Daily Archives: April 9, 2020

Unlike the financial crisis of a decade ago, coronavirus is not at root a manmade disaster, but it struck a society weakened and undermined by a decade of economic stagnation and nearly 40bn slashed from social security with the acquiescence of the pre-Corbyn Labour party.

Now the rules have been torn up. A 330bn package of support is available for businesses, while welfare systems were rapidly made temporarily more generous to the tune of 7bn. The state is now capable of stepping in to cover the salaries and sick pay of millions, to the fury of the Institute of Economic Affairs.

The job retention scheme was demanded by Labour and trade unions, with details being hammered out between the TUC, CBI and the Treasury. Though it keeps in place employers roles in deciding whether, when and who to lay off, it seems vastly preferable to the situation in the United States, where a third of workers appear likely to have to fall back on unemployment insurance.

Any demands for permanent social change need to connect the current crisis with long-term problems, if not to seem unconvincingly opportunist

The government has rightly been criticised for not covering everyone who needs support and for the ludicrously low level of statutory sick pay, which Matt Hancock sheepishly admitted he couldnt live on. And for the 2 million employees earning too little to qualify even for that and for the lack of help for those whose hours have been reduced but who wont see their tax credits rise in response. For workers who started after 28 February or are leaving their jobs, the safety net means the slim pickings of universal credit.

The subsequent similar scheme for the self-employed will leave some even better off than if coronavirus hadnt happened, but will not be paid until June and will still exclude 2 million self-employed because they earn too much, or have income from work elsewhere, or started their business after April 2019. These people will also have to rely on universal credit to get by.

With all these flaws in the schemes and meagre fall-back, there has never been a better chance for advocates of a universal basic income (UBI): conceptually, if not practically, the simplest way to ensure nobody misses out. Long promoted by campaigners on both the left and the right, a universal payment would plug all the holes by regularly giving every adult enough to live on. The US is experimenting with something approaching it, though (so far) only as a one-off, means-tested payment.

As yet, however, a basic income looks far from becoming a popular demand, let alone reality. Most peoples regular incomes are now covered by employers or government and as they are stuck at home with little to spend money on it can seem like an irrelevant distraction to be demanding regular additional payments for them. There have always been other, more fundamental, arguments from all angles against basic income. But, in terms of immediate practicality, it is hampered by the lack of a government database of peoples bank accounts to make immediate payments without duplication, unlike employers and the benefits system.

There are, however, alternatives that explicitly target only those currently missing out and that, like UBI, eliminate the upfront means test. OpenDemocracy has launched a campaign for a liveable income guarantee and last week the New Economics Foundation put forward its proposal for how a minimum income guarantee might work. Set at the level of the 2019 minimum income standard of 221 a week (excluding rent), though any level could be chosen, the payment would be available to every adult not currently benefiting from the existing schemes. It would be paid immediately through the universal credit advanced payment system, but would be free from conditionality and upfront means testing, while wealthier recipients could see theirs clawed back. People waiting for payments from job retention or self-employed schemes could also claim it as an advance on those.

As the Black Death is said to have sown the seeds for the Industrial Revolution, some have claimed coronavirus could even do for capitalism. But any demands for permanent social change need to connect the current crisis with long-term problems, if not to seem unconvincingly opportunist.

Not only is a minimum income guarantee a more feasible short-term solution to the economic crisis precipitated by coronavirus, it highlights the need for a permanently stronger social security net one that is humane to those who lose their jobs under all circumstances, without seeming impossible or utopian.

Most importantly, alongside any new policy ideas, the left cannot let up for a moment in pointing out the painful shortcomings exposed in public provision: the scandalous fragmented care system; the dangers of outsourcing and the two-tier health workforce; the evil of no recourse to public funds, which endangers us all; our overfilled and understaffed prisons.

Above all, the crisis has shown the continuing dependence of society on the working class employed in both the public and private sector, male and female, of all religious and ethnic backgrounds. Our weekly applause for public sector workers could be either a convenient figleaf over their continued exploitation or it could become the basis of a politics that puts all workers essential, furloughed or unemployed at its centre.

Rory Macqueen is a Labour party activist and was an economic adviser to John McDonnell between 2015 and 2020

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UK workers hit by the economic pain of coronavirus need an income guarantee - The Guardian

Universal basic income was for a long time an obscure term bandied about in economics circles. Thats no longer the case. The idea, usually involving a monthly cash grant to every person with no strings attached, has entered mainstream discourse.

Former US presidential candidate Andrew Yang made it a main plank of his campaign. Occupy Wall Street activists called for it in their social movement. Some economists and policymakers amid concerns about job insecurity in an age of rapid automation and the widening income gap between rich and poor are seeking big solutions. And the idea has reemerged with the current Covid-19 pandemic that has wiped out the income of many workers practically overnight.

CREDIT: JAMES PROVOST (CC BY-ND)

University of California, Berkeley

Many political leaders support at least expanding current income-assistance programs a much-talked-about idea in the lead-up to the recent Democratic presidential primaries. These existing programs focus on specific groups: people who are underemployed, disadvantaged or have a low income, including those who are elderly, disabled or have children. But a universal basic income would go further. It would remove all conditions on the payments, giving a measure of security without the stigma sometimes associated with current programs.

Writing in the Annual Review of Economics, economists Hilary Hoynes and Jesse Rothstein of the University of California, Berkeley, examine how a universal basic income would play out in the United States, as well as in some other countries, if it were implemented on a national scale. They based their analysis on limited programs with universal basic income attributes, such as the Alaska Permanent Fund and the Eastern Cherokee Native American tribes program, as well as more limited welfare programs already in place in the US.

Hoynes spoke with Knowable Magazine about the challenges and likely impacts, and prospects for more targeted income-assistance programs. This conversation has been edited for length and clarity.

How did you get into research involving a universal basic income?

For most of my career, Ive been studying how government policies and the social safety net affect the economic well-being of low-income families with children in the United States. Ive done a lot of work on cash welfare programs, the Earned Income Tax Credit (EITC), food stamps and other nutrition programs.

How would you define the most common form of universal income (UBI)?

I think the best way is to think about universal, basic and income.

Universal means that everybodys eligible, regardless of needs. Most of our social safety net is conditioned in some way. You wont get food stamps if your income is above 150 percent of the poverty line. You need to have earnings to benefit from the Earned Income Tax Credit. But with the UBI, everyone would get it: Bill Gates, Mark Zuckerberg, single mothers working as cashiers.

Basic implies the benefit is large enough to create some substantial amount of protection. So, for example, we wouldnt consider the Alaska Permanent Fund to be basic income, because its not that large.

And income means its cash rather than some other form of benefit. Loosely, people are using UBI to talk about cash benefits that arent conditioned on work.

I dont think there are any examples of programs that are truly universal and basic income in the United States.

Finlands basic income trial was targeted at unemployed workers, so was not universal. And Kenyas could be universal and basic but is still in the pilot phase, so is not available everywhere. Taking a UBI to scale and making it truly universal requires confronting the costs of a truly universal basic income.

Supporters of former US presidential candidate Andrew Yang march in San Francisco on October 27, 2019. A universal basic income was central to Yangs campaign.

CREDIT: AMARIS WOO PHOTOGRAPHY

What are the main goals of UBI programs?

There are two different groups of people talking about UBI. The first one is people who recognize that our current level of government assistance is inadequate for improving the lives of the most disadvantaged in the US. Weve got stagnating incomes and declining wages for low-skilled workers and increasing costs in many dimensions, and folks are not able to keep up with that. Theres the perspective that we need to do more.

The second group includes more conservative, policy-interested individuals who dont like the patchwork nature of our current social safety net. They think its inefficient and creates disincentives to work that wed be in better shape if we could toss it all away and replace it with something simpler. There are really profound consequences of that idea, thinking about UBI as a replacement of our current system versus a supplement to it.

Critics claim that UBIs create free-riders or people who spend the money on things like alcohol and cigarettes rather than groceries or paying bills. Is there truth to that?

What we know about income assistance in general is that people spend the income in a similar way to how they spend other income they have. The vast majority of it is spent on the big-ticket items for households: housing, transportation, food, clothing and things of that sort.

The available research shows that a UBI leads to no change in work, or at most a very modest reduction in labor supply.

What do you think of UBI pilot programs or proposals, such as in Chicago or Stockton, California?

There are several programs going on, and theyre being touted as UBI pilots, but theyre really not. In Stockton, theyre income-conditioned. Its not like everyone in Stockton is getting this benefit, rich and poor alike. In Chicago, the pilot will be tested on 1,000 low-income residents. Theyre not truly universal.

But an important aspect of these pilot programs is that even if your income goes up, the amount of benefit doesnt change. So there is that insurance aspect of knowing its there, which could be important.

Many universal basic income pilot programs are being tested before implementation on a wider scale, and many proposals have been put forward, including by political scientist Charles Murray of the American Enterprise Institute, a conservative think tank, and Andy Stern, former president of the Service Employees International Union. The Swiss proposal is based on suggestions from supporters of a national referendum and apply to a family with two adults and one child. The figures in the Ontario, Canada, pilot are for a couple. The Y Combinator study is an experiment, by the nonprofit research arm of a Silicon Valley incubator, involving a few dozen families.

People argue that we should make these programs universal because it creates a sort of shared experience, which means that public support for the program is broader and doesnt marginalize those who are receiving the benefit, the way it could for food stamps. But to study that, you need to have a program thats universal, and none of these pilots are that way.

Lets talk about the Alaskan and Eastern Cherokee programs. Both are universal but the amounts have been modest: about $1,000 to 2,000 annually for Alaskans and usually about $4,000, paid through revenue from casinos, for adult tribe members. Is there evidence that they can reduce poverty or economic inequality?

It is very clear that providing more income to low-income people reduces poverty and reduces inequality. Its not rocket science that when you give people income, their income goes up.

But in a truly universal basic income setting, the vast majority of those resources would not go to reducing poverty; they would go to supplementing an income for those who already have adequate income. So really, the issue comes down to whether UBI is the right tool. It comes down to whether the gains from universality having everybody in the system outweigh the costs associated with having to pay out to everybody in the system.

A UBI program of, say, $1,000 per month per person in America would cost more than the entire social safety net that we have right now, including Medicare, Medicaid, Social Security and all the rest. People have talked about looking at other income sources to finance a UBI, like carbon taxes, financial-sector taxes and things of that sort. But this is a tremendously expensive program.

What do you think of alternatives to UBIs? For example, a negative income tax, in which poorer peoples incomes are supplemented up to a minimum level, or a universal job guarantee, which would provide jobs at non-poverty wages for all workers who want one?

The negative income tax is basically the way most social safety nets are structured. You essentially have some set benefit level that the government provides, that might vary depending on how large your family or household is. And then, as your income increases, the amount of the benefit you get decreases at some rate. The negative income tax is kind of like a UBI that isnt truly universal. The devil is in the details: How high should the payment be, and at what rate is it phased out?

I think, a few years ago, when this conversation started, there were these two different policy ideas. One was the federal jobs guarantee and others were saying we should expand income assistance. The federal jobs guarantee has sort of faded, perhaps partly for political reasons. I think it has to do with labeling a program like that as a big government program.

Safety-net programs like the Earned Income Tax Credit are hidden in the tax code in the same way that tax breaks for corporations are hidden in the tax code. Its profoundly important that something about the hidden nature of these programs creates a broader appeal, against a backdrop of many Americans not trusting government in some way.

Would you say that programs like the Earned Income Tax Credit and food stamps are ineffective or insufficient?

I just served on a National Academy of Sciences panel that produced a report on child poverty in America last year. If you look at that, you see that the top two programs that reduce child poverty in America are the Earned Income Tax Credit and food stamps.

These are extremely effective programs. And theyre income-targeted. We have a set amount of resources targeted at the most needy, at poverty or a bit above poverty. The challenge is, despite them, we have very high rates of poverty in America compared to other countries.

And so the question is, do we need to do more? The answer is yes. The next question is, is UBI the solution to the problem? And I think the answer to that is no.

The Earned Income Tax Credit and food stamps could be expanded. While the tax credit is very generous for families with children, it provides almost nothing for families without children. SNAP [the Supplemental Nutrition Assistance Program] is adequate for families with children but puts a lot of restrictions on those who dont have children, particularly those who arent elderly or disabled. Those programs work very well, but we should make them available to all who are income-eligible.

This chart shows how much the child poverty rate in the US (13 percent) would increase in the absence of each assistance program already in place. The projections indicate that the Earned Income Tax Credit, the Child Tax Credit and SNAP (food stamps) are individual programs that have the biggest impacts in reducing child poverty.

Would you say that expanding the tax credit and SNAP would be more effective than a UBI?

I think what we need is an additional policy to stack on top of those things one that is more unrestricted, cash-based, but still targeted. The child tax credit was expanded in the last tax bill passed in Congress, in 2018. That has a tax credit of $2,000 per child for all families in the US, except a small group. This child tax credit is almost universal: Married couples with children and who have income up to $500,000 a year get this, but it is not fully available for families with the lowest income levels or families without children.

The policy that many have been advocating former presidential candidate Michael Bennet [the Democratic senator from Colorado] has this as part of a bill that hes put forward is taking that child tax credit and making it universal, providing it even to households that have no earnings. That could then be a base thats built on, to be distributed on a monthly basis and to go beyond just people with children.

It seems like UBIs have more widespread support than before. Would you agree?

I share your view on that. As someone who has studied the social safety net for a long time, it makes me optimistic to hear so many people talking about the problems out there and the insufficiency of our current system. To me, that feels very powerful and valuable, because in the end, we need to make policy changes in order to realize any of this. So if this broad conversation translates into action, then that would be very useful.

What are your thoughts on the cash payment proposals that were put forward by US senators to help people during the Covid-19 pandemic? The coronavirus relief package now includes one-time payments of up to $1,200, while other proposals had a recurring schedule for example, monthly payments of up to $2,000, either universally distributed or below some income cap.

I think this is a good idea. The key question iswhether to means-test it(make people eligible if below some income threshold). The positive side of this is that we could concentrate resources on those who need it most and thus we could continue to support them over the months. But any means-testing would mean administrative costs that may slow down the payments. This is what we need to figure out in any UBI scenario but in the current situation, speed of delivery is critical.

Link:

The complexities of a universal basic income - Knowable Magazine

Whenever anyone proposes a policy that would benefit ordinary Americans, we are met with the repetitive chorus of How are we going to pay for it?

Medicare for All? Green New Deal? Universal housing? Universal childcare and preschool? Universal food? Tuition-free higher education? Student and medical debt cancellation? A jobs Guarantee? A living wage? Paid parental leave? Paid sick leave? Expanded Social Security? Universal Basic Income? High-speed rail? Free public transportation? National free wi-fi?

Socialism for the rich remains normalized, while socialism for the majority remains demonized.

How are we going to pay for it? It is often asserted more as an aggressive statement to shut down the idea, than as a genuine question seeking information, even though many of these policies have been enacted elsewhere. The question seems to be a fear-based, greed-based ideological hammer.

During the economic downturn and expected global recession coming with the COVID-19 pandemic, the US government and Federal Reserve Bank are considering, or already implementing: slashing interest rates; lower tax rates; tax deferrals; bank, airline, cruise, and other corporate bailouts; huge loans; equity stakes; dramatically increased financial liquidity; direct payments to Americans; forcing companies to produce certain items under the Defense Production Act; tapping the Strategic National Stockpile; activating the National Guard; a 60-day pause on foreclosures and evictions; prohibiting substantial price hikes; free testing for the coronavirus; and so on. Trillions of dollars will be spent. We also see federal, state, and local governments ordering the shutting down of travel, many businesses, schools, parks, and most other non-essential activities and events to slow the spread of COVID-19, while rolling back regulations on corporations.

Interestingly, no one is defending, let alone praising, the so-called free market, no one is championing libertarian laissez-faire ideas, no one is demanding small government, no one is attacking public health and social welfare programs, and, to be sure, no one is asking how we will pay for it. Instead, massive government involvement and intervention in the economy is steamrolling ahead at a remarkably quick pace and, seemingly, everyone wants a piece of the action.

American ideology regarding the free market, being self-made, self-reliance, self-sufficiency, and individualism has largely been mythology and hypocrisy. Crises tend to make that abundantly clear. And, for what it is worth, Horatio Alger, the original rags-to-riches success story, was fictional.

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Even without a crisis, the question How are we going to pay for it? is typically unasked when it comes to the bloated military budget and the military-industrial complex, American imperialist wars, the drone program, the CIA, NSA, ICE, prisons and detention centers, both public and private, and other aspects of the coercive apparatus of the state. We also do not ask How are we going to pay for it? when it comes to the billions of corporate welfare dollars and other forms of wealthfare the US regularly doles out to the affluent. Likewise when the Republicans cut taxes on the wealthy, when Trump runs trillion dollar budget deficits, or when the Republicans balloon our national debt to over $23 trillion or about $70,000 in debt foreachAmerican.

It has never been about whether the US could afford a progressive program; it has always been about whether the elite wanted to or were forced to fund it. It is an issue of political will, apparently, not economic means.

And these are just the financial costs. How do we pay for what has been lost, what has been squandered, what has been ruined beyond repair, who and what has gone extinct that we will never recover? How do we pay for the unnecessary suffering, the shortened and lost lives, the productivity and creativity squandered, the shattered dreams, the tears shed? How do we pay for what could have been, but never was nor will be?

If there is one thing history teaches us, Naomi Klein, author ofThe Shock Doctrinereminds us, its that moments of shock are profoundly volatile. We either lose a whole lot of ground, get fleeced by elites, and pay the price for decades, or we win progressive victories that seemed impossible just a few weeks earlier. Which path will we choose now?

In the meantime, socialism for the rich remains normalized, while socialism for the majority remains demonized. But heres the thing: we will either have democratic socialism or we will continue to socialize suffering. If we do not choose wisely, we will surely pay for it.

See the rest here:

How Are We Going to Pay for It? - Common Dreams

Of all the people who might have been expected to emerge from the current coronavirus crisis with their reputations enhanced, I dont think many would have nominated Karl Marx.

And yet when governments around the world are adopting unimaginably radical solutions to address yet another crisis of capitalism, Marx and acolytes in academia still have much to tell us about the way the world works, and not just the economic parts either.

Many will be appalled at the very idea. After all, universities are routinely caricatured as infested with left-wing academics hopelessly out of touch with reality and intent on filling the minds of students with dangerous ideas. But some people think encouraging multiple viewpoints and the capacity for critical thought is actually what we academics are paid to do, even when those ideas are challenging to those who benefit from an increasingly bankrupt status quo.

Yes, these are extraordinary times, but what does it say about the way that we collectively organize ourselves that when things go badly wrong, the last thing we expect is that market forces and aggregated individual preferences are likely to save us?

Even before the current economic crisis, many scholars working in a broadly Marxist tradition made a simple but incontrovertible point: its simply not possible to have an economic system that is based on endless expansion, increased consumption, and the intensive exploitation of finite resources without doing fundamental damage to the natural environment.

This claim looks plausible under any circumstances, but its especially compelling in the context of a still expanding global population, the majority of whom would like nothing better than to live in the same way that we do in the privileged enclaves of the global North.

Its also telling that in the wake of the last global financial crisis many students complained about the inadequacy of economics courses to actually explain, much less predict, the recurrence of crises and the irrationality of markets. Business schools remain notably immune from criticism, despite students emerging with almost no understanding of economic history and the material circumstances in which capitalism exists.

If there was one thing Marx knew a bit about it was historical materialism. As he famously pointed out, we make our own history, but under circumstances already given and transmitted from the past. Unfortunately, this applies just as much to the political systems and ideas we inherit as it does to the natural environment upon which our lives ultimately depend.

One of the most remarkable features of this crisis is not simply that the coronavirus is a product of humanitys collective impact on the biosphere, but that the remedies that countries everywhere are adopting look much closer to those of Marx than they do to Friedrich Hayek or Milton Friedman.

When capitalism is engulfed by one of its recurring crises, the ruling class always looks to the state to bail it out. Remarkably enough, however, in Australia the Morrison government is not simply the executive committee of the bourgeoisie, as Marx would have it. On the contrary, in addition to saving the shareholding class and captains of industry, Australia is effectively nationalizing parts of the economy, providing a form of basic income guarantee, and even experimenting with central planning.

Yes, these are extraordinary times, but what does it say about the way that we collectively organize ourselves that when things go badly wrong, the last thing we expect is that market forces and aggregated individual preferences are likely to save us? On the contrary, only capable, well-resourced states can get the job done.

The good news, such as it is, may be that we have had a vision of what a more sustainable planet might actually look like. One of the few pluses in this unfolding nightmare is that carbon dioxide emissions are plummeting as transport, especially the aerial variety, grinds to a halt. Consumption of everything other than necessities has been dealt a mighty blow, too.

The popularity of ocean cruises may thankfully take a permanent hit, but we might also think differently about some of our other supposedly essential needs. Do we really need to travel quite so much, or cram our homes with quite so many resource-intensive consumer durables especially when they arent very durable at all?

This is a lifestyle choice, to be sure, but one that goes to the heart of the way our social and economic systems are organised. Endless consumption is not only unsustainable, inequitable, vacuous, and frankly selfish, but its inflicting so much damage to the planet that it threatens the basis of life of any sort, let alone the good variety.

As we suddenly discover that nurses may provide a more valuable contribution to society than hedge-fund managers, an old socialist adage looks newly apposite: From each according to his ability, to each according to his need.

Yes, the adoption of socialist principles does sound a bit unlikely, but its worth asking what the alternative is. Business as usual? I dont think so. Nature is providing us with a wake-up call of global proportions. This is historical materialism on stilts. Might be time to download a copy of the Communist Manifesto while youre in self-isolation. Its even free these days as it should be, of course.

See original here:

We're all socialists now | The Interpreter - The Interpreter

As the personal tragedies arising out of this crisis mount up, of course our energies must be devoted to saving lives, and comforting and caring for one another.

The early equating of this crisis to wartime never really took hold for me and many others, especially younger generations. But it did remind me that even in the depths of the second world war, many like Orwell, Laski, Bevan and Attlee looked back on the experience of the 1930s and said, Never again. They started dreaming, describing, debating and planning the society they would construct for the future. That is the vital role the left and progressives can play now.

Even the most diehard Tory neoliberal free marketeer would acknowledge that if the crisis has taught us anything, it is that anything is possible. There is no dogma that cannot be thrown overboard. The crisis has taught us what values we cherish the most, and which we would want to build society upon after the crisis.

We all uphold individual freedom, but in this crisis most have recognised that it is collective action and solidarity that has held us together. It has been the collective action embodied in public services provided by the state that is seeing us through the crisis. It is the public servants for a decade denied adequate support, decent wages and then threatened with privatisation whose sacrifice is protecting us.

If we are to build the resilience to cope with any further waves of this virus, or other future unknown threats, our new society needs to be built on fully funded, publicly owned and democratically controlled public services.

Lets acknowledge that there are services such as rail transport that the private sector has proved incapable of sustaining in this crisis, and that there are new services such as broadband that have become essential to modern life and should be classified as a universal basic service.

What this crisis has also exposed is that so many of our fellow citizens and their families do not have the financial resilience to deal with an unexpected hardship imposed upon them. Our new society must eradicate the individual economic insecurity that comes from low pay, precarious work and the employment status, for many, of being little more than a chattel, capable of being discarded with no say and no control.

The crisis has meant that many who have never experienced our social security system previously have suddenly discovered how brutally inadequate it has become after 10 years of austerity and targeted attacks on the unemployed, the poor, children, disabled people and others. The appreciation that anyone can fall, and therefore everyone needs a safety net, has made intensely relevant the design of a minimum income guarantee or universal basic income.

The threat of recession hangs over our economy. There are still those who will argue that another period of renewed austerity is the solution, and as always that will mean the heaviest burden falling on working people. Austerity never worked in tackling the impact of the banking crisis and it wont work in addressing the consequences of the coronavirus crisis either.

Plus we have the greatest crisis of all facing us: the existential threat to human existence from the climate crisis. Thats why we need to rebuild our society post-Covid-19 not with another decade of austerity, but with a decade-long programme of intensive investment in our social and physical infrastructure to end our dependency on fossil fuels once and for all, and construct a green economy, sharing the wealth and quality of life that it engenders.

We pay for it by introducing an immediate windfall tax on the banks and finance sector that we bailed out when they brought about the crisis more than a decade ago. Combining this with a wealth tax on the richest within our society and a tax on multinationals, we can demonstrate just as the current government has demonstrated that when we need the resources, they can always be found.

We will only be able to deliver and secure our future to guard against future crises if we ensure our new society is founded on a participative democracy blossoming within our communities but also within the economy and at work, buttressed by a media whose ownership is more democratically dispersed and effective in speaking truth to power.

As we enter possibly a longer and more distressing period of this pandemic, we must give people hope that there is light at the end of the tunnel, and that together we can make it a bright one. We will never let our eyes become accustomed to the dark.

John McDonnell is shadow chancellor of the exchequer

Link:

Out of the coronavirus crisis, a new kind of Britain must be born - The Guardian

Before the crisis, they met monthly in a room in the Dublin Institute of Technology, writes Michael Clifford.

A core group of around a dozen people usually showed up for the Basic Income Ireland meeting on a Wednesday in the Aungier Street building.

They discussed the next campaign, research that had surfaced from basic income experiments around the globe, review a book that explored the subject.

If we had a basic income in place before this happened, there would have been a cushion there, says Anne Ryan, a co-ordinator with Basic Income Ireland.

This is a time that people are losing jobs very quickly and although supports have been put in place people will fall through the cracks. If a basic income was there it would act as a safety net.

The crisis prompted Ryan and her colleagues to issue a petition for a unconditional Universal Basic Income of at least 203 per week to all legal residents between 18 and state pension age, starting as quickly as possible.

The petition was announced on midday on 24 March. Within four hours, Leo Varadkar was announcing that the original emergency Covid payment of 203 was being raised to 350.

There was no connection between the two but the raising of the emergency payment showed the speed at which events are occurring and a realisation that most people would simply find it extremely difficult to live on the first payment.

Will the crisis present opportunity for a rethink on schemes such as Basic Income? Time and the recovery will tell, but there is no doubt that the crisis is prompting may to ask about how we are living and whether now is the time to re-evaluate how society is structured.

Among those with such an opinion is the President, Michael D Higgins. Speaking to Pat Kenny on Newstalk last week, President Higgins outlined the direction he felt the country, and the wider world, should embark on when we reach the other side.

What is going to emerge globally is that there is an unanswerable case now both globally and regionally in the European Union for having a universal basic services, he said.

That is a flow of basic services that will be there to protect us in the future, from which we can depart to be able to live, for people to hae a sufficiency for what they need. This is what happened after the war, this is what happened after her Great Recession in 1929.

The reaching for a different way of doing things has been prompted to some extent by the solidarity on display across society. More pertinently has been the governments reaction to the crisis. Responding to the sudden shock to the economy, the caretaker government has acted in a manner that would have been unthinkable six weeks ago.

The emergency Covid Payment of 350 has been mentioned above; a wage subsidy for firms who have lost 25% of their income. A freeze on rents and a stop on evictions from properties; the subsuming of the private health service into the public one.

All of these measures have been repeatedly cited, to a greater or lesser extent, by organisations advocating for equality for years. Yet the stock response was it simply could not be done. When the crisis was big enough it was done in jig time.

There will be a large bill to pay when the country and world emerges at the other side of this crisis. But the suggestion from the president down is that values and focus could be realigned in a more inclusive manner.

Proponents of a Universal Basic Income like Anne Ryan have been advocating for it as the route to a more equitable and sustainable society. The concept has been around for decades.

Its primary tenet is that every adult, irrespective of circumstances, receive an income from the state. This ensures that poverty traps are avoided. Those in work, at all wage and salary levels, receive it.

Those out of work are also paid. Effectively, it provides a floor below which society concurs it would be difficult to subsist. To its proponents it reflects an egalitarian principle. Opponents see it as a disincentive to work and, at the other end of the scale, spending public money on people who simply dont need it.

I think when we are eventually post crisis people will see value in having a system of basic income, Anne Ryan says.

Some businesses will survive and others wont and people could start a business of their own if there was a safety floor there. It could give them a chance to put wheels on ideas. We would see it very much as an investment in rebuilding.

Other groups also see the prospect of doing things differently on the far side of the crisis. Social Justice Ireland, the think tank that advocates for equality and a sustainable future has also taken the opportunity to present what it says should be a new social contract.

As part of this social contract arrangement in a modern democratic society, citizens may expect; access to meaningful work, as well as protection from poverty at times where paid employment is not accessible, the proposal states.

It goes on to include a minimum floor of income in times of old age, disability or infirmity and a proper education system and guarantee that needs will be met at times of ill-health.

In return, the contract expects citizens to contribute to society in different ways at different points in the lifecycle.

Michelle Murphy, policy analyst with SJI, says that the virus crisis has changed everything.

People have seen what you can actually do if there is real will there, she says.

In the space of three weeks our health system has more or less become a public health system. Look at childcare. All of a sudden we have a national childcare system.

We seem to be able to do these things when faced with a huge crisis and its going to be difficult to roll back from that. Things have changed and I dont think we can ever go back. Everybody is now thinking on a personal level what is and is not important to them. The political system should use this opportunity to start as discourse to think about exactly what kind of society we want.

Political will holds the key to any big changes in society. It is as yet too soon to know how exactly the country will emerge and therefore Whether the scars left will on the national psyche will be so deep as to demand significant change in how we live.

Will, for instance, the vested interests that drive much of the political culture retain their power? Will a government facing into what many expect to be a deep recession be equipped to make these changes?

Is there any chance that the political culture could collectively bypass its first instinct to give priority to the short term and instead address the big picture?

Economist Jim Power is not optimistic on that front. You would hope that certain elements of this (crisis) would make people reassess, he says.

Look at the fact there is currently no traffic and the impact that has on the environment. Id hope that a lot more people might, for instance, look at the need to travel, to go to meetings and such like. Zoom has transformed a lot of that.

But in terms of whether we can recalibrate the economy and introduce something like basic income, youd like to think so but once things reopen there will be a scurry to repair balance sheets.

The balance sheet requiring the greatest repair will be the national one. Some estimates put the cost accruing to the state at upwards of 30bn if the crisis last throughout the Summer.

There will be a huge public debt legacy, Mr Power says. And the question is what will be done with that. There are strong possibilities that taxes will be increased in the coming years and obviously massive pressure to curb public spending and get finances back into shape.

At the same time there will also be pressure to continue with the level of spending in the health service. If one lesson should be learned from this it is that a depleted health service is not a good idea and there must be targeted spending there.

Between it all, he doesnt see much room for introducing what some might consider radical schemes such as basic income.

The notion of introducing a universal basic income sounds nice but I simply dont believe that the environment to facilitate it will be there. It would be lovely in theory but very different in practice.

The hard economics do make it appear that any kind of a structural change in society will be difficult. However, the old adage about not wasting a crisis comes to mind. After the economic collapse in 2008, there were voices saying that things would have to do done differently in future.

To a large extent they werent, and some would argue that the ultimate outcome was the recent general election which appeared to soundly reject politics as usual.

Will things be different this time around?

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Michael Clifford: Is it now time to give some real thought to Universal Basic Income in Ireland? - Irish Examiner

Since the second half of March, more thanthreemillion Canadians have applied for jobless benefits and emergency income aid due to the coronavirus. This week, the federal government started taking applications forthe Canada Emergency Response Benefit. The CERB will directly deposit $2,000 a month into thebank accounts of Canadians who qualify.

The government has already acknowledged there will be glitches, which it has promised to fix. What's important is that, in two or three weeks, a huge surge will sweep through Canada's shutdown economy, as households spend the replacement fundspaying past-due bills and restocking their bare cupboards.

Alongside the threat that COVID-19 could overwhelm even the most modern hospitals, the pandemic has revealed several serious weak points in profit-driven economies. Indeed, with most service industries shut down --a sector that comprises 77per cent of the U.S. and 70 per cent of the Canadian economies --business voices warn of an imminent recession and perhaps a big D depression.

In the U.S., 10 million peoplelost their jobsin late March, as several -- but not all --states closed all non-essential businesses. The U.S. president openly emphasized COVID-19's effects on the economy, rather than on the population.He announced that U.S. governorswere on their own to handle their states'emergency medical responses to the pandemic.

Governors like New York's Andrew Cuomo, juggling inadequate resources among a patchwork of private and public hospitals, are blasting POTUS for blatantly trying to find some way to exploit the crisis. State governments are not just on their own;they are bidding against each other and the federal government for essential medical supplies.

While scholars will spend decades parsing what happened during the pandemic, some lessons seem pretty clear.

1. In dealing with a global hazard, co-operation works better than competition. Everyone's survival depends on people being able to get along.

Facing this pandemic, co-operative householders are more likely to stay home when asked, and co-operative medical services are more likely to lend equipment back and forth across jurisdictions. The U.S. president sowed discord by undermining top U.S. experts and encouraging competitive bidding for essential medical equipment, as well as promoting an unproven prescription drug.

There's no question which culture has higher survival rates.Co-operative California is sending 500 ventilators to competitive New York City, which needs them desperately.

2.Some of our most valuable workers are also the most poorly paid.We're re-defining who and what's "essential."

Horrifying images on the news, of trucks full of bodies outside hospitals full of patients lining internal corridors, keep reminding us that the cleaners, orderlies, doctors, nurses and other medical staffmust be driven by something greater than a paycheque or even duty. That's why, around the world, including in Canada, grateful citizens stand outside their homesand cheer the health-care workers, retail clerks, delivery drivers, stockers and helperswho provide essential goods and services while the rest of us are staying home.

3. Globalization breaks down just when you need it most.

"The new coronavirus is shaping up to be an enormous stress test for globalization,"warnedthe March 16 issue of Foreign Affairs magazine."... As critical supply chains break down, and nations hoard medical supplies and rush to limit travel, the crisis is forcing a major reevaluation of the interconnected global economy.

"Not only has globalization allowed for the rapid spread of contagious disease but it has fostered deep interdependence between firms and nations that makes them more vulnerable to unexpected shocks. Now, firms and nations alike are discovering just how vulnerable they are ... "

******

In the 1980s, Ronald Reagan and Margaret Thatcher birthed the Conservative myth that tax cuts would stimulate the economy.Thatcher used the term TINA, "There is no alternative," to tax cuts, public service cuts, rush hoursand the whole capitalist, militaristic, colonialist, fossil fuel-driven, class-ridden, racist, sexistand generally callous world economy.

With COVID-19, Mother Nature has overturned TINA. Having the Angel ofDeathwalk among us humans has stimulated our ingenuity. Suddenly organizations of all kinds are learning how to work remotely, via shared documents and live videos. We're burning a lot less fuel --no rush hour traffic jams, no bustling crowds lighting up the big office buildings, no planes full of guests to destination weddings. Although humanity is paying a terrible price, the earth is getting a rest.

And so is the economy, which raises an intriguing question:Between COVID-19 and oil prices lower than $10 a barrel, most of Canada's capitalist economy stopped last March. Humanity persisted, nonetheless. Now the question is, do humans drive the economy, or does the economy drive humans?

In some ways, with the spontaneous "caremongering"movement, we're back in the gift economy, the goodwill economy, where people run errands for neighboursand share their food (at a distance), and learn how to sew face masks to protect medical workers. Manufacturers small and large are retooling their production lines to turn out life-saving equipment, often gratis.

But modern economists don't count gifts in their calculations.They only count paid transactions. With everything shut down,spending in Canada has slowed. Almost our whole economy is based on retail or providing services.

Of course, all those threemillion newly unemployed people would gladly do their part to boost the economy, if only they had money to spend. Canada is very similar to U.S. in that, "Consumer spending ... accounts for more than two-thirds of U.S. economic activity,"Reuters reported in August 2019. And this from Bloomberg: " ... Consumer spending, or consumption as the bank likes to call it, was the single biggest contributor to economic growth last year and is expected to retain that title in 2020."

Hencemy prediction that the CERB payment will produce a surge, in the same way that the Canada Child Benefit, which acts as a basic income guarantee for families with children, has been credited with increasing Canada's GDP.Spain's finance ministerhas already announced similar emergency funding in response to COVID-caused economic crises, stating that the payments will evolve into a universal basic income.

Figures from the Canadian Centre for Economic Analysisshow that since 2016, the Canada Child Benefit has injected $71 billion into the economy, or 2.1 per cent of Canada's total GDP. Every CCB dollar generates nearly $2 in economic activity, and returns more than half ($0.55) through taxes, $0.30 to the federal government and $0.25 to provincial governments.

In short, government cash injections into households may be able to help a consumer-driven economy chug along at half speed for quite a while, probably much longer than similar injections into mega projects such as pipelines.

Everything may look different again by the fall. The economy will have to change to accommodate contagion concerns that are likely to continue for two or three years due to uneven isolation rules. Social distancing may doom some industries, such as ocean cruise lines. Most of the changes will decrease carbon emissions.

"Nature is sending us a message,"said Inger Andersen, theUN'senvironment chief. "We are intimately interconnected with nature, whether we like it or not. If we don't take care of nature, we can't take care of ourselves ...There are too many pressures at the same time on our natural systems and something has to give."

Indeed, capitalism's insatiable demand for growth lies behind the climate crisis, desperate povertyand the Saudi-Russian price war over oil.Warning signs are flaring all around the globe, as wildfires, locust invasions, floods and droughts.Atiny protein molecule wrapped in fathas brought us all a wake-up call with the spring equinox. Right now, with physical distance requirements challenging basic aspects of the service and retail sectors (in effect, putting them out of business indefinitely) the world economy is broken. Right now, while we recognize that we're all in this together -- albeit two metres apart -- now is the time to recognize that endless perpetual growth for profit is an illusion. Now is the time to figure out how human beings are supposed to fit into nature, and to re-introduce equity and justice to our financial and ecological economies.

If not, well, nature has much deadlier viruses out there that we have yet to discover.

Award-winning author and journalist Penney Kome has published six non-fiction books and hundreds of periodical articles, as well as writing a national column for 12 years and a local (Calgary) column for four years. She was editor of Straightgoods.com from 2004-2013.

Image: Tim Dennell/Flickr

Editor's note, April 9, 2020:An earlier version of this story misspelled the lastname of the UN's environment chief. She is Inger Andersen, not Anderson.

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COVID-19 kicks over the economy - rabble.ca