Universal Basic Income and the Dearth of Good Ideas

Andrew Yang isn’t doing gangbusters in the Democratic polling, but of the bottom tier Democratic candidates, he was one of two that I found most interesting (the other of course being Tulsi Gabbard).  Although when you aggregate all of his mostly left leaning positions, there is no way I could have voted for him.  However I acknowledge that he was out there with a message that needs to be addressed; and that message?  The Robot Apocalypse of course!  Not the Skynet-destroy-all-humans, but the Skynet-destroy-all-jobs type.

I’ve been worrying about this for several years, and wrote about it in 2014 when I discussed the problem.

Automation over time has made things easier for us since it’s reduced the demand of physical labor, which we’ve benefited from.  But automation is not only continuing to reduce the number of boring, repetitious jobs, it’s now going after higher end jobs.  An Oxford Study predicted that 47% of US jobs could be lost to automation in 20 years.  Burger flippers and baristas for sure, but also lawyers and doctors are at risk. There is a lot fewer tax preparers now then there were in the days before tax preparation software.  So it’s not just low end drudge jobs that will be going away, it’s upper end jobs that require education that used to provide a lot of middle class and upper middle class incomes.

These long term trends will lead to pretty dire economic consequences in our lifetimes.

If these trends continue, with more and newer jobs being for the more educated class and few new low skilled jobs created, what are we going to do with people who are just not smart enough? We are improving automation along the lines of Moore’s Law, but there isn’t a Moore’s Law for human intelligence or ability. That is my concern. Not that we hit the Singularity and every human is unemployed and targeted for termination, but that the gradual change in the economy means few jobs for people on the  left hand side of the Bell Curve. We’ll have a growing cadre of people permanently unemployable no matter how great the stock market is doing or how much increase in GDP there is.

So it’s the economic and social robot apocalypse that I worry about.  And in the several years since I’ve really become aware of the issue, there just hasn’t been a good solution presented.  Yeah I know, “more money for education!”  After all, look how well that’s worked out?  But wait; there is one more go-to idea when the issue of automation eliminating jobs comes up; Universal Basic Income (UBI).

Andrew Yang’s proposal is the Freedom Dividend.”  As Yang’s campaign website put it, “Technology is quickly displacing a large number of workers, and the pace will only increase as automation and other forms of artificial intelligence become more advanced. ⅓ of American workers will lose their jobs to automation by 2030 according to McKinsey. This has the potential to destabilize our economy and society if unaddressed.” 

He’s not wrong about the problem but the solution?

“Andrew would implement the Freedom Dividend, a universal basic income of $1,000/month, $12,000 a year, for every American adult over the age of 18. This is independent of one’s work status or any other factor.”

Whee!  Free Money!

“Other than regular increases to keep up the cost of living, any change to the Freedom Dividend would require a constitutional amendment. It will be illegal to lend or borrow against one’s Dividend. “

Well good luck enforcing that one.

So to the question, what do we do about no jobs, Yang’s answer is simply free money.  However I will give Yang credit. Unlike most advocates of UBI, Yang actually has a way to pay for it, a 10% Value Added Tax.  That is at least a more honest answer than the one you usually get from UBI advocates, which range from “the rich,” some version of Modern Monetary Theory (MMT), or an Ocasio-Cortez-esque “You Just Pay for it.”

Free money sounds great and I can absolutely see the attraction to it.  Would I like an extra thousand bucks a month?  Absolutely!  Most people, and certainly a voting majority, could use extra cash each month.  In fact, it’s hard not to even discuss UBI without fantasizing about what we would do with the money.  It’s almost like lotto winnings, and like lotto winnings, it would wreak havoc on the recipients.

As much as I would love an extra twelve thousand bucks a year, Universal Basic Income is a total disaster as a social policy. We already have some great examples of a society dependent on welfare.  We have ghettos all over this country, of all races, in which cash benefits have totally flipped the incentive structures that a normal society has.  The bourgeois norms of thrift, work ethic, and responsibility have totally broken down in those areas, and I can’t imagine anyone who would want to replicate that nationwide.  In spite of Yang’s alleged safeguards, it’s easy to see how this would reorder politics into those who want to increase benefits (for the people!) and those who want to hold the line.  If history is any guide, the hold the line types are destined to lose.

UBI as a societal cancer probably won’t discourage those who want the government to make it rain with dollars, but even if UBI was the smartest idea ever, why would you want to institute it now?  Unemployment rates across all demographic groups are at historic lows. It certainly sounds difficult to justify a multi-trillion dollar program for a problem that has not arrived yet, and we don’t have a clear idea when it will arrive.  Of course, when the automation hammer falls, it’s not going to fall on the people who advocate for it now, primarily young people who can’t wait for an extra thousand bucks a month for weed and pizza.  It will hit people, in the way automation advances always have, on middle aged and older workers who suddenly find themselves laid off in their 40’s or 50’s with a set of work skills that are now obsolete. Common sense would seem to dictate that at the point it becomes a real societal problem, a program to provide a bridge for older workers to retirement would make more sense than starting a Freedom Dividend retirement program for people who are just graduating from high school.

The robot job apocalypse is a real issue that needs to be addressed.  The only solution out there, UBI however, is probably the dumbest of all answers. UBI doesn’t fix the problem.  People who are left unemployed by automation will still be unemployed, they’ll just have a long term welfare/unemployment check to buy groceries and pay rent. Of course, I didn’t have a solution in 2014 and I still don’t have one, but I don’t want to make things worse with an idiotic universal basic income scam.  It’s simply an end-stage democracy idea to buy votes.

This election season has the Democrats running on a maximum wish list of items that totaled up, exceed the GDP of the entire world, let alone the United States.  Between a Medicare for all, Green New Deal, Fee healthcare for illegals, and free college for all, the country would have long been a smoking financial ruin before UBI ever got put on the agenda.

Andrew Yang won’t get the nomination, but like reparations, UBI will continue to exist as a Democratic talking point and will probably show up as an issue in every Presidential election from here on out.  Why not?  It’s only money.

The News Media Primary Debate

Tomorrow is the first of two Democratic Presidential candidate debates.  With so many candidates running, even splitting the debate over two nights still seems like it’s going to be too crowded a debate stage.

As a consequence, there is likely to be nothing much of interest said in this first debate(s).  How many actual chances to speak will each candidate get?  One or Two?  So we might, if we’re lucky, get a few sentences out of each candidate.  That’s a shame because some of these candidates are interesting, and I would be curious to hear some give and take with candidates like Andrew Yang or Tulsi Gabbard; two candidates who are unlikely to get more than the minimum amount of airtime.

So at this point, the real story (at least to me) won’t be what the candidates say, but how the coverage of the debate is handled by the MSM.  The debate is being shown on NBC/MSNBC, which is well known for its own biases, so how they cover the candidates, and how the other TV media cover the candidates, will be more revealing than anything the candidates say.  As a casual viewer of mainstream TV news, here are my guesses on the media’s picks for the Democratic candidate.

NBC/MSNBC:           Although the network has shown love to all of the major candidates, the one they have come down to defending has been Joe Biden.  The Morning Joe gang routinely sounds like a Biden cheering section.  My guess is that NBC/MSNBC feels like Biden has the best shot to beat Trump, and have taken an editorial position to support Biden.

CNN:              CNN doesn’t sound like it has any animus towards Biden, but hasn’t made up its mind and just wants the most leftward candidate who can beat Trump. So it seems for now they are actually being an honest broker other than mostly ignoring the candidates who are too far down in the polls to have a shot.  They may have learned their lesson with Beto to not fall in love to early.  The heartbreak is still probably painful from that.

ABC:               This network has clearly taken the editorial position that Biden can’t beat Trump and his constant gaffes are not going away.  That’s why they’re the only major TV news station (other than Fox) to cover extensively the Hunter Biden corruption scandal.  ABC seems to want to clear the field of Biden quickly to allow a more electable candidate rise up.  They just don’t know who that is yet.

CBS:               This is the mystery to me.  I honestly have not been able to get a firm handle on their positioning yet (maybe after I see their coverage of the debate) but I suspect it mirror’s CNN’s position.

Fox News:  With nothing at stake and no frantic need to push the Democratic primaries on a mission to replace Trump, their coverage seems to be the most even handed.  They’ve had several Town Halls with Democratic candidates (including a successful one by Bernie Sanders) and have had the candidates who will actually appear (most of the top tier candidates boycott Fox) as guests.  I’ve seen Gabbard and Yang multiple times on different Fox shows.

I’m curious if we’ll know by the weekend if the MSM has settled on a candidate, or at least decided on a slate of possible candidates.  Since none of the candidates will probably get to say much (with the exception of Biden; this is on NBC/MSNBC after all), the ones declared “winners” will be purely at the media networks discretion.

Stay tuned!