Taylor: Even after coronavirus goes away, universal basic income is here to stay. Click here.
As of last week, we have the results from the Democratic primaries, and we have a surprise winner. I didn’t expect to say this, but tech entrepreneur Andrew Yang has run away with the 2020 presidential election.
No, I don’t mean that, literally, Yang will become president next year, obviously. But his central, formerly kooky-sounding idea of universal basic income, or UBI, is about to become reality. With bipartisan support. And more than that — I think it becomes permanent.
What the Trump administration and key Republicans senators are looking to pass in the next week or so, as a response to COVID-19, is an unconditional cash transfer to American adults.
As of this writing, they’re debating the amounts and timing. But an agreement seems likely. Maybe $1,200 per adult and $500 per child, as proposed in a GOP Senate bill, according to news reports Friday.
This cash transfer is a previously untried — in the U.S. — solution to alleviating the effects of a recession. For what it’s worth, it feels to me like exactly the right thing to do.
The traditional strategy of lowering interest rates and hoping the benefits “trickle down” doesn’t target the people who face imminent poverty because the bar, restaurant, retail store, theater or gymnasium where they work is closed until the virus abates.
As Americans, we think we’re opposed to transfers like this. We think in terms like “bootstraps” and “no work, no pay.” But just as there are no atheists in foxholes, there are fewer libertarians in a pandemic-induced recession.
Nobody is to blame when their restaurant-employer shuts down indefinitely by order of the city. People want to work, but they can’t. The only humane response is a bit of cash to cushion the blow until normalcy returns.
So why do I think this one- or two-time cash transfer will become permanent? For a bunch of virologic, economic and political reasons.
I’m not an infectious disease expert (although I am married to one!), but I can imagine scenarios where we do not have the “all clear” signal to return to public places three months from now.
Let’s say the COVID-19 lockdown and recession continues for not three months but six to 12 months. Every shuttered business represents people who can’t afford to pay rent or the mortgage, or buy groceries. The pesky thing about food and shelter is that we all have to pay for it every month. The federal government is going to have to make another unconditional cash transfer three months from now.
And then, if the virus continues to circulate among the population, another month after that. And so on.
Pretty soon, we’re looking at a monthly universal basic income.
Why will it become permanent? Let’s look at Alaska. Then Social Security.
For Alaska residents, a basic income check known as the Alaska Permanent Fund Dividend — recently around $1,600 per year — sure is popular. Even though oil revenue has plummeted and the state can’t necessarily afford it, Alaskan politicians would not dare eliminate the dividend. It turns out people like free money.
There was a moment, in the mid-1930s, when Social Security looked to some people like a radical socialist idea. Now, only paleo-conservatives find Social Security to be un-American.
So I bet by month six of this recession — just before elections — a majority of Americans will have swung around to deciding that a universal monthly basic income is a comfortable and necessary thing.
Perhaps the greatest whiplash is happening among political leaders.
How did the Republican Party suddenly become advocates for this unconditional cash transfer?
President Donald Trump undoubtedly has an instinct for what his key supporters want and need. A strong case can be made that the Rust Belt voters of Michigan, Pennsylvania and Ohio who pushed Trump over the top in 2016 are eager for an economic lifeline. When you live in factory town and manufacturing jobs are going overseas, a little monthly help goes a long way.
Trump, nominally a Republican, has an unorthodox approach to economic policy. Certainly he’s proved willing to reject the free-trade, open-borders, global-market approach of the Bushes and Romneys of his own party.
But then, Utah Sen. Mitt Romney himself kicked off the cash transfer idea on the Republican side Monday by urging $1,000 be sent to every American adult.
Arkansas Sen. Tom Cotton, a Republican with sterling conservative bona fides, jumped in to support $1,000 payments for every American, introducing the idea that payments should be made monthly, as needed.
Embedded in Cotton’s proposal is the reason conservatives might, and should, endorse cash transfers and UBI.
Cotton said on Fox News, “We worry that the (already passed rescue) bill is setting up a new and complicated system relying on businesses giving paid sick leave and then getting a refundable tax credit that won’t move quickly enough and could give pressure on those businesses to lay workers off.”
To Cotton, and possibly other conservatives, unconditional cash transfers and the related idea of UBI have the huge advantage of simplicity. And simple means smaller government.
Charles Murray, a staunchly conservative intellectual, wrote in his book “In Our Hands: A Plan To Replace The Welfare State” that UBI represents a far preferable system to the current patchwork of federal programs.
It doesn’t take a massive government system to send money transfers. Traditional welfare programs, such as food stamps and the earned income tax credit, require giant bureaucracies. Small-business tax credits are complicated. UBI is easier than housing subsidies or unemployment checks. Faster than rent or mortgage freezes.
The idea of trusting people to use money as they personally choose is a deeply conservative, small-government idea.
When conservatives like Cotton, moderates like Romney and unorthodox Republicans like Trump unite around an economic idea that feels pretty lefty, you have the makings of a permanent feature of American life.
I haven’t mentioned the Democrats yet. Senate Minority Leader Chuck Schumer has already argued that the one-time cash transfer does not go far enough.
“This is not a time for small thinking,” he said. “A single $1,000 check would help someone pay their landlord in March. But what happens after that?”
New York Congresswoman Alexandra Ocasio-Cortez has weighed in with support, but not if it comes at the expense of existing welfare programs.
If given the chance to implement a permanent UBI, would Democrats support this idea? I don’t know … is the pope Catholic? They are never going to allow Republicans to get to the left of them on this idea.
The final match-up between former Vice President Joe Biden and Vermont Sen. Bernie Sanders has left neither candidate with a viable economic plan. Biden because he never had any forward-looking ideas except to replace Trump. And Sanders because his forward-looking idea of “Medicare for All” has precisely zero chance of implementation over the next 20 years.
So that leaves Yang as the ultimate winner of the presidential race, even if he’s not the one who will occupy the Oval Office next year.
“Money for Nothing,” as Dire Straits used to sing.
I bet nobody is as surprised as Yang that he won the war of ideas — and far more quickly than he imagined.
But remember that you read it here first: We’re getting UBI in the United States starting this year — and we’re never going back.
Michael Taylor is a columnist for the San Antonio Express-News and author of “The Financial Rules for New College Graduates.”
