Friday, July 8, 2016

Kate McFarland — US: President’s top economic adviser rejects basic income

Jason Furman, President Obama's top economics adviser, rejected the idea of a universal basic income in remarks made on Thursday, July 7, at a White House workshop on automation. Furman favors job-training and job-creation programs instead.…
US: President’s top economic adviser rejects basic income
Kate McFarland


Andrew Anderson said...

Furman favors job-training ...

Oh yea, let's train more people to automate more work so we'll need to train more people to automate more work ...

Of course many won't have the aptitude for robotics so what's for them? Being butlers and maids? For those who prefer and can afford human servants?

and job-creation programs instead.…

Give the population a Universal Basic Income and such jobs as are needed or desired SHALL be created and NONE other.

Bob said...

They've not given up on the idea of full employment... that's news to me.

Dan Lynch said...

I've always said that a UBI would be both politically and economically challenging, but a means-tested BIG would be much less difficult to implement. The UBI fanatics are not doing the BIG concept any favors.

Furman's claim that a BIG would make inequality worse doesn't hold water.

If you're a poor person currently received $50/month in food stamps and the government replaces that with a $1100/month BIG, you're going to be better off, not worse off.

As for Medicaid, that should be replaced by public health care. Many poor Americans don't qualify for Medicaid, anyway.

Of course the Obama administration is not going to support any serious proposal to end poverty, that's not what Obama's owners pay him to do.

Tom Hickey said...

But the deal to get any kind of income guarantee through Congress is using it in replacement of welfare transfers and related spending, which would be very costly to poorer people. This would also upset automatic stabilization, for example.

Greg said...

Right Dan, poverty is too profitable for many. Profitable for the Prison Industrial Complex, profitable for the payday lenders... profitable for anyone who likes to take advantage of desperate people.

Dan Lynch said...

@Tom, a means-tested BIG -- as opposed to a UBI -- would increase automatic stabilization.

Agree that conservatives would only support a BIG if it replaced at least some social programs, but I don't have a problem with that as long as SS/Medicare is not part of the deal. The average food stamp payout is only $133/month and many poor people can't even get that due to asset limits or time limits. If you live in a red state, there is no Medicaid. Unless you have kids, EITC is not significant. So basically there is no significant safety net now. A $1200/month BIG sounds pretty good by comparison.

Also, like the Speenhamland program, food stamps and EITC tend to be de facto subsidies to low-wage employers, that depress wages and leave the workers no better off (a UBI could lead to the same problem).

Agree that even a poverty threshold means-tested BIG would be difficult to pass. It ain't gonna happen with an unpopular Democrat like Obama in the White House. Just as only Nixon could go to China, and only Clinton could pass NAFTA and deregulate Wall Street, it seems that only a Republican president might be able to pass a serious anti-poverty program. Nixon might have passed a BIG if not for Watergate. It was a Democrat, Patrick Moynihan, who torpedoed Nixon's BIG.

Tom Hickey said...

I would suggest looking at through the lens of social credit developed by C. H. Douglas as an engineering approach to money and product flows in order to optimize effective demand wrt to potential output. In other words, the purpose of an economy is consumption, which requires investment and investment is base on finance.

"Build it and they will come" depends on effective demand since oversupply is the usual state of affairs. A modern technological economy can produce a lot more goods that people can afford. This is especially the case with technological innovation and increased productivity.

As Douglas realized, allowing output gaps for lack of money when money is not produced but issued is just plain stupid. Adjust money to circular flow rather than making circular flow depend on getting money.

There is also the issue of enclosure that made capitalism possible. Formerly yeomen were self-sufficient having access to the commons. As the commons was enclosed wage labor became a necessity.

These two factors would argue from some kind of BIG.

I don't that that a BIG would be sufficient in a capitalist economy, however. A JG is also needed to eliminate involuntary unemployment.

I would say that these are basic to creating social democracy with a view of moving toward democratic socialism.

Random said...

""Build it and they will come" depends on effective demand since oversupply is the usual state of affairs. "

The general line should be that increased spending is to be ‘paid for’ by increased production, and that any price rises will be treated with ‘competitive measures’ – the state investing to set up competitors that price compete, breaking up cartels or in extremis, increased corporation tax. Get that right and you’ll go a long way before you actually fill anything up.

Tom Hickey said...

Right, there is no limit on quantity other than the real resource constraint and that is expandable through technological innovation and "doing more with less," which the way Bucky Fuller defined what he called "design science."

There should also be a proviso that needs be met before wants in resource allocation.

This is doable. Just takes intelligence and will, as well as enough agreement.