The sad reality and absurdity of our economic situation is on display in today’s New York Times. Two front-page stories, conveniently – thoughtfully? deliberately? – placed next to each other, present two sides of “the economy.”

First, because it’s higher on the page, is:

$3.4 Billion Profit at Goldman Revives Gilded Pay Packages

(Online title: With Big Profit, Goldman Sees Big Payday Ahead.)

Here are a few key sentences:

Goldman posted the richest quarterly profit in its 140-year history and, to the envy of its rivals, announced that it had earmarked $11.4 billion so far this year to compensate its workers.

At that rate, Goldman employees could, on average, earn roughly $770,000 each this year — or nearly what they did at the height of the boom.

Senior Goldman executives and bankers would be paid considerably more.

Second is:

In Recession, a Bleaker Path for Workers to Slog

(Online title: Part-Time Workers Mask Unemployment Woes)

A few key sentences:

In California and a handful of other states, one out of every five people who would like to be working full time is not now doing so.

It is a startling sign of the pain that the Great Recession is inflicting, and it is largely missed by the official, oft-repeated statistics on unemployment. The national unemployment rate has risen to 9.5 percent, the highest level in more than a quarter-century. Yet it still excludes all those who have given up looking for a job and those part-time workers who want to be working full time.

The complete articles are here and here.

The article on unemployment includes a link to a labor department data report:

U-6 Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached worker … 16.5 percent.

The complete table is here.

Income security for all – a guaranteed basic income for every adult citizen, say $1,000 a month – will ensure that all “marginally attached workers” can afford food and shelter, at least. Plus, people spending that money will stimulate economic growth from the bottom up by demanding goods and services. That would be by far the most direct, rapid, just, and democratic way to end the recession.

Recent economic policies, the conventional approaches using bailouts and subsidies, have directly and obviously enriched Goldman Sachs, but not done a lot for the rest of us.

Some of the questions I ask:

Do we still believe that government should “promote the general welfare”?

Does it make sense to continue subsidizing mostly the special welfare of Goldman, AIG, GM, et. al.?

How much are these absurdities and inequities a result of Goldman execs. holding key government positions over the past two decades?

What kind of society do we want to live in?

We need a peaceful, positive revolution.

It’s time to update ideas from the 1890s, 1930s, and 1960s and enact a guaranteed income. The updated idea is to set some amount, say $1,000 a month, and provide that to every adult citizen. It should be enough for food and shelter, but just enough, so people still have strong incentives to work and earn.

Why don’t we have that? Because we individuals and We the People are not demanding it.

The complete plan, the idea, the benefits, and how we can make it happen, is in Peaceful, Positive Revolution,.

Additional information is on the home page and elsewhere on this web site.

I hope you’ll also comment on this blog. And please help spread the word.

Steven Shafarman

Official unemployment is now 9.5 percent, according to the U.S. Department of Labor. As reported in the New York Times:

The American economy lost 467,000 jobs in June and the unemployment rate edged up to 9.5 percent in a sobering indication that the most painful downturn since the Great Depression has yet to release its hold.

(Note the passive phrasing: “the economy lost 467,000 jobs … the unemployment rate edged up.” That’s so common. Much more honest and meaningful, in my opinion, is to focus on real people, not abstractions. “Another 467,000 people lost their jobs last month.”)

The complete Times story is here.

It’s important to remember that 9.5 percent is just the official number. It excludes people who have given up looking for jobs, those who are only working part-time but would like full-time jobs, and those who have only contingent work. Including all of those, using what some analysts call “Effective Unemployment” the rate is 18.70 percent and the Effective Number of Unemployed is now 30,172,000.

Effective Unemployment is the subject of blog posting from Steve Clemons in the Washington Note:

Each month, I receive from Leo Hindery an update on “America’s effective unemployment rate” which includes not only the official unemployment figures but other data points showing off-the-books unemployed or underemployed people.

…

Hindery writes:

Here is a June 2009 version of the summary that calculates the Effective Unemployment Rate, which is now 18.70%, and the Effective Number of Unemployed, which is now 30,172,000.

There are currently 14,729,000 officially unemployed workers, as just announced. However, this figure does not include the combined 15,443,000 workers either (1) in the “labor force reserve” because they have abandoned their job searches (i.e., 4,278,000) or (2) underemployed because they are “part-time of necessity” (i.e., 8,989,000) or “otherwise marginally attached” (i.e., 2,176,000).

…

It’s important to see the entire picture of America’s jobs profile — no matter how unpleasant.

What are those 30 million people, the effectively unemployed, going to do? How are they going to manage? There aren’t enough jobs, and there won’t be. That would be obvious if we were not so numbed, distracted, and confused by the passive language.

Let’s give every one of the 30 million a guaranteed basic income of, say, $1,000 a month. Every adult citizen ought to get the same amount. Guaranteed. Unconditional. We can and must ensure that every citizen has an income independent of any job. Income security for all.

Millions of Americans demanded guaranteed income in the 1930s, and that’s how we won Social Security. In the 1960s, Martin Luther King Jr. and many moderate politicians and many leading economists also endorsed guaranteed income. It’s time to update the idea and enact it.

The complete plan, the idea, the benefits, and how we can make it happen, is in Peaceful, Positive Revolution,.

Additional information is on the home page and elsewhere on this web site.

I hope you’ll also comment on this blog. And please help spread the word.

Steven Shafarman

It’s no secret that families are scrimping, struggling, and sacrificing.

Too often, however, the human face of financial difficulties is obscured by the conventions of economic discourse. Pundits, journalists, and economists – and most  politicians, though they ought to know better because they depend on winning votes – seem to prefer to talk in abstractions, such as “the economy” and “the recession.”

A real and rather moving exception is a series in the New York Times on “Living With Less: the human side of the global recession.” Today’s piece describes the Ferrell’s, a California family with four children, two sets of twins, the youngest just 20 months old.

Here’s a key paragraph from near the top of the story:

For millions of families, this is the recession: not a layoff, or a drastic reduction in income, but a pay cut that has forced them to thrash through daily calculations similar to the Ferrells’. Even if workers have managed to avoid being laid off, many employers have cut back in other ways, reducing employees’ hours, imposing furloughs and even sometimes trimming salaries.

A link to the whole piece is here, and includes a slide show of the family.  A direct link to other pieces in the series is here.

As the article describes, Jeff Ferrell earns $72,000 a year, but furloughs have meant a 9 percent reduction in his take home pay, roughly $450 per month.

Imagine a government that truly puts people first; that bails out ordinary Americans, not banks and other big corporations; that promotes the general welfare directly. Imagine, in other words, a society with Citizen Dividends.

Suppose every adult American receives a guaranteed basic income of, say, $1,000 a month. The Ferrell’s would have an extra $2,000 a month,  more than 4 times what they’ve lost due to the furloughs. Their quality of life would be dramatically enhanced.

What about you? What would an extra $1,000 a month mean for your quality of life?

This is an idea that ordinary Americans might really get behind – if they knew about it. Now that you know, you can help educate others.

It’s not such a radical idea. Earlier versions of guaranteed income were mainstream ideas in the 1960s, supported by moderate Democrats and moderate Republicans, Martin Luther King Jr., and more than 1,200 economists from across the political spectrum. Earlier proposals for income security go back to Thomas Jefferson and Thomas Paine.

Citizen Dividends is an updated version of their ideas. The complete proposal, the benefits, and the plan to make it happen is in my book, Peaceful, Positive Revolution,.

Please explore this web site, IncomeSecurityForAll.org, read the book, and help spread the word.

This will happen when enough of us demand it, when We the People demand it.

Steven Shafarman

Sooner or later, our elected officials and other “leaders” will have to acknowledge that conventional political and economic approaches are not working. Conventional policies cannot work.

A panel of prominent economists and scholars recently discussed the economic crises and some of the problems with the policies our government is employing. No one talked about basic income, not surprisingly, though neither did they propose any other specific policy.  Their comments clearly indicated, at least to me, the need to provide income security for all.

The participants were former senator Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, George Soros, and Robin Wells, with Jeff Madrick as moderator.

The link is here.

Do you know any of them? If not directly, than perhaps through a few degrees of separation? It would be great to hear them respond to the idea of Citizen Dividends, income security for all. Please do what you can to facilitate those connections. Please send out links to this post.

(Some personal contact, or multiple contacts, seem to be necessary before any of us consider new products, services, or ideas. You can make a real contribution. Please help.)

Here’s an important quote from Krugman, from late in the discussion:

The other thing not to miss is the importance of a strong social safety net. By most accounts, most projections say that the European Union is going to have a somewhat deeper recession this year than the United States. … But the human suffering is going to be much greater on this side of the Atlantic because Europeans don’t lose their health care when they lose their jobs. They don’t find themselves with essentially no support once their trivial unemployment check has fallen off. … When Americans lose their jobs, they fall into the abyss. That does not happen in other advanced countries, it does not happen, I want to say, in civilized countries.

And there are people who say we should not be worrying about things like universal health care in the crisis, we need to solve the crisis. But this is exactly the time when the importance of having a decent social safety net is driven home to everybody, which makes it a very good time to actually move ahead on these other things.

Citizen Dividends, a guaranteed basic income for all, is the solution for many reasons. That includes the fact that this is an idea that can appeal to Republicans and Democrats, and especially to ordinary Americans who are simply angry at or about our government. I’ve discussed that appeal in several recent blog posts and on the home page of this web site, IncomeSecurityForAll.org.

The complete proposal, the benefits, and the plan to make it happen is in my book, Peaceful, Positive Revolution,.

Following is something from a blog post of a week or ten days ago:

Think about it: We can give every adult citizen a basic income of, say, $1,000 a month.

The amount should be enough so the poor and unemployed can afford food and shelter, at least. But we give it everyone, even Bill Gates and Oprah Winfrey, to create a baseline of economic justice and economic equality.

We pay for it by ending the bailouts and subsidies, and cutting government programs that become superfluous. With this basic income, which I call Citizen Dividends, there will no longer be any rationale for individual welfare or corporate welfare. We’ll be able to cut or eliminate hundreds of federal, state, and local government programs. Every citizen will have an income independent of those programs and independent of any job.

This is a platform that can appeal to Democrats and Republicans who sincerely want to take their parties back from the special interests. It can also appeal to Greens, Libertarians, and independent candidates who seek to overthrow the Democrats and Republicans.

This is actually not such a radical idea. Earlier versions of guaranteed income were mainstream ideas in the 1960s, supported by moderate Democrats and moderate Republicans, Martin Luther King Jr., and more than 1,200 economists from across the political spectrum. Earlier proposals for income security go back to Thomas Jefferson and Thomas Paine.

Please explore the web site, read the book, and help spread the word.

This will happen when enough of us demand it, when We the People demand it.

Steven Shafarman