Andrew Yang won
Andrew Yang won
Universal Basic Income is here, but will it stay?
Welcome to my newsletter by me, King Williams. A documentary filmmaker, journalist, podcast host, and author based in Atlanta, Georgia.
This is a newsletter covering the hidden connections of Atlanta to everything else.
By King Williams
A stimulus is coming from the Trump administration
As of the time of this article, current US Treasury Secretary Steve Mnuchin publicly stated that he has floated the idea of a direct stimulus of $1,000 to every American.
Mnuchin is currently speaking to several Republican senators on the potential of such a direct stimulus as a way to stave off a recession due to the outbreak of the coronavirus. This comes as a result of several gaffes by the Trump administration in handling the response to the coronavirus as well as the ongoing economic fallout.
Universal Basic Income is back in the conversation, thank Andrew Yang
This comes after Utah Senator, Mitt Romney (R) has called for a direct cash payout of $1,000 to every American as a result of the economic fallout of the coronavirus. Many on Twitter quickly called out the need for direct stimulus by both Romney and Mnuchin as owing a debt of gratitude to former 2020 Democratic Presidential nominee, Andrew Yang. Andrew Yang was the first Asian American to run for president of the United States who is an entrepreneur and former member of the Obama administration. Yang, who dropped out of the race in February, made the notion of Universal Basic Income (UBI) and the threat of automated technology on American workers a cornerstone of his presidential run.
Universal Basic Income isn’t a new idea, as the idea has been around for a long time. UBI over the centuries, yes, centuries, is the overall idea that in a capitalist society, all individuals should be given a tax-free allowance to cover the basic needs of the individual, with the individual being able to choose freely what to do with their money.
…And the response to UBI has been as you would expect it to be.
UBI’s detractors bring range from valid criticisms such as the costs to implement, the potential to increase inflation, specifications on how to implement this program, and does giving out free money equates to overall economic growth. And then some generally bad criticisms such as: it makes people lazy, it makes people dependent upon government, it’s another form of welfare, it’s un-American and would make people unproductive citizens if they don’t work.
UBI doesn’t replace income, it’s not meant to be a livable wage, it’s a stop-gap to everyday funding shortages (such as surprise bills), cash for addressable basic needs (medicine costs), and a rainy day fund. And considering that as of 2019, despite growth in the stock market and GDP, 40% of Americans didn’t have even $400 in savings. UBI has been touted as a way to decrease the need of providing welfare, while not abandoning citizens completely and providing a direct cash flow that many people need in order to stay afloat.
UBI isn’t a new idea
Martin Luther King was championing this idea of a ‘guaranteed income’ before his murder in 1968. In several of King’s appearances in the 1960s, ranging from speeches to television interviews or in his 1967 book, ‘Where do we go from here?’. The book was King’s last completed book and was written a year before his death in 1968 while spending time in isolation in Jamaica.
During this time King reflected on his time in the civil rights movement and is a foreshadowing into his work of The Poor People’s Campaign in 1968. The last campaign King would be a part of before his assassination in Memphis, Tennesse on April 4th of that same year.
King wrote (p.172):
“I am now convinced that the simplest approach will
prove to be the most effective—the solution to poverty is
to abolish it directly by a now widely discussed measure: the
guaranteed income.”
It should be noted that Yang’s proposed UBI would be popular. It would also be a test case of where The Dems are in 2020, ahead of a very contentious election. As well as a larger discussion on inequality, bailouts, and how to stimulate the parts of America left behind in the next economy. Dems if they do adopt, will have to play it close to as perfect as possible, should they win in 2020. But the GOP may get a chance to get the first chance at dictating the stimulus, as they control the Senate and the White House.
Economist Milton Friedman is also why UBI as an idea has taken off
But King was not alone, as famed Libertarian free-market economist Milton Friedman, also championed a similar idea in the 1960s via the concept of a negative income tax. This idea, despite being embraced by then-president Richard Nixon, couldn’t make it out of congress and any concept of UBI hasn’t had any traction for nearly 50 years, until Andrew Yang’s presidential campaign, beginning in the fall of 2018.
Yang’s campaign was monumental for several reasons: scaling his profile via podcasts, developing a strong online base, growing positive consensus on conservative media outlets, and bringing the conversation of UBI back into the national spotlight.
The key tenet of Yang’s campaign was UBI, rebranded as the ‘The Freedom Dividend’, which would’ve been a direct cash infusion of $1,000/month to every American from 18 until 64 years old regardless of income. Yang’s policy did not allow for overlap with other government programs such as welfare programs and would stop at 65 when social security would kick in for the average American. The idea grew like wildfire online and translated into grassroots support amongst three key groups: younger voters, males 18-29, and surprisingly, 1/4 of surveyed 2016 Trump voters.
The Dems have signaled they also support this
Yang isn’t alone in this, as Hawaii Democrat (and still presidential hopeful) Tulsi Gabbard has also called for a similar program, House Bill —H.Res 897, another direct cash payment initiative. Gabbart’s program is temporary and would allow for every American over 18 to receive $1,000 per month as well but only until the Coronavirus is contained and the economy is on a more firm footing.
This is on top of Minnesota rep Ilhan Omar (D) who has also introduced a bill that would give every American $1,000 dollars and every child $500 dollars. While similar to Gabbard’s bill, (which she says she cosponsored), this direct cash payment is meant to be added to the wave of relief bills currently on the table. California Senator Kamala Harris also, proposed the LIFT Act a permanent, $500/month tax break, totaling $6,000/year for every American couple making under $100,000/year, and a single person at $3,000 per year back in 2018.
Conservatives have shown support as well
And this notion of direct cash payments to Americans is now bipartisan, as conservative Senator Tom Cotton of Arkansas is also in favor of a direct cash stimulus, alongside Mitt Romney of Utah. The key difference here is messaging. Conservative supporters online are touting this not as a form of socialism but a helping hand conceived by Republicans, on behalf of the American people, and completely removing Yang’s influence. The Republicans are currently working on their own plans of a direct cash stimulus after already winning a key change to paid sick leave a few days earlier.
This is also on top of the largest amount of movement in the financial and government services sector since the Great Recession. In the last 14 days, we’ve seen $1.5 trillion in available collateral loans made available by the Federal Reserve to financial firms, on top of lowering interest rates to 0.25%, the closest to an interest-free loan as you can get.
As well as a rumored but not confirmed, potential $50 billion dollar bailout of the airline industry —which as you may imagine, has not been received well by the American people. This will be on top of a now $1 trillion dollar+ aid package that is currently being discussed and fast-tracked by Mnuchin, Republicans in the Senate, and the Trump administration.
All of these legislative efforts; decreasing interest rates by the Fed and heavy amounts of spending by the Trump administration are now being questioned. A general criticism of costs related to Yang’s ‘Freedom Dividend’ was the suggested notion as being too costly to implement. While some estimates pointed the costs of the policy at over $3 trillion per year according to the National Bureau of Economic Research (NBER), we’ve already committed over $1 trillion dollars today and that’s not even considering that there will be an immediate third stimulus package being formulated as we speak.
At the heart of what Andrew Yang was advocating for with UBI, is the notion of improving the social safety net for 90% of Americans.
It should come as no surprise as inequality has grown throughout the last decade, so has a change in public sentiment about the nature of using government to contribute towards corporate bailouts, tax cuts for wealthy individuals, and tax-based subsidies for corporations (and sports teams for that matter). To put it simply, Americans aren’t making enough to cover all of the ends without either going into debt, leveraging equity, borrowing from some form of savings, or liquidating assets. 40% of Americans right now don’t have enough to cover an emergency of more than $1,000 dollars. And despite the overall job growth, that’s been mostly from service-based, part-time, non-unionized, and contract jobs.
The current reluctance by many on the presidential campaign in 2019 and the initial reluctance of those lawmakers to even address UBI makes Andrew Yang’s call more prescient in this time of economic crisis. As prosperities have blossomed for shareholders, private equity, and Fortune 1000 companies, the economic gains did indeed trickle down but not enough or as often. Our rainy day fund is now a need for protection against a tsunami. And if we’re being honest, a one-time $1,000 check, won’t be enough for most Americans to stay on top of recurring bills for individuals and definitely not enough for businesses.
The 2010s will be marked as one of the sharpest increases in wealth inequality in history. It’s also the same decade that started out with Occupy Wall Street and will end with Wall Street occupying the White House. We’ve been here now three times in less than 20 years, with each time being more damaging for the average American.
Andrew Yang won, even if he lost the nomination.