Daily Archives: June 6, 2020

Michael Howard, Co-ordinator of USBIG, has written an article about increasing Basic Income activism in the United States.

Two years ago, if one were to speak of a basic income movement, one might be accused of hyperbole. USBIG was able to muster support for annual congresses, in cooperation with the Basic Income Canada Network, and disseminate information and analysis through the website and newsflash. Then came the Yang campaign, putting UBI on the national agenda.

To read the article, click here.

Michael Howard has written 5 articles.

Michael W. Howard is Professor of Philosophy at the University of Maine, USA. He is the coordinator of the US Basic Income Guarantee Network, co-editor of Basic Income Studies, and co-editor, with Karl Widerquist, of two books on Alaska's Permanent Fund Dividend.

The views expressed in this Op-Ed piece are solely those of the author and do not necessarily represent the view of Basic Income News or BIEN. BIEN and Basic Income News do not endorse any particular policy, but Basic Income News welcomes discussion from all points of view in its Op-Ed section.

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Basic Income activism in the United States | BIEN - Basic Income News

(Pixabay)Such an expansion of the welfare state would have once kept conservatives awake at night.

Amid all the momentous events that have defined the coronavirus pandemic, the decision by both the Trump administration and, in near-unanimous votes, both houses of Congress to institute a stimulus program an element of which amounts to a de facto universal basic income (UBI) is perhaps the least appreciated.

Paying individuals a flat check of $1,200, is, effectively, a one-time UBI. Legislators are already considering a second round.

The long-term import of this is significant. At a time when the two parties can agree on almost nothing, they came together to support a policy that up until recently was restricted largely (but certainly not exclusively) to the Silicon Valley Left.

Watching this go through brought to mind Rudyard Kiplings 1919 poem The Gods of the Copybook Headings. Kipling contrasts the Gods of the Marketplace, meaning the socially acceptable wishful thinking, with the Gods of the Copybook Headings, who remind us of the eternal truths we routinely abandon for a more fashionable pantheon. He concludes with these lines:

And that after this is accomplished, and the brave new world beginsWhen all men are paid for existing and no man must pay for his sins,As surely as Water will wet us, as surely as Fire will burn,The Gods of the Copybook Headings with terror and slaughter return!

Sound familiar? In a few short months, we went from UBI (the idea of giving almost every adult citizen a check) being an idea favored only at the margins to its being the official policy of a Republican administration backed by a Republican-controlled Senate.

The counterargument is clear. These are extreme times. This is not UBI but merely a temporary support measure for working families in exceptional circumstances. It is an argument that might have more force had not conservative political parties in the Western world found it so difficult to rein in an expanding welfare state that can no longer be afforded, something that became all too obvious in the battles over austerity after the European debt crisis.

Since Americas current UBI was promoted as an essential element in a stimulus program, it seems reasonable to assume that, whatever is being said to the contrary, it will be more difficult to end it until the economy gets strong enough to no longer need stimulus. The list of temporary spending programs instituted during a crisis but later discontinued is distressingly short.

Fearing the electoral consequences of challenging this regime, many conservative parties of the Western world seem to have given up on the task of decreasing the size of government. In the United Kingdom, Prime Minister Boris Johnsons Conservative Party has made protecting the U.K.s public health-care system one of the cornerstones of his government.

The Trump administration has signed relief plans totaling over $2 trillion, in an environment where were already spending $4.45 trillion a year. The small-government that once defined conservative politics appears to have fallen out of fashion.

UBI programs such as the individual $1,200 checks are simply the next step in the evolution of the welfare state. The preexisting welfare systems (whatever their faults) are designed to act as safety nets, but the checks in this case are universal they go to people who havent fallen into the safety net as well as to those who have. It isnt an unemployment benefit, federal jobs guarantee, work-for-welfare regime, or any other welfare system. Those at least maintain the pretense of encouraging the recipient to be self-reliant.

An expansion of the welfare state of the type represented by these checks would have once kept conservatives awake at night. But wed put our emphasis on the used to, as conservative parties have been on their current path for years; it just took an excuse, provided now by the pandemic and accompanying shutdowns, to push them off the cliff. We might look back on the societal consequences of the pandemic not as revolutionary but as acceleratory.

Unfortunately, we have been doing the bidding of Kiplings Gods of the Marketplace for quite some time now, by acting as though we can infinitely expand the federal government and suffer no consequences. Had the Western world not abused monetary and fiscal policy during our past crises and recoveries, we would have had more margin, more room for error in dealing with this one. But we treated peacetime like wartime, and now that a true war is here, we find our swords are dull.

The United States is straining against the limits of sound policy and relying on the credulity of bond investors after decades of growth of the federal government in a way and to a size that now threatens our fiscal stability. Even if this first draft of UBI does not last past the pandemic, the Trump administration has normalized the practice of giving every American a check solely for existing. Dont be surprised if 2022 and 2024 feature politicians far more prominent than former Democratic presidential candidate Andrew Yang running campaigns on Universal Basic Income.

If a Republican president can do it, why not a Democratic one?

A pandemic should prompt some introspection, if nothing else. While it is far from clear how things will turn out and how severe the consequences of our policies will be, the coronavirus and its repercussions have demonstrated once again that we are not invincible. The laws of economics are not suspended just because theres a crisis.

Jerry Bowyer is the president of Bowyer Research and editor of Townhall Finance. Charles Bowyer is a risk analyst for Bowyer Research and a writer for Townhall Finance.

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When All Men Are Paid for Existing: Universal Basic Income Has Arrived - National Review

ImpactAlpha, June 3 If the COVID crisis has laid bare longstanding inequities, the widespread protests over the police killing of George Floyd are pushing racial equity to the center of the COVID recovery.

Just as long-standing inequities have left black people disproportionately at risk to the virus, the lockdown has been particularly devastating to Black-owned businesses that are heavily concentrated in the service economy in hospitality, retail, wellness and other high-touch businesses. The number of working African American business owners in the U.S. has fallen by more than 40% in the pandemic, far more than for other groups. And these are the same kind of businesses that have struggled to access federal relief.

Impact investors and corporate leaders are calling for bold action for racial justice. All businesses are being closely watched for how they treat workers, customers, communities and other stakeholders. A growing chorus is demanding a bailout of people, not just corporations.

Racial lens investing, with both private and public funds, both equity and debt, has never been more timely.

Get up, stand up: Impact investors speak out for racial justice

The blueprints for a racially inclusive recovery already are taking shape in communities across the country. In Oakland, Calif., Boston, and New Mexico, local funds such as Runway Project, Ujima Fund and the Boston Impact Initiative are doing the kind of deep, innovative, relationship-based work that is needed to begin to heal racial inequities and trauma.

Such new revivalists, are modeling solutions that can be rolled out widely, to speed the recovery of people and families, as well as businesses. That includes universal basic income for black founders, people guarantee pools and sharing power in investment decision-making and ownership the financial infrastructure that is going to love black and brown people as Runways Jessica Norwood puts it.

The pandemic is an accelerator and amplifier of everything, says Deborah Frieze of Boston Impact Initiative. If we cant figure out how to respond now, when will we?

Runway was established to address the racial wealth gap. Its portfolio is an example of the potential for Black entrepreneurs when they have access to capital, mentoring and a support network that has too often been out of reach.

For Small Business Week in early May, the Runway Project had planned to celebrate the strides made by the Black-owned businesses in its portfolio, from Essence of Flowers, a locally-sourced floral business to Hox Uniforms, which makes custom team uniforms. Instead, the loan fund found itself scrambling to keep them afloat as the COVID crisis shut down large swaths of the economy.

We were trying to grow businesses, now were trying to stop the loss, says Jessica Norwood, who founded Runway in 2016 to tackle the gap in friends & family funding for Black entrepreneurs. COVID has changed everything.

Starting in Oakland, Calif. and expanding to Boston, Norwood and her team have spent the past few years modeling a different kind of financial system that is attuned to the needs of underserved communities and the historic legacy of social and economic discrimination they are trying to overcome.

Jessica Norwood: Believe in you money for black entrepreneurs

When COVID hit, the first order of business was to speed relief to small businesses whose revenues evaporated almost overnight. Small, local funds were among the parallel system of first financial responders. Norwood and her team conducted wellness checks and immediately deferred all loans and interest payments from its 30 or so borrowers for six months. (Its standard loan terms include a 2-year interest-only period).

They helped portfolio companies apply for federal aid via banking partners such as Self-Help Credit Union and Berkshire Bank. And they offered strategic and marketing support through partner Uptima Business Bootcamp, an Oakland-based accelerator cooperative, so that businesses could retool for the new socially distant world.

Even more was needed to stem the loss of income for Runways business owners, many of whom are sole proprietors. The answer: six months of no strings attached payment or, universal basic income for Black business owners.

We wanted to create spaciousness to pivot, reimagine, create a new business plan for the post-COVID world, says Norwood. UBI reflects our belief in choosing trust and relationships over bureaucracy and evaluation, and doubling down on what it means to be friends and family.

That support made all the difference for Ariana Marbley, the founder of Esscents of Flowers, a local flower delivery service in East Oakland. Marbley had entered 2020 with a full schedule of events and weddings, but as COVID took hold, one by once they cancelled or postponed. She reluctantly applied for loans, but was turned down by bank after bank.

The monthly payments from Runway have relieved the stress and allowed her to focus on marketing. I felt for the first time in a long time that I was taken care of, that the business was taken care, says Marbley. Its not until times like this that you realize how deep that support and love runs.

Shes returning the favor, in a sense, by handing out yellow roses with a message of affirmation to Black East Oakland residents grieving over the killing of George Floyd.

Oaklands community capitalists are modeling an inclusive economy

Runway was inspired in part by Aisha Nyandoros Magnolia Mothers Trust, which distributes $1,000 a month for a year to twenty families in Jackson, Mississippi. The city of Stockton, Calif., has also experimented with $500 universal basic income payments to low-income residents. In the face of the COVID crisis, Stockton has extended the program, which was set to wind down this summer, through January.

Runway was able to raise the money to fund these programs in less than a month from longtime funders including RSF Social Finance and Candides Olamina Fund.

In Boston, Deborah Frieze conducted resiliency tests with the 30 portfolio companies of the Boston Impact Initiative, the charitable loan fund she founded to help close the racial wealth divide. Only four have had to completely close (seven were deemed essential and a dozen or so were able to operate remotely). But some teetered on the brink after gearing up for big contracts with hard-hit industries like airlines that were put on hold. All told, 200 employees suffered a full or partial loss of income.

Her first imperative was to throw out a lifeline for workers, many of them women of color, undocumented immigrants, formerly incarcerated or part-time employees who lacked savings and might not be eligible for federal aid. Frieze worked with her lawyers to structure what she calls a People Guarantee Pool to provide a one-time $1,200 non-taxable gift to portfolio company employees (those who lost partial income received $600).

At the same time, she instituted a blanket three-month principal and interest forgiveness for business owners starting April 1, which could be extended, restructured or deferred further as circumstances required.

BII also worked with portfolio companies to help them preserve cash and renegotiate rents and other expenses.

As a small fund, we can actually wrap our arms around the entire set of companies in our portfolio, says Frieze, who raised $162,000 in grants to fund the peoples guarantee pool and another $230,000 in recoverable grants for the loan forgiveness programs. Some donations came from MBA 1200, where Harvard and other MBA students or alumni donated part of their government relief checks.

That kind of unconventional thinking is a hallmark of BII. The fund deploys a creative mix of debt and equity financing to achieve its goals. Rather than lavishing perks on its biggest investors, it prioritizes the small, retail investors with higher interest rates and more loss protection.

Those that can least afford to lose the money should be de-risked the most, says Frieze. And those who have the most can take on more risk, either a lower rate or higher risk.

How community investment funds are building resiliency to disasters, pandemics and economic shocks

BII helped incubate and launch the Boston Ujima Fund, which is democratically controlled by community members in Bostons working class neighborhoods, who vote on impact objectives and investment decisions. Ujima has created its own relief fund, the Ujima Boston Worker and Resident Care Fund, that will issue one-time payments to voting members, businesses and employees impacted by COVID.

Now, Frieze is turning her attention to the recovery phase, which will be equally hard on business owners of color that have traditionally struggled to access capital but will need to invest in order to re-open. BII is looking to raise a $2.5 million Business Resilience Fund fund to originate zero-percent working capital loans to fund an inclusive recovery.

The recovery has just begun. But the models these small funds are designing and testing point the way to a recovery and system rooted in a different set of values and beliefs. If we understood ourselves as interdependent, wed be looking at, how can I ensure that my suppliers stay healthy? My customers and employees? says Frieze.

The COVID crisis may speed up the development of infrastructure to nurture and support entrepreneurs of color. We really leaned into our values at this time and it made all the difference, says Norwood. There is another way and world possible, and its happening right now. We all feel so much stronger.

The kind of deep, relationship-based work does not necessarily scale. Thats why Runway is evolving its model to support more communities of practice and moving the needle on what it means to build a repair economy and infrastructure that loves black and brown businesses.

Frieze has launched a fund-building cohort to share BIIs experience with others looking to create their own place-based and racial justice funds. A dozen teams spanning Baltimore to the Twin Cities to New Mexico have been meeting virtually since April. Many are speeding up their timelines and prototyping funds in realtime to deal with the COVID fallout.

As Norwood says, I dont believe we will make it on the other side of this COVID crisis if we dont all make it.

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Local funds model the racial reckoning and renewal central to the COVID recovery - ImpactAlpha