Universal Basic Income (UBI)

[Wake-up!]

Stockton Gets Ready to Experiment With Universal Basic Income

From: The California Report
January 22, 2018
By Sam Harnett
The link is here; https://ww2.kqed.org/news/2018/01/22/stockton-gets-ready-to-experiment-with-universal-basic-income/

Wake-up's comments are in [ ]. And there are plenty of them. Sorry, I got long-winded. But it was fun! And a few bloggers may even read it!

Wage stagnation. Rising housing prices. Loss of middle-class jobs. The looming threat of automation. These are some of the problems facing Stockton and its residents, but the city's mayor, Michael Tubbs, says his city is far from unique. "I think Stockton is absolutely ground zero for a lot of the issues we are facing as a nation," Tubbs said.

Stockton is one of many Bay Area cities on the fringe of the wealth accumulating in Silicon Valley and San Francisco [Hell-o. Stockton is NOT in the Bay Area. It is some sixty miles up the Sacramento and San Joaquin rivers from the Bay. It is an interior city.] The Central Valley city went bankrupt in 2012, and for decades it has been trying to diversify its agriculture-based economy. [Not sure diversification has been the true aim. See below.]

"I feel that as mayor it's my responsibility to do all I could to begin figuring out what's the best way to make sure that folks in our community have a real economic floor," Tubbs said. [Let business create itself, dummy. Get government out of its way.] He is coordinating an effort to test a new way to sustain residents: universal basic income, or UBI. For one year, several dozen Stockton families will get $500 a month, no strings attached [Another internet reference says for two years].

[So the pilot program will do this. Assume the 'several dozen' means 36 families, for the sake of a discussion. It will pay each of 36 families $6,000 a year to do with as each family wishes. That is a total of $216,000. Is that a net $6,000 a year, or will some of the families just below the poverty need to pay California State Income Tax?]

Dorian Warren co-chairs the Economic Security Project, which is contributing $1 million to the initiative [Here is a link to their website; https://economicsecurityproject.org. Wait, what is going on here? I went to the Economic Security Project webpage and did not find any information on where they get their money. But I did see a 'Donate' button, so I know how they get their money. I assume they are a philanthropic organization. But $1,000,000? Thirty-six families receive 'only' $216,000. Where does the other $784,000 go? See below.]

Warren said the goal is to gather data on the economic and social impacts of giving people a basic income. In addition to tracking what residents do with the money, Warren said they will be monitoring how a basic income affects things like self-esteem and identity.

[So here is what is apparently happening. An organization raises a million dollars from donations, then 'spends' $216,000 per year of it on a public project. Then they spend the other $784,000 on themselves, paying staff to collect and analyze data on where and how the $216,000 is spent. Nope, guess it can't be called philanthropy. That is a 363% return on investment. Anyone else want in on that deal? A government project with that money will have Democratic hands wringing warmly, thinking, 'ah, desert, a latte and tiramisu'. The Republican hands will be wringing in anticipation also. They may be happy with a little less than 363%, maybe just 300% (they aren't typically as statistic-happy), simply thinking of a second slice of apple pie.]

Warren asked, "What does it mean to say, 'Here is unconditional guaranteed income just based on you being a human being?' The hope is to demonstrate UBI's potential and encourage other places to give it a try. UBI has recently gotten a boost from Silicon Valley moguls concerned about income inequality and the future of society, but the idea isn't actually all that new, said Michelle Anderson, a Stanford law professor. Anderson said, "UBI was first pitched by Nixon as an answer to post-industrial job losses." With this experiment, Anderson said Stockton may discover it gets more economic stimulus by giving money to its citizens rather than corporations it hopes will bring in jobs and tax revenue. [Now there is an unclear statement. Does Anderson, or the author, mean 'than the City subsidizing corporations to come to Stockton', or 'than the City taxing existing businesses'?]

"The UBI that is being proposed in Stockton now is very small compared to the big corporate subsidies that cities like that engage in," Anderson said. [Ah, maybe talking about subsidies, i.e., big government's way of colluding with big industry at taxpayers' expense.]

Stockton racked up millions in debt on development projects in the past, which got the city into trouble, Mayor Tubbs said. "We've overspent on things like arenas and marinas and things of that sort to try to lure in tourism and dollars that way," he said.

[No sh*t. Here is what they did. Beginning in the late 1990s, Stockton started revitalization projects that include the Bob Hope Theater, Regal City Centre Cinemas and IMAX, San Joaquin RTD Downtown Transit Center, Lexington Plaza Waterfront Hotel, Hotel Stockton, Stockton Arena, San Joaquin County Administration Building, the Stockton Ballpark, the "Dean DeCarli Waterfront Square. A new downtown marina and adjacent Joan Darah Promenade were added along the south shore of the Stockton Deep Water Channel during 2009. Other projects under consideration by the city council as of January 2009 include South Shore housing, the revitalization of the Robert J. Cabral Train Station neighborhood, bridges across the Stockton Deep Water Channel, and a new San Joaquin County Court House.]

[Stockton has some 320,00 folks today. It is a good size city, so there is probably a lot of State and Federal grant money mixed in with the taxpayers' contributions to fund all that. Does anybody see projects that positively and directly benefit the residents of the community? I see two, a housing project and a neighborhood revitalization project. And the second one has questionable benefits. What I do see see is politics. I see huge contracts to huger corporations. I see mandates for Union labor, and overtime hours and other bennies. I see payments made to ghost employees, ones that do not exist. I see that ghost-money being distributed to higher City and State officials and to Union bosses and Corporate boardrooms. Those dollars grease the wheels of America's Corporate State. Headlines could tell that story every week, except the press is part of the Corporate State.]

Tubbs thinks the UBI experiment will show that Stockton's best bet is to invest in its own people. [Well, duh, buddy. But why does it take the UBI experiment to show that? Doesn't the past spending behavior of millions of dollars on non-essential projects that directed money away from your residents prove that the money needs to be spent in the opposite fashion? Especially when poverty skyrocketed while 'you' were busy lining the pockets of 'special interests'? To be spent directly helping people? That is, if it needs to be spent by government at all. But that is a tangental subject.]

[I'll let Tubbs off the hook a little. I can't hold him responsible for a federal monetary policy that devalued the dollar while creating a real estate bubble. However, it was the City's lack of economic sense that lead them to borrow from the future, expecting the real estate bubble would never burst. Warning, do not elect a person that supports Keynesian economics to public office.]

[All the theater above aside, what will the project accomplish? If the research says UBI works and Stockton should decide to expand it to every impoverished household, what will it cost? Statistics say this: there are 90,600 households in Stockton; Stockton's poverty level is 26.6%. That second number may be families or households, the site did not say. So I'll assume most families are also householders and equate the two. That means, there are approximately 24,200 households that would qualify for a $6,000 a year entitlement. That is $145,200,000. To put that number in one perspective, Stockton had a 2016-1017 working City budget of slightly over $590,000,000. It would cost the City an additional 24.6% of its budget to fully fund the program. So is 'philanthropy' going to support the poor? Is that the concept? Is Silicone Valley going to foot the bill? What happens when the Silicone Valley losses 50% of it value? And it will, all business cycles come and go. Questions without answers. But money acquisition without bleeding the source dry must be a huge concern. And the taxpayer well is dry, do not go there.]

[What of the research that consumes nearly 80% of the million dollar contribution? It collects data on 36 families, i.e., several dozen, and intends to determine UBI viability for 24,200 households. That is a 0.15% sample size. That is seriously small for a diverse demographic of folks living below the poverty line. How can it possibly come to valid or statistically significant conclusions when the demographics reflect white, black, Asian, Mexican, Native American, married, single-parent, mentally handicapped, physically handicapped, educated, under-educated, home-bound, healthy, sick, drug addicted, teenage, elderly, lazy, etc? It more than likely can not, IMO.]

[But here is the biggest drawback to the research. The UBI research needs to run closer to ten years or more, not a year or two. And here is why. The single biggest expense a household will have in its lifetime is owning a home. And that is usually a 30-year mortgage. And close to first in expense is having kids. Depending on family size, it may be first. My guess is ten to fifteen years might be needed to see a pattern of expenditure with a stable mortgage coupled with changing family dynamics. And commitment to a mortgage is the number one action that will dictate how much cash, discretionary or otherwise, will be available to spend elsewhere. It will markedly effect all other spending that this study will attempt to analyze. Ah, and maybe my thoughts here suggest that the program has no intention of considering that the poor may want their own homes. Maybe the intention is to keep them on a low rung of the social ladder as tenants, so the poverty issue can remain a viable political hot potato. After all, it has been an arguable political issue since the 1930's, or at least since LBJ's Great Society. And it has been a great source of funding for Democrats and Republicans. Just give the poor a little more entitlement, this time from monies not coerced from wage earners. I'm pretty sure politicians have the message that ship is sailing relative to more income taxes. Although the Left Coast may not get that, yet.]


[Disclaimer: The above are my opinions. They are not directed at Stockton's government, or people. I do not know Stockton, I've been there only once. That was back in the day when the biggest thing in town was a cowboy bar sitting back from the highway. I was there. So was Emmylou Harris. Ummm. A hippie I know spent most the night buying cheap beers for cowboy hats, to keep from getting tossed from the joint. I saw three shows in a row. Umm-hummm. Recalling this, I may be confusing Stockton with Bakersfield.]