the prices on childcare, rent, and other basic needs have risen substantially.

I love the idea of “Gross National Happiness,”  but you don’t even have to be that elegant about it. You can just say “Hey, how are Americans doing in terms of our ability to satisfy our own basic needs?” We’ve had an affordability crisis for years on most of the things that are most important to us and our families.

How are you continuing to push this agenda?

My organization Humanity Forward has contributed $1.4M directly to Americans. That’s why we like Project100 so much; it’s stepping up to put money into struggling American’s hands at a larger scale than my organization has been able to do so far. This is a trying time for the entire country, so I’m deeply grateful to all the generous donors doing all they can to help. They are demonstrating that we can help our people by providing them with economic resources when they need it most.

Certainly, our government should be doing more in this direction. But it takes people and companies and foundations all working together to help the most vulnerable among us. I know many of the donors are interested in supporting the communities hardest hit by the coronavirus, and we know the virus infection rates amongst African American communities is several times higher, because they have higher levels of preexisting conditions and lower access to healthcare infrastructure. The great thing about Project100 and giving directly is giving funds for people to be able to stay at home and do the right thing for themselves and their families.

In celebrating the generosity of the donors who contributed millions to this initiative, it does feel a bit ironic to know that some of that wealth was originally amassed through the very extractive economic systems you critique. It’s precisely why my firm Candide Group, and many others, including Project100 donor Blue Haven Initiative, don’t just participate in philanthropy but are also social investors — to try and make money as ethically as possible in the first place. 

When is it important to focus on just donating as much as possible, versus focusing on what Anand Giridharadas would say, “not taking” instead of giving? 

We are in the midst of a crisis that’s killed thousands of Americans and cost us millions of jobs. Anyone who has the capacity to help should give all they can. After this crisis passes, we can look at some of the inequities that have unfortunately contributed to the lethality of this crisis to many Americans. For now, it’s all hands-on deck doing everything we can to help.

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A Basic Income Is a Lifeline in This Crisis — But Can’t Solve Everything

Emilio Caja and Leonie Hoffmann

https://www.jacobinmag.com/2020/04/unconditional-basic-income-coronavirus-pandemic-crisis

With millions of people put out of work, analysts across the political spectrum have proclaimed that the time has come for an Unconditional Basic Income.

But this safety net won’t be enough unless we take on the biggest problem we face — an economic model based on high rents and high personal debts.

As the COVID-19 pandemic engulfed Europe and North America, previously unshakable foundations of neoliberal policy seemed to melt into thin air. Increased government intervention in health care provision appears to contravene decades of privatization and market “efficiency.”Debt-funded stimulus packages and bailout funds of unprecedented proportions indicate a pivot to expansionary economic policy. State-imposed lockdowns have shifted attention to the social value of goods and services and are fueling a widening conversation about the purpose of work and the economy. No wonder that on the Left, these measures reignited hope about the emancipatory potential of the crisis — and, to some, suggested nothing less than the end of neoliberalism.Nowhere was this hope more visible than among supporters of Unconditional Basic Income (UBI). After decades of advocacy and “mainstreaming,” it looked like the call for a guaranteed income for all was finally having its moment. Even the Financial Times acknowledged that cash handouts made sense during a pandemic that forces people to stay home from work. Well-worn but powerful objections about laziness and incentives to work suddenly became redundant, while the emergency context freed up fiscal resources that are kept under a tight lock under normal circumstances.

Is UBI a preferable alternative — and if so, could it be implemented? When everything seems in flux, the previously unimaginable suddenly becomes thinkable. But despite its seeming popularity, we cannot expect this idea to materialize without a struggle. Periods of crisis expose power relations in all their brutality, without the usual mediations — they do not suspend them. Moreover, focusing on a single policy in the midst of a crisis of epic proportions glosses over the risks of deeper transformations in labor markets and class alignments. In this sense, UBI could be a crucial lifeline in the coming recession — but won’t be a silver bullet.

Managing the Crisis

A precondition for understanding the way ahead for emancipatory struggles is that we have a clear map of the situation in front of us. In this sense, the emergency responses thus far are useful in revealing the distribution of power and priorities, and established divisions in the labor market. And even though they are inadequate, they also harbor some opportunities that can be seized for wider transformation.

Despite its large scale, the British government’s response has been fundamentally conservative in orientation. While it aims to ease the return to the precrisis status quo by minimizing job losses, it maintains existing divisions in the labor market and the punitive Universal Credit system of unemployment provisions.

Newly introduced government subsidies cover up to 80 percent of the wage costs of employees for a limited period — yet only meet workers’ wages if employers decide to keep them on their books.  Faced with public pressure, this was complemented by a scheme that picks up some of the lost profits of the self-employed, but still leaves out precarious gig-economy workers and new entrants into the labor market. Those who have already lost their jobs fall back into an unemployment “safety net” which neoliberal workfare principles have left radically insufficient.

In the United States, a one-off cash handout of $1,200 was implemented amid rising attention to basic income in the national debate. While the country’s safety net is even more limited, current measures include drastic increases to unemployment benefits and the extension of entitlements to vulnerable workers, including freelancers and the self-employed. These measures provide direct income support without recourse to employers and have the potential to erode existing divisions among the working class by unifying entitlements. Yet these gains won’t be sufficient in the face of the massive upheavals brought by the upcoming recession.

As the country hit hardest by coronavirus, the Italian response is a patchwork of income support schemes: besides traditional unemployment insurance, and a more recently introduced guaranteed minimum income, a new emergency support mechanism consists of a €600 bonus for autonomous and part-time workers; and might include an additional “emergency income” for nearly 3 million people still uncovered at the moment. Campaigns are currently underway to counteract this fragmentation by extending the guaranteed minimum income to everyone in need and to eliminate work requirements — bringing it closer in line with UBI.

The Promise of UBI

The advantages of UBI in the current circumstances are clear: 1) it directly addresses the income problem workers face, without recourse to employers or extensive means tests; 2) it flexibly ensures income security as employment relations change; 3) it avoids a fragmented response tailored to specific groups; 4) it can account for the needs of those in atypical, informal, or precarious working situations (e.g., those on zero-hour contracts, the pro forma self-employed), and those performing unpaid work within the family or community, where e.g., childcare now takes up more time due to school closures; and 5) it increases the bargaining power of workers who remain engaged in essential activities, to fight for safer working conditions and compensation for the risks to which they are exposed.

Yet, there is a crucial difference between unconditional cash transfers as a response to the immediate income losses many are suffering because of the lockdowns, and a permanent, full UBI.

Let’s be clear: an economic downturn is riding on the heels of the pandemic, and it’s bound to dwarf anything we’ve seen in our lifetimes. Under these circumstances, temporary relief measures are a far cry from a permanent UBI and its emancipatory promise to free us from worries about our livelihoods. Nor should we assume, as some of its advocates believe, that an emergency UBI — were it implemented now — would simply stay put once its benefits are demonstrated in practice.

To the contrary: once governments try to kickstart the economy, they may be tempted — or forced — to push the costs of current emergency packages onto the backs of workers, through wage compression, high unemployment levels, and welfare cuts.We are already witnessing the large-scale socialization of losses in corporate bailouts, accompanied by mantras calling for collective sacrifices. But capitalist elites may demand even more severe forms of neoliberal austerity to deal with the post-health crisis period.

Preventing this scenario depends on how we use the opportunities of the present moment to mobilize and push back against a post-pandemic dystopia. Broad sections of society would benefit from an emergency UBI right now, which could provide a platform to unify demands for income support. But the transformation of such a measure into a permanent, structural UBI will also require strong mobilization. Building a sustainable class coalition will be a challenge as workers are affected differently by the current crisis. Finally, we must be vigilant not to fall for a mirage of cash transfers while labor relations, income security, and public welfare provisions are further hollowed out.

Labor Market Transformations

Indeed, despite what many want us to believe, this crisis has not hit everyone in the same way. As the risk of contagion recedes and lockdowns are slowly lifted, social distancing will have a tremendous and lasting impact on labor demand, with dramatic consequences for the composition of the labor market. Many — though not all — white-collar, middle-class workers who switched to working from home can rely on continuing income streams and employment relations. By contrast, a huge number of workers in many manufacturing and services jobs have been forced to stop working as their sectors have been deemed nonessential — notably service-sector workers in the hospitality, entertainment, and aviation industries, among others.

The more these sectors rely on short-term, insecure, or atypical employment, the greater are the subsequent job losses as operations are downscaled amid the economic downturn. The United States has already seen the sharpest rise of unemployment in history, with 22 million people filing for unemployment benefits over the past four weeks alone. However, not all workers are at home. For example, distribution sectors — often shaped by income and employment insecurity — are part of the fundamental infrastructure of the social distance economy, accelerating the move to more sedentary modes of consumption. Corporate giants like Amazon and Deliveroo will increase their domination in a market where workers — already poorly protected — will be disciplined by high unemployment.

The interaction between transformations in the labor market and government emergency cash transfers becomes crucial, here. We can sketch out the following scenarios: at worst, pressure from economic elites and neoliberal technocrats to roll back emergency subsidies will find little opposition among the educated middle class who are able to return to work. This will leave a mass of newly unemployed or precarious workers with little substantive support. Certainly, the white-collar experience during the lockdown could encourage interest in a permanent UBI. Temporary relief from the commute and new sensibilities about the value of work could give rise to demands for a better work-life balance and a reduction of the working week to focus on meaningful activities. Arguments for UBI as a way to maintain middle-class lifestyles while cutting “bullshit jobs” might seem particularly appealing in this context.

But a theoretical compromise between the middle class and economic elites to maintain emergency cash support schemes could still come to the detriment of the expanding mass of precarious workers and the unemployed. A downsized UBI is enough to make up for income cuts some might see under a reduction of the working week, but it won’t cover the livelihoods of those who need substantive income replacements in the face of a deep, structural crisis leaving them unemployed or underemployed. Worse, as many continue to struggle to make ends meet on meager income support, any extra cash will be pocketed by elites through mortgage, debt, and rental payments. In the United States, banks and private debt collectors have already been given green light to seize “stimulus” cash grants to offset prior debt, despite the explicit purpose of these checks to support livelihoods. In this scenario, a UBI could obscure and legitimize a permanently worsened condition for the precarious working class.

Transforming current cash transfers into a structural, permanent UBI needs to be driven by strong popular mobilization and underpinned by demands for full livelihood support if this goal is to stand a chance at success. At the same time, we must not neglect the need for substantive improvements in sectors already marked by job and income insecurity. Any fight for UBI would be self-defeating unless it includes the struggle against financial accumulation and household debt, welfare retrenchment, and wage compression, not least in those jobs whose social value has become more obvious than ever.

The pandemic has laid bare the fault lines of struggle. With it comes the great opportunity of the present conjuncture: the recognition that we can’t go back to normal. But we also need to be attentive to the very concrete risk that the new normal could be worse than the old. Let’s temper both utopian optimism and reflexes to denounce what could be political opportunities. The outcomes of the crisis are fundamentally a matter of political organizing. We need to pay greater attention to the diverse but interlinked struggles that shape them. Otherwise, even if an emergency UBI might be a battle won, we’re losing a war.

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Coronavirus pandemic raises question: Is it time for a basic income?

Maryam Shah, Global News (Canada),  April 22, 2020