Another Reason for a Universal Basic Income

Another Reason for a Universal Basic Income

If you aren’t honest (about automation), you will continue to have a populist revolt that may not result in good economic outcomes in the future. 

-       U.S. Senator Heidi Heitkamp, via Marketwatch

By J.M. Hamilton (2-26-2017)

The case for a UBI (universal basic income) is unfolding before our very eyes. 

Bear with me, as we look at two seemingly disparate recent events:

One, the nascent acknowledgement of the Deep State’s existence, by a leading fourth estate news organization, the New York Times.

A wave of leaks from government officials has hobbled the Trump administration, leading some to draw comparisons to countries like Egypt, Turkey and Pakistan, where shadowy networks within government bureaucracies, often referred to as “deep states,” undermine and coerce elected governments.

So is the United States seeing the rise of its own deep state?

Not quite, experts say, but the echoes are real — and disturbing.

JMH has written about the Deep State’s extraordinary and abused power before. 

As my readers may know, the Deep State consists of: the DOD; the military brass, who ride the revolving door into the MIC; the intel services, NSA, FBI, CIA, etc, etc, etc.; the police state (i.e. fed, state, county and local law enforcement); MIC contractors (who own and operate much of the Deep State for profit); and the Wall Street banksters, private equity & hedge fund operators, who possess active stockholdings, or ownership, and help finance Deep State operations, directly or indirectly.  Some would broaden this definition to include the Justice & State Departments, and even the Department of Homeland Security. 

And who can forget the Federal Reserve, who has been printing money to keep up with the nation's catastrophic nation building adventures.

Some citizens may still wonder why the U.S. finds itself: perennially at war w/ the world; w/ special ops forces in 70% of the world’s nations; and last we checked, in the closing days of the Obama administration, with the U.S. bombing no fewer than seven nations.  The U.S. too, is the planet’s number one merchant of death.

(The U.S. is estimated to spend a trillion dollars, annually, on this racket... particularly when factoring in interest expense.  And now the Deep State is alleged to be leaking secrets to the MSM, as POTUS Trump has gone on the offensive with the Intel Services.)

But don’t take this libertarian’s/liberal’s word for it.  None other than conservative columnist, George F. Will of Washington Post fame, just did a piece on the topic.  Read here.  Or my pieces on privatized government as a profit center, here and here.

Eisenhower’s warnings w/in his farewell address to the nation have come to fruition, and our Democracy, and elected politicians, are heavily influenced, if not controlled, by the Deep State.  Which, by the way, makes us little better than Egypt, Turkey, or any other third world country run by military dictatorship or junta.  It’s truly frightening to witness, and yet, entirely foreseeable:

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.

In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.

Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.

The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present

• and is gravely to be regarded.

Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

-       POTUS Eisenhower’s farewell address. 

In the 20^th Century, Eisenhower may have been the most prescient individual, rivaling George Orwell.

Two, the acknowledgement that M&A, free trade/globalization, and automation are killing jobs, and all too often opportunity, at an alarming rate.

As written up by the NY Times, in the mere span of a couple of years, since the floor fell out of the oil market, the resurgent fracking - and oil production - industry has automated to a considerable degree.  Automation in the oil field, per the Times, is estimated to have eliminated 33% to 50% of the unskilled labor jobs.  Now, consider that pace of automation, the profit making potential of eliminating all human labor (often biz’s largest expense), and project it into the future….

Even the BOE has estimated that America may lose up to 80 million jobs to automation.

Apparently, many of tech’s titans have seen the future.  Mr. Bill Gates, mega-billionaire of Microsoft fame, is an advocate and believer in UBI, and believes he has a solution for funding UBI; that is, tax the robots. 

But what constitutes a robot?  Is a robot the automated/computerized command center at an oil or chemical refinery; is a robot the software and code; or is a robot any humanoid device or machinery that has replaced human labor?  Is a robot all the above?

We can see Mr. Gate’s concern… he’s fast-forwarded, and the future appears – largely – human labor free, particularly in regards repetitive tasks.  But even formerly bullet proof professions aren’t immune from job cuts. The poor don’t pay income tax; albeit, they get hit w/ predatory/regressive taxation all the time.  The upper middle class, and wealthy, pay the bulk of the nation’s taxes, via income taxes.  The uber wealthy – corporations, multinationals, & the billionaire class - often dodge taxes and basically write the tax code to their advantage; hence, the reluctance of the U.S. congress to go where even angels fear tread: revisiting the U.S. tax code. 

Now eliminate the middle class due to automation, M&A consolidations, and free trade and globalization, and one can see the tax burden growing exponentially, particularly w/ an aging baby boom population.

Hence, the mass exodus of major corporations out of the United States (so as to dodge taxes).  One can imagine beads of sweat forming upon Mr. Gate’s furrowed brow.

Capitalism (crony or otherwise) – as practiced today – does not provide enough employment for the world’s labor pool, and it's only going to get worse. M&A, a known job killer, aggravates the situation by eliminating labor/aggregate demand, which spawns successive waves of additional job killing mergers and acquisitions.  In the short run, Mr. Trump may, indeed, be successful in bringing jobs back to America (and he should be encouraged); but that event, will likely coincide w/ American manufacturing’s biggest push yet towards complete automation.

On free trade & globalization, economists have commented on how free trade agreements have harmed both U.S. labor and are a threat to national sovereignty.  And JMH, too, has taken up the topic on several occasions, here, here, and here.

M&A, automation, free trade/globalization, and AI are killing jobs at an alarming rate.  Simultaneously, the Deep State has bankrupted this nation with endless warfare and nation building, and has a pernicious impact upon U.S. global affairs and our nation's standing in the world.  Therefore, the case for a UBI has never been more clear.  Do the elite want to stave off, or prevent, a Luddite revolt, or eliminate a corrupt shadow state?  Better to come up with a UBI now, and not wait for the revolution.

But, as JMH stated going into this piece, there’s yet another reason to create a UBI.  Take the two examples provided above: the inexorable rise of a privatized deep state, from WWII forward (a shadow state that threatens the very fabric of our democracy); and the recent reinvigoration of an - increasingly labor free -  fossil fuels industry, due to petrol market rigging by OPEC and speculators (a fossil fuels industry that threatens the very survival of our planet).

The point here is simple.  If a leader or POTUS … or more importantly, the majority of the country’s citizens, want to eliminate an industry (because said industry, such as the private prison industrial complex – is exceptionally prone to moral hazard), what’s the biggest issue preventing the elimination of said industry?

Answer: JOBS.  

One can hear the refrain from the U.S. Chamber and the Business Roundtable in response to such a proposal, and foresee the subsequent lobbying efforts that would amount to scorched earth.

We’ll kill jobs and employee payroll if the U.S. eliminates or significantly curtails the MIC; we’ll kill opportunity for thousands of employees, if we end the morally bankrupt enterprise of privatized prison contractors; the U.S. will crush a million or more jobs, if the U.S. dumps big carbon (coal, gas, and oil) and goes entirely, renewable. (Interesting: The Chamber & the Roundtable are nowhere to be found, when jobs are being cut to juice quarterly returns.)

Institute a UBI, w/ a basic benefits package, and those types of arguments are eliminated.  And America, and other countries who choose to institute a UBI, are free to eliminate entire industries that are – as w/ the horse and buggy – antiquated, or operate against the earth’s, humanity’s and future generation's best interests. (All of this helps to explain why free trade agreements are negotiated behind closed doors by multinationals, and away from the public's prying eyes.  Many of these free trade agreements contain ISDS provisions that allow multinationals to sue nation states - w/in extrajudicial courts - run by and for multinationals - for passing legislation, rules, or regulations that are detrimental to said multinational's profits.  These free trade agreements are little more then multinational welfare, and this predatory behavior and these agreements should be destroyed and transparently renegotiated.)

Up until now a UBI really has not enjoyed public backing from the establishment, but that is beginning to change.  As with many progressive advances, this latest wave in favor of UBI is coming from the West Coast and the tech sector.  To be sure, JMH is not advocating the end of private sector jobs & opportunity; but rather, UBI would work in harmony w/ the private sector. 

In fact, UBI just might save capitalism. 

Look for economic considerations and how to fund for a UBI in my next piece.

Copyright JM Hamilton Publishing 2017

Over the Falls…

Over the Falls…

Those who make peaceful revolution impossible will make violent revolution inevitable.

- John F. Kennedy - POTUS

If you tell a lie long enough, it becomes the truth.

- Joseph Goebbels – Reich Minister for Public Enlightenment and Propaganda

By J.M. Hamilton (2-12-2017)

For those who have not viewed Niagara Falls, the Falls are well worth the visit.  Particularly the Canadian side, the view of Horseshoe Falls is breathtaking and otherworldly, providing – for me anyway –as close a case, as I care to come, to sensory overload.  The sheer power, nature’s force and primal rage, the constant rush, the deafening roar, the mighty Niagara reminds me of the Goddess above.  After a short period of time when viewing the Falls, I often have to avert my eyes.  In particular, the Falls reminds me that we are an infinitesimal spec of carbon, and our life span – relatively speaking – but a nanosecond in time’s great arc.  Absolutely, humbling.

Nevertheless, our lives have purpose, and part of that purpose is to be the earth’s stewards, and hopefully, leave something better behind for our children and future generations.

JMH brings up Niagara Falls because it’s the closest analogy I can provide to the news flow issuing forth from the White House.  Simply amazing and not entirely reactive, but rather, the news flow is by intelligent design and not w/out a great deal of political strategy.  One can see the strategies of Sun Tzu, Machiavelli, Sherman’s march through Georgia, and even the Reich Minister of Public Enlightenment & Propaganda coursing through the White House’s executive orders & POTUS proclamations barrage.  (Interestingly, Machiavelli – in The Prince – recommended that a leader, who conquered a Republic, must destroy said Republic and its citizens, before it destroys him.)

The press appears blown away by it, and JMH is having a hard time coming to terms with it, as well.  If, as Hunter S. Thompson wrote, “politics is the art of controlling your environment,” and the news flow and US media are the “political environment,” then Mr. Trump – and Mr. Bannon – are kicking serious tail and taking names.  Trump - or Bannon - seemingly, wants to be a man of destiny, and clearly want their agenda adopted (or both want, to at least appear, to be making progress in that direction).

The news flow is rapid fire.  In no few instances, the news flow emanating from the White House appears to be running full throttle to divert our attention away from the prior day’s or week’s errors, or the latest public outrage.  The MSM - owned and operated by the corporate and multinational establishment – often finds itself merely reacting in Mr. Trump’s wake.  Not everything Mr. Trump has done is bad or dreadful – some of his actions are creative & positive (albeit often conducted in a highly unorthodox manner).  One would not know this, however, from the core news organizations’ reactions, the five major media organizations that control about 90% of the news flow & content.

So how do we pull back, and not allow Mr. Trump’s administration to play us with a Niagara like news flow, and/or the MSM – and its agenda -  to do the same?  The consolidation of the news organizations – seen in the U.S. over the last several decades – has led to, and allowed for, a homogenized narrative and messaging, among most of the core media outlets (that any authoritarian or totalitarian might appreciate).  Indeed, some news outlets have even been witting instruments of the two establishment political parties, and the establishment candidates running w/in the parties.  Makes sense, the plutocracy owns the politicians and of course, the media outlets.  (Hence, Mr. Trumps distaste for additional media mergers, such as ATT/Time Warner)

When dealing with complex issues and problems, JMH generally finds it’s best to pull up and take a look at the macro picture.  In this case what is Mr. Trump’s core mandate, and ultimately, will he achieve said mandate?  That’s exactly how the American people will likely judge Mr. Trump over the course of his first term.  "It's all about the economy, stupid."  Here, it’s instructional to look at Mr. Trump’s inaugural address, and its fundamental themes.

…we are transferring power from Washington, D.C. and giving it back to you, the people.

The establishment protected itself, but not the citizens of our country. Their victories have not been your victories.

For many decades, we've enriched foreign industry at the expense of American industry; subsidized the armies of other countries, while allowing for the very sad depletion of our military. We've defended other nations' borders while refusing to defend our own.

Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs.

We will follow two simple rules; buy American and hire American. When you open your heart to patriotism, there is no room for prejudice.

(JHM’s underline.)

Mr. Trump ran on two primary themes during his candidacy, and this came through in his address.

One, domestically & economically: Mr. Trump – a full fledged member and product of the establishment – ran as an anti-establishment candidate, and flat out told the American people that the U.S. political system is owned and operated by the establishment/plutocracy, and our government is generally run for the benefit of the establishment and plutocracy (aka the Davos elite).  And Mr. Trump would certainly know that.

Moreover, Mr. Trump planned to turn that around so that the economy, free trade agreements, and employment would be key features of his domestic agenda, and in the future, the economy and government would be run for middle America’s benefit (aka the 99%).

Two, foreign policy:  Mr. Trump acknowledged that credit card wars and nation building (aided & abetted by the Washington foreign policy establishment, which is embedded in both establishment political parties) had been a tremendous disservice to: Americans; the women & men who serve; U.S. prestige around the world; and amounted to gross fiscal mismanagement.  Along with that, there was the mixed message of remaining engaged in the Middle East and finishing the fight against radical Islam, and ISIS.  (That the U.S., and its so-called allies in the Middle East, spawned ISIS seems to be beside the point.)  And finally, on foreign policy, POTUS Trump wanted to break w/ the foreign policy establishment and not set up a new Cold War with the Russians.

And on these two core issues, JMH would argue that many Americans, perhaps a majority (given that Senator Sanders ran on many similar themes, and nearly beat Mrs. Clinton in the democratic primaries), support POTUS Trump.

What the majority of Americans did not, and do not support, is the Republican establishment’s social wars against American women, American minorities, and the LGBTQ community. 

Mr. Trump defeated the Republican establishment, it’s what he successfully ran on.  Not so surprisingly, it’s when the POTUS has adopted Mr. Pence’s (Mr. Establishment) social views, within the barrage of executive orders and POTUS proclamations, that Mr. Trump has found himself in a great deal of hot water, almost w/out fail.  It’s when Mr. Trump has adopted Mr. Bannon’s alt-right views that, again, he’s found himself dealing with marching in the streets (last seen on this scale in the ‘60s).

Mr. Bannon’s views apparently can be best summed up w/ the slogan: Make the White American Male Great Again. 

Nobody, or very few have said a word, when Mr. Trump took on the superpredators of Big Pharma, the contractors of the MIC, cajoled and jawboned U.S. multinationals into returning or maintaining jobs in the United States.  Very few – outside the globalist/multinational/corporate elite (and the academics, foreign policy establishment, and news organizations owned by same) – said a word when Mr. Trump tore up the TPP.

In short, there have been no protests in the streets over Mr. Trump's core – economic – agenda.  And outside the chattering class, little has been said about Mr. Trump’s foreign policies, excepting the Muslim travel ban, and Mr. Trump’s relations with Russia.

Here, it's worth noting that the Muslim travel ban was badly botched, and had Bannon’s finger prints all over it.  More importantly, it's worth noting that not a single terrorist attack has occurred on U.S. soil, originating from citizens from the countries on the Muslim ban list.  Per the Atlantic: "Nationals of the seven countries singled out by Trump have killed zero people in terrorist attacks on U.S. soil between 1975 and 2015.” (Ironically, the same cannot be said for the Sunni – Royal Monarchies – that the U.S. has commercial ties to and, conveniently, were left off the list.)  Word to the wise, Mr. President, discrimination based upon race, color, creed, religion, or sexual orientation is not only Un-American, but is probably considered backward by a majority of Americans.  There was a hundred different ways Mr. Trump could have executed upon that same executive order, calling for greater vetting of refugees, without even mentioning the word “Muslim.”

Now, as of this writing, the Muslim ban executive order has ended up in a federal court’s dust bin, precisely where it belongs.

In terms of Russia, POTUS Trump caught serious flack when he said, in response to the observation that President Putin was a killer:

“There are a lot of killers. We’ve got a lot of killers. What, you think our country is so innocent?” 

Anybody with a rudimentary high school education knows that America has a checkered history and suffers from a serious dichotomy between our ideals, and the manner in which our country is actually run and behaves, domestically and internationally.  From slavery, to manifest destiny, to overthrowing foreign governments throughout the 20^th & 21^st centuries to further multinational interests, Mr. Trump is right, and deserves credit for speaking the truth.  America has plenty of killers, and America has special forces in 70% of the globe’s countries.  These U.S. special forces aren't abroad on Boy Scout jamborees. 

Some American killers have well-trimmed fingernails and wear white-collar shirts, bespoke suits, and silk neckties.  We can generally, find this special breed of killer near the corner of Wall & Broad in Manhattan, or operating America’s private equity firms.

And the American press, here in particular, should know better.  It's on foreign policy in particular, where the MSM and the foreign policy establishment are most incensed about the Trump administration, and his abandonment – at least so far – of: a Pax-Americana foreign policy & the high priests of endless war.

The foreign policy establishment and the military industrial complex’s financial statements were very much counting on a new – credit card financed – Cold War (at the American people’s expense).  And the MSM is still upset over Mrs. Clinton's loss in the election, not through her own machinations or the DNC’s duplicity, but, allegedly, because Russia hacked the election and published DNC/Podesta correspondence.  Mr. Podesta’s correspondence, of course, has been discredited by no one.  In short, the truth found its the way to the surface, possibly with Russian involvement, and reflected poorly upon Mrs. C, the DNC, and her establishment base. 

Hence, the liberal McCarthyism that has been unleashed upon the Trump administration.  Meanwhile, hypocrisy is on full display.  Where is the liberal, and GOP’s, attack on Red China, and the totalitarian-communist thugs who run the slave labor kingdom?  Answer: Nowhere to be found.  U.S. multinationals make a killing off indentured Chinese labor, who often live and work in appalling conditions.

Mr. Putin is a killer, but anybody who has read Gulag Archipelago, by Aleksandr Solzhenitsyn, knows that Mr. Putin is no Joseph Stalin, or Adolph Hitler for that matter.  Mr. Trump’s and his staff’s conflicts of interest & machinations aside, along w/ Russia’s own modest empire expanding tendencies (spawned by the humiliation of the USSR’s collapse), this administration deserves credit for not landing the U.S. is a new Cold War (a new war this bankrupt nation can ill afford).

Yes, the news flow emanating from the White House is incredible, and so is the MSM’ response to it.  It’s pretty wild when the “liberal” media, such as Vanity Fair, takes the side of C-Suite/Multinational plutocrats over Mr. Trump. In the Vanity Fair piece, Mr. Trump was merely taking on the CEOs – who have grown wealthy beyond measure, via financial engineering and killing jobs and opportunity in America.

Role reversal? 

No.  Limousine liberals, Dems (see the Clinton Foundation), and establishment GOP have been on the side of the plutocrats for a long time, which allowed POTUS Trump to come to power.

How dare Mr. Trump attempt to fulfill his campaign pledge and keep multinationals from exporting U.S. jobs offshore.

POTUS Trump’s biggest shortcoming?  In his effort to appear decisive, he often takes liberties w/ the truth, which give the news media plenty of fodder to denigrate, or ignore, Mr. Trump’s more nobler efforts.  Mr. Trump should also stay away from Messrs. Bannon & Pence… their extremist social ideology is not a part of your mandate, Mr. President.  Their fascist beliefs & ideas may make for red meat to toss to some members of the GOP’s ever shrinking base, but they’ll do nothing to land your administration a second term. 

Best to go Rockefeller Republican on social issues, Mr. President.

MSM, pull up… don’t let a Niagara like flow of information emanating from the White House dictate the news flow or your reactions to same.  Hold Mr. Trump and his administration accountable to his mandate, and continue to speak truth to power.  And to the extent possible, MSM, ignore your corporate overlords' globalist – free trade – ambitions, and desire for endless warfare.  Yes, there’s a bogeyman around every corner, but none of them are a threat to the world’s last standing superpower.  If you can, MSM, stop spreading a fear based message. 

That’s the establishment GOP's, and Democratic Party's, job.

Copyright JM Hamilton Publishing 2017