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

Politicians are talking about paygo, and President Obama endorsed the concept a few days ago. Why not? It purportedly worked in the 90s, when President Clinton and the Republican Congress cut government spending and produced a budget surplus.

It’s a simple rule: New spending legislation must include the cuts to pay for it. Pay as you go.

Obama and the Democrats are endorsing it now in response to Republican warnings about the budget deficit. Republicans want to blame Obama and the Democrats for the deficits, ignoring the fact that most of the red ink spilled on their watch, while they controlled Congress with the Bush administration, cutting taxes and launching the war in Iraq.

For some help in cutting through the spin and fear tactics, here‘s a very good article from a truly nonpartisan source, Public Agenda.

Paygo: Useful, but Not Nearly Enough

A direct link to an article it recommends,

America’s Sea of Red Ink Was Years in the Making, is here.

For some “truly terrifying data about the real state of the U.S. economy” (that’s the subtitle), here’s a piece from Slate that has some very good short tables.

All three articles conclude that radical reforms are necessary.

The best way to start, in my view, is with income security for all.

In the 1960s, guaranteed income was a mainstream, moderate idea. Martin Luther King called for it in his last book, and a plan to provide it passed the House of Representatives by two-to-one, but was blocked in the Senate. Proponents including leading economists from the left and the right.

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.

Once that is in place, it will be a lot easier to cut government programs. Everyone will have a basic income, so we’ll be able to cut individual welfare programs. Everyone who’s unemployed or underemployed will be able to manage while they find or create jobs for themselves, so we’ll be able to cut corporate welfare programs that subsidize employers. Cut individual welfare, perhaps eliminating whole programs and agencies. Cut corporate welfare bailouts, subsidies, tax credits, and such. That’s how we pay for the basic income, Citizen Dividends.

Give the same amount to everyone – the hungry and homeless, the middle class, Bill Gates and Oprah Winfrey – and we create a baseline of economic justice and economic equality. It will be a lot easier for us to work together as We the People to demand that our elected officials enact the necessary reforms. That includes the necessary reforms of our tax code.

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, www.IncomeSecurityForAll.org.

Please comment on this blog and 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

The story is about community banks, and merits front-page coverage because it’s an aspect of the situation that’s been generally ignored. Community banks are mostly fine. They’re earning profits, not failing. They haven’t gotten bailout money from our federal government. Here’s the story.

The logic of income security for all is that government is supposed to promote the general welfare, the general interests, not special interests. The recent bank bailouts directly aided only a select group of very special interests, the biggest Wall Street finance companies, notably AIG, Goldman Sachs, Bank of America, and Citibank.

Those bailouts were pushed through Congress and sold to the American people as necessary to “save the economy.”  That phrase, as the whole sorry bailout episode demonstrated, is often a code for “subsidize big corporations.” A main reason big corporations get bailouts and subsidies is their ability to produce campaign contributions and lobby both Democrats and Republicans.

What if AIG and the rest had been allowed to fail?

The Times story suggests something many of us were saying at the time: Government could have stimulated economic activity and recovery by supporting individual citizens and community banks. With financial support from the government, community banks could have expanded their lending and promoted local economic activity. We would be enjoying real, perhaps rapid economic recovery from the bottom up, instead of the current top-down, tenuous, tepid drift.

This is the logic of income security for all. Stop thinking in abstract terms about “the economy,” “the banks,” and even “jobs.” Start, instead, focusing directly and concretely on the concrete and local, especially on individual people.

I’m reminded of some lines by the poet William Blake: “One who would do good must do it in minute particulars. General good is the plea of scoundrels, hypocrites, and flatterers.”

To learn more about these ideas, please visit the home page and other material on this web site, www.IncomeSecurityForAll.org.

You can read the complete plan for income security, the idea and how we can implement it, in Peaceful, Positive Revolution, which is available from Tendril Press.

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

Steven Shafarman

When people hear about Citizen Dividends, they often agree with the concept – stop the bailouts, give money directly to people, promote the general welfare only – while asking some obvious questions: How are we going to pay for it? How can we afford to give every adult citizen $1,000 a month (or $800 or $1200, to be determined)?

Good questions, especially with massive federal budget deficits. The short answer: We pay for it by cutting government programs that become superfluous. Start with individual welfare programs and corporate welfare. There’s a lot of both in $3.4 trillion.

Every adult citizen will have an income, guaranteed, for food and shelter at least. So it will make sense to cut or eliminate programs that provide for the poor and homeless. That includes food stamps, temporary aid to needy families, housing programs, and much more. We’ll be able to cut those programs at the local, state, and federal level. Current programs are conditional, and therefore highly bureaucratic and costly to administer. The basic income is unconditional, so administrative costs will be extremely low.

Corporate welfare includes all of the bailouts to Wall Street – several trillion dollars in the past year, counting the money released by the Federal Reserve Board. (Though such bailouts will, we hope, not be needed in the future.)

More common and recurring corporate welfare is government spending to create jobs. Politicians and pundits talk about “creating jobs” all the time. Right? Most elected officials seem to believe their primary task in office is to create jobs. Just about everything they do, every time they spend our money, especially these days during the recession, “creating jobs” is what they talk about. We hear that from Democrats and Republicans, from Obama, members of Congress, governors, state legislators, and local officials

Stop for a moment. Think about it. With Citizen Dividends, everyone will have an income for food and shelter. Everyone who’s unemployed or underemployed will be able to provide for themselves while they find or create jobs for themselves. People won’t expect or depend on government to find or create jobs for them.

The federal budget is $3.4 trillion. How much of that spending is individual welfare? How much is corporate welfare and other job programs? A lot of that spending is hidden, most notably corporate welfare in the military budget. Politicians routinely vote for spending, weapons for example, that military experts don’t even want, always with some statements about “jobs.”

Let’s not forget state and local spending, individual welfare and corporate welfare.

We can afford Citizen Dividends. The total cost may be $2 trillion or more, but it could all be paid for through cutting or eliminating other programs. As we debate those cuts, Democrats are likely to insist on protecting the poor and homeless, ensuring that none are harmed. Conservative Republicans and Libertarians might call for cutting and eliminating programs immediately. Lots of compromises will be necessary, but at least we’ll be moving forward.

Real change, not just cosmetics, a Peaceful, Positive Revolution.

Steven Shafarman

The article, here, opens by describing an employer calling a meeting of the 50 workers at his factory:

But rather than resorting to layoffs, Mr. Koppe asked half his employees to come in every other week. The government would make up roughly two-thirds of their lost wages out of a fund filled in good times through payroll deductions and company contributions.

…

The Europeans say they have no need for further stimulus right now because their social safety nets, derided in good times by free market disciples as sclerotic impediments to growth, are automatically providing the spending programs that the United States Congress has to legislate.

Europe’s extensive job protections and unemployment benefits are “bad in the upswing, because firms don’t dare to hire people, because then they are glued to them,” said Hans-Werner Sinn, president of the Ifo Institute for Economic Research in Munich. “In the downswing, it’s good if the people are glued to the companies. They keep their jobs. They keep their income. They keep consuming.”

European workers are “glued” to their companies. Those companies are constrained and dependent on their governments. That’s what makes European society and economies more stable than ours.

Citizen Dividends, in contrast, will provide greater freedom to workers and companies. Workers will have an absolute financial safety net regardless of economic conditions. Companies will be more able to innovate; they won’t be “glued” to workers or government.

European approaches are fairly static. The basic income alternative will be much more dynamic.

European approaches are bureaucratic and paternalistic. The basic income alternative is more minimalist and libertarian.

It’s during downturns that European approaches are especially attractive, and that’s illustrated in two more paragraphs from the Times article:

Indeed, to travel between the United States and Germany is to find two countries experiencing the economic slowdown completely differently. The severity of the downturn does not appear to have sunk in yet in for Germans. There was no real estate bubble here, and few people have a substantial portion of their savings or retirement accounts invested in the stock market. The unemployment rate has risen more than a percentage point, to 8.5 percent in February from 7.1 percent last November. But, significantly, the latest figure is still lower than it was just a year ago.

“In contrast to America, our social systems are not on the decline right now,” Mrs. Merkel said Sunday night in a widely watched interview on a television talk show. “Pensions are not cut, unemployment insurance is not reduced. On the contrary, we can register stable and, in some sectors, also rising expenditures, and this makes me hope that our social market economy will enable us to cope with this complicated situation.”

Basic income will protect us and liberate us at the same time, in the downturns and the upswings.

Steven Shafarman

Moderate Democrats and Republicans supported guaranteed income in the 1960s — so did leading economists, liberals and conservatives — and a plan to provide it passed in the House by two-to-one, but was blocked in the Senate. Before that, in the 1890s and 1930s, there were mass movements for income security, and those movements succeeded in winning major reforms. Today, however, almost no one is talking about any form of guaranteed income.

Getting these ideas into public discourse will require lots of us posting material and links on the web, phoning talk radio and TV, writing articles and letters to the editor, talking to our family members, friends, and neighbors. You can make a real contribution. IncomeSecurityForAll.org is designed to assist those conversations and writings, and we can cite the history of serious people who endorsed earlier income security proposals to add credibility. It’ll help if we can find some prominent individuals who are willing to invest their money and reputations.

Here, from the home page of IncomeSecurityForAll.org, is the updated idea:

·   Set some amount and provide it to every adult citizen; enough for food and shelter, but just enough, so there will still be lots of incentives to work and earn.

·   Cash payments, monthly, for the very poor; tax deductions for everyone else.

·   Periodic adjustments to offset changes in the cost of living.

·   Possible supplements from local revenues where living costs are high.

·   The same amount for every citizen, to promote justice and equality while minimizing government intrusiveness and bureaucracy.

Everyone will have some income, guaranteed, in addition to what we earn or get from other sources. You and the rest of us will have more money to spend. We’ll spend, stimulating economic activity and creating jobs. You and the rest of us will have more money to save and invest. We’ll save, and our savings will help recapitalize banks. People will have money to make mortgage payments, reducing home foreclosures.

You and the rest of us will have some secure income even if we lose our jobs. Everyone who’s unemployed will have some secure income, and therefore the ability to manage while they look for work or create jobs for themselves, perhaps starting their own businesses.

Ordinary Americans will have the money we need to solve most of our personal financial problems. Our spending, saving, investing, job-seeking, and job-creating activities will solve our national economic problems.

We pay for it by stopping the bailouts and handouts to banks, Wall Street, and big corporations. And by cutting other government programs that become superfluous, individual welfare and corporate welfare.

Our government will promote the general welfare only, and will do so directly, efficiently. That’s what our government is supposed to do, according to the Constitution: promote the general welfare. Everyone’s basic welfare will be guaranteed. Everyone’s basic welfare, moreover, will be guaranteed equally, with every citizen receiving the same amount. That equality will make it easier for us to unite, organize, and work together as We the People, cutting and eliminating special welfare programs, outvoting and overpowering special interest groups.

America’s free market economic system will be more free and more fair. Markets serve only those who have money, after all, and this universal income will ensure that everyone can participate in the market. Markets will be more free and more fair, also, because bailouts and special interest programs distort markets and we’ll be eliminating many such programs.

This ought to appeal to liberal Democrats, conservative Republicans, and the rest of us as well. Liberals can cheer the way Citizen Dividends will create a baseline of economic justice and economic equality. Conservatives might embrace the prospects for cutting government programs that become superfluous. All of us can rejoice in transcending the old partisan divides, liberal vs. conservative, left vs. right, Democrats vs. Republicans. The new politics will be We the People vs. the status quo and the special interests that have been profiting from the status quo.

Income security for all will be a peaceful, positive revolution. Let’s enact it and make history.

Steven Shafarman

Give us the money. We’ll stimulate economic activity by our spending. We’ll make mortgage payments, ending the foreclosure crisis. We’ll buy houses and strengthen housing markets. We’ll also save money, and thus help recapitalize banks. That’s the rapid, reliable, responsible way to end the recession — give the money to us.

A question people commonly ask when they first hear about Citizen Dividends is: How will we pay for it? Where will the money come from?

One possible answer — for the short-term, in any case — is on the front page of today’s Washington Post:

The central bank, effectively, will print more money to pay for the purchases.

Here’s the complete Post story.

In the longer term, we’ll pay for it by cutting government programs that become superfluous, starting with the bailouts and handouts to big corporations, including AIG and the banks. There will no longer be any rationale for corporate welfare to create jobs, because everyone will have an income for food and shelter while they find or create their own jobs. We’ll also be able to cut most individual welfare programs, federal, state, and local.

Indeed, the long-term is when we’ll really be grateful to have Citizen Dividends. Sooner or later our federal government is going to cut spending and start balancing its budget. That’ll be a lot easier politically when we’re united by Citizen Dividends. And it’ll be a lot more just, humane, and sustainable.

Steven Shafarman

The anger is real and growing, though unfocused and therefore unproductive. One reason for the lack of focus is that people don’t know the history. “Give the money to us” is a lot more meaningful when we educate people about the movements for income security in the 1890s and 1930s, and the support in the 1960s from Martin Luther King, Richard Nixon, George McGovern, Gerald Ford, and more than 1,200 economists. That history turns “Give the money to us” from an angry rant into a viable policy.

When people express their anger about the bailouts, that ought to be our cue to talk about basic income. That’s how we can focus our anger and use it to drive the reforms we need.

Steven Shafarman