Friday, June 18, 2021

Why Guaranteed Annual Income was, is, and always will be, a very bad idea and never, ever happen.

Bad ideas don't become good ideas because celebrities endorse them!

A reader writes (and I am paraphrasing here):

Dear Stupid Do-Do Head:

You are so wrong about guaranteed annual income!  All the smart people like Professor Know-It-All (and he has a PhD!) say it is great!  And Jeff Bezos, too!

So you are wrong!  Pfffffft!

Hard to parse this, other than the reader never read my blog, particularly the articles about credentialism.  Credentialism isn't an argument, it's a way of trying to shut down argument.  By saying some "smart guy" or "rich guy" supports an argument, you are not addressing the merits of the argument, but turning it into a war of credentials.  Whichever side has the best credentials wins!

But as I noted in earlier postings, credentials can be exaggerated, faked, or not related to the field in question.  Quoting a Physicist when you should be quoting a Physician (as Penn & Teller did), is a case in point.  Both are "Doctors", but only one is qualified to talk about the effects of smoking.  People with credentials can and have been, wrong about so many things.  Look at me, an Electrical Engineer and a Lawyer and I'm wrong about everything most of the time.   The major fuck-ups in history were all supported by people with incredible credentials.  That doesn't turn a wrong answer into a right one.

So if you throw away credentialism, his argument amounts to... nothing.   On the other hand, even a schoolboy can see through the fallacies of this "basic income" or "guaranteed annual income" or whatever it is:

1.  It ain't never gonna happen:  Even with the Presidency and the House and the Senate, President Biden can't push through all of his agenda, thanks to the Filibuster.  Love it or hate it, it exists and isn't likely to go away, simply because the party in power can quickly become the party out-of-power.  Republicans loathed the Filibuster when they were in power - they love it today.  Ditto for Democrats when the situation is reversed.

OK, you say, let's all vote Democratic and take over 60 seats in the Senate, or abolish the Filibuster!  Well, even then, it fails.  You see, a lot of Democrats are NOT Ms. AOC or someone like her.  Many are middle-of-the-road and some actually think things through, and they don't go along with every liberal idea that comes down the pike - nor do most Americans.  These Democrats, in "swing States" know also they won't get re-elected if they support a far-left agenda.  This Rep. Manchin fellow from West Virginia, for example, isn't being obstinate, he's just representing the views of his constituents.

The idea that an overwhelming majority of Americans would support this (or student loan forgiveness, slave reparations, or other giveaways) is just a fantasy.  The idea that there are enough Democratic votes to make this happen is a fantasy as well - particularly after we lose the House or Senate in 2022.  Rep. Warnock spams me daily, asking for more money (than I already gave him).  Sadly, the Democrats will likely lose the House or the Senate because they are embracing far-left proposals like this, and the GOP will paste these ideas on to even conservative Democrats in swing States and people will vote them out.

2.  It wouldn't work.   Sure, they have tried "experiments" with "basic income" where Andrew Yang or some Mayor hands out checks to a random group of people.  Sociologists then do "surveys" that show that, when you hand someone money it makes them happier.  Surveys, however, are not science, as I have noted before.  And whenever someone uses a survey to try to prove a point, watch out - you are being snookered.

But even in these limited experiments, the result were sort of mixed.  People getting more free money didn't feel compelled to seek out a job, nor did it improve the local economy much, at least according to one study in Finland

The problem with these experiments is that they don't give the money to everyone. If they did, well, we'd see the actual effect it has on people.  Fortunately, we have run a nationwide experiment during the last year, which did hand out money to everyone, rich and poor in the form of "stimulus checks" and the results are about what a first-year economics major would report.

Namely, inflation, materials shortages, and labor shortages. Funny thing, but when you pay people not to work, they don't work.  So they aren't. Help wanted signs are all over the place and many businesses are cutting back on production or hours of operation or even changing how they operate, because of the lack of labor.  It is a simple equation - if I can make enough money sitting at home, why bother working?

Free money - unearned income - erodes the soul, squashes ambition, and leads to depression.  Almost every single person I've met who has inherited wealth - enough to goof off all day long and never work - suffers from some sort of mental illness or another.  The suicide rate amongst the wealthy is surprisingly high - you would think it would be zero.

3.  It just resets zero: But you won't have to worry about any of that with basic income.  Once all this money is handed out and put into the economy, prices will go up, as people will have more to spend, and as a result, fewer will work and labor costs will escalate.  Finally, the $15 minimum wage is here - not by law, but by default!  And I say this with confidence as this is what is happening today, right now, right in your home town (or at least mine).

Inflation erodes earning power, as we are seeing right now.  $1000 a month is great, if you receive it as part of Andrew Yang's "experiment" and no one else does.  It has real buying power.  But when everyone gets it, $1000 becomes the new zero.  Well, not exactly zero, but it ain't worth what $1000 was before we started printing money.  And that's what we would have to do - print money.

And by the way, Andrew Yang is not a "billionaire silicon valley startup guy" but a dude who started a test prep company and has a net worth hardly more than mine.  Somehow this mythology has erupted that he has more money than God and he is some sharp businessman.  Like I said, credentialist arguments are flawed, as credentials can be exaggerated and entirely made-up.

4.  We can't afford it:  $1000 a month ($12,000 a year) is the amount some propose for "basic annual income" or whatever you want to call it.  For 330 million people that would come to three trillion nine hundred sixty billion dollars a year.  Or about four trillion dollars.  Find that loose change under your sofa cushions!

Our annual budget for the US government, as proposed by President Biden, is about $4.89 trillion.  So either this "basic income" concept would double the national budget or we would have to cut every other program to the bone to afford it.  And bear in mind our current budget is far, far more than we take in, in taxes, and adds to the national debt. We would be throwing gasoline on the fire of debt.  And that's already a New Jersey tire fire!

But wait! some say, We can abolish social security and other programs and use basic income instead!  Nice try.  First of all, social programs make up only about half the budget.  Or are you proposing zeroing-out our military budget as well, Comrade? Second of all, not only would there be rioting in The Villages but in the trailer park and ghetto as well.  You see, while a lousy $1000 a month might buy a lot of weed for a 20-something living in their Mother's basement playing video games all day long, it represents a 2/3 pay cut for a middle-class person who spend the last 40 years paying into Social Security.  And let's face it - old people vote, in droves.  This is exactly why Florida went from Blue State to reliable Red State in the last 20 years.

Those on our various welfare programs would be similarly pissed-off.  $1000 a month?  People in Section-8 housing get more than that in housing subsidies alone, in many cases.  Add in the food stamps, Obamaphone, Medicaid, and other forms of subsidy we provide as a compassionate nation, and you're talking 40 grand a yearYou want to tell them they are only going to get 12 grand?  It won't even fly with them.

It is just not a well-thought-out idea and it isn't going anywhere.  And stupid "experiments" where small numbers of people are handed taxpayer's money willy-nilly, don't prove a damn thing.  And quite frankly, I'm surprised some taxpayer hasn't challenged this nonsense in court.  We used to call that corruption.

It is sad to me that people even think this way today - but maybe people have always been idiots.  Back in the 1960's, we were going to fly to the moon, and we would all become Scientists and Engineers and embrace a new age of reason and technology.   I held up my end of the bargain.  Others went off the deep end.

Basic Guaranteed Income is right up there with Qanonsense, Antifarts, Anti-vaxxers, Holocaust deniers, neo-Nazis, Flat-earthers, Moon-landing deniers, 9/11 "Truthers", UFO believers, Gold-bugs, Crypto-nonsense, Scientologists, and some Evangelical Christians - you know, the hatey-whack-church kind.  We have entered a new age of unreason, where you can believe what you want to believe and not only is this OK, it is not up for discussion.

And many of these beliefs are amplified by Russian and Chinese influencers - who want us to become divided, passive, and all living on welfare.  We've gone from being the vanguard of intellectual ability and the apex of civilization, to reverting to belief systems of the 12th Century.   I mean, flat earth - really?  If I was to go back in time to 1968 and tell people that flat-earthers were a "thing" in 2020 and that people thought polio vaccines were evil, I would have been laughed at.

And yes, a lot of celebrities and "smart people" and "rich people" lend their voices to some of these ideas - on occasion - or are quoted out of context.   Elon Musk tweets about Bitcoin, not because he believes in it, but because he knows the price will spike when he tweets about it, and he'll make a cool Billion in an afternoon.

Maybe right there is the key. If we can get people to believe in just about anything, then you can manipulate them out of their last dime. An article in the paper today talks about "Trump Conventions" being held nationwide, where "My Pillow Guy" gives speeches and Trump appears by remote hookup.  No doubt, they solicit donations for the Trump cause.  So maybe these crazy ideas are being bandied about to try to loot people's wallets.

But how would "basic income" or UBI as AOC calls it, factor into this?  Why would Jeff Bezos support this idea, when it would prevent his workers from coming to work or force him to pay correspondingly higher wages (and not to mention, raise his taxes astronomically)?   Well, if you look into it, Bezos (and other tech Billionaires) never said it.  Or to be more precise, it was taken out of context.

Bezos (and Gates, who thinks "AI" is going to take over the world) did muse once that if robots really become a "thing" and everyone gets laid off from work, then "UBI" might make sense, since everyone will have nothing to do and there won't be any jobs around.  So he wasn't saying we need "basic income" today, but in some hypothetical far-off future where robots rule the world.  A hypothetical future that likely won't happen, or if it does, doesn't mean jobs will go away.

If you look at the history of mankind, the amount of labor required to keep our civilization going has decreased dramatically through the centuries, the trend accelerating rapidly in the last few decades. Yet not only are massive numbers of people not out of work, more people are working than ever before. In medieval times, almost everyone worked in agriculture, and it took dozens of workers to farm even a small plot.  Over time, agricultural processes improved, and more and more people left the land and moved into cities.  They all found jobs, though, as technology took off - technology needed to keep an ever-increasing population supported. Today, few farm the land, and fewer and fewer work in factories. A modern auto plant has less than half the workers of even 30 years ago, and yet produces more cars that are also better made.  And yes, this is in part, due to robotics.

But even with half the people gone, unemployment rates haven't increased to 50%. or even close to that. And during this time period, the workforce effectively doubled, when women entered the workforce in droves in the 1970's.  When I was a kid, if you were a woman, you were a housewife, period.  Women made up a small part of the workforce.  Today, they make up nearly half.   Yet the workplace absorbed all those women as well.  Unemployment has rarely risen above 10% in my lifetime and it is considered "normal" for it to be around 5%.   Are robots really going to put us out of work?  Why aren't they already?  Because robots already exist, and they aren't displacing many people from work - yet.  Perhaps they never will.

Or perhaps life will get better for us humans.  Over time, not only are fewer people needed to do jobs, but people have worked fewer hours.  Maybe in the old days, people slaved (often literally) for 12 hours a day, seven days a week. Religion became wildly popular in part because it promised people a day off. Henry Ford introduced the assembly line, making it possible to produce a massive amount of cars with less man-hour per vehicle.  He also introduced the 40-hour workweek and doubled wages overnight to attract and retain workers.

There is a pattern here - with technological advances and "labor-saving" devices, labor is actually saved (funny thing, that!) and our lives get easier and easier.   So yes, as more automation (not "robots") takes place, we will work fewer days, fewer hours, and have longer vacations, perhaps.  But unemployment?  I suspect not.

But perhaps there is another reason Mr. Bezos - who rivals Walmart as one of the nation's (if not the world's) largest low-wage employer - might think this "UBI" concept is keen.  It acts as a wage subsidy to low-wage employersI wrote before about food stamps and Obamacare and other programs designed to help the working poor.   Republicans make noises about abolishing welfare-type programs, but they go along with Medicaid and Foodstamps and whatnot, provided there is a working requirement.  Walmart can pay its employees less if they can get by with food stamps - and their own employee website has (or had) links on how to sign up.  Obamacare is opposed by many in the GOP (mostly for show, it turns out) but low-wage employers don't mind - it means their part-time employees can get health care and they don't have to provide it.  They just would rather not provide it for full-time employees as well!

So, to Bezos, $1000-a-month in "UBI" is $1000-a-month in wages he doesn't have to pay his employees, at least in theory.  So maybe even without the robot apocalypse, he might favor it.

Or maybe, since he knows is just ain't never gonna happen, he can say he supports it, to build up his "street cred" with the plebes, who then might decide they don't need to unionize, as Uncle Jeff and Uncle Sugar will take care of them.

It is a funny thing, ain't it?  I mean, how many poor and underpaid people in the United States have made folk heroes out of Billionaires, like Space Jesus.  Maybe it started years ago, with "Sir" Richard Branson.  He was hip with the cool kids, and allowed all us hippies to fly to the UK for cheap on one of his 747's.  But any good Communist shouldn't be rubbing elbows with Billionaires, should they?  Yet, many do, and many people who are Billionaires or wealthy celebrities, claim to endorse far-left causes that are really not their own.  Like I said, it is a funny thing.

So, to the dear reader who never really read my blog - no sale to credentialist arguments.  If you can't argue the thing on its merits, but have to revert to credenitalism, it means you have nothing really to say, particular when your citations to authority are a wee bit overstated.  Moreover, it just isn't going to happen, and in fact, pining for these sort of things is what is going to cost us the 2022 and 2024 elections.

We need to focus on the ground game.  And winning elections is really the only thing that matters - to either party.  One reason Biden won last time around, was that people wanted not just change from Donald Trump, but a more middle-of-the-road, centrist candidate.  Liberals are pissed-off that Biden hasn't "come out" as a raging Bernie-like Socialist, and likely he never will, as he never was.  And that isn't what the majority of Americans want, anyway.  Get over that.

We keep blathering on about "slave reparations" - as if paying people today for ills visited upon people who were their distant ancestors, will some how make things right (Again, does Obama get these, given that none of his ancestors were slaves in the US?). Similarly, "free college" and "student loan forgiveness" ring pretty hollow to people who never went to college or who paid off their student loans. Encouraging these sort of things only encourages people to borrow yet more money - or stop making payments on their current loans.   Free money corrodes society.

The GOP will do a bang-up job of painting all Democrats with this wide, red brush, defacing campaign posters with the hammer-and-sickle. People like Bernie Sanders (who is NOT a Democrat!) and Andrew Yang (who barely is) are not helping matters, any more than Qanonsense supporters and the MyPillowGuy are making the GOP appear attractive and normal to mainstream America.

But in most elections, people "hold their nose and vote" - and will vote for a candidate they might not even like, if they dislike the other fellow even more, or see him as a threat to their way of life.  Trump screwed the pooch with his toxic behavior over four years.  He could have behaved a smidgen more rationally and been re-elected.  But his paranoid, narcissistic behavior - which came into full bloom after the 2020 election - convinced people to vote Democratic, even if they feared some of the more liberal tenets of the Democratic party.

Next time around, the narrative will be flipped.  People will vote for GOP candidates in swing States in 2022, because they fear the Democrats will "go too far" - and in fact, this is how our system works, to dampen extreme swings in policy. Whether this will put Trump back in the White House in 2024 (presuming he hasn't choked on a Col. Sanders chicken bone by then) remains to be seen.  I suspect Trump has had enough of being President, and would prefer to be king-maker instead, next time around.

We'll just have to see.  The point is, pining for nonsense political views - whether they are far-left or far-right, not only is a waste of time, it damages the party you are most closely aligned with, and emboldens the party you are diametrically opposed from.  "Basic Income" is never going to happen.  So just give it up!