Dickinson’s Purse and Sword

A lesser known founding father is John Dickinson, but he should be more well known considering how important he was at the time. His politics could today be described as moderate conservatism or maybe status quo liberalism. During conflict with the British Empire, he hoped the colonial leaders would seek reconciliation. Yet even as he refused to sign the Declaration of Independence, not based on principle but prudence, he didn’t stand in the way of those who supported it. And once war was under way, he served in the revolutionary armed forces. After that, he was a key figure in developing the Articles of Confederation and the Constitution.

Although a Federalist, he was highly suspicious of nationalism, the two being distinguished at the time. It might be noted that, if not for losing the war of rhetoric, the Anti-Federalists would be known as Federalists for they actually wanted a functioning federation. Indeed, Dickinson made arguments that are more Anti-Federalist in spirit. An example of this is his warning against a centralized government possessing both purse and sword, that is to say a powerful government that has both a standing army and the means of taxation to fund it without any need of consent of the governed. That is what the Articles protected against and the Constitution failed to do.

That warning remains unheeded to this day. And so the underlying issue remains silenced, the conflict and tension remains unresolved. The lack of political foresight and moral courage was what caused the American Revolution, the problems (e.g., division of power) arising in the English Civil War and Glorious Revolution still being problems generations later. The class war and radical ideologies from the 17th century led to the decades of political strife and public outrage prior to the official start of the American Revolution. But the British leadership hoped to continue to suppress the growing unrest, similar to how present American leadership hopes for the same and probably with the same eventual result.

What is interesting is how such things never go away and how non-radicals like Dickinson can end up giving voice to radical ideas. The idea of the purse strings being held by a free people, i.e., those taxed having the power of self-governance to determine their own taxation,  is not that far off from Karl Marx speaking of workers controlling the means of production — both implying that a society is only free to the degree people are free. Considering Dickinson freed the slaves he inherited, even a reluctant revolutionary such as himself could envision the radicalism of a free people.

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On a related thought, one of the most radical documents, of course, was Thomas Jefferson’s strongly worded Declaration of Independence. It certainly was radical when it was written and, as with much else from that revolutionary era, maintains its radicalism to this day.

The Articles of Confederation, originally drafted by Dickinson, were closely adhering to the guiding vision of the Declaration.  Even though Dickinson was against declaring independence until all alternatives had been exhausted, once independence had been declared he was very much about following a course of moral principle as set down by that initial revolutionary document.

Yet the Constitution, that is the second constitution after the Articles, was directly unconstitutional and downright authoritarian according to the Articles.  The men of the Constitutional Convention blatantly disregarded their constitutional mandate in their having replaced the Articles without constitutional consensus and consent, that is to say it was a coup (many of the revolutionary soldiers didn’t take this coup lightly and continued the revolutionary war through such acts as Shay’s Rebellion, which was violently put down by the very Federal military that the Anti-Federalists warned about).

But worse still, the Constitution ended up being a complete betrayal of the Declaration which set out the principles that justified a revolution in the first place. As Howard Schartz put it:

“The Declaration itself, by contrast, never envisioned a Federal government at all. Ironically, then, if one wants to see the political philosophy of the United States in the Declaration of Independence, one should theoretically be against any form of federal government and not just for a particular interpretation of its limited powers.”
(Liberty In America’s Founding Moment, Kindle Locations 5375-5378)

It does seem that the contradiction bothered Dickinson. But he wasn’t a contrarian by nature, much less a rabblerouser. Once it was determined a new constitution was going to be passed, he sought the best compromise he saw as possible, although on principle he still refused to show consent by being a signatory. As for Jefferson, whether or not he ever thought the Constitution was a betrayal of the Declaration, he assumed any constitution was an imperfect document and that no constitution would or should last beyond his own generation.

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Letters from a Farmer
Letter IX

No free people ever existed, or can ever exist, without keeping, to use a common, but strong expression, “the purse strings,” in their own hands. Where this is the case, they have a constitutional check upon the administration, which may thereby be brought into order without violence: But where such a power is not lodged in the people, oppression proceeds uncontrolled in its career, till the governed, transported into rage, seek redress in the midst of blood and confusion.

Letter II

Nevertheless I acknowledge the proceedings of the convention furnish my mind with many new and strong reasons, against a complete consolidation of the states. They tend to convince me, that it cannot be carried with propriety very far—that the convention have gone much farther in one respect than they found it practicable to go in another; that is, they propose to lodge in the general government very extensive powers—powers nearly, if not altogether, complete and unlimited, over the purse and the sword. But, in its organization, they furnish the strongest proof that the proper limbs, or parts of a government, to support and execute those powers on proper principles (or in which they can be safely lodged) cannot be formed. These powers must be lodged somewhere in every society; but then they should be lodged where the strength and guardians of the people are collected. They can be wielded, or safely used, in a free country only by an able executive and judiciary, a respectable senate, and a secure, full, and equal representation of the people. I think the principles I have premised or brought into view, are well founded—I think they will not be denied by any fair reasoner. It is in connection with these, and other solid principles, we are to examine the constitution. It is not a few democratic phrases, or a few well formed features, that will prove its merits; or a few small omissions that will produce its rejection among men of sense; they will inquire what are the essential powers in a community, and what are nominal ones; where and how the essential powers shall be lodged to secure government, and to secure true liberty.

Letter III

When I recollect how lately congress, conventions, legislatures, and people contended in the cause of liberty, and carefully weighed the importance of taxation, I can scarcely believe we are serious in proposing to vest the powers of laying and collecting internal taxes in a government so imperfectly organized for such purposes. Should the United States be taxed by a house of representatives of two hundred members, which would be about fifteen members for Connecticut, twenty-five for Massachusetts, etc., still the middle and lower classes of people could have no great share, in fact, in taxation. I am aware it is said, that the representation proposed by the new constitution is sufficiently numerous; it may be for many purposes; but to suppose that this branch is sufficiently numerous to guard the rights of the people in the administration of the government, in which the purse and sword are placed, seems to argue that we have forgotten what the true meaning of representation is. I am sensible also, that it is said that congress will not attempt to lay and collect internal taxes; that it is necessary for them to have the power, though it cannot probably be exercised. I admit that it is not probable that any prudent congress will attempt to lay and collect internal taxes, especially direct taxes: but this only proves that the power would be improperly lodged in congress, and that it might be abused by imprudent and designing men.

Letter XVII

It is said, that as the federal head must make peace and war, and provide for the common defense, it ought to possess all powers necessary to that end: that powers unlimited, as to the purse and sword, to raise men and monies, and form the militia, are necessary[168] to that end; and, therefore, the federal head ought to possess them. This reasoning is far more specious than solid: it is necessary that these powers so exist in the body politic, as to be called into exercise whenever necessary for the public safety; but it is by no means true, that the man, or congress of men, whose duty it more immediately is to provide for the common defense, ought to possess them without limitation. But clear it is, that if such men, or congress, be not in a situation to hold them without danger to liberty, he or they ought not to possess them. It has long been thought to be a well-founded position, that the purse and sword ought not to be placed in the same hands in a free government. Our wise ancestors have carefully separated them—placed the sword in the hands of their king, even under considerable limitations, and the purse in the hands of the commons alone: yet the king makes peace and war, and it is his duty to provide for the common defense of the nation. This authority at least goes thus far—that a nation, well versed in the science of government, does not conceive it to be necessary or expedient for the man entrusted with the common defense and general tranquility, to possess unlimitedly the powers in question, or even in any considerable degree.

Basic Income: Basic Solutions for Basic Problems

The contemporary tendency in our society is to base our distribution on scarcity, which has vanished, and to compress our abundance into the overfed mouths of the middle and upper classes until they gag with superfluity. If democracy is to have breadth of meaning, it is necessary to adjust this inequity. It is not only moral, but it is also intelligent. We are wasting and degrading human life by clinging to archaic thinking.

The curse of poverty has no justification in our age. It is socially as cruel and blind as the practice of cannibalism at the dawn of civilization, when men ate each other because they had not yet learned to take food from the soil or to consume the abundant animal life around them. The time has come for us to civilize ourselves by the total, direct and immediate abolition of poverty.

~ Martin Luther King Jr.

A basic income is an interesting proposition. For one, it is a fundamentally American idea.

In the form of a citizen’s dividend, it goes back to Thomas Paine through his recognition of the significance of the loss of the Commons to the average person. The founders understood the value of land and having access to it, and they realized it was upon land that economies and lives were built. The early government lacked an income tax for the reason the federal government was able to gain so much money from the sale and taxation of land. Paine’s insight was that financial gain from public resources, especially when given away and privatized, should be shared to some minimal degree with the citizens that the government constitutionally represents.

Later American thinkers such as the 19th century Henry George had related ideas. Like Paine, he supported free markets and the private use of land. Also, like Paine, he saw land taxes as a way of dealing with the social problems related to the loss of access to land and its value.

All wealth originates from land. The reason for this is because everything procured and made comes from natural resources, including human lives and communities (a close, entangled relationship existing between natural capital, economic capital, and social capital). All natural resources were public before they were private. All private gains made from natural resources is at least in part wealth removed not just from the public domain but also from future generations. This a touchy issue for Americans, as our country was founded on the notion of consent of the governed, which was understood by the founders to mean that one generation of citizens shouldn’t be allowed to make decisions for and force costs upon future generations of citizens. It’s the worst form of externalization, for those future generations don’t necessarily even get any of the benefits for what they end up paying.

Americans, in particular, have ignored these realities. We could do so, for in the early centuries of our country, Americans could fool themselves into thinking that land and natural resources were practically infinite. The government’s giving away of the Commons for free or below-market value seemed like a necessary incentive for growth, not a theft from the public good. In recent generations, this privatization of gains and externalization or rather socialization of costs has become more difficult to ignore.

The implementation of a basic income is a way of evening out of the playing field that has, through past political policies (along with plutocratic maneuverings), been intentionally or unintentionally made uneven. A basic income doesn’t eliminate the faux meritocracy and rigid socioeconomic hierarchy, but it does lessen the sting of the harshest consequences. The challenge posed becomes an ever more present problem as increases are seen with the mechanization of jobs and the related rates of unemployment and underemployment. Average wages have been stagnating, median wages have been decreasing, buying power for basic goods has taken a hit, economic mobility has fallen, the middle class is shrinking, economic inequality is growing, and on and on. An entire permanent underclass is forming in this new economy.

One solution made popular came from the Progressive Era. Franklin Delano Roosevelt proposed everyone had the right to work, with government as the employer of last resort. This was understandable during a time of growing industrialization. It makes less sense under present conditions. Neither the job market or welfare is keeping up with the economic problems facing so many Americans. If real work isn’t available, creating pointless busy work doesn’t seem all that productive or inspiring of a solution, not to argue that public service can’t be a worthy form of work.

The point is: What end is work supposed to serve, if and when it no longer serves a market purpose? Real work or not, the government as an employer of last could end up being more expensive than present welfare and almost certainly would be more expensive than a basic income. How much would be willing to pay for employment for its own sake?

This line of thought could explain why a basic income has gained support from across the political spectrum. Even many libertarians are getting on board, as they see it as an attractive and viable alternative to a growing welfare state and the bureaucracy that goes along with it. Also, many people in general see as a failure such things as the call for raising the minimum wage, either a failure on practical grounds or a failure of imagination. A minimum wage just shifts the costs around, but it doesn’t alter the fundamental conditions and solve the fundamental problem. Sometimes shifting costs around is a necessary evil, as someone has to pay the costs (both financial and social), and at least the minimum wage is an acknowledgement of the problem itself, but maybe we should look to the systemic causes that go beyond any particular segment of the economy, even if one thinks raising the minimum wage is a partial or temporary solution. Basic income can exist with or without a minimum wage, for if the basic income is high enough a minimum wage simply becomes irrelevant and so would become useless as a political football.

A basic income obviously goes much further than present mainstream solutions. It turns a probing eye toward how public resources get allocated in the first place. It pushes the debate back to first principles and it questions upon what basis should our economy be built (not just the basis of politics and markets, but also that of the social values and moral vision). Also, it puts public costs and benefits squarely in the realm of public decisions to be made, not shifting the responsibility to private employers. A basic income could be designed in many ways, but it doesn’t even require an increase of taxes or any other form of altering the cost equation in the private sphere. It could be fully financed either through a redirecting of present welfare funds or through ensuring the economic value of natural resources is used toward this public good (or a combination of the two). I’m sure that diverse other funding possibilities are available as well.

As many realize, our present economic situation isn’t stable or necessarily even sustainable. We too often forget that this arrangement of capitalist employment is only a few centuries old, feudalism having had just come to an end as the US was being founded (and slavery extending feudal-like conditions well into the capitalist era). Traditional forms of economics existed for millennia prior to modern economics. Even within recent centuries, capitalism has changed drastically. Further changes are inevitable. We will have to deal with this, one way or another. The loss of jobs through better technology and more efficient markets could be seen as a sad fate, but it could also be seen as an opportunity to build a new kind of society.

Anyway, there is never a lack of work that could be done. Most of the work people already do is unofficial and unpaid, from raising children to community-building, from church activities to volunteerism, along with endless other wanted and unwanted activities that whittle away one’s time. Having more freedom and leisure could mean more time spent with family, community, and church; more time growing fresh fruits and vegetables and cooking healthy meals; more time building social capital, participating in democracy, and implementing social innovations; even more time to seek education and training to find better and more satisfying employment.

The problem for Americans has never been laziness. If anything, we’ve been obsessed with work to an unhealthy degree. America is the land of the Protestant work ethic. The question is how do we turn this drive to work toward ends that are economically sustainable, socially beneficial, personally satisfying, and politically liberating. How do we increase opportunities and access for people to have better lives, for themselves, their families, and their communities? Even during this time of increasing unemployment/underemployment and economic inequality, the economy is growing. The problem is obviously not a lack of resources and productivity. Rather, it is an issue of what kind of society we want to live in, not just for some of us but for all of us.

Don’t forget the alternative. We could always choose to live in a society with a mass population of a permanent underclass. Instead of something like a basic income, we could have increasing rates of poverty, welfare, ghettoization, crime, gangs, black markets, and imprisonment. That is the choice we are making at present by default. There is no indication that these problems are going to inevitably lessen through natural forces, market mechanisms, or somehow otherwise solve themselves.

Whether or not we do so consciously and intentionally, we are always making choices. Changing conditions means both new problems and new opportunities, and hence new potential choices.

* * * *

Related previous posts:

Bullshit Jobs

Governing Under the Influence

Our Bleak Future: Robots and Mass Incarceration

Worthless Non-Workers

Whose Work Counts? Who Gets Counted?

Working Hard, But For What?

Work Ethic: Denomination, Region, Ethnicity

No, The Poor Aren’t Undeserving Moral Reprobates

Structural Racism and Personal Responsibility

To Be Poor, To Be Black, To Be Poor and Black

Where Liberty and Freedom Converge

Every Freedom Comes At A Cost of Freedom

The Cultural Determinants of a Voluntary Society

Ask A Cow What It Is To Be Free

Neoliberalism: Dream & Reality

A Sign of Decline?

Morality-Punishment Link

Earthbound Capitalism and the Frontiers of Space

To Put the Rat Back in the Rat Park

Rationalizing the Rat Race, Imagining the Rat Park

The Desperate Acting Desperately

It’s All Your Fault, You Fat Loser!

Ideological Realism & Scarcity of Imagination

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Relevant articles:

Mincome: A Guaranteed Income for All Americans

However, in his book, author Charles Murray concedes that a mincome-like plan may not be realistic… yet. “I began this thought experiment by asking you to ignore that the Plan was politically impossible today,” he wrote. “I end proposing that something like the Plan is politically inevitable — not next year, but sometime.”

Guaranteed Annual Income – Wikipedia, the free encyclopedia

Guaranteed minimum income – Wikipedia, the free encyclopedia

Mincome – Wikipedia, the free encyclopedia

Basic income – Wikipedia, the free encyclopedia

Global basic income – Wikipedia, the free encyclopedia

List of basic income models – Wikipedia, the free encyclopedia

Category:Basic income by country and region – Wikipedia, the free encyclopedia

Citizen’s dividend – Wikipedia, the free encyclopedia

Asset-based egalitarianism – Wikipedia, the free encyclopedia

Agrarian Justice – Wikipedia, the free encyclopedia

Geolibertarianism – Wikipedia, the free encyclopedia

Georgism – Wikipedia, the free encyclopedia

Land value tax – Wikipedia, the free encyclopedia

Rent-seeking – Wikipedia, the free encyclopedia

Value capture – Wikipedia, the free encyclopedia

Reserve army of labour – Wikipedia, the free encyclopedia

Economic democracy – Wikipedia, the free encyclopedia

Four Freedoms – Wikipedia, the free encyclopedia

Right to an adequate standard of living – Wikipedia, the free encyclopedia

Second Bill of Rights – Wikipedia, the free encyclopedia

Why We Need Movement Of Free People

Thomas Paine (1737-1809) and Thomas Spence (1750-1814) on land ownership, land taxes and the provision of citizens’ dividend

Debate Argument: Georgism Should be Implemented in the United States | Debate.org

Martin Luther King Jr. Where do we go from here

Martin Luther King’s Case for a Guaranteed Basic Income

Martin Luther King’s Economic Dream: A Guaranteed Income for All Americans

Remembering Martin Luther King, Jr.’s Solution to Poverty

MLK’s Other Dream: Economic Justice and a Guaranteed Annual Income

Four ways Martin Luther King Jr. wanted to battle inequality

Guaranteed income’s moment in the sun | Remapping Debate

Should the government pay you to be alive? – The Boston Globe

A Brief History of Basic Income Ideas

15 quotes that show Basic Income is the way forward

Wealth and Want: Citizen Dividends

EmbraceUnity » The Basic Income is Dead

Negative Income Tax: How does it differ from basic income?

Universal Basic Income versus Unemployment Insurance- Working Papers – St. Louis Fed

Unconditional basic income + flat income tax = effectively progressive income tax

Universal Basic Income as the Social Vaccine of the 21st Century

The Basic Affordability of Basic Income

EconoMonitor : Ed Dolan’s Econ Blog » The Economic Case for a Universal Basic Income (Part 1 of a series)

EconoMonitor : Ed Dolan’s Econ Blog » Could We Afford a Universal Basic Income? (Part 2 of a Series)

EconoMonitor : Ed Dolan’s Econ Blog » A Universal Basic Income: Conservative, Progressive, and Libertarian Perspectives (Part 3 of a Series)

Funding Universal Basic Income by Creating Money, Not Taxes

The Pragmatic Case for a Universal Basic Income

Ten Reasons to Support Basic Income

Three Trends That Will Create Demand for an Unconditional Basic Income

If We No Longer Force People to Work to Meet Their Basic Needs, Won’t They Stop Working?

it’s all one thing: Four problems with work requirements for Basic Income

The Case For A Basic Income Guarantee

Krugman’s Argument In Favor Of A Universal Basic Income

Universal Basic Income gets mentioned to John Stossel on Fox News

Why the Tech Elite Is Getting Behind Universal Basic Income | VICE | United States

Vice on Universal Basic Income: A Response

Interview: Neil Jacobstein Discusses Future of Jobs, Universal Basic Income and the Ethical Dangers of AI – Singularity HUB

Afraid of Robots Taking Your Job? You Should Be

How to pay for such an outlandish idea? Tax the rich, particularly the truly rich. Our current tax brackets often fail to distinguish between someone who makes, say, $500,000 and $5 million. But this difference matters, as does the difference between $5 million and $50 million. To simplify things, let the Google and Nike and Narrative Sciences executives eliminate all the jobs they please, as long as their taxes support a guaranteed minimum income.

The Future Threat to Middle America No One Is Talking About

Why trucking matters: The country was built on transportation. According to the Bureau of Labor Statistics, 1.6 million long-haul truckers and 2.8 million truckers are in the workforce. The American Trucking Association estimates an additional 5.2 million people are employed by the trucking industry who aren’t drivers. That includes operations managers, sales personnel, repair staff and instructors.

Trucking creates an ecosystem of towns and businesses fed by the steady flow of human drivers who stop along their route for basic necessities. Scott Santens, a blogger about basic income and automation, wrote on Medium:

“Those working in these restaurants and motels along truck-driving routes are also consumers within their own local economies. Think about what a server spends her paycheck and tips on in her own community, and what a motel maid spends from her earnings into the same community. That spending creates other paychecks in turn. So now we’re not only talking about millions more who depend on those who depend on truck drivers, but we’re also talking about entire small town communities full of people who depend on all of the above in more rural areas. With any amount of reduced consumer spending, these local economies will shrink.”

Those truckers are like nutrients moving along the roots and outer branches of the middle American tree — and when robots don’t need to pull over to spend their money at rest stops, each of those secondary services loses its viability. According to independent research reports as recent as May, the truck stop and convenience store business alone is a $450 billion industry.

If self-driving trucks take over the roads, that puts 70% of the nation’s freight shipping in the hands of capable robots. That is, if the trucks of the future are all they’re cracked up to be.

Will self-driving trucks actually take over the industry? Detractors say the change toward automation will happen so gradually that the industry won’t be irreparably disrupted. Bloomberg economy columnist Megan McArdle argues:

“Overall, I think Santens is right that eventually, we’ll solve the problems and self-driving trucks will displace a lot of drivers. That will be good news, because truck accidents are extremely deadly. But I expect the number of jobs lost will be smaller than he thinks, and the change will be slower. So while eventually a set of former drivers will have to figure out what to do with their freed time, that’s likely to be a problem for the next generation of truckers, not this one.”

Martin Ford, author of a recent book on automation called Rise of the Robots, told Mic a number of other factors will prevent self-driving trucks from taking over. To start: They’re extraordinarily heavy objects to be moving around populated roads without drivers, and that any computer system is likely to have its security issues. “The technology might be there, but it’s going to take some time,” he said.

Another argument against the rapid loss of jobs is the concept that, like dozens of industrial transformations in human history, this change will create other kinds of jobs, like maintaining the automated trucks.

But Santens disagrees. “When we mechanized farming, we transitioned to services — but now we’ve hit this part where instead of automating muscle power, we’re automating brain power,” Santens told Mic. “Suddenly, all this work we’ve been shifted to is automatable. There’s a belief there will be all these new jobs. And yes, there will be some, but not the millions on millions that will be lost.”

Trucking in the U.S. was a stable, reliable source of income for millions of Americans. But now, as the sector explodes with new job opportunities in the short term, driver pay is also at a decadelong low.

But self-driving trucks are arriving soon. Even if, as McArdle argues, this is far enough off in the future that only the next generation of truckers will be affected, we’ll need to find many of those drivers new job opportunities. Jobs that can’t be immediately automated — a classification of career that’s becoming smaller and smaller in scope.

Basic income paid to the poor can transform lives

The main conclusion is that a basic income can be transformative. It had four effects, most accentuated by the presence of the collective body.

First, it had strong welfare, or “capability”, effects. There were improvements in child nutrition, child and adult health, schooling attendance and performance, sanitation, economic activity and earned incomes, and the socio-economic status of women, the elderly and the disabled.

Second, it had strong equity effects. It resulted in bigger improvements for scheduled caste and tribal households, and for all vulnerable groups, notably those with disabilities and frailties. This was partly because the basic income was paid to each individual, strengthening their bargaining position in the household and community.

Third, it had growth effects. Contrary to what sceptics predicted (including Sonia Gandhi), the basic incomes resulted in more economic activity and work.

Conventional labour statistics would have picked that up inadequately. There was a big increase in secondary economic activities, as well as a shift from casual wage labour to own-account farming and small-scale business. Growth in village economies is often ignored. It should not be.

Fourth, it had emancipatory effects. These are unappreciated by orthodox development thinkers. The poor’s liberty has no value. But the basic income resulted in some families buying themselves out of debt bondage, others paying down exorbitant debts incurring horrendous interest rates. For many, it provided liquidity with which to respond to shocks and hazards. In effect, the basic income responded to the fact that in such villages money is a scarce commodity, and as such that has driven up its price, locking most in a perpetual cycle of debt and deprivation.

A bipartisan proposal to make a universal basic income a reality in America

Universal Basic Income: Something We Can All Agree on?

A Universal Basic Income Is The Bipartisan Solution To Poverty We’ve Been Waiting For

But would it actually work? The evidence from actual experiments is limited, though it’s more positive than not. A pilot in the 1970s in Manitoba, Canada, showed that a “Mincome” not only ended poverty but also reduced hospital visits and raised high-school completion rates. There seemed to be a community-affirming effect, which showed itself in people making use of free public services more responsibly.

Meanwhile, there were eight “negative income tax” trials in the U.S. in the ’70s, where people received payments and the government clawed back most of it in taxes based on your other income. The results for those trials was more mixed. They reduced poverty, but people also worked slightly less than normal. To some, this is the major drawback of basic income: it could make people lazier than they would otherwise be. That would certainly be a problem, though it’s questionable whether, in the future, there will be as much employment anyway. The age of robots and artificial intelligence seems likely to hollow out many jobs, perhaps changing how we view notions of laziness and productivity altogether.

Experiments outside the U.S. have been more encouraging. One in Namibia cut poverty from 76% to 37%, increased non-subsidized incomes, raised education and health standards, and cut crime levels. Another involving 6,000 people in India paid people $7 month—about a third of subsistence levels. It, too, proved successful.

“The important thing is to create a floor on which people can start building some security. If the economic situation allows, you can gradually increase the income to where it meets subsistence,” says Guy Standing, a professor of development studies at the School of Oriental and African Studies, in London, who was involved with the pilot. “Even that modest amount had incredible effects on people’s savings, economic status, health, in children going to school, in the acquisition of items like school shoes, so people felt in control of their lives. The amount of work people were doing increased as well.”

Given the gridlock in Congress, it’s unlikely we’ll see basic income here for a while. Though the idea has supporters in both left and right-leaning think-tanks, it’s doubtful actual politicians could agree to redesign much of the federal government if they can’t agree on much else. But the idea could take off in poorer countries that have more of a blank slate and suffer from less polarization. Perhaps we’ll re-import the concept one day once the developing world has perfected it?

From basic income to social dividends: sharing the value of common resources

Rethinking basic income in a sharing society

This model of economic sharing recognizes that all citizens have a right to income from the commons—such as land and other resources that are either inherited or co-created by society. Although this approach is rarely part of the popular discourse on implementing a citizen’s income scheme, the idea can be traced back to the work of the American revolutionary Thomas Paine, who stated that “the earth, in its natural, cultivated state was, and ever would have continued to be, the common property of the human race.”

As explained by Peter Barnes in his book With Liberty and Dividends for All, the majority of the wealth that’s inherited or created in society is captured and extracted by the rich, rather than distributed fairly among citizens. Meanwhile, the damaging social and environmental costs of this process are largely borne by the public or the biosphere. The simple idea at the heart of most proposals for a social dividend is therefore to charge user fees on shared resources, which can then be distributed to all citizens as a basic right.

Although an agency would initially have to be set up by governments to administer the program, it would operate independently of the private and public sector as a ‘commons trust’ that could conceivably manage a range of shared resources—from land, fossil fuels and atmospheric carbon storage, to the electromagnetic spectrum and intellectual property. According to calculations by Barnes based only on a specific selection of shared assets, the program could provide every American citizen with as much as $5,000 a year.

The real advantage of a social dividend from resource rents is that it would facilitate, rather than impede, the creation of a more equal society that embodies the ethic and practice of sharing. Unlike the standard basic income proposal, this alternative approach would not compete with existing welfare budgets, and it would therefore complement solidarity-based systems of social protection.

The social dividend also acknowledges that all citizens are entitled to a fair share of co-owned wealth and resources, which is a commonsense proposal with the potential to dramatically reform economic systems and enhance social cohesion. Since the value of common resources would be shared more equitably, social dividends present an important systemic solution to poverty that can counterbalance the injustice of a global economic model in which wealth predominantly flows to the richest one per cent of the world’s population.

In line with some of the common arguments made in favor of a basic income, social dividends would also increase our sense of personal freedom, since people would no longer feel forced to do menial or difficult jobs that they would otherwise undertake reluctantly or for reasons of survival. This would leave them free to devote more time to creative, cultural and caring pursuits, sparking a much-needed debate on the nature and purpose of work at a time when the escalating environmental crisis necessitates a radically new economic model that is no longer predicated on consumption-driven economic growth.

Furthermore, social dividends could have a transformative impact on individuals and communities, which could pave the way for more extensive changes across society. The additional income received by individuals could help sustain the indispensable unpaid activities that take place in the core economy by giving people the freedom to act on their inner desires to give or be of real service to others. This includes raising children and caring for the elderly, maintaining community relationships and mutual support networks, and participating in voluntary action and civil society organizations.

According to Edgar Cahn, the core economy produces “love and caring, coming to each other’s rescue, democracy and social justice”, which is why there is a clear imperative to rebuild and strengthen this fundamental aspect of society that is increasingly under assault. The profound relationship between genuine compassion and the creation of a more equal world was also vividly expressed by Martin Luther King, who once declared that “Standing beside love is always justice.”

Embodied in these insights is the hope that strengthening the bonds of love, empathy and reciprocity within communities could spark a cultural shift in favor of social justice, and that this could eventually find expression in democratic institutions and policy debates. By helping to resuscitate a rapidly diminishing core economy, a basic income derived from the value of collectively owned resources could therefore empower citizens to take a crucial first step in the co-creation of a truly sharing society.

The Aquarian Agrarian: Conservatives for Georgism and a Social Market Economy

The Conservative Case for a Guaranteed Basic Income

Why reform conservatives should embrace a universal basic income

While Ryan’s expansion of the EITC is a good idea, it can’t address the bargaining power issue because getting the EITC is dependent on getting a job. So, like much of the rest of America’s social safety net, it can’t be used as leverage against an employer. Only a non-market wage of some sort can. By providing a little financial breathing room, a UBI would combat labor market slack and let more workers say “no” to jobs that don’t come with decent pay and sane schedules.

Unfortunately, this is also what makes reformocons nervous about a UBI, since they rightly recognize the profound human damage that’s done — to both individuals and communities — when people detach from the work force. Jim Manzi and Pascal-Emmanuel Gobry have pointed to U.S. experiments with a negative income tax (NTI) — a close policy cousin to the UBI — that showed a drop in work effort of roughly 13 percent. However, the reduction wasn’t from people giving up on finding work entirely, but from people simply waiting longer during spells before taking another job — a crucial distinction. Most of them were mothers who chose to spend more time caring for their children, or young people who spent more time accumulating an education. A similar experiment in Canada around the same time found the same result. People weren’t “listing away in socially destructive idleness” as Gobry put it; they were simply contributing to the social fabric in ways not recognized by the market.

And even when it’s not parents or teenagers waiting longer to get a job, these would-be workers could very well be holding out because they’re waiting for a better deal — enforcing exactly the kind of market discipline on employers that results in better wages and treatment. All unemployment is not created equal, and reformocons should not fear the UBI on this score.

In fact, reform conservatives should embrace the UBI’s modest reductions of work effort. One of the reformocons’ primary concerns is for the “mediating institutions” of civil society; the families, neighborhoods, churches, community groups, charities and so on that make up the fabric of American social life. Perceptive conservatives like Patrick Deneen have long realized that it’s not just the state — reformocons’ typical bête noire — that threatens civil society, but the market as well. Ross Douthat, another reformocon, recently worried that “both capitalism and the welfare state tend to weaken forms of solidarity that give meaning to life for many people, while offering nothing but money in their place.”

When we are dependent solely on the job market for our income, a tyranny of need sets in: We must go where the job market dictates, when it dictates, and do as its vagaries determine. That’s why the closing of a factory can decimate a town, and why a layoff can ruin a marriage. The time and energy we pour into work is time and energy we cannot give to our children, our spouses, our community gardens, our church bible studies, our hobbies and talents, or to our bowling leagues. The job market can poison and rend the social fabric as easily as bolster it. But by rolling back the ubiquity of the market, while minimizing the government’s bureaucratic footprint (it requires minimal administrative overhead to send people checks), a UBI would thread the needle between the market and the state.

Pethokoukis has also worried that we’re headed toward a future where automation really does begin reducing the supply of jobs, or where the economy’s ability to deliver more corporate profits while employing fewer people becomes permanent. In that case, a UBI would also shift us away from the current situation, where total dependency on the job market means the most vulnerable Americans are the last to enjoy the benefits of increased productivity, but the first ones to be squeezed out of the labor force when another threshold of efficiency is reached. If the economy is learning to do more with less, then the ideal would be a world where attachment to the labor force remains high, but everyone just works fewer hours — essentially the opposite of what we have now. By equitably distributing some of those productivity gains, a UBI would make such a world a bit more likely.

By giving all Americans at least a little income that is not dependent on the whims of the market, a UBI would allow workers more pro-active control over when and why they do or do not engage with the job market. It would open up more time and space for people to participate in those mediating institutions, becoming a de facto investment in the health of America’s civil society. In fact, the investment could very well be literal; any UBI — but especially one financed by tax deduction closures and military spending cuts — would be a massive distribution of income down the income ladder, and most social data suggests the poor and working class contribute more of their income to their churches, communities, and local charities than do the rich.

Poverty: The argument for a basic income (Opinion) – CNN.com

This tidy, egalitarian concept isn’t new, and its support isn’t limited to the radical political left. Dig through the Rev. Martin Luther King Jr.’s little discussed book, “Where Do We Go From Here: Chaos or Community,” published in 1967, the year before his assassination, and you’ll find an endorsement: “I am now convinced that the simplest approach will prove to be the most effective. The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” Milton Friedman, the Nobel-prize winning economist who was an adviser to conservatives Ronald Reagan and Margaret Thatcher, also supported a variation of the idea.

The basic income continues to have a diverse set of supporters — left, right and libertarian. They like the concept for different reasons, said Matt Bruenig, a writer and policy analyst for Demos. Those on the left tend to like it because it’s egalitarian. It helps give everyone an equal (or more equal) shot at success in our capitalist society. Some libertarians and right-wingers support the concept, meanwhile, because they see it as a way to whittle away at government bureaucracy. Some would have the basic income replace many existing social safety net programs. There’s also a conservative philosophy underlying all of this: Give people money and they, not the government, know best how to spend it. They know what they need. The feds do not.

Basic Income: From Paine to MLK; a solution to Welfare and Poverty?

Three Problems for Libertarian Supporters of a Basic Income

August 2014: The Basic Income and the Welfare State

Libertarians Debate Basic Income Guarantee

It might not be ideal—certainly “no libertarian would wish for a BIG as an addition to the currently existing welfare state,” writes Zwolinski. “But what about as a replacement for it?” He argues that the BIG would amount to less bureaucracy, less expense, “less rent-seeking”, and less paternalism.

Will a guaranteed basic income replace welfare? | Deseret News National

One of the strangest aspects of basic income proposals, which Matthews handles at length, is that there is substantial support for it from both ideological extremes.

On the conservative side, for example, libertarian political philosopher Matt Zwolinski joined the likes of economists Milton Friedman and John Kenneth Galbraith when he argued last year that such a policy could potentially simplify the current federal bureaucracy, lower costs and provide greater protections to individual privacy.

“In Libertarian Utopia, we might not have any welfare state all, no matter how limited or efficient,” he argued. But, he continued, “the question is not whether a GBI is a perfectly libertarian policy in every way, but whether it is more libertarian than the other realistically available policy alternatives.”

On the liberal side, many have noted that Martin Luther King Jr. advocated for similar measures, as did philosopher Bertrand Russell. “In a GBI (guaranteed basic income) world, an employer has to make work somehow appealing enough to get employees even though everyone’s guaranteed a basic minimum whether they work or not,” Matthew Yglesias wrote in Slate in 2013 (Yglesias is now an editor at Vox).

“But that ‘appealing’ factor could be high wages, could be valuable skills and training, could just be a pleasant work atmosphere,” Yglesias added. “Or (it) could be some combination of the three.”

Though there have been proposals in the past for some form of a basic income, most notably from the Nixon administration, most pundits, including Matthews, aren’t optimistic that such a major change to the American welfare system could come any time soon. Still, they argue, it’s at least worth a look.

Basic minimum income is a BRILLIANT idea. Small problem: it doesn’t work as planned

It should be fairly obvious that the other group of people who support this idea, us over on the very free market right, don’t necessarily support it for the same reasons. Yet it is true that this is where the other focus of support is. My own support comes from the incentives problem.

I’m pretty much convinced that incentives matter to people – there would be little to be said about economics if this were not true. What you get, after tax and benefits withdrawal for your labour, is obviously an incentive that affects your willingness to labour. As the Budget points out every year (it’s one of those things it is supposed to detail each year) there’s several million people who face marginal tax and benefit rates of 70 per cent or more. There’s even a couple of hundred thousand over 100 per cent.

By earning an extra pound or ten in a week they actually end up with less money in their pockets and have also had to work more to get less. You don’t have to entirely buy into a strict reading of Art Laffer’s famous Curve to believe that this is going to reduce the amount of extra work that these people are going to be willing to do. They’re thus stuck in a poverty trap; they work more and get less, therefore they won’t work harder and get over that hump into better territory.

Please note the implication of this: yes, us free market right w(h)ingers really do think that hugely high marginal tax rates affect the poor just as they do the rich and that therefore we shouldn’t have them.

So, from this point of view, just give everyone some amount of money per week, untaxed and not withdrawn as incomes rise and those poor will face hugely lower marginal tax rates. It’ll thus leave room for the incentives for people to slowly improve their situations through extra work, better work, experience, education and so on. We have, we hope, solved the poverty trap caused by the current tax and welfare system.

This is largely the argument that Charles Murray (yes, he of the Bell Curve) used in his book on the subject, “In Our Hands”. The collision between tax rates and benefit withdrawal rates is such that we’d be better off just giving everyone some cash and letting them get on with it. If that means they go to the beach all their lives so what? It’ll be a minority that do and we’ll all still be better off.

The problem really boils down to us asking, what is the definition of “basic” that we’re using here? There’s some who want to call for a universal income: something like the UK’s living wage of £15,000 a year or so. Without taxing the economy into oblivion, that’s just not going to happen. Murray’s worked out that the US, a much richer place, could afford about $10,000 a year per adult. But do note that that replaces everything else: the entire welfare state, including old age pensions (or Social Security as the colonials call it) disappears into that one $10,000 per adult payment.

The Green Party is talking about £75 a week or so, which is pretty minimalist for even the word “basic”. The assumption seems to be that we’ll all eat off our own potato patches. Despite how that they’re not very good at explaining where the money will come from, the answer is obvious: it’s folding large pieces of that welfare state into making that payment.

Dillow and I seem to think that something around the level of the pension guarantee could be done: £130 a week. But at that point you really have stripped absolutely everything out of the welfare state to pay for it. Pensions, tax credits, personal allowances for tax and so on all disappear into the gaping financial maw of said universal basic income. And we think that all would be better off in such a system.

Money for nothing: Mincome experiment could pay dividends 40 years on | Al Jazeera America

For those on the left, basic income represents a chance to strengthen the social safety net and more evenly redistribute wealth, while some American libertarians view it as a way to cut back on bureaucracy and provide individuals with greater personal choice. There’s disagreement, however, on whether there would be accompanying tax hikes and whether other social programs would remain in place.

Karl Widerquist, an academic and vocal supporter of basic income, suggested its rising popularity in the U.S. springs from concern over income inequality spurred by the Great Recession. “It’s really incredible how much it’s grown so fast, and there’s no telling where it will go,” he said.

The Dauphin experiment, like four others in the United States around the same time, was an attempt to measure if providing extra money directly to residents below a certain household income would be effective social policy.

Dauphin was unique among those studies in that all residents of the municipality and surrounding area, with a population of about 10,000, were eligible to participate if they met the criteria.

For those who didn’t qualify for support under traditional welfare schemes, such as those for the elderly and the working poor, Mincome meant a significant increase in income. Low-wage earners had their incomes topped up.

Richardson, for instance, recalls collecting about 30 Canadian dollars some months. That’s the equivalent of about CA$145 today (US$133).

The experiment produced a trove of data, but the results were never released. After changes at the federal and provincial government levels, the program was shut down without a final report or any analysis.

Decades after the program ended, sociology professor Evelyn Forget dug up records from the period and found there were far-reaching benefits in the education and health sectors.

In a 2011 study she reported an 8.5 percent drop in hospital visits, a decrease in emergency room visits from car accidents and fewer recorded instances of domestic abuse. There was also a reduction in the number of people who sought treatment for mental health issues. And a greater proportion of high school students continued to the 12th grade.

As with U.S. experiments during the same period, there was no evidence that it led people to withdraw from the labor market, according to her research. “It’s surprising to find that it actually works, that people don’t quit their jobs,” said Forget, a University of Manitoba professor. “There’s this fear that if we have too much freedom, we might misuse it.”

What happens to kids when you give families a universal basic income? | JSTOR Daily

In a 2010 paper, a team of researchers looked at how the payments, which started in 1997, affected children. They determined that the payments increased the likelihood that kids would graduate from high school and reduced the chances that they would get involved in criminal activity. That was particularly true for the town’s poorest children. For those kids, an extra $4,000 in annual household income added up to an additional year of education and a 22 percent reduction in the chance of committing a minor crime at ages 16 or 17.

How does giving families money help kids? The researchers found at least part of the explanation seems to be that adults who received the payments were able to be more effective parents. They were less likely to commit crimes and more likely to know where their kids were and what they were doing. Children in families receiving the payments also reported a higher number of positive interactions with their mothers (though there was no statistically significant effect here when it came to fathers).

The authors suggest that getting a bit more money reduces stress and other mental health problems related to poverty. (Parents receiving the payments didn’t work any less, so the change was not about simply spending more time with their kids.) The fact that a simple transfer of money could produce this kind of change provides an interesting corrective to the frequent focus on supposedly deep-seated cultural differences to explain class differences among children.

Lessons from Mincome: How a Basic Income Would Improve Health

A Canadian City Once Eliminated Poverty And Nearly Everyone Forgot

Two years before the Harper government shut down its operations, the National Council of Welfare released a damning report criticizing how welfare rules are trapping people in poverty.

“Canada’s welfare system is a box with a tight lid. Those in need must essentially first become destitute before they qualify for temporary assistance,” said TD Bank’s former chief economist Don Drummond after the social agency’s report was released in 2010.

“But the record shows once you become destitute you tend to stay in that state. You have no means to absorb setbacks in income or unexpected costs. You can’t afford to move to where jobs might be or upgrade your skills.”

Former Conservative senator Hugh Segal is a longtime proponent of a guaranteed annual income policy. He believes the program could save provinces millions in social assistance spending on programs like welfare.

Instead of being forced through the welfare system, people’s eligibility would be assessed and reassessed with every income tax filing. Those who don’t make above the low-income cut-off in their area would be automatically topped up, similar to Mincome in Dauphin.

[ . . . ]

“I would think it’s fair to say ideologically, the present government would eye the notion that this is some ‘kooky left-wing scheme’ without addressing the fact that really strong social and economic conservatives like Milton Friedman argued in favour of a negative income tax,” he said.

In Canada, the idea of an universal basic income was first presented at a Progressive Conservative policy convention in October of 1969. Then-leader Robert Stanfield argued the idea would consolidate overlapping security programs and reduce bureaucracy.

Cenk Uygur on Tax Cuts for the Rich

Cenk Uygur has been slowly breaking into the mainstream for a while. He now has his own segment on Ratigan’s show.

It’s interesting that Cenk Uygur used to be a Republican. This makes obvious why he left the Republican party.

The question I wonder about is: What is the motivation for Republicans being for and Democrats being against tax cuts for the rich? Many like to argue that both parties are in the pocket of the wealthy elite. But if that were the case, Democrat politicians should support tax cuts for the rich as much as Republicans do.

TAX DAY TEA PARTY 2010

There are all kinds of real issues to worry about. Why do these people complain about paranoid conspiracies and absurd notions of socialism?

These are the same people who deny global warming science because they believe scientists are evil liars working for the liberal one world government. These are the same people who deny Darwinian science because they believe God created the world. Is it easier and more comforting to live one’s life according to baseless fantasies?

Hypocritical Critics of Government

Many Libertarians and Tea Party protesters like to claim that taxation is theft. The idea is that the Federal government does nothing to earn that money. It just takes our hard earned cash and then takes credit for redistributing the wealth. So, no value is added. This argument is so weak as to be laughable.

First, of course value is added. The Federal government adds the following values: oversight and regulation; services and goods provided or guaranteed (e.g., public roads, internet, public schools, state universities, utilities, military, police, emergency services, postal service, medicare, medicaid, disability, 40 hr work week, overtime, safe working conditions, child labor laws, abolition of slavery, Constitutional rights and freedoms, jury of your peers, etc); and on and on. Yes, the government redistributes wealth in doing all of this. So?

One response is that, no matter how good the benefits may seem, taxation is still theft.

One argument is that we have no choice in being taxed, we aren’t freely giving to the government. My response is that each of us is as free to leave the country as we are to leave our jobs. In some countries, people aren’t free to just leave, but that isn’t so in the United States. You can seek citizenship or asylum in another country. You can disappear into the wilderness and no IRS agent will track you down in the wilderness.

The other argument is that, even if we are free to give taxes or free to leave this society that is funded by taxes, the government still hasn’t earned the money it redistributes. Just because politicians provide services and goods that keep the public happy, it doesn’t mean politicians have the right to our money in the first place. Why not have a voluntary tax? To be honest, it’s as voluntary as your job. If you don’t pay your taxes, there are legal consequences. If you don’t show up for work, there are consequences as well. Did your employer earn your labor? No. We live in a society where we are forced to work or else be homeless, and the opportunities for self-employment are few and difficult (with most small businesses failing because our capitalist system favors big businesses).

Similar to the politician, what does the owner or CEO of an international corporation do to earn so far beyond the worker who actually makes things in the factory? Nothing tangible, for sure. Also, what does the international corporation do to earn the resources it takes from nature which took thousands or millions of years to form? Nothing. Like the politician, they just took it. Why has it been standard practice for both corporations to swindle land from the indigenous or else terrorize them into leaving? Didn’t the indigenous people earn those natural resources for having lived there for thousands of years?

Why is it that those who criticize taxation tend to do so in defense of capitalism and often even big business? If you think the actions of politicians is unfair, then to be fair you should also consider unfair the actions of business owners, CEOs and upper management. To be honest, it’s the workers who actually make things, who keep the economy going. In the past, prior to capitalism as we now know it, the person who made things was the typically same person who sold it and profited from it.

If government is theft, then capitalism is even greater theft. Politicians make relative little money as politicians, but business owners and CEOs make massive amounts of money. The only reason politicians do the bidding of corporations (i.e., owners and CEOs) is because politicians know they have highly profitable corporate jobs waiting for them (as lobbyists to encourage other politicians to further do the bidding of corporations).

So, there ya go. One can still criticize the government for not being perfectly fair, but if you don’t apply the same criticisms to capitalism you’re a hypocrite. Of course, many (specifically Libertarians) will gladly admit our capitalist system is imperfect and unfair, but they’ll make the unfounded claim that it’s not real capitalism, it’s not a free market. Well, it’s the only capitalism we’ve ever had. Yes, there has been an occasional experiment to implement a different capitalist system, but no such experiment has been implemented on the largescale and the experiments on the smallscale don’t tend to last long. If you’re going to defend capitalism based on an ideal, then it’s hypocritical to criticize those who defend our democratic government based on their own ideals.

I covered all the possibilities I could think of, but no doubt the pro-capitalist/anti-government types would have further arguments about why their idea/ideal is better than the ideas/ideals of everyone else.

Cantor Lying with a Straight Face

Here is a boring and stupid video. There isn’t much point in watching except it’s a representative example of Republican behavior (see commentary below).

Cantor, with a straight face, does nothing but lie and mislead. This is common behavior for Republicans because they know the facts don’t support their ideology and their own self-interest.

There are two other things about this video.

First, it sounds like he is talking down to a child. I’ve noticed that some Republicans talk this way when they’re trying to get a message to the voters. It sounds mean, but it seems like Republicans such as Cantor think their constituents are lacking in intelligence and have a child-like mentality.

Second, this video sounds like a campaign ad. I’m wondering why the mainstream media airs campaign ads for free. Why is it rare for the media to confront politicians about their lies and misinformation?

Basically, no useful facts are being shared in this video, no rational argument is being made, no insightful criticism is being offereed. It’s just typical GOP talking points.

Reagonomics & Tax Cuts for the Rich

Rich and defenders of the rich (who have an unfounded belief that one day they will be rich) love to argue for tax cuts for the rich. Afterall, they earned it. The people working in the factories didn’t earn it. The indigenous who were living on natural resources the rich took away didn’t earn it. The taxpayers (which excludes some of the wealthies US companies that pay no taxes at all) who bail out the rich didn’t earn it.

Who owns most of the wealth? The best way to determine this is to add all wealth and invested wealth. The only factor that should be excluded is the wealth invested in the houses people live in because it can’t easily be translated into tangible wealth and in this market many people lose their homes after investing lots of money into them. So, going by all wealth accept for homes, the top 1% own more wealth than the bottom 95%.

How do wealthy people get their wealth? Most wealthy people are born into and grow up with wealth. Most wealthy business owners received larged start-up money, inherited a business, or inherited other forms of wealth.

Another way of thinking about wealth is wealth disparity. Ever since Reagonomics, the wealth disparity has increased to the highest in the developed world.

http://counterpunch.org/pollin02222006.html

“At the simplest factual level, it is not accurate that Reagan’s tax policies were responsible for bringing inflation down, from an average rate of 8.2 per cent under Nixon, Ford and Carter, to 4.6 per cent under Reagan. The main force here was the stringent monetary policies imposed by then Federal Reserve Chair Paul Volcker. Volcker was appointed not by Reagan but by Jimmy Carter in 1979… Volcker did indeed break the back of persistent and rising inflation brought on primarily by the four-fold oil price increases in 1973-4 and again in 1979. But he achieved this at a very high cost… real wagesi.e — . the buying power of your dollars of wages — peaked in 1973, the period of high inflation. Average real wages fell sharply throughout the Reagan presidency. The average figure for those eight years, at $15.72 per hour (in 2005 dollars), was 7.6 per cent below the average hourly wage under Carter of $16.95, and 9.6 below the Nixon/Ford peak of $17.39.

…This decline in real wages, beginning in the late 1970s and accelerating sharply in the 1980s under Reagan, is also a crucial link in understanding why inflation did not rise up as unemployment fell in the 1990s, contrary to expectations of virtually every single economics textbook. The standard theory held that when unemployment gets too low, workers gain in bargaining strength. They then push up wages, and businesses pass along these additional costs in the prices they charge consumers. This means rising inflation. But beginning in the 1990s under Clinton, unemployment fell, to as low as 4.0 per cent in 2000, but inflation stayed low. What happened?

Former Federal Reserve Chair Alan Greenspan’s own answer to this question (as reported by Bob Woodward in Maestro, his book-length hagiography of Greenspan) was that U.S. workers had become increasingly “traumatized” in the 1990s, and as such did not feel sufficiently secure to attempt to bargain up wages even at low unemployment. …if one would have to pick the single most important turning point over the past 30 years in the treatment of U.S. workers, I would choose Ronald Reagan’s decision to summarily fire more than 11,000 air traffic controllers who, as members of PATCO, the air traffic controllers’ union, went on strike eight months into Reagan’s presidency, in August 1982. This early attack by Reagan was followed by eight years of relentless hostility to the organized working class.

But Reagan did not attack the organized working class only. More broadly, Reaganomics entailed a dramatic new framework for fiscal policy, the area in which Mr. Roberts was likely to have primarily involved as a Treasury official. Reagan’s fiscal program was fundamentally about tax cuts for the rich, a massive expansion in military spending, sharp reductions in social expenditures, and an acceptance-or better still, an embrace-of large-scale federal government fiscal deficits on these terms. All of this should have a familiar ring to those who have followed the course of economic policy under George W. Bush.

No doubt Mr. Roberts recalls President Reagan’s frequently recounted stories about “welfare queens” driving to pick up government checks in their Cadillacs. It was through repeating stories like this that Reagan was able to build support for an assault on even the minimal welfare state programs that had been operating prior to his taking office. It is no surprise that the individual poverty rate rose from 11.9 per cent under Carter to 14.1 per cent under Reagan. ..large-scale fiscal deficits create persistent pressure for a permanent contraction in social spending by the federal government… Remember the Reaganites, as with the Bush group, apparently experienced few qualms about throwing more money to the military while cutting taxes for the already overprivileged.”

Thom Hartmann: Government & Taxation

Thom Hartmann did these two interviews on the same day. They make for a perfect comparison of worldviews. Which person interviewed actually represents values of the average American? Which is speaking for the benefit of the struggling working class?