Job Guarantee, Good-- Guaranteed Basic Income, Scam

Elizabeth Esty is a New Dem backbencher from northwestern Connecticut (CT-05)— Meriden, Waterbury, Danbury, New Farfield, Mew Milford, Salibury… Obama won the district both times (with 56.4% in 2008 and 53.5% in 2012) and Hillary beat Trump 49.9% to 45.8%. The district’s PVI is D+2, least blue in the state. Esty is a relatively conservative Democrat, an EMILY’s List politician, who won Chris Murphy’s seat in 2012 when he ran for the U.S. Senate. She won the primary by beating progressive House Speaker Chris Donovan in a 3-way race, a real tragedy since he’s a proven leader and she’s a big waste of a seat, a seat she’s being forced to vacate after being exposed for creating a horrible workplace by retaining a chief of staff, a violent sexual harasser for three months after she first learned of the allegations in 2016. Among the Democrats eyeing the race to replace her are Harvey Weinstein buddy Dan Roberti, Waterbury Mayor Neil O'Leary, state Rep. Liz Linehan of Cheshire and former state Sen. Dante Bartolomeo of Meriden are considered top contenders. Luckily for the Democrats, the filing deadline is June 8 and the primary is August 14.

Not much of a news story, right? But it’s getting a thousand times more coverage than Chris Hedges’ TruthDig column about, a scam being pushed by oligarchs, guaranteed basic income, which is a thousand times more consequential. Bernie, the most important advocate of Job Guarantee has been warning his supporters that UBI is a scam. Hedges agrees. He wrote that “A number of the reigning oligarchs-- among them Mark Zuckerberg (net worth $64.1 billion), Elon Musk (net worth $20.8 billion), Richard Branson (net worth $5.1 billion) and Stewart Butterfield (net worth $1.6 billion)-- are calling for a guaranteed basic income. It looks progressive. They couch their proposals in the moral language of caring for the destitute and the less fortunate. But behind this is the stark awareness, especially in Silicon Valley, that the world these oligarchs have helped create is so lopsided that future consumers, plagued by job insecurity, substandard wages, automation and crippling debt peonage, will be unable to pay for the products and services offered by the big corporations.”

The oligarchs do not propose structural change. They do not want businesses and the marketplace regulated. They do not support labor unions. They will not pay a living wage to their bonded labor in the developing world or the American workers in their warehouses and shipping centers or driving their delivery vehicles. They have no intention of establishing free college education, universal government health or adequate pensions. They seek, rather, a mechanism to continue to exploit desperate workers earning subsistence wages and whom they can hire and fire at will. The hellish factories and sweatshops in China and the developing world where workers earn less than a dollar an hour will continue to churn out the oligarchs’ products and swell their obscene wealth. America will continue to be transformed into a deindustrialized wasteland. The architects of our neofeudalism call on the government to pay a guaranteed basic income so they can continue to feed upon us like swarms of longnose lancetfish, which devour others in their own species.

“Increasing the minimum wage or creating a basic income will amount to naught if hedge funds buy up foreclosed houses and pharmaceutical patents and raise prices (in some cases astronomically) to line their own pockets out of the increased effective demand exercised by the population,” David Harvey writes in “Marx, Capital, and the Madness of Economic Reason.” “Increasing college tuitions, usurious interest rates on credit cards, all sorts of hidden charges on telephone bills and medical insurance could steal away the benefits. A population might be better served by strict regulatory intervention to control these living expenses, to limit the vast amount of wealth appropriation occurring at the point of realisation. It is not surprising to find there is strong sentiment among the venture capitalists of Silicon Valley to also support basic minimum income proposals. They know their technologies are putting people out of work by the millions and that those millions will not form a market for their products if they have no income.”

The call for a guaranteed basic income is a classic example of Karl Marx and Antonio Gramsci’s understanding that when capitalists have surplus capital and labor they use mass culture and ideology, in this case neoliberalism, to reconfigure the habits of a society to absorb the surpluses.

…This phase of capitalism ended once industry moved overseas and wages stagnated or declined. The well-paying unionized jobs disappeared. Jobs became menial and inadequately compensated. Poverty expanded. The oligarchs began to mine government social services, including education, health care, the military, intelligence gathering, prisons and utilities such as electricity and water, for profit. As a publication of the San Francisco Federal Reserve reportedly noted, the country-- and by extension the oligarchs-- could no longer get out of crises “by building houses and filling them with things.” The United States shifted in the 1970s from what the historian Charles Maier called an “empire of production” to “an empire of consumption.” In short, we began to borrow to maintain a lifestyle and an empire we could no longer afford.

Profit in the “empire of consumption” is extracted not by producing products but by privatizing and pushing up the costs of the basic services we need to survive and allowing banks and hedge funds to impose punishing debt peonage on the public and gamble on tech, student debt and housing bubbles. The old ideology of the New Deal, of government orchestrating huge social engineering projects under the Public Works Administration or in the War on Poverty, was replaced by a new ideology to justify another form of predatory capitalism.

In Harvey’s book A Brief History of Neoliberalism he defines neoliberalism as “a project to achieve the restoration of class power” in the wake of the economic crisis of the 1970s and what the political scientist Samuel Huntington said was America’s “excess of democracy” in the 1960s and the 1970s. It achieved its aim.

Neoliberalism, Harvey wrote, is “a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade.”

American oligarchs discredited the populist movements of the 1960s and 1970s that had played a vital role in forcing government to carry out programs for the common good and restricting corporate pillage. They demonized government, which as John Ralston Saul writes, “is the only organized mechanism that makes possible that level of shared disinterest known as the public good.” Suddenly-- as Margaret Thatcher and Ronald Reagan, two of the principal political proponents of neoliberalism, insisted-- government was the problem. The neoliberal propaganda campaign successfully indoctrinated large segments of the population to call for their own enslavement.

The ideology of neoliberalism never made sense. It was a con. No society can effectively govern itself by basing its decisions and policies on the dictates of the marketplace. The marketplace became God. Everything and everyone was sacrificed on its altar in the name of progress. Social inequality soared. Amid the destruction, the proponents of neoliberalism preached the arrival of a new Eden once we got through the pain and disruption. The ideology of neoliberalism was utopian, if we use the word “utopia” as Thomas More intended—the Greek words for “no” and “place.” “To live within ideology, with utopian expectations, is to live in no place, to live in limbo,” Saul writes in “The Unconscious Civilization.” “To live nowhere. To live in a void where the illusion of reality is usually created by highly sophisticated rational constructs.”

Corporations used their wealth and power to make this ideology the reigning doctrine. They established well-funded centers of propaganda such as The Heritage Foundation, took over university economic departments and amplified the voices of their courtiers in the media. Those who questioned the doctrine were cast out like medieval heretics, their careers blocked and their voices muted or silenced. The contradictions, lies and destruction within neoliberal ideology were ignored by those who dominated the national discourse, leading to mounting frustration and rage among a populace that had been abandoned and betrayed.

The propagandists for neoliberalism blamed the other-- Muslims, undocumented workers, African-Americans, gays, feminists, liberals, intellectuals and, of course, government-- for the downward spiral. Politicians who served the interests of the corporate oligarchs told dispossessed white workers their suffering was caused by the ascendancy of these marginalized groups and a cultural assault on their national identity and values, not corporate pillage. It was only a matter of time before this lie spawned the xenophobic, racist hate speech that dominates American political life and led to the rise of imbecilic and dangerous demagogues such as Donald Trump.

“Each of Globalization’s strengths has somehow turned out to have an opposing meaning,” Saul writes in The Collapse of Globalization and the Reinvention of the World. “The lowering of national residency requirements for corporations has morphed into a tool for massive tax evasion. The idea of a global economic system mysteriously made local poverty seem unreal, even normal. The decline of the middle class-- the very basis of democracy-- seemed to be just one of those things that happen, unfortunate but inevitable. That the working class and lower middle class, even parts of the middle class, could only survive with more than one job per person seemed to be the expected punishment for not keeping up. The contrast between unprecedented bonuses for mere managers at the top and the four-job family below them seemed inevitable in a globalized world. For two decades an elite consensus insisted that unsustainable third-world debts could not be put aside in a sort of bad debt reserve without betraying Globalism’s essential principles and moral obligations, which included unwavering respect for the sanctity of international contracts. It took the same people about two weeks to abandon sanctity and propose bad debt banks for their own far larger debts in 2009.”

The oligarchs mask their cruelty and greed with an empty moralism. They claim to champion women’s rights, diversity and inclusivity, as long as women and people of color serve the corporate neoliberal project. An example of this moralism occurred last Tuesday when NPR’s Ari Shapiro interviewed Lyft co-founder and President John Zimmer and former Obama administration official Valerie Jarrett, a member of the company’s board, about diversity and gender equality in the workplace. Shapiro asked about Lyft offering free rides to those marching against gun violence and donating to the ACLU.

“We serve our drivers, we serve our passengers, and we serve the employees that work for us,” Zimmer said in the interview. “And when it comes to [resisting gun] violence, when it comes to equality, those are things that we’re going to stand up for.”

America’s “gig economy,” as I wrote last week in my column, is a new form of serfdom. Corporations such as Lyft use lobbyists and campaign donations to free themselves from regulatory control. They force poorly paid temporary workers, who lack benefits, to work 16 hours a day in a race to the bottom. This neoliberal economic model destroys regulated taxi and livery services, forcing drivers who were once able to make a decent income into poverty, bankruptcy, foreclosures, evictions and occasionally suicide. By fighting gender, sexual and racial inequality in the workplace rather than economic inequality, by denouncing mass shootings rather than out-of-control police violence and mass incarceration, these corporations hide their complicity in societal disintegration. Their empty moralism and faux compassion is an updated version of the publicity stunt that John D. Rockefeller, whose personal fortune was $900 million in 1913, or $189.6 billion in today’s terms, used when he handed out shiny new dimes to strangers.

Neoliberalism heralds a return to the worst days of unregulated capitalism, after the Industrial Revolution when workers were denied a living wage and decent, safe working conditions. Oligarchs have not changed. They are out for themselves. They do not see government as an institution to defend and promote the rights and needs of citizens. They see it as an impediment to unrestricted exploitation and profit. Human beings, to oligarchs, are commodities. They are used to increase wealth and then discarded. Oligarchs don’t propose programs such as a guaranteed basic income unless they intend to profit from it. This is how they are wired. Don’t be fooled by the grins and oily promises of these human versions of the Cheshire Cat. The object is to spread confusion while they increase levels of exploitation.

“Alice asked the Cheshire Cat, who was sitting in a tree, ‘What road do I take?’ ” Lewis Carroll wrote. “The cat asked, ‘Where do you want to go?’ ‘I don’t know,’ Alice answered. ‘Then,’ said the cat, ‘it really doesn’t matter, does it?’”

The longer the elites keep us in darkness with their ideological tricks and empty moralism, the longer we refuse to mobilize to break their grip on power, the worse it will get.

In a brilliant new working paper, Job Guarantee: Design, Jobs, and Implementation, Pavlina Tcherneva answers the questions “Why don’t we just give people cash assistance instead?” and “Isn’t universal basic income (UBI) a better program?”

Even if UI were increased, other cash assistance programs were strengthened, and a form of basic income guarantee were implemented, people would still want jobs.

Research indicates that the nonpecuniary costs of unemployment (85–93 percent) far outweigh the pecuniary costs (15–7 percent). This suggests that interventions that are based on providing income alone will not be successful. People reap a great many benefits from working; income is but one of them. Decent work at decent pay brings significant mental and physical health benefits, it increases and deepens one’s social capital, strengthens educational and labor market outcomes of other family members, and offers institutional support and economic opportunities not available to those outside the labor market, to name just a few.

While there are many good reasons why some people cannot or should not work and why other public policies should be designed to offer them economic security, income assistance does not solve the problem of involuntary unemployment.

There are reasons to doubt the effectiveness of UBI programs. The first is that they do not address unemployment and the associated social and personal costs. Experiments around the world show that, even in places where some form of UBI has been implemented, many people still seek but are unable to find paid employment.

Secondly, UBI in and of itself does not guarantee access to needed real resources. Working families today have trouble finding adequate housing, care, afterschool programs, clean public spaces, etc., even if they already have above-poverty incomes.

The JG guarantees both: the income and the public goods and services that are currently in short supply. The JG is a type of guaranteed income, except it guarantees both the income-- through public service employment-- and the provisioning of the very goods and services communities need.

I had a discussion with Bernie's economic advisor and Stony Brook professor, Stephanie Kelton, about this today. “The Silicon Valley version of a UBI is obviously a self-serving Trojan horse,” she told me. "Money for Nothing and the [shredding of the last vestiges of the New Deal and Great Society] for free.” 

Whenever someone pitches a basic income guarantee, ask them: (1) Is it genuinely universal?-- ie does everyone get the same no-strings-attached payment? (2) Is it enough to live on without working? (3) How do you “pay for it?” Chances are, it’s a scheme to enrich those at the top by eviscerating the safety net-- that’s their “pay-for-- under the guise of “efficiency” or some other bogus neoliberal label. Be afraid. Be very afraid.

Stephanie introduced me to Geoff Coventry last January and he did a guest post on Modern Monetary Theory. He’s a serial entrepreneur and a member of the Patriotic Millionaires, a group dedicated to ending the destabilizing concentration of wealth and power in America. I asked him to comment on this one as well. “We all recognize,” he told me this morning, “that there are some people in society who should be the beneficiary of income support, including children & students, the elderly, those who cannot or will not work for various reasons. But we should also recognize that there are many who want to work for a living but are denied this opportunity to participate in the economy, contribute their skills, and provide a living for themselves and their families. The Job Guarantee specifically addresses this need by providing local work for any who seek it but who are not currently needed for any private or public sector labor needs. It also provides a floor to what a full time job deserves in terms of wages, benefits, and working conditions. Proponents of a UBI but not a job guarantee are suggesting those who want a job should not receive a job but instead receive income, effectively denying these citizens their right to work.

“In addition to meeting a basic need of society, a well designed job guarantee can play a key role in reshaping our economy in ways that reduce discrimination, wage suppression, inequality, and structural poverty. The formerly incarcerated, the long-term unemployed, those living in abandoned towns and communities all need targeted opportunities to learn skills, become reconnected in their communities, and contribute to meeting the needs unique to their locale. Income alone does not connect people together. Income alone does not help people gain skills and confidence by working with others. It does not provide pride of having done something in the community that matters to their friends and neighbors. It doesn’t set a new bar for company wages, benefits and working conditions. A job guarantee is a foundational policy for those who seek to restructure our economy to one that works for all, raises the standard of living for those who most need it, and providing a path for both personal and community development.”