Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Thursday, March 9, 2017

UBI and Economic Systems


 UBI might be a way to save Capitalism from worker exploitation, one of its major failings.  Capitalism is based on using resources effectively to maximize return on investment of capital.  One important resource is labor.  There are few incentives in Capitalism to provide adequate compensation to laborers.  For most jobs in a free labor market recruiting and training costs are minimal making employee turnover a non-issue compared to pay scales driving pay and working conditions to minimum legal standards.  Even in higher skilled jobs where recruiting and training costs are significant immigrant labor can drive average compensation down if visas are easily acquired by the Capitalist. 


 With a UBI recruiting and training costs become significant even for entry level jobs, as enterprises must entice employees to accept time constraints and cooperative work in competition with unlimited free time and independence with subsistence living costs covered.  Wages, working conditions and benefits would be an important part of the exchange.   


 Enterprises must also compete on quality of products especially in service industries, as entry level entrepreneurship is essentially risk free.  Employed workers with a bit of extra disposable income might choose to become capitalists by backing an entrepreneur with capital rather than labor.  E.g. Leasing a taco truck for a latino family with traditional food preparation skills.  A risk free transactionon both sides. The capitalist still has his job and if the truck doesn't pay a competitive wage for the entrepreneurs plus a return on the lease, at the end of the lease everybody goes back to the status quo. 


At higher skill (and pay) levels working conditions, hours and time off, benefits and other intangibles, will be a competitive necessity to retain high skilled employees that can easily save enough FYM to become a competitor.  Employee spin-offs will be an important source of competition in most industries even ones with extremely high entry costs.  See Lucid Motors as a recent new entry in the automotive industry.  


 An alternative economic system to Capitalism (never before tried) that might work is based on a UBI with a slight surplus over subsistence (UBI+) where people buy goods and services direct from the producers via apps like Amazon or Lyft with the producers funding their means of production via loans from the local thrift institutions that float the UBI, surplus and accumulated savings for speculative productivity aids.  Neither the thrift institutions nor the government would invest in or subsidize productive facilities.  Government spending on infrastructure would be treated as a consumer good.  Government itself would be as usual a slush fund for politicians. 

 The money supply would be managed by the Government by regulating the amount of the surplus to balance supply and demand in the economy.  

The government providing the UBI+ would collect taxes using a progressive income tax on producers, or a VAST progressive VAT on consumption.  Links to both are below the fold.

 ----------------------------

A thorough analysis of the tax effects of UBI based on income taxes.  
Hat tip to @miniver
https://www.weforum.org/agenda/2017/01/why-we-should-all-have-a-basic-income/ 

Wednesday, March 1, 2017

Collection Post for Basic Income and Living Wages

This post is a working collection of blue road thinking on UBI and LW.  It is subject to additions, editing and other annoyances.  A more readable version an be found at http://jcarlinbl.blogspot.com/2016/11/universal-basic-income.html which is also a work in progress but updated as comments and careful thinking refine the blue road thinking here.

Once again a guest post to start things off.  
 

July 19, 2015 at 4:43am

The biggest reason I support UBI (Universal Basic Income) has nothing to do with our possible automated future, as labor becomes less essential, or at least as we need much less of it, though that's a great reason to support it. It's not even about eliminating poverty or making the unemployment rate a non-issue, though those are very good reasons too.

The reason I want a UBI is to make work at least -technically- optional. I want this because so long as work is not optional, so long as it is mandatory, it is coercive. I want UBI so that every low wage worker whose boss screws them on hours, who reprimands them for taking sick days, who asks them to work too fast in unsafe conditions (see the current fast-food lawsuit), every young employee whose boss secretly grabs their ass while no one is looking, who's constantly making lewd comments, or racist comments, or any other sort of hateful bullshit... So that every employee who finds themselves trapped in the fiefdom of some petty little tyrant of a boss, which is actually The Majority Of Low End Workers, so that they can say:

"TAKE THIS JOB AND SHOVE IT"

So that they can really, truly, meaningfully walk the fuck away. And not have it mean they end up on the streets or their kids starve or they find themselves turning tricks to keep the water running and the lights on. Or for that matter just ending up in yet another job with a slightly different petty tyrant. And they can do this, deal with this, without having to deal with lawyers or Union Reps, who though are better than -not- having them it'd be nicer to just be able to do it ourselves. Because if -enough- of them (us) say 'NO' to this petty fucking bullshit, then firms will be forced to stop letting the petty bullshit happen (those who fail to will simply not get workers), and work in general will end up less awful for everyone.

Because the ability to say 'NO' to someone who's actively abusing you... that should be pretty high on the list of 'Liberties' worth defending. In my mind.


GDP is ultimately people buying goods and services from other people. Somebody has to flip those burgers the basic income recipients are buying. 
Since low income people spend locally and buy from people they know (not robots) the income from outside the local economy stays in the local economy and all are better off. The multiplier effect of the basic income or entry wage dollar is nearly 3 times. That is, the burger flipper who is paid somewhat more than the basic income or hesh wouldn't work, spends most of herm income on local goods and services, creating more local demand for those goods and services.   Also some basic income recipients will use their time to pursue a dream of artisan goods production, a local service like a band or restaurant or performance venue.  Some will succeed and generate more local income. 

Eliminating corporate welfare in the form of support for inadequate wages for minimum wage workers would be the first step to a more equitable distribution of the GDP.  Instead of welfare to supplement inadequate earned income each adult citizen or green card holder would be provided with one half the income necessary for housing, medical care, education,  and local transportation for a family if married, less if single.  This assumes that a two parent household is preferred for raising children.  Single mothers would be encouraged to partner up with an interested co-parent of any gender to form a family unit enabling the larger per person payment. 

Eliminating welfare with all its administrative costs would more than pay for the BI for those unable to work or have better things to do with their time than unskilled minimum wage labor. Those with better things to do will probably provide taxes and purchase goods and services which will cover their BI. Everybody wants to start a restaurant, or write a graphic novel, or sing a song. Some of them would actually succeed if they didn't have to worry about feeding the family first.

It wouldn't take much transfer of wealth from the hoarders to have a profound effect on the GDP. If the corporate welfare queens had to compete for unskilled labor with a UBI minimum wage laws would be anachronistic. Market wages and working conditions for unskilled labor in a competitive market for those willing to work at those jobs would move even unskilled laborers into the low middle class.

The economic argument for a UBI is that it is outside money to low income people who spend locally for necessities provided by mainly other low income people. The bodega proprietor, (there would be food trucks on every corner) and other neighborhood business would thrive and economic benefits would trickle UP to landlords, food truck lessors, food truck builders, etc. They might even buy a solar food truck with a Powerwall 2 from Tesla if they are really successful.


A note on what basic income would cover. UBI would be based on the needs of a family of whatever size is considered optimal by the goverment split between 2 adult citizens independent of relationship status or child care choices.   Basic housing, basic food, a local bus pass, HMO premiums and public education costs would be included. Infrastructure, and government costs would be abbsorbed by the govvernment.

--------------------------------------------------
 


4 comments:


J'Carlin said...
Why it is worth the daily slog through facebook.
J'Carlin said...
I learned about the TTJASI from a mentor at Pan Am. His advice: As soon as you save up enough "Fuck You Money" you can begin to do your job right. In a sense privilege, and/or another livable income in the family gives the same work freedom as FYM which is after all a relative term, but UBI puts a safety net under all who wish to "do their job right."
J'Carlin said...
Nyah Wynne Yes! Definitely. That's probably my number 2 top reason, in part because it's talked about very little. There are huge numbers of activities that people can engage in that are of real meaningful value to society that don't translate well into market value. Experimenting with art is a major one. Art sometimes pays off, sometimes doesn't, but all too often ends up either compromising itself in order to sell better or having to be fit into someone's spare time while they work some non-career, low end, dead-end job to survive. Other things include many sort of research, as finding grants can be as troublesome as trying to fund art. Care of children and the elderly sometimes pays but only if the ones being cared for can pay. In fact any sort of general service to the community tends to be deeply undervalued. The market values service to people according to their ability to pay, so serving the needs of 100 poor people is worth less than serving the whims of 1 wealthy person. There are all manner of truly valuable activities one can engage in that the market deems worthless.
J'Carlin said...
The compromises involved in selling art and research to the rich individuals and/or corporations is probably why real art and research so seldom see the light of day. On the hopeful side, the internet and crowd funding may be breaking the strangle-hold of the rich on both art and research. If you build it and post it on Facebook "The people will come."

Tuesday, February 28, 2017

Subsistence Spending and the Hood Economic Multiplier

A person choosing not to work would necessarily spend every penny of UBI just to stay above the poverty line. Almost none of that would go out of the neighborhood. Even bus fare to the MegaMall is not figured into the poverty line.  Since poverty economies are generally cash economies, and the savings rate is essentially zero at the poverty line, the economic multiplier of each external dollar to the community is huge. Whether that external dollar comes from UBI, street vending, busking, or graft, that dollar supports many local businesses most of which buy locally. with cash.

A good lay explanation of the multiplier effect can be found here: http://economicsonline.co.uk/Managing_the_economy/The_multiplier_effect.html

1/18/17

Sunday, May 15, 2016

How to Spend Your Stimulus Payment

From an unknown email meme.  Courtesy Paul Carrubba 
Economics in a nutshell.


Sometime this year, we taxpayers will again receive another 'Economic Stimulus' payment.

 
This is indeed a very exciting program, and I'll explain it by using a Q & A format:

 

Q. What is an 'Economic Stimulus' payment ?

 
A. It is money that the federal government will send to taxpayers.

 

Q.Where will the government get this money ?

 
A. From taxpayers.

 

Q. So the government is giving me back my own money ?

 
A. Only a smidgen of it.

 

Q. What is the purpose of this payment ?

 
A. The plan is for you to use the money to purchase a ; high-definition TV set, thus stimulating the economy.

 

Q. But isn't that stimulating the economy of China ?

 
A. Shut up.

 

Below is some helpful advice on how to best help the U.S. Economy by spending your stimulus check wisely:

 

* If you spend the stimulus money at Wal-Mart, the money will
  ; go to China or Sri Lanka .

 

* If you spend it on gasoline, your money will go to theArabs.

 

* If you purchase a computer, it will go to India , Taiwan or
  ; China ...

 

* If you purchase fruit and vegetables, it will go to Mexico , Honduras and Guatemala ...

 
* If you buy an efficient car, it will go to Japan or Korea .

 
* If you purchase useless stuff, it will go to Taiwan .

 
* If you pay your credit cards off, or buy stock, it will go  ; to management bonuses and they will hide it offshore.

 
Instead, keep the money in America by:

 
1) Spending it at yard sales, or

 
2) Going to ball games, or

 
3) Spending it on prostitutes, or

 
4) Beer or

 
5) Tattoos.

 
(These are the only American businesses still operating in the U.S. )

 
Conclusion:

 
Go to a ball game with a tattooed prostitute that you met at a yard  ; sale and drink beer all day !

 

No need to thank me, I'm just glad I could be of help.

Friday, April 1, 2016

Winning Is Not the Only Thing

For white dudes winning is the only thing. Winning is a zero sum game by definition. If you are not a winner you are a loser. It is possible to opt out, even for white dudes, but their culture makes it hard to do. White dudes from little leagues, to presidential candidates are taught that those who do not win are losers. Doing whatever it takes to win is not only acceptable it is exemplary. Destroy your body and life with drugs? If that is what it takes to win -- go for it. Destroying your family and friends to take the next step to the win, no problem, they will be destroyed anyway if you lose. Winners can buy new families and friends. Ersatz families and friends flock to winners. It is all part of the game. If you can't win by the rules, simply change the rules. If winning is the only thing, rules like taxes are for the ordinary people. (AlphaGo is a white dude machine. If it can't win it seems to stoop to insults in losing.)

There are other ways of living your life. White dudes rigging the rules so that heads I win, tails you lose means opting out of the game is the only rational solution for most people especially those that are not white dudes. Trying to play by white dude rules means accepting the heads white guys win, tails you rules that are provided by the white dudes. Those challenging the white dudes at their game are never going to win. The only option is to opt out of the white guy zero sum game. This is frequently done by white guys, you just never hear about them. You see, they are failures. No matter what they have done for themselves, their families, or humanity, they didn't win and therefore are failures.

Opting out at one point in US history was a respectable and adequately compensated choice for most men and some women willing to work. In the post WWII consumer driven economy unemployment was low and temporary for most willing and able workers, and even marginal workers were able to provide necessities for their families. That all changed by design when the white guys invented Voodoo Economics and found an unemployed actor to sell it for them. The bigoted white guys were already in congress and once voodoo economics and right to work laws made opting out difficult if not impossible; the winners were fewer and fewer and took all the winnings. This works for a while, but sooner or later those that can no longer opt out and still survive reclaim their lives, traditionally in America by electing a progressive, but with pitchforks if that fails. In the words of Kris Kristofferson/Fred Foster made famous by the iconic failure Janis Joplin "Freedom's just another word for nothin' left to lose."

The only way to prevent this is to provide a way for people to opt out comfortably if not necessarily successfully. Providing basic needs for those who opt out, see Scandinavian socialism and post war unions, makes it possible for people to opt out of the zero sum game and still be human. In a modern society where mass production is essentially labor free, the consumption driver for the economy is gone. Some countries are recognizing this and providing a basic stipend that is liveable if not comfortable. Those who wish to contribute to society, and most reasonable people do, will find ways to contribute with artisanship, sale of intangibles on crowd funding sites, and innovation. None of which is possible for a person struggling to feed a family or even hermself.

I was brought up by a famous athlete who opted out of the winning game, probably because he was too nice a guy and nice guys are losers, and found a niche for himself in what is now called Human Relations Management. There are no winners in that field, pay is not commensurate with the responsibility of not only providing the necessary support for those who might become winners, but not incidentally those who are not winners but still contribute to the enterprise. One of the earliest admonitions from dad was a 1908 quote from Grantland Rice
For when the One Great Scorer comes to mark against your name
He writes—not that you won or lost—but how you played the Game.
recycled in a poem Alumnus Football, which I just read for the first time in researching the quote, which is a poem about life after being a super star athlete, in a game where the rules are the white guy rules of winners and losers. My impression from dad and from others was that originally at least for the athlete the game was more important than the W. Perhaps the loss of that attitude is what is wrong with the American culture and economy today. 

From a very limited exposure to Chinese culture, it seems that this attitude of playing well at whatever level you are at is the most important thing. Western culture has intruded a bit, but even Apple is finding that exploitation, that is creating losers, is a losing game in the East. There is an adage among Asian weiqi players, "If your life is troubled; look to your weiqi game. Perhaps Google should learn from that.

Saturday, January 23, 2016

Reparations and Politics


http://www.theatlantic.com/politics/archive/2016/01/bernie-sanders-reparations/424602/   In which At-Nehisi Coates takes Bernie Sanders to task for not feeling guilty enough about white supremecy to insist on reparations.


You can't unscramble an omelet. Reparations like affirmative action polarize society and are therefore political suicide. I notice that Coates has no suggestions on how to make reparations work. Just that they are his wet dream of something or another. And where do you begin with the reparations? Native Americans? Black men? Black women? White women? American Veterans? There have been enough atrocities in the USofA let alone the rest of the planet, that choosing one group for reparations would merely turn all of the equally deserving victims into enemies of both the recipient and the granter of the reparations.  Add to that the white supremacists who think they earned their supremacy and are entitled to the spoils.  Any attempt to redistribute those spoils is politically impossible, particularly if any single group is singled out as more deserving than the rest.  What is Coates' plan to attack white supremacy?

At least Bernie Sanders has a plan to redistribute wealth that has a chance of helping all disadvantaged citizens. 
  • Single payer medicine treats all the same, the rich and the poor have equal rights to sleep under the hospital roof and receive the same care. While the comfortable may choose to pay a premium to heal in first class, they get to the same result at the same time.  
  • Higher education for all at any college one can be accepted into at no cost is at least theoretically egalitarian.  Different preparation and support from parents and mentors will tip the playing field so that those with less preparation will be at a disadvantage, but so will the  lazy and stupid denizens of the privileged.  
  • Rebuilding the infrastructure using local labor is ideally egalitarian although political reality is less so.  The best one can do politically is focusing your infrastructure on the disadvantaged areas and hire locally.
  • Breaking up banks and making the local subsidiaries responsible for fraudulent activities by making restitution to those damaged paid for by punitive fines to the National banksters would help all equally but since the disadvantaged were the primary victims they would be primary beneficiaries.  As an example if Banks were required to return fraudulent foreclosed homes to the original mortgagee repaired to code compliance where known or to homeless families where the original mortgagee is unavailable homelessness would be a minor problem.   There are more foreclosed homes unoccupied today than there are homeless.  
  • A living minimum wage is known to raise living standards for all as minimum wage earners spend essentially all of their earnings.  A living wage is a foundation that supports all wages as employers who require more than minimum skills will be forced to raise wages to attract the skills they need.  A living wage is also "fuck you" money against an exploitive employer as the employee is not a paycheck away from destitution.    

     Have you read "A Case for Reparations?" -  Coates

OK. I read it. I see a lot evidence that black people (Coates usage) have been treated badly and therefore deserve special consideration but I see no case for reparations as the only or even a desirable solution. In particular I see no case at all that reparations should be considered by Sanders or would be a better solution than Sanders' announced policies to mitigate the problems of all the disadvantaged. As black people are heavily over represented in the disadvantaged population, why commit political suicide by advocating reparations. Simply giving foreclosed housing back to the former owners and forcing the bank to pay for code compliance would overwhelmingly benefit the black population as Coates notes in the article.


I agree that the case for reparations for all I mentioned in my post is unassailable. So is the case for justice for unarmed blacks killed by police. And a thousand similar cases of injustice. But aside from "Look at what a good slactivist I am." what do the arguments accomplish.

     That's part of why affirmative action is still so essential.

Please compare for me affirmative action and "a truly blind admissions" policy on graduate success if the university is paid the same for all admissions. There will still be structural differences, but the stupid white guys wouldn't even get in the door. 
Pass
Most of the top tier private universities are "need blind" in admissions, but preferences are given to athletes, legacies, and rich kids. I suspect they consider ethnic balance and gender issues as well.  I know of one top University that first sorts applications on academic excellence, that is, those below these standards are not suitable for admission under any subcategory.  Once that threshold is passed department heads, coaches and development people are permitted to assign preferences: Superstar, preference, and desirable.  Once those preference tiers are considered, the admissions department applies demographic and gender preferences to the mix and admissions are issued. 

Many elite High Schools today have to discriminate against North and South Asian women to get a balanced student body. That is, give the white boys a chance.  Both Lowell and Lincoln HS are magnet schools in SF with a high Asian demographic. IIRC both tried to restrict Asian admissions by applying a higher academic standard for Asians. At least Lowell has resolved the issue by restricting academic admissions to 70% of the admissions.  The other 30% come from middle school recommendations based partly on academic excellence but considering other criteria including special preference for schools underrepresented in last year's admissions.   

Affirmative action like reparations in the absence of other indications of merit are simply causes for failure and resentment.  Lotteries are a good indication of rewards based on nothing but chance.  Most winners end up worse off eventually than they were before winning, victims of "advisors" and other scam artists that help them get rid of their windfall.  Perhaps I am simply lacking in imagination, but I can think of no way to administer reparations that would not cause resentment among those in the reparation class that missed out which inevitably would be a large majority if reparations are significant for any recipient.  

I assume this is why Coates refuses to spell out how reparations would work for black people.  Just that reparations are like motherhood and apple pie. They are all great concepts until somebody has to decide who gets the child subsidy or the apple pie.