Over the past week we’ve seen some possible breakthrough steps toward a basic income. Did you miss that news? Not surprising, because it’s been buried in news reports about the Copenhagen Climate talks.

Sen. Maria Cantwell from Washington is introducing a bill calling for “cap and dividend” — a cap on emissions, with permits being auctioned off and the revenue distributed to American citizens. Here’s a quote from a McLatchy News story:

Under her bill, the federal government would auction off carbon shares to the nation’s 2,000 or so fuel producers like coal and oil companies. Every two years, the shares would expire and, over the years, the U.S. government would offer fewer and fewer shares for sale as a way to reduce carbon consumption.

Seventy-five percent of the money raised would be rebated directly to U.S. citizens. Cantwell’s office estimated that an average family of four would receive a total of about $1,100 a year in the form of tax-free monthly checks.

An important point is that the proposal seems to have some bipartisan support in the Senate, and even support from oil companies. The complete story, with the title “New Proposal Would Pay Americans a Percent of Carbon Permits” is here.

An even stronger version of this idea was in the New York Times a few days earlier. James Hansen, one of the world’s leading climate scientists, had a an op-ed denouncing the Democratic party’ “cap and trade” plan, and calling instead for “fee and dividend.” It’s an idea Hansen has advocated for some time, and that I’ve written about before.

Here’s an excerpt from Hansen’s op-ed:

Under this approach, a gradually rising carbon fee would be collected at the mine or port of entry for each fossil fuel (coal, oil and gas). The fee would be uniform, a certain number of dollars per ton of carbon dioxide in the fuel. The public would not directly pay any fee, but the price of goods would rise in proportion to how much carbon-emitting fuel is used in their production.All of the collected fees would then be distributed to the public. Prudent people would use their dividend wisely, adjusting their lifestyle, choice of vehicle and so on. Those who do better than average in choosing less-polluting goods would receive more in the dividend than they pay in added costs.

For example, when the fee reached $115 per ton of carbon dioxide it would add $1 per gallon to the price of gasoline and 5 to 6 cents per kilowatt-hour to the price of electricity. Given the amount of oil, gas and coal used in the United States in 2007, that carbon fee would yield about $600 billion per year. The resulting dividend for each adult American would be as much as $3,000 per year.

The complete piece, with the title “Cap and Fade” is here.

Fee and dividend, cap and dividend, tax and dividend — whatever you call it, and whatever the size of the dividends — this is the most direct and politically-feasible way to move toward a basic income in the United States.

The idea is so simple and powerful.  Tax fossil fuel consumption and redistribute the revenues on a per capita basis. The net effects would reduce consumption and pollution and climate change overall, while promoting social justice and a stronger democracy.  I discuss this in more detail in my book, Peaceful, Positive Revolution: Economic Security for Every American.

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

There are many lessons. One is that we depend on government. In crisis situations particularly, we rely on government to respond appropriately and inform us responsibly. President Obama and other officials mostly did that, with the notable exception of some excessive comments by Joe Biden, while the tone in the news media was at times somewhat hysterical. We have to be active citizens to ensure that our government is prepared and does its job.

Other lessons concern poverty. A piece in today’s Washington Post discusses the fact that poverty among Mexicans added to flu deaths. If Mexicans had sought prompt medical treatment, there would have been fewer deaths and perhaps no pandemic.

In the United States, poor people are also more at risk, and so are the rest of us, because many of the poor cannot afford to stay home from work. People who cannot afford to see  doctors are more likely to take their symptoms to work and perhaps infect others. More likely, also, to send kids who may be infected to school.

Recall the news reports of the past week. How did you respond? Were you worried? What did you think? Did you do anything differently?

Here’s a thought experiment: Imagine that we have Citizen Dividends, a basic income for every adult citizen, and even the poorest among us have some secure income independent of their jobs. That lest phrase is key: secure income independent of their jobs.

What would that mean for you and your family? Would you feel more secure, knowing that you can afford to stay home if you had symptoms? If your kids school is closed, would it be easier for you to make the necessary arrangements?

Two pieces about poverty reinforce the idea that guaranteed income will bring significant benefits to all of us, though neither piece talks about guaranteed income. First is a New York Times column by Judith Warner. Second is from USA Today about tent cities and growing poverty around the country.

We will all be safer and healthier when our neighbors, all of our neighbors, have some basic income security guaranteed. Citizen Dividends will promote the general welfare directly, efficiently. The general welfare includes public health. This is common sense, something liberals and conservatives ought to support.

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

You can read the complete plan, 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

That’s more evidence for why we need Citizen Dividends, a guaranteed basic income.

Economist Paul Krugman discusses falling wages in his New York Times column today. He notes the paradox in this and other areas of economics. Workers in one company or industry can save their jobs by accepting lower wages, but when many companies do so that creates downward pressure on all wages and all workers, and thus more unemployment.

Wages fall. Workers have less money to spend. Workers also have more incentive to save, preparing for harder times ahead. Less spending means less economic activity generally. Economic conditions worsen. Employment falls. It’s a “vicious circle” according to Krugman, and he concludes the column by warning of the prospects for long term economic stagnation.

We can break the circle by implementing Citizen Dividends. Conservatives ought to support this idea because it will stimulate economic activity. Markets will be more free, more active, more productive, because more people will have more money to spend. The guru of free market economists, Milton Friedman, endorsed the negative income tax for that reason. Liberals, including Krugman, ought to support this idea because it will help workers directly, protecting everyone from economic hardships.

Most conservatives, however, are reflexively anti-government, and opposed to any new programs, especially programs that would help ordinary people. Most liberals are merely timid, afraid to endorse anything so bold as Citizen Dividends. Their idea of an aggressive program to end hunger and homelessness is to increase the Earned Income Tax Credit.

If we ordinary citizens want real reform, we have to demand it. We have to get angry and start talking about these ideas with our family members, friends, and neighbors. This is a key part of the solution to many of our problems, including health care reform and reversing climate change.

It’s up to us. If we really want to save GM and Chrysler, and help their workers, and possibly save our own jobs, we can do all that and more by demanding and winning Citizen Dividends.

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

You can read the complete plan, 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 everyone has a guaranteed basic income, we’ll be much more able to stop the spread of the disease. And much better prepared to cope with whatever happens. If it becomes a pandemic, in particular, basic income can be a critical component of public health.

In this case, moreover, to get the maximum benefits from the basic income, it ought to be universal. We in the United States will benefit directly if Mexicans also have basic income. And Guatemalans. And Canadians, Chinese, and so on.

Before I write about why this is so, here are a few headlines that, by themselves, tell a large part of the story;

U.S. Declares Public Health Emergency Over Swine Flu New York Times

Mexico Takes Powers to Isolate Cases of Swine Flu New York Times

U.S. Steps Up Alert as More Swine Flu Is Found  Washington Post

In Mexico, Young Adults Appear Most at Risk: Capital Grinds to a Halt as Suspected Deaths Rise to 103 Washington Post

Swine Flu Outbreak Could Deepen Mexico’s Recession Washington Post

Suppose there is a pandemic here in the United States, and government orders the closing of airports, train stations, shopping malls, and other public facilities. What will happen to the people who work in those places or commute through them? How will they cope with the lost income and other disruptions in their lives? What about their families? Their communities?

Imagine that for your family, your neighbors, your community, your town or city. Imagine that for your workplace, company, industry.

What if public facilities stay closed for a few weeks, or a month or longer?

Now suppose we have Citizen Dividends and everyone has some guaranteed income independent of any job. At the very least, there will be much less fear about how to manage financially, much less stress about how to pay the bills.

Secure income independent of any job will give people the resources to adapt by, for example, working from home by computer and phone, homeschooling the children, rescheduling vacations, planting gardens, organizing community support networks.

Containing a pandemic will require everyone’s cooperation, and Citizen Dividends will affirm that we’re all in this together.

Steven Shafarman

If those protesters sincerely seek to cut government, they ought to endorse Citizen Dividends.

When every citizen has a guaranteed basic income, hundreds of programs, even whole agencies and departments, will become unnecessary.

No more bailouts for Wall Street. No more subsidies to big corporations. We’ll be able to cut or eliminate various welfare programs for individuals – without harming current beneficiaries of those programs. This is a conservative, anti-government approach that ought to appeal equally to liberals.

The anti-tax, anti-government protesters won’t get very far unless they also present some specific positive demand. They have to be for something, not just against stuff. Getting them to endorse Citizen Dividends won’t be easy, because of the knee-jerk objection that it’s a big government program, but it’s important to try. Those who are serious about cutting government will, let us hope, see that this one program will let us eliminate hundreds of others. Plus, this one program, because it will be so big and universal, will be much more transparent and accountable than the hundreds of smaller programs it replaces. If they really want to cut government, this is the way to do it.

A second set of knee-jerk objections is that some of the money will go to the poor and undeserving, to the lazy, alcoholics, drug addicts. One answer is that it’s a matter of human decency and dignity to care for everyone. Read the Bible, old Testament or new. When everyone has an income for food and shelter at least, and that income is guaranteed and unconditional, it will be a lot easier to address people’s psychological and spiritual needs.

The next time there are anti-tax protests, it would be good to attend, even if they don’t serve any tea, and to use that opportunity to encourage the protesters to support basic income.

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

Aid to small businesses is a step, potentially, though only a baby step, in the direction of a guaranteed basic income for all Americans.

A New York Times story about President Obama’s announcement is here and a 15-minute video is here.

A story in the Washington Post, here, includes the following paragraph:

“Small businesses are the heart of the American economy,” Obama said in announcing the measures. “They’re responsible for half of all private-sector jobs, and they created roughly 70 percent of all new jobs in the past decade.

That’s well known and documented. Our government should be helping small businesses, not big ones. Obama’s announcement made that point, though only indirectly, when he began his remarks by criticizing AIG and the harms and waste that have been caused recently by big companies and government support for big companies.

When each of us has a guaranteed basic income, lots of us will start small businesses. Starting a business, after all, being self-employed, is for many of us a core part of the American dream. If the Obama administration really wants to create jobs and promote economic growth, it will make it a lot easier for every would-be entrepreneur to start a small business. Basic income will do that.

The AIG bailout is a clear indicator of the underlying problem. Last September, when the financial system was freezing up, our government set out to save AIG, Citibank, Bank of America, and other big finance corporations. That reflected a knee-jerk assumption that big businesses are good, deserving respect and support. Big is good, many people seem to believe, and bigger much therefore be better. That’s wrong.

Suppose our government had not been afflicted by those assumptions, and not further biased by campaign contributions from the finance industry. (For evidence of the biases and assumptions, see Henry Paulson and Robert Rubin and so many other Wall Street officials in our government.) When the credit markets froze, instead of bailing out AIG, Citibank, Bank of America, et. al., our government could have loaned funds to community banks and credit unions arounds the country. Restore the credit and finance system from the ground up, rather than trying to do so from the top down.

Obama began his remarks by praising community banks. It would be great if he put those ideas more thoroughly into practice. Truly great if he goes even further and endorses the guaranteed basic income. One step at a time.

Steven Shafarman