Monday, 26 September 2016

How pro-immigration policy is a boon to capital

I began thinking about this after I watched Bernie Sanders early in the campaign talk about immigration policy in an interview. And he said that pro-immigration policy is a right wing policy. He argued that it serves to bring down worker's wages. At first, I disagreed strongly with him. But after giving it more thought and putting the matter into a larger context, something which Sanders didn't do, I nonetheless came to his conclusion. And later on I was well surprised by George Galloway's stance vis-a-vis the Exist referendum; and his motivation was very reasonable in my opinion. Galloway said that the last straw for him was Greece (of how it was treated by the Troika). And he maintained that a sovereign country ought to be able to decide on its own immigration policy. When I heard him say that, I immediately thought about Palestine under British mandate, which was precluded to decide on its immigration policy. We all know what happened. Lots of American and European immigrants came in and settled down. The British Empire promised the land to both sides. Then they retreated. Conflict erupted. Might made right. And the Palestinians were screwed over by both the Arab powers and the British.

Now, to the issue at hand.

Let's take into account the other side of the balance sheet, namely, the countries from which people are emigrating from. Regions in these countries are being depopulated through this phenomenon. I shall use my country (Romania) as an example. A significant portion of the adult population has left the country to work abroad. Most of them work, others steal and beg, what can you do... They left their children in the care of their grandparents. The consequence of this massive emigration takes a heavy toll on families, and children in particular. The grandparents are too old to take care of them, or the grandparents don't work or have very low pensions... and bringing up the children is very hard. Sure, the money the parents send back home helps out, but it's not enough. And households have it particularly worse in the rural regions or in towns in which the local industries are dead. To offer up my personal view, I don't like the fact that Romanians are emigrating just to find work that pays well, when they could be working here - and the gods know this country needs a lot of work. Now, let's look at what happens in the countries who are the desired choice of immigrants.

How does capital benefit off them?

Well, more people in creates more demand to be covered and consequently, higher saving desires. More people willing to take on jobs for lower pay decreases labor's bargaining power and puts downward pressure on wages. So capital benefits from an inflow of non-skilled workers, skilled workers, and workers of higher specialization (such as doctors, for instance). In my country, there is no law which precludes public school graduates to leave the country immediately after they obtained their degrees. So the Romanian government covers the cost of their training, while countries in the West reap the benefits of that free training. So on the one hand, you have depopulation, and on the other, you have overpopulation - which in turn gives birth to racial and ethnic tensions, which in turn give birth to the usual debate between right and left - which split the middle class. And that debate most of the time is plagued by various views on morality, while the mechanics side of it, which produces actual effects, is lost in translation. So overall lower labor costs for capital makes it easy for Western firms to compete with producers from developing countries.

Romania, for instance, has been a net importer for a long time. The country imports a lot of things which could produce domestically, while it exports natural resources like timber (mostly illegally cut), minerals, and fuels. Recently in my country, foreigners may acquire land. Our hospitals are understaffed, underequipped, and underfunded. While more and more doctors are leaving the system, seeking to emigrate, with the students hot on their trail. Now, don't get me wrong. It's only natural for people to go out and seek the best life for themselves and their families. That's not what the issue is about. The issue is about pro-immigration policy being in fact a pro-capital policy, to the detriment of labor. Capital wins economically, or financially if you will. And it also wins politically, because it manages to divide the working class via identity politics. It exploits racial and ethnic tensions. Make no mistake, the mainstream left is also interested in keeping people divided, keeping capital on top of the hierarchy, defending rent seekers and economic parasitism. Hear out Michael Hudson in this great speech of his.

One way of dealing with this, in my opinion, is for Western governments and international organizations to take steps to reverse this process. One way of doing it is to promote full employment in the South and East, so that people will have an incentive to return to their homeland - and enjoy a good living there. It strikes me odd to concentrate so many people in one particular major region, instead of having them spread out and maintaining a comprehensive network between countries/societies. The problem of immigration will be solved once full employment will be the norm in every country. So when the mainstream left says, oh, we welcome immigrants. It's going to be great. And when they're asked about money. They'll say, oh, we'll cut here and there, increase tax there and over there, we'll have a balanced budget, lower government debt, and it will be great for both domestic labor and immigrants. When they say that, it's utter bs. It won't work. They won't deliver on their promises, and from their failure, the right will profit in the polls, and nothing's going to change - it will only get worse.

Let's remember that the Great Depression produced by the Roaring Twenties was not solved in the US by the New Deal. The New Deal alone wasn't enough to do it, because the program simply wasn't big enough - and Keynes told FDR this in his letters, telling him that he's not spending enough. When finally the US Government spent enough, it was because of war motivations. So the decision to enter WW2 was the political motivation to pursue fiscal policy for full employment.

Wednesday, 21 September 2016

Churchill was a genocidal maniac

"Churchill was a genocidal maniac. He is fawned over in Britain and held up as a hero of the nation. He was voted ‘Greatest Briton’ of all time. Below is the real history of Churchill, the history of a white supremacist whose hatred for Indians led to four million starving to death, the man who loathed Irish people so much he conceived different ways to terrorize them, the racist thug who waged war on black people across Africa and in Britain. This is the trial of Winston Churchill, the enemy of all humanity.

...

Bengal had a better than normal harvest during the British enforced famine. The British Army took millions of tons of rice from starving people to ship to the Middle East – where it wasn’t even needed. When the starving people of Bengal asked for food, Churchill said the ‘famine’ was their own fault “for breeding like rabbits”. The Viceroy of India said “Churchill’s attitude towards India and the famine is negligent, hostile and contemptuous”. Even right wing imperialist Leo Amery who was the British Secretary of State in India said he “didn’t see much difference between his [Churchill] outlook and Hitler’s”. Churchill refused all of the offers to send aid to Bengal, Canada offered 10,000 tons of rice, the U.S 100,000, he just point blank refused to allow it. Churchill was still swilling champagne while he caused four million men, women and children to starve to death in Bengal."

Thursday, 1 September 2016

My review of this brilliant non-fiction title

THE INDIAN OCEAN FROM ADMIRAL ZHENG HE TO HUB AND SPOKE CONTAINER MARITIME COMMERCE

by Jacques COULARDEAU & Ivan EVE


Grab the ebook here: https://www.amazon.com/INDIAN-ADMIRAL-CONTAINER-MARITIME-COMMERCE-ebook/dp/B01AY2H0JC/

Review by Serban V.C. Enache


Note: this piece was considered ineligible for publishing by the reviewers at Indialogs for the following reasons: "This review is written in a colloquial, non academic style and it is full of personal opinions, inappropriate for an academic journal. It seems more a journalistic insight."


The Review itself:


This book tackles the New Silk Road from a number of different perspectives, historical, social, economic, and from the standpoint of geopolitics. The reader is given a background regarding the Old Silk Road – its human cost and the socio-economic implications in the present, typified by what is called Post-Traumatic Slavery Disorder and Post-Traumatic Slave Syndrome.


We learn about the 13 centuries of slave trading done by the Muslim powers, and of the Trans-Atlantic slave trade, which lasted 300 years, but produced approximately the same number of casualties. We learn about slavery in India and about the slave-trade in the Indian Ocean. That it had existed since probably the emergence of agriculture, something like 12,000 years ago. Slavery existed in America before the arrival of Europeans. And the book concludes that slavery was and still is a global or universal phenomenon. Religious motivations for slavery are also highlighted, alongside the changes in thought and values, from Judaism to Islam, and of course, Christianity.


It’s always a pleasure to read an objective take, no matter how brief, on slavery. Because there are myths flowing around out there, which claim that slavery and the slave trade are purely an invention of “the white man”. And these two evils are not only an invention of secular institutions and practices, but they are also enshrined in mythology, dogma, religion. To sum it up in a humorous expression, treat thy neighbor as thyself if he’s not a foreigner or a heathen. But if he is, then kill the bastard or take him in thralldom.


I wholeheartedly agree on how the authors tackle the issues of Post-Traumatic Slavery Disorder and Post-Traumatic Slave Syndrome. They insist on a process of proper information and open dialog. And they emphasize the requirement of meritocracy. If we are to have true equality and meritocracy, then the rise and fall of individuals within the hierarchical system of any civilized society must occur based on their own merits, not based on favor or prejudice. Any system or policy that’s designed to ignore a merit-based argument in favor of a non-merit-based argument can only be of a discriminatory nature. One cannot be granted favor without someone else receiving an injury as a consequence. One is either an egalitarian, or one’s not. One either believes people should be judged based on their own merits, or one believes that they should be judged based on favor or prejudice. Like the authors, I count myself among the former.


There is also a worrisome phenomenon occurring, particularly in the USA, in which unpopular speech is being censored, not only by right wing reactionaries, but by left wing progressives as well. The latter are called mockingly as “regressive leftists” or “the regressive left”. I will quote the Thomas Jefferson Center on this issue.1


"An epidemic of anti-speech activity swept across the campuses of American colleges and universities in 2015 and shows little sign of abating in 2016. Not long ago, these same institutions were at the vanguard of First Amendment issues; students demanded—then made powerful use of—expanded speech rights on campus, and administrators held academic freedom sacrosanct. These positions reflected a shared understanding that intellectual inquiry requires an environment in which debate is uninhibited, robust, and wide-open, even if it occasionally results in unpleasant or offensive exchanges.

Today, however, the focus seems to be on limiting rather than promoting the open exchange of ideas. Students who once protested to have their voices heard now seek to silence those they disagree with or find threatening. Meanwhile, university administrators appear locked in a competition to determine which school will take the toughest stand against offensive, unpopular, and hurtful speech. First Amendment principles have given way to identity politics, trigger warnings, and so-called “safe spaces,” and the Free Speech Movement has, at many colleges, become the Anti-Speech Movement.

Since 1992, the Thomas Jefferson Center has awarded Jefferson Muzzles to those individuals and institutions responsible for the more egregious or ridiculous affronts to free speech during the preceding year. Our usual practice has been to select eight to twelve recipients each year, reflecting the unfortunate reality that threats to free expression regularly occur at all levels of government. This year, however, we were compelled to take a different approach.

Never in our 25 years of awarding the Jefferson Muzzles have we observed such an alarming concentration of anti-speech activity as we saw last year on college campuses across the country. We are therefore awarding Jefferson Muzzles to the 50 colleges and universities discussed [...] both as an admonishment for the acts already done and a reminder that it is not too late to change course."


Afterwards, the book presents the Old Silk Road proper, the ancient network of trade routes that were central to economic and cultural interactions among different regions of Asia, connecting the West and East from China to the Mediterranean Sea. The religious implications associated with the various countries and trade interests are also approached (Buddhism, Hinduism, and Islam).

We learn from that ancient epoch and we’re moved to the 15th century, to Admiral Zheng He, his great fleet of merchant ships – and the reader learns of his visits to foreign lands. Most notably, his repeated journeys into India, Africa, and Arabia.


Past that point, the book moves the reader into the present and reveals great information regarding planned investments in new port infrastructure and upgrades, new trade routes, cross-judicial and economic cooperation between countries for safety and development. Figures regarding freight capacity and throughput are given for some key trade nodes in China, Africa, Singapore, Hong Kong, Dubai, and South Korea.


The authors make important observations, especially regarding China. This nation isn’t placing its eggs in the same basket. The Chinese are preparing different scenarios. China is open to the Indian Ocean. In maritime trade, it’s investing in the port of Colombo and in Hambantota. It is developing the hub-and-spoke model; but China is also developing alternatives to it. To reach America, the railroad option via the Behring Strait. To reach Europe, via the Arctic approach and westward along its ancient route – by linking virtually the whole of Europe through railways, down to Spain.

I’d like to add that there are many ideas on the table, ready to be carried out with Chinese help. For instance, a second Panama Canal in Nicaragua, to connect the Pacific and the Caribbean (albeit voices of skepticism and dissent haunt this proposal).2-3 The Brazil-Peru transcontinental railroad – a massive undertaking meant to link via rail the Atlantic coast and the Pacific coast, and thus open Brazilian exports to Asian markets.4 There are also plans for China to create an alternative transcontinental route from Brazil, through Bolivia and Peru.5


Deals between India and China are also underway. Collaboration on atomic science, especially regarding the thorium-based nuclear reactor and the Chinese pebble-bed solid fuel 100Mw demonstration reactor.6 It’s also important to note that atomic power still remains an important outlet of investment and energy generation with near zero CO2 emissions, particularly when looking at 2 billion souls seeking to attain western living standards. India holds around 25% of the world’s major thorium reserves, and it is actively developing the thorium fuel cycle.7-8


Coulardeau and Eve take special note of India and Sri Lanka, and do not dismiss them from the greater scheme in the wake of such big projects like the Trans-Pacific Partnership deal – which, for political reasons that the authors identify, are left outside by the main geopolitical power. We’re referring of course to the USA.

Globalization is a multi-door street, but some doors are bigger and wider than others. Such free trade agreements can only push for lower sovereignty at the regional and national level, enforce strict intellectual property laws, and diminish the collective bargaining power of labor. Supposedly, consumers and firms are the ones who profit from such deals – but history shows that’s not really the case everywhere all the time. Otherwise protectionism would not have resurged in the West. And Britain would not have practiced protectionism to grow its own industries first, before projecting the comparative advantage doctrine (whilst ignoring absolute advantage) upon others through threat of violence and outright war.9 I am, of course, referring to the British Empire’s bloody tally in imperialism and colonialism. The exploitation of India’s people and the artificially-induced famines, and the Opium-wars with China leap to mind.


The so-called race to the bottom is a true phenomenon. It manifests itself when governments of signatory countries (pacts of free trade or ‘fiscal responsibility’) implement policies meant to keep domestic purchasing power lower & living standards low, in the hope of gaining market share for their export-oriented enterprises. These countries are thus deliberately keeping their domestic levels of Aggregate Demand low, and they rely on imports of Aggregate Demand from abroad in order to keep their economies working (albeit with considerable unused capacity to spare).10 Aggregate Demand means income plus the change in private debt.11 Private debt inflation adds to Aggregate Demand – it translates into more spending, more sales, more income. While private debt deflation (what much of the world is experiencing after the Great Financial Crisis of 2008) decreases Aggregate Demand – it translates into less spending, fewer sales, less income. Accounting-wise, every net exporter of goods and services is a net importer of Aggregate Demand and vice-versa. Spending is income. Debt is equity. All government debt in the world represents world-wide private sector financial savings (equity).12-13


Issues of flags of convenience are explored in the book, alongside those of safety. Ships and harbors require protection. Merchandise requires tracking. Elements of corruption, bureaucracy, and the relationship between capital and labor must not endanger the flow of goods and services, or add undesired and unnecessary costs to it. The authors state that what’s required for true security is the existence of an international agency, with satellite monitoring capabilities, and with the legal mandate and military means to combat terrorism, human trafficking, drug smuggling, and illegal weapons trade. Whether one is personally in favor of globalization or not, the soundness of the above proposition is indisputable.


I believe the many countries involved in the New Silk Road must follow the two principles behind the Peace of Westphalia of 1648, which ended successfully 150 years of religious war and established the notion of co-existing sovereign states; peace between them being reached through diplomatic congress.14 The first tenet said that for the sake of peace, the crimes of all sides must be forgotten. While the second tenet maintained that foreign policy must be carried out with the “interest of the other” in mind. What relevance do these Westphalian principles have on our present imperfectly globalized world? It is geopolitics that makes or breaks progress. That makes or breaks nations. That promotes war and strife, or peace and development. And it is precisely this lack of Westphalian sovereignty among nation states today, as well as the desire to severely outsource national and local sovereignty to super-state bureaucracies, that endangers the peaceful process of globalization – and turns it into a deliberate phenomenon of exploitation carried out by financial interests for the interest of financial elites, rather than for the shared benefit of countries as a whole.


John Maynard Keynes said that the unregulated movement of international capital endangers that self-governing experiment we call democracy.15 How prophetic his words were, especially if we look at the wealthiest and strongest nation on earth – at the extreme income inequality in the US today, which resembles not a capitalist economy, but a feudal economy.16

In short, if households are doing well, then so are the firms. GDP growth not seen in wage growth appears in profit growth.17 As an adept of Chartalism18, I can tell you that macro fiscal policy is more important to public purpose than trade. Whether a country is practicing free trade or protectionism, so long as it has monetary sovereignty (so long as the national government spends and taxes in its own free-floating nonconvertible fiat currency) it can do away with permanent and involuntary unemployment. The currency sovereign faces no solvency risk. He can never miss a payment.19 The real constraints are of a physical nature; unused physical resources, available labor (people willing and able to work), and know-how.


Brazen corruption, political instability, and natural disasters are conducive to high inflation or hyperinflation episodes for countries, alongside fixed exchange rate regimes with strong currencies. Inflation is not always everywhere a monetary phenomenon, like mainstream (orthodox) theory likes to claim.20 The overproduction of money is always a consequence of a crisis of hyperinflation, never the cause of it. The Weimar Republic had to print (deficit spend) many figures as % of GDP in order to purchase foreign currency with which to make war reparation payments. That money didn’t go to the creation of roads, railways, industries, schools, or hospitals. In Zimbabwe, a favorite example employed by inflation mongers, a number of different factors triggered the hyperinflation episode. First, Mugabe’s failed land reform, which crippled agricultural output. And secondly, persistent political instability and brazen corruption and the need to import more food from abroad contributed to the overproduction of money.21


And of course, in all aspects of human society, one cannot ignore or reject that great element called geopolitics. When powerful interests converge, either deliberately or through random opportunity/chance, the weaker party incurs the terms of the stronger ones.

I would recommend this title to any investor or public servant that is looking to familiarize himself or herself with the historical realities of the Old Silk Road, and with the challenges posed by the New Silk Road in proper context. People seeking to invest in the New Silk Road – either in a specific supply chain, in a particular technology, service, or financial institution – must realize the complexity of this trans-national region and the many competing geopolitical and economic interests within it. Public servants, those placed in key government agencies that hold important positions, must also study carefully this tapestry of interests, challenges, and must weigh all the potential consequences (both positive and negative), if they are to draw up pertinent national policies that take into account not only the interests of wealthy lobbying parties, but also the interests of the common citizens and their natural environment.


Footnotes:

1-http://jeffersonmuzzles.org/complete-list/

2-Michael D. McDonald, Bloomberg, 2015 http://www.bloomberg.com/…/china-s-building-a-huge-canal-in…

3-Lily Kuo, Quartz, 2015 http://qz.com/…/why-is-a-chinese-tycoon-building-a-50-bill…/

4-Brianna Lee, International Business Times, 2015http://www.ibtimes.com/china-brazil-peru-eye-transcontinent…

5-China Daily, 2015 http://www.chinadaily.com.cn/…/2015…/17/content_21031116.htm

6-Fiona MacDonald, Science Alert, 2016 http://www.sciencealert.com/china-says-it-ll-have-a-meltdow…

7-Stratfor, 2016 https://www.stratfor.com/…/gauging-indias-nuclear-power-pot…

8-BBC News, 2006 http://news.bbc.co.uk/2/hi/south_asia/6219998.stm

9-John M. Legge, 2016 http://www.johnmlegge.com/…/comparative-versus-competitive…/

10-Warren Mosler, 2011 http://moslereconomics.com/…/the-euro-zone-race-to-the-bot…/

11-Steve Keen, 2012 http://www.debtdeflation.com/…/economics-in-the-age-of-del…/

12-Steve Keen, Private Debt Project, 2016http://www.privatedebtproject.org/view-articles.php…

13-Bill Mitchell, 2015 http://bilbo.economicoutlook.net/blog/?p=32396

14-New World Encyclopedia, 2015http://www.newworldencyclopedia.org/ent…/Peace_of_Westphalia

15-Noam Chomsky, Hegemony or Survival, page 138

16-Laura Tyson, The Huffington Post, 2015 http://www.huffingtonpost.com/…/us-income-inequality-costs_…

17-Anna Louie Sussman, The Wall Street Journal, 2015http://blogs.wsj.com/…/inside-the-fight-over-productivity-…/

18-Bill Mitchell, 2009 http://bilbo.economicoutlook.net/blog/?p=5402

19-Brett W. Fawley, Luciana Juvenal, St Louis Fed, 2011https://www.stlouisfed.org/…/Why-Health-Care-Matters-and-th…

20-Antonella Tutino, Carlos E. Zarazaga, Fed In Print, 2014https://www.fedinprint.org/items/feddel/00008.html

21-Edward Harrison, Naked Capitalism, 2010http://www.nakedcapitalism.com/…/mmt-fear-of-hyperinflation…

Thursday, 25 August 2016

Why Garbagemen Should Earn More Than Bankers

Any sensible person would agree that inter-temporal arbitrage (aka banking) is LESS important than trash disposal. Read this great piece by Rutger Bregman at Evonomics.

Thursday, 4 August 2016

How a bloke & his property got ruined

Andy Thompson, a tale of a debtor screwed by his lender & by the judicial system. It might sound tedious at first, but you'll find that it really is disgusting...

Wednesday, 27 July 2016

Pathetic emotional response from TYT against Alex Jones, the troll


Ana was completely unprofessional & super rude. If you can't take a little bit of trolling whilst remaining calm, then you're in the wrong profession. Dore's stunt was foul as well. Emotional responses are exactly what trolls are after. They're counter-productive as hell too. If you need to shout, curse, and spit cause you can't land a good burn on a right wing troll, such as Jones, using wit, then... the left is doomed.

Thursday, 30 June 2016

George Galloway OWNING the UK Parliament!




George Galloway OWNING the UK Parliament, earlier this year, - speaking about Iraq, ISIL & western interventions.


Tuesday, 28 June 2016

Like him or hate him, Farage is so good in this

Like him or hate him, Nigel Farage correctly brings up the Mediterranean & the Lisbon treaty & big business. And he also throws some barbs against the rest of the MPs.

Saturday, 25 June 2016

My review for Mehreen Ahmed's The Blotted Line

Great sketches

The Blotted Line contains several sketches, each one a depiction of struggle, a story of loss, sacrifice, and unjust odds. The author is able to capture and expose human emotion and weakness – and the conclusion of each short story is always fulfilling. To name a couple (without giving any spoilers), The Wager’s ending will make you shudder. Charade might give you a pesimistic outlook about single life and trivialities between friends. The Black Coat will give you a most intimate journey into the yearning heart of artist painter Piccolo-Xavier. The Anomalous Duo is the only sketch in the collection with an actual happy ending, and it explores the deep love between Minah & Sidu, two young souls, hindered by their different backgrounds and social status. Of Note starts with a dark premise, and equally dark or more is its ending. In some places the writing is slower, in others it’s faster. But it’s always worth your while to finish each sketch.



Note: I received a free copy in exchange for an honest review.

The Blotted Line, links:
Goodreads
Amazon Author profile
Mehreen Ahmed

Friday, 10 June 2016

Germany's political elites, narrow unenlightened self-interest

This is why German political elites won't change their unreasonable stance towards the Periphery. And until that capital account starts shrinking dramatically, things are not likely to change.


Source: http://www.tradingeconomics.com/germany/current-account-to-gdp

Also, the European Commission Macroeconmic Imbalance Procedure states that ALL COUNTRIES have to meet the following constraints: a) The three-year average of the current account balance as a percentage of GDP should remain within the boundaries of -4% and +6%. b) Private sector debt as a percentage of GDP should be less than 133%. c) Private sector credit flow as a percentage of GDP, consolidated, should be less than 14% of GDP d) General Government Sector Debt as a percentage of GDP should be less than 60%. We clearly see that there's a double-standard.

Someone asked the EC on this issue. And the answer was: "the indicators and the thresholds should not be read in a mechanical way." They're psychopaths anyway, so hypocrisy is built into their thinking & speech. For more on this, read this great piece http://chartalismo.blogspot.ro/2015/02/respuesta-de-la-comision-europea.html

Wednesday, 1 June 2016

My 2 cents on the attacks against the UBI from supporters of the JG

I see some folks engaging in sermons like "People without jobs are not free", and "Work is a blessing." The UBI supporters believe that toil is a curse. It's a big difference between these two words (work & toil). However, nobody is against people doing work, serving each other, opening up firms, hiring people etc. The UBI doesn't hinder people from going out to work. Those who like volunteer work will have more freedom to do it. Those working minimum wage jobs & working long hours, who shoulder a lot of physical & psychological stress, are going to have their situation augmented. It increases labor's bargaining power. Money velocity will be raised at healthier levels.
And even if say 10% of the workforce decide to become bums, the technology level (and its productivity) is more than enough to cover them. People operating manufacturing plants, computers, health services... these people won't be content to stay at home, doing nothing on the UBI. The UBI (which doesn't make you rich) needs to be viewed not as a Government handout, but as a social dividend - the result of society's gains in technological progress & productivity.


And this idea that if somehow you introduce UBI & it creates bad effects to the economy that Government won't be able to get rid of it is nonsensical. Look what they did to Greece. Look throughout the Periphery and see what neoliberal politicians have done. They cut pensions. They increased VAT. They increased income taxes. They increased the retirement age. They privatized public assets and laid off workers. They cut social safety net programs. Why? Because government deficit & debt levels went over arbitrarily defined ratios. A completely natural symptom of private debt deflation, households seeking to deleverage - and they can only deleverage if either the foreign sector or the government sector increases its debt (or both). The simplest, safest, and quickest solution is for the government to operate with higher negative equity in the downturn.


Now, I would like to point out the empirical results of Dauphin Canada, in which a UBI experiment was carried out. Economist Evelyn Forget of University of Manitoba conducted an analysis of the Dauphin experiment in 2009 which was published in 2011. The paper is titled The Town With No Poverty.


"MINCOME, a Canadian Guaranteed Annual Income (GAI) field experiment ran in the province of Manitoba between 1974 and 1979, and ended with no final report and no analysis of data from the saturation site. This essay uses a quasi-experimental design and routinely collected health administration data to revisit outcomes for the saturation site. We found a significant reduction in hospitalization, especially for admissions related to mental health and to accidents and injuries, relative to the matched comparison group. Physician contacts for mental health diagnoses fell relative to the comparison group. A greater proportion of high school students continued on to grade 12. We found no increase in fertility, no increase in family dissolution rates and no improvement in birth outcomes. Our results document the value of health administration data for historical analysis, and demonstrate that a relatively modest GAI can improve population health suggesting the possibility of health system savings."

For those who claim that the UBI has a built-in inflation mechanism because of its design, I haven't found in the articles I read about the UBI a single paragraph that talked about indexing the UBI with inflation. I would like to touch on minimum wages now. Norway, Switzerland, Denmark, Iceland don't have a minimum wage, but they have good social safety nets (money velocity at the bottom).
The Job Guarantee, which I support, has a conundrum. If we don't want it to compete with private sector jobs, then it must provide jobs that the private sector is not interested in carrying out; but if the JG pays a higher wage than the minimum wage, it WILL destabilize private sector employers. And I'm not concerned about big companies who can cover the costs, but I am concerned about small businesses and cooperatives not being able to. I am much more in favor of payroll tax rebates. I favor minimum wage increases too, but I prefer that be left in the hands of the local governments & be accompanied by reductions in fiscal drag. It's easy to get lost in the macro picture & not care about the micro one; but that means ignoring a lot of people.


Realistically speaking, someone who might, under a UBI, just sit at home and refuse to work. How is he inflationary? And someone who goes to the JG and obtains the same paycheck for, say, reading to the blind (a very noble activity) is not inflationary? Or easing inflationary pressures?
Answer, they're not. The CPI stays the same. Someone who just sits at home, not bothering anybody doesn't make the CPI rise. Someone reading for the blind, clearing out garbage, or building swings for kids in the JG is not making the CPI rise, or fall either. People say the JG is a price anchor. They say it's a better price anchor than the NAIRU (the non-accelerating inflation rate of the unemployed), which is a deliberate policy of keeping a certain % of the population in a state of permanent & involuntary unemployment in order to keep the economy from ever reaching full capacity. Unless you're putting people in the JG to produce things like food, fuel, and electricity, the JG is NOT a real price anchor. And if you do put people to produce such things, then the JG is actively competing with private sector employers - which is counter to the official aim of the program, so say its authors.


Those who sermonize that the UBI is guaranteed to be "inflationary & dangerous" start from an invalid premise. The value of the currency needs to be understood on average (i.e. the average amount of labor power being commanded by a unit of the currency, economy-wide), not at the margin - like these people insist. A lot of productive activity occurs outside the workforce and a lot of unproductive activity occurs within it. But by the marginalist logic on currency value, there should already be hyperinflation because some people are getting an income outside of a job. Measured at the margin, the value of the currency is already zero. Now, if the UBI as a policy proposal gains momentum, let it pass into law. If it's bad for society/the economy, lower the guarantee or abrogate the program. And like I stated earlier, this CAN be done.


If people are really scared of inflation & afraid that the UBI will make output very inelastic, let's tackle the beast's many hearts. Abolish patents. Regulate the banking sector on the asset side to serve, not sabotage public purpose. Cease taxing labor & man-made goods. Focus on taxing land & capital gains. Invest today in education, in the creation of capital goods, and in the implementation of eco-friendlier technologies to replace antiquated ones in order to have a future worth living in. Our children won't be burdened with higher taxes, instead they'll be burdened with a poorer economy, with a less bright society, and with a far more decayed environment if we don't act in the present to bring about a better future.


In short, I am in favor of experimentation. That creed which is against experimentation (in this case, experimenting with the UBI alone) is not a creed worth following. That's my opinion. I am not an economist. I'm not an academician. I'm just a pleb from Romania. A famous person (J.M. Keynes) said that when the facts change, I change my opinion. If the empirical results (on a nation-wide scale) will prove me wrong, then I will change my opinion regarding the UBI. I fear, however, that some of its opponents are so stubborn that even if the UBI will prove to have positive or neutral effects, they will still sing their song of venom towards it. So pass it into law, and we'll see what the dice read.