India is nearly done building the plumbing to enable such a system by connecting the Aadhaar-based biometric ID system to individual bank accounts. It’s already replaced LPG gas canister subsidies with cash, a program that has 150 million beneficiaries and is the now the world’s largest cash transfer program. So could India take this example to its logical conclusion and replace all welfare benefits with UBI? (GiveDirectly is asking a similar question in a bold 10-year $30 million experiment in Kenya.)
The Survey’s assessment begins with quotes from Mahatma Gandhi suggesting both support and objection to the principles of UBI. The chapter then methodically addresses the conceptual pros (e.g., justice, equity, agency, efficiency) and potential cons (e.g., labor disincentives, moral hazard, political objections). It attempts various modeling, including a rough estimate that cutting national poverty in half via UBI would cost just 1.5 percent of GDP, less than the subsidy bill in the 2016-17 budget. For the data nerds, there are seven (!) appendices explaining all the estimates and calculations. Continue reading
Category Archives: #MLKGlobal
Regulations are Protections
Here is a typical example. Minority President Trump has said that he intends to get rid of 75% of government regulations. What is a “regulation”?
The term “regulation” is framed from the viewpoint of corporations and other businesses. From their viewpoint, “regulations” are limitations on their freedom to do whatever they want no matter who it harms. But from the public’s viewpoint, a regulation is a protection against harm done by unscrupulous corporations seeking to maximize profit at the cost of harm to the public. Continue reading
Liberalism and Trumpism
By “liberalism” I mean what is considered under this term in the US. By “to blame” I mean “for the rise of Trump and similar nationalist-populists”.
What are the arguments for seeing liberal triumphalism which began with the collapse of Communism in the 1990s as having produced the backlash we are witnessing today? I think they can be divided into three parts: economics, personal integrity, and ideology.
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Biggest rise in inequality since Thatcher years
The Resolution Foundation’s study found that the current parliament would be the worst for living standards for the poorest half of households since comparable records began in the mid-1960s and the worst since the early years of Thatcher’s 1979-90 premiership for inequality.
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Unemplyment and Trade Deficit
Note that the level of manufacturing employment, while it has cyclical ups and downs, is nearly constant from 1970 to 2000 at around 17 million. It plunged in the early years of the last decade as the trade deficit exploded. Most of the fall in employment was before the collapse of the housing bubble in 2008. This is what happens when a trade deficit increases from around 1.5 percent of GDP, the mid-1990s level, to almost 6.0 percent of GDP at its peak in 2005-2006 (over $1.1 trillion in today’s economy).
In his article Brad does a bit of slight of hand on this rise in the trade deficit, attributing it to an over-valued dollar rather than trade agreements like NAFTA. I agree with him on this, but I think the ignorant masses can be excused for failing to recognize that the jobs lost to trade were due to the Clinton administration’s dollar policy rather than its trade deals.
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On Martin Luther King Day – PROJECT 2018
PROJECT 2018 Poor People’s Call to Action – Dr. King’s work re-envisioned fifty years on
Next April 2018 will mark the 50th anniversary of the assassination of Dr. Martin Luther King. His ‘last great exertion’ in 1967/68 was The Poor People’s Campaign – a march on Washington DC that was a more radical effort than 1963. Its aim was to get racial and economic justice for all poor Americans. He was becoming an ever greater threat to anti-progressive forces as he realised that, in addition to race, class was becoming an equally critical part of the struggle. At what was to become the end of his life, he was now mobilising black and white Americans.
At the heart of this campaign was an Economic Bill of Rights, addressing employment, health, education, land, finance and participatory government. Today in the USA, there is a renewed push to mark and re-envision the Poor People’s Campaign.
We think the time is right to build on those USA efforts and today we launch a new project to ‘internationalise’ Dr. King’s Poor People’s Campaign and place a renewed vision for the Economic Bill of Rights at its heart.
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British Medical Journal calls for a study of universal basic income
Recently, there have been increasing calls for dialogue on a universal basic income (UBI) from political parties, think tanks (including the Royal Society for the Encouragement of Arts, Manufactures, and Commerce (RSA)), civic activists, trade unions, and leading entrepreneurs such as Tesla chief executive Elon Musk. These calls are a response to growing income insecurity, some sense that welfare systems may be failing, and as a preparation for the potential effects of automation and artificial intelligence on employment prospects in industries that might be better served by machines.3 UBI-style pilots are planned in Finland, the Netherlands, and Canada as a potential answer to these questions and concerns.4
Our complex economic, technical, political and social systems, eroded by energy-related and other biophysical constraints, are showings early signs of failure
Thought provoking.
Slow economic growth is not just an after-effect of the Great Recession but part of a deeper malaise that predates, and indeed may have helped cause, the financial crisis. A number of narratives have emerged in recent years to try to explain this global dearth of growth, such as the ‘debt overhang’ narrative, which states that growth is primarily hampered by an excessive indebtedness of economic agents, or various versions of the ‘secular stagnation’ narrative, which sees the cause of slow growth in a chronic shortfall of demand resulting from population ageing and the rise of income and wealth inequality, and/or in the diminishing returns of technological innovation. These various narratives probably all have some degree of validity. However, they tend to focus on developments that, even if they act as mutually reinforcing drags on growth, are in fact symptoms of the world’s economic predicament rather its deeper root causes.
Even more than from what most economists usually look at, i.e. constraints on capital and labour and on the productivity of their use, the slowdown of global economic growth since before the financial crisis might be resulting from factors that they typically ignore, i.e. constraints on the supply of energy and other biophysical resources that feed into the economic process and impact its functioning. In fact, the world’s capacity to create additional wealth is getting increasingly eroded by biophysical boundaries that over time tend to raise the acquisition costs, constrain the quantity and degrade the quality of the flows of energy and natural resources that can be delivered to the economic process, as well as by the constantly increasing costs of some of the economic process’ side effects (i.e. ‘negative externalities’ including environmental degradation and climate change), and the growing need to ‘internalise’ them into the price system. These biophysical constraints, as they increase, tend to weigh more and more on the economy’s productive capacity, thus eroding the potential for productivity and output growth.
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How to make a Universal Basic Income a reality
In the UK, growing interest is being driven by two deep-seated structural trends: the growing fragility of the jobs market and the inadequacies of the existing, increasingly punitive, intrusive, and patchy benefits system. With its built-in income guarantee, a universal basic income (UBI) would help relieve both problems. It would bring a more robust safety net in today’s much more precarious working environment while boosting the universal element of income support and reducing dependency on means-testing. A UBI also offers a way of providing income protection as the robotic revolution gathers pace, and could be used to help ensure that the possible productivity gains from accelerated automation are evenly shared rather than being colonised by a small technological elite. Continue reading
The Movement for Black Lives
Black humanity and dignity requires Black political will and power. Despite constant exploitation and perpetual oppression, Black people have bravely and brilliantly been the driving force pushing the U.S. towards the ideals it articulates but has never achieved. In recent years we have taken to the streets, launched massive campaigns, and impacted elections, but our elected leaders have failed to address the legitimate demands of our Movement. We can no longer wait.
In response to the sustained and increasingly visible violence against Black communities in the U.S. and globally, a collective of more than 50 organizations representing thousands of Black people from across the country have come together with renewed energy and purpose to articulate a common vision and agenda. We are a collective that centers and is rooted in Black communities, but we recognize we have a shared struggle with all oppressed people; collective liberation will be a product of all of our work. Continue reading
Trump’s Vision
You can look to the president-elect himself for a vision of what is to come. He has told you his plans all along, though most chose to downplay or deny them. You can even look back to before his candidacy, when in February 2014, he went on Fox News to defend Russia. Why a reality TV host was on Fox News defending Russia is its own story, but Listen to what Trump said already back in 2014.here is what he said about his desired outcome for the United States:
“You know what solves it? When the economy crashes, when the country goes to total hell and everything is a disaster. Then you’ll have a [chuckles], you know, you’ll have riots to go back to where we used to be when we were great.”
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Understanding Trump
Unconscious thought works by certain basic mechanisms. Trump uses them instinctively to turn people’s brains toward what he wants: Absolute authority, money, power, celebrity.
The mechanisms are:
1. Repetition. Words are neurally linked to the circuits that determine their meaning. The more a word is heard, the more the circuit is activated and the stronger it gets, and so the easier it is to fire again. Trump repeats. Win. Win, Win. We’re gonna win so much you’ll get tired of winning.
2. Framing: Crooked Hillary. Framing Hillary as purposely and knowingly committing crimes for her own benefit, which is what a crook does. Repeating makes many people unconsciously think of her that way, even though she has been found to have been honest and legal by thorough studies by the right-wing Bengazi committee (which found nothing) and the FBI (which found nothing to charge her with, except missing the mark ‘(C)’ in the body of 3 out of 110,000 emails). Yet the framing is working.
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Goodbye, American neoliberalism.
What is to be done? First we must try to tell the truth and a condition of truth is to allow suffering to speak. For 40 years, neoliberals lived in a world of denial and indifference to the suffering of poor and working people and obsessed with the spectacle of success. Second we must bear witness to justice. We must ground our truth-telling in a willingness to suffer and sacrifice as we resist domination. Third we must remember courageous exemplars like Martin Luther King Jr, who provide moral and spiritual inspiration as we build multiracial alliances to combat poverty and xenophobia, Wall Street crimes and war crimes, global warming and police abuse – and to protect precious rights and liberties. Continue reading
The problems of the handling of the Great Recession by Democrats
That’s how the party ended up with its most vulnerable members — centrist Blue Dogs in the South — hawking austerity during the worst mass unemployment crisis in 80 years. Almost all of them lost in 2010. That loss, in turn, paved the way for many of the other major problems Democrats are having. That was a census year, and huge Republican victories allowed them to control the subsequent redistricting process, in which they gerrymandered themselves a 7-point handicap in the House of Representatives and in many state legislatures.
That brings me to the foreclosure crisis, the handling of which was even worse. Instead of partially ameliorating it as with employment, the Obama administration helped it happen. As David Dayen writes in Chain of Title, the financial products underpinning the subprime mortgage boom were riddled with errors, and in order to be able to foreclose on people who had defaulted, they had to commit systematic document fraud. This epic crime spree gave the White House tremendous leverage to negotiate a settlement to keep people in their homes, but instead the administration co-opted a lawsuit from state attorneys general and turned it into a slap on the wrist that reinvigorated the foreclosure machine. There was also $75 billion in the Recovery Act to arrest foreclosures, but the administration’s effort at this, HAMP, was such a complete disaster that they only spent about 16 percent of the money and enabled thousands of foreclosures in the process.
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Basic Income trial at Ontario
A Canadian province is to run a pilot project aimed at providing every citizen a minimum basic income of $1,320 (£773) a month.
The provincial government of Ontario confirmed it is holding public consultations on the $25m (£15m) project over the next two months, which could replace social assistance payments administered by the province for people aged 18 to 65.
People with disabilities will receive $500 (£292) more under the scheme, and individuals who earn less than $22,000 (£13,000) a year after tax will have their incomes topped up to reach that threshold.
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Basic Income and the Welfare State
The argument goes that because we currently target money to those in need, by spreading out existing revenue to everyone instead, those currently targeted would necessarily receive less money, and thus would be worse off. Consequently, the end result of basic income could be theoretically regressive in nature by reducing the benefits of the poor and transferring that revenue instead to the middle classes and the rich. Obviously a bad idea, right? …
Basically, this particular argument would only make sense if we in no way altered our tax system to achieve UBI, and if our programs worked as we assume they work because that’s how they should work. The problem is they don’t work that way.
In the United States today, on average, just about one in four families living underneath the federal poverty line receives what most call welfare, which is actually known as Temporary Assistance for Needy Families, or TANF. It gets worse. Because states are actually just written checks to give out as they please in the form of “block grants,” there are states where far fewer than one in four impoverished families receive cash assistance. Continue reading
Watergate Babies and the loss of the anti-monopoly and anti-bank tradition in the Democratic Party
A wonderful article. Brilliant analysis.
Indeed, a revolution had occurred. But the contours of that revolution would not be clear for decades. In 1974, young liberals did not perceive financial power as a threat, having grown up in a world where banks and big business were largely kept under control. It was the government—through Vietnam, Nixon, and executive power—that organized the political spectrum. By 1975, liberalism meant, as Carr put it, “where you were on issues like civil rights and the war in Vietnam.” With the exception of a few new members, like Miller and Waxman, suspicion of finance as a part of liberalism had vanished.
Over the next 40 years, this Democratic generation fundamentally altered American politics. They restructured “campaign finance, party nominations, government transparency, and congressional organization.” They took on domestic violence, homophobia, discrimination against the disabled, and sexual harassment. They jettisoned many racially and culturally authoritarian traditions. They produced Bill Clinton’s presidency directly, and in many ways, they shaped President Barack Obama’s.
The result today is a paradox. At the same time that the nation has achieved perhaps the most tolerant culture in U.S. history, the destruction of the anti-monopoly and anti-bank tradition in the Democratic Party has also cleared the way for the greatest concentration of economic power in a century. This is not what the Watergate Babies intended when they dethroned Patman as chairman of the Banking Committee. But it helped lead them down that path. The story of Patman’s ousting is part of the larger story of how the Democratic Party helped to create today’s shockingly disillusioned and sullen public, a large chunk of whom is now marching for Donald Trump. Continue reading
Chinese Cooperative and Basic Income
Finally, all Huaidi citizens have had a basic income of 1500 yuan [US $221] per year since 1995, which is directly transferred to their bank accounts in shares of 125 yuan [US $18.5] per month. For children under 18, this money is kept in parents’ accounts. This amount money was significant in 1995 (Chinese cities’ nominal per capita annual income was about 5000 yuan [US $738] in 1995), but not as much now, due to the rapid rise of GDP in the last 20 years (in 2015, the nominal per capita annual income in Chinese cities was about 50,000 yuan [US $7,379]).
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Depression and Trump
Torsten Bell, director of the Resolution Foundation, provided a useful breakdown of voting patterns in last Tuesday’s presidential election. Taken at face value, the results seem to show that Hillary Clinton did well among those voters on the lowest incomes. She led 53%-41% among those earning less than $30,000 a year and by 51%-42% among those earning between $30,000 and $50,000.
But these statistics are misleading. There was actually a 16-point net swing to the Republicans between the 2012 and 2016 elections among those earning less than $30,000 a year and a 6-point swing among those earning $30,000 to $50,000. By contrast, there was a swing to the Democrats among those on higher incomes, and this was particularly pronounced among those earning more than $100,000 a year. Continue reading
How the destruction of industrial Britain casts a shadow over present-day public finances
A new report by Christina Beatty and Steve Fothergill, Centre for Regional Economic and Social Research, Sheffield Hallam University
- UK manufacturing employment has fallen from 8.9 million to just 2.9 million overthe last fifty years, and 500,000 jobs have disappeared from the coal industry. This has destroyed the economic base of many communities, especially in the North,Scotland and Wales.
- The main effect ofthis job loss has been to divert vast numbers of men and women out ofthe labour market onto incapacity related benefits, these days Employment and Support Allowance (ESA) which accounts for almost 2.5 million adults of workingage. The highest claimant rates – 10per cent or more of all 16-64 year olds – are nearly all in older industrial areas.
- ESA and the additional benefits received by ESAclaimants – Housing Benefit and Disability LivingAllowance for example – are a £30bn-plus annual claim on the Exchequer.
- Low pay in former industrial areas depresses tax revenue and inflates spending on in-work benefits. Spending on Tax Credits, for example, exceeds £850 a year per adult of working age in much of older industrial Britain – double the level in parts of southernEngland.
- The Treasury has misdiagnosed high welfare spending as the result of inadequate work incentives and has too often blamed individuals for their own predicament, whereas in fact a large part ofthe bill is rooted in job destruction extending back decades.
- The welfare reforms implemented since 2010, and strengthened since the 2015 general election, hitthe poorest places hardest. In effect, communities in older industrial Britain are being meted out punishmentin the form of welfare cuts forthe destruction wrought to their industrial base.
- Across most of older industrial Britain the loss arising from welfare reform is expected to exceed £750 a year per working age adult by 2020-21.
- There is an alternative – a genuine rebalancing ofthe economy in favour of industrial production and a revival of regional economic policy.
- Policy makers need to take a long-term perspective, look at the differences between places, and stop thinking in silos.
Tipping Point North South 