If you have "no place to go," come here!

Times visits Michigan, just can't understand why people aren't feeling the rebound!

I ploughed through the story, and there's only one key sentence:

56 percent said their family’s incomes were falling behind living costs — about where that sentiment was in 2008 — and 45 percent said they had experienced financial hardships like layoffs, inability to pay health care bills, or run-ins with debt-collection agents over the past year.

No money. That's for Detroit. This is for the country:

A George Washington University poll conducted last month found the economy to be the top issue on voters’ minds, with 71 percent saying their personal economic situation was either the same or worse than four years ago.

No money.

And that's before we get to the crap jobs.

NOTE The owners are doing fine, and good for them, especially the small ones. But the distinction between owners and not-owners is very, very clear.

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CMike's picture
Submitted by CMike on

In the matter of Bill Mitchell's concern about a stigma which would be associated with people receiving a Basic Guaranteed Income (BIG), you avoid that by writing every adult citizen the same sized check every month. Some people could use it as cash towards paying off all or part of their federal, state, and local taxes.

And as far as it being a tough sell I think you would try to introduce the government administered American inheritance program, i.e. BIG, by first setting up a program to write the same sized check every month for each minor child in the country to be cashed by their parent or guardian, while dialing back on other programs, especially any non-refundable child tax credits. I haven't made a go at crunching his numbers but I think Matt Bruenig has the right idea here:

Ultimately, the $300 [per month] amount and the figures that it generates here are not necessarily the point. You can have more or less than that if you want, which would mean lower or higher poverty reductions.

The point is that, whatever the amount we decide upon, providing it flatly to all parents is the way to go, if you actually care about supporting families and what they undertake to raise children. If you actually just care about giving middle and upper class parents some extra money while neglecting poor families almost entirely, then you go with the convoluted tax code stuff.

See Bruenig also here and here on this matter. Again, I haven't made any sort of an assessment of his numbers myself, I'm just liking the theory behind his approach. I would concede that Mitchell raises a troublesome issue for the Bruenig approach which I highlight in bold:

Many critics of such programs always focus on the possibility of corruption (money not spent properly) etc. The NYT article notes that the programs have not only reduced poverty but are also reducing income inequality. The article also notes that:

For skeptics who believe that social programs never work in poor countries and that most of what’s spent on them gets stolen, conditional cash transfer programs offer a convincing rebuttal. Here are programs that help the people who most need help, and do so with very little waste, corruption or political interference. Even tiny, one-village programs that succeed this well are cause for celebration. To do this on the scale that Mexico and Brazil have achieved is astounding.

The moralists always criticise these type of programs because they consider them paternalistic interventions to free choice. In most microeconomics textbooks you will find some discussion about the “optimality” of cash transfers versus in-kind (or conditional) transfers. The mainstream economists usually conclude that unconditional cash transfers are “best” because they allow “free choice”.

The reality is that when confronted with a starving child it is always better to give them “food” than give their father money to drink or gamble away! Children do not have “free choice”. I could write a whole blog about this sort of debate.

Submitted by lambert on

1) Tax breaks suck. They assume you make enough to pay taxes, to start, and they're convoluted to calculate and invasive of personal information. Like ObamaCare. I can't imagine advocating using them for anything serious. The winger probably like them because shrink gummint.

2) "while dialing back on other programs" I'm not clear what you're saying here. Are you saying elimate all cash transfer programs (i.e., welfare, unemployment benefits, housing allowances, "welfare" in all its forms) and consolidating them into this one program?

3) I don't get the inheritance framing. Who are we helping here? Adults are kids?

4) On moralism. I admit to being a moralist here. I am aware of examples for, say, the homeless, where it's cheaper and more effective just to give them houses than to have all kinds of "programs"; I'm aware that the gatekeeping apparatus in health care to prevent so-called unncessary or illicit care is more expensive than simply giving the care -- other things being equal.

However... I know (rather too well) certain adults who believe that money is always there simply for the asking, no reciprocity involved. Of course, I know that government is not like a household, making the cases different, and making it possible to do much more. But consider the three forms of property: Private, public, common pool resource. I think we can agree that we'd like a good deal more of the last two, and especially a good deal more of the last. I would love it if the whole world were an edible forest, where anybody can walk in and pick from the trees; in fact, I support them locally and blog about them when I find out about them. But at the same time there needs to be some sort of collective responsibility taken for the health of the edible forest as a common pool resource. I think -- on the whole and on the average, as a matter of public policy and public purpose -- that something is work. I am happy to define work* very broadly and to distinguish it from a job and to have it democratically defined and publicly allocated, and even (in the case of the CPR) to rely on social sanction rather than a timeclock, but the work of the forest must be done if the forest is to continue. Mitchell writes:

It does not provide any capacity building. A BIG treats people who are unable to find adequate market-based work as “consumption” entities and attempts to meet their consumption needs. However, the intrinsic social and capacity building role of participating in paid work is ignored and hence undervalued. It is sometimes said that beyond all the benefits in terms of self-esteem, social inclusion, confidence-building, skill augmentation and the like, a priceless benefit of creating full employment is that the “children see at least one parent going to work each morning”. In other words, it creates an intergenerational stimulus that the BIG approach can never create.

I'm willing to add income guarantees to prevent falling through the cracks and to support starving artists, but I'm still very iffy about it as public policy. And my focus is the 12 Points, that I will have to defend as I move through them, and I think the BIG is a hard sell if we want to make any progress in the world beyond the comments section.

I don't see any issue about being a moralist, as long as one isn't a scold. Smith wrote on the theory or moral sentiments, after all, and Marx also had views on morality.

NOTE * And would also be happy if people would stop mischaracterizing work as "make work."

CMike's picture
Submitted by CMike on

1) Agreed, especially when the explicit or implied justification for them is that they'll somehow help those in the middle or lower quintile income cohorts.

2) No, I'm not in favor of eliminating all in-kind programs as I'm in favor of, for instance, cradle to grave eligibility to free public education in the liberal arts, STEM subjects, the professions, and for vocational training as well as for cradle to grave single-payer health care. As to various cash transfer programs specifically, yeah I'd like to see them phased out in favor of a cradle to grave subsistence income that would be a birthright of any American citizen or a right that came along with naturalization. If something like that was in place and if people could be taught they shouldn't use credit to purchase consumer goods then, for instance, unemployment insurance could be eliminated- unless a worker really did want to pay for some sort of supplemental unemployment insurance.

3) Who are the intended beneficiaries? Well my point was that cash payments as a right of citizenship could be introduced in the form of monthly incomes provided to all minor children, be they in rich, middle class, or poor households. This would be on the way to expanding the right to a monthly income to citizens of all ages. This political approach is along the strategic lines of what universal single payer advocates might ultimately have in mind when they call for lowering the age qualification for Medicare to 55.

4) I don't want social welfare programs restricted to those in danger of falling through the cracks or to those who have all ready done so. The beneficiaries thereby become charity cases to be resented by the rest of the population especially when certain political winds are blowing. Instead, as the country becomes wealthier and wealthier, I'd like to see an expansion of the outlook expressed by Harry Truman on the occasion of his receiving the first Medicare card:

This is an important hour for the Nation, for those of our citizens who have completed their tour of duty and have moved to the sidelines. These are the days that we are trying to celebrate for them. These people are our prideful responsibility and they are entitled, among other benefits, to the best medical protection available.

Not one of these, our citizens, should ever be abandoned to the indignity of charity. Charity is indignity when you have to have it. But we don't want these people to have anything to do with charity and we don't want them to have any idea of hopeless despair.

Mr. President, I am glad to have lived this long and to witness today the signing of the Medicare bill which puts this Nation right where it needs to be, to be right. Your inspired leadership and a responsive forward-looking Congress have made it historically possible for this day to come about.

Now would such a system work or do the vast majority of people really need the wolf at their door to make them live fulfilling and productive lives? I'm not sure what the answer to that but is but for several millennia the leisure classes have been producing active, educated people even if they are unChristian in their sentiments on the matter of the equality of man. If relieved of the absolute necessity to labor, perhaps the attitude of the general population might become more enthusiastic towards work and leave people less likely to act as if they are in a state of exhaustion when the opportunity arises to do so. But I recognize I may be way off on this.

Submitted by lambert on

... which isn't revolutionary. Are there examples of where this policy has worked anywhere in the world? (Comparable to the US; not hunter gatherer society's or something).

So I think you will have to be contented, as far as work I want to do, with 1) JG with liberal definition of work + supplemental BIG, 2) More co-ops, and 3) Tons more focus on Common Pool Resources, which are collectively managed.

So in terms of experimentation and proofs-of-concept, I think that gets you where you want to go.

CMike's picture
Submitted by CMike on

What I'm talking about could never have existed before but it's one of the few options we're going to have to choose from in the coming decades. By the time a JG program could be put into place according to any political schedule I can foresee I'm sort of thinking it will be at a historical point when the great masses of "humans need not apply" to perform anything but work not all that useful to the market. (It's your blog so I won't use the ordinary term for that type of work in order to identify it.) When this "humans need not apply" point is reached I'm thinking there will be nothing a JG program could offer but an endless boot camp designed by the leisure class ostensibly to give the peasants some dignity.

Submitted by lambert on

1) Surely a JG is easier to implement immediately than a BIG. I can't imagine a "schedule" that ever put a standalone BIG with no JG in place (as opposed to a JG with a supplemental BIG.

2) You can't simultaneously believe that a BIG can be passed and also believe -- you've now reframed "make work" three times, and it's as wrong now as it was then -- that a leisure class is going to make a JG boot camp. If democracy is healthy enough for a BIG, it's healthy enough for a JG.

Frankly, I'm amazed at this argument. It crops up all the time, with both the JG and MMT. Both are designed for democratic control. Their proponents insist on democratic control. And for some weird reason, detractors (a) propound the idea that elite dominance vitiates both, while (b) propounding alternatives that, if elite dominance were as they say, could never be passed. Shows the disempowering character of utopian thinking, I guess.

CMike's picture
Submitted by CMike on

What I think is necessary is to start talking about the future in terms that radically challenges neo-liberalism, the reigning conventional wisdom. Before the population might be willing to embrace the idea a BIG, it first must become a proposal that is a familiar one. Right now I'll concede it sounds radical and does not have much of a constituency. There's a line from somewhere, "First they laugh at you..."

One of the odd things in the discussion by MMTers is that the way I heard it pitched was that, because it was agreed taxing the rich was a political non-starter, printing money was deemed a clever way to get around that constraint to finance socially responsible government spending. Of course, if taxing the rich is a non-starter because of the political power of the rich then the idea of directing some new found source of "revenue" for government spending to the benefit not of the rich but to the benefit of the general population would be a nonstarter, too. And, in fact, we see that it wasn't the general population that the Fed with their keystrokes came to the rescue of in the aftermath of the 2008 meltdown.

You seem to believe a groundswell among the masses in favor of a JG underpinned by an MMT approach to running the economy would be an easier sell than a call for a BIG. Putting aside which would be the better policy, I'm not sure in a political sense that your belief in this is necessarily correct. To implement either policy is going to require a lot of advocacy and as the unemployed and the underemployed become a greater share of the work force I'm thinking BIG may be an idea that makes more sense to most people.

Again I stress, the developed world is on the threshold of a new economic reality- I don't think the pursuit of endless more, a hallmark of modern capitalism, is going to be an option in the coming century while, at the same time, I think there's just about enough wealth all ready to provide a comfortable standard of living for everyone by getting away with a few inefficiencies and making a few adjustments with how wealth is distributed.

As to your last paragraph I think you're begging the question with your association of good old democracy with MMT and wild-eyed Utopianism with a BIG.

CMike's picture
Submitted by CMike on

Before the population might be willing to embrace the idea of a BIG...

To implement either policy is going to require a lot of advocacy and as the number of unemployed grows and the underemployed become a greater share of the work force...

...I think there's just about enough wealth all ready to provide a comfortable standard of living for everyone by doing away with a few inefficiencies and making a few adjustments with how wealth is distributed.

Submitted by lambert on

On small business views:

More owners still think business conditions will be worse in six months than think they will be better.

On the stats:

That’s because the NFIB’s membership doesn’t represent all U.S. small businesses and because the survey has low response rates. (About 20 percent of members selected for this month’s survey submitted usable responses, according to the NFIB.) The result is that the survey tracks the opinions of “people who want to be heard, who have a message they want to send out,” Mach said.

This is very helpful on the NFIB; I'm still coming to grips with the stats.