Basic Income Guarantee Versus the Corporate Media

[papau]

Posted with permission of the author

Basic Income Guarantee Versus the Corporate Media

By David Swanson

A case can be made that the left in the United States is too eager to compromise, that because we have no far left, our moderate left is more easily dismissed as extreme. This contrasts with a far right that advocates -- for decades if necessary -- for extremely unpopular positions (such as eliminating Social Security), thus rendering the right's goals (such as partially dismantling Social Security) respectable, moderate, and middle of the road.

But what happens when people in this country begin promoting an idea from the left that is completely off the map, that is not a response to a White House initiative, that does not propose to damage the country or the world a little bit less than the Republicans want, that actually sets forth an innovative proposal?

Many people in this country have no way to answer that question, because fundamentally what happens -- in contrast to what happens with ideas from the right -- is that the corporate media blacks out the proposal. With some proposals, such as single-payer health care, the blackout is incomplete. The proposal is given minimal attention and is even included in opinion surveys, such as the October, 2003 ABC News/ Washington Post poll, which found that 62 percent of Americans favor single-payer health care. But the idea is carefully marginalized by the media, and labeled politically impractical, so that most of that 62 percent almost certainly have no idea they sit in a majority. See http://ilcaonline.org/modules.php?op=modload&name=News&file=article&sid=801

With other proposals the media blackout is virtually absolute. Consumers of the media have no reason to imagine these proposals exist at all, much less have enough information to form a useful opinion about them. This is the case with an idea that has garnered considerable attention in Europe, Africa, and South America, but virtually no mainstream media attention in the United States. That idea? The basic income guarantee.

This basic income guarantee, or BIG as it's known to the activists and academics who make up the U.S. Basic Income Guarantee Network "is a government ensured guarantee that no one's income will fall below the level necessary to meet their most basic needs for any reason."

How would a basic income guarantee work? Each month, every adult would receive a check from the government, for the exact same amount. These checks, notes the Citizen Policies Institute, would be "large enough to meet basic costs of food and shelter, and perhaps health care, but not so large as to undermine incentives to work, earn, save, and invest." The checks, likely "in the range of $400 to $800 a month," would go to everyone, working or not working, wealthy or not wealthy.

I should note quickly that some of the chief proponents of the basic income guarantee in the United States today would object to my characterizing the idea as "left." They would note that supporters of an income guarantee have historically fallen across a broad political spectrum, from liberals like John Kenneth Galbraith to to such right wingers as Milton Friedman. A limited "BIG" was actually endorsed by President Nixon in 1970 and passed by the U.S. House, but not the Senate.

Under Republican Governor Jay Hammond, the state of Alaska established an income guarantee in 1976 that sets aside 25 percent of the state's tax revenue from oil production. The money goes into a permanent fund run by an appointed board of trustees. Every year, the fund pays a portion of investment earnings to any person who has lived in the state for at least a year. Since the first checks were mailed in 1982, each resident has received $21,902.

Former Governor Hammond has, in recent years, promoted the Alaska program as a model that should be applied to Iraq. Mary Landrieu (D.-La.) and Lisa Murkowski (R-Alaska) have advanced the same idea. They have proposed a fund created out of Iraqi oil revenues that would put money directly into the hands of every Iraqi.

That idea has international support as well. Brazilian Senator Eduardo Suplicy, the sponsor of BIG legislation in Brazil signed into law last year, has pushed the notion extensively.

"When the Brazilian Sergio Vieira de Melo was nominated to be the coordinator of the United Nations' actions in Iraq, in May 2003, I contacted him, suggesting that the Alaskan model be applied for the Iraqis," says Suplicy. "He quickly replied positively and said that he would share the suggestion with the relevant authorities. The following month, on June 23 in a speech in Jordan, Ambassador Paul Bremer, the chief administrator in Iraq, said: 'Some profits from oil sales could be distributed to Iraq's citizens as "dividends," along the lines of the system used by the State of Alaska.'"

So bipartisan support currently exists for the idea of a basic income guarantee, but only apparently for Iraqis. And even that Iraqi BIG has yet to be created. As Karl Widerquist of USBIG has noted, in the 1970s right-wingers viewed a basic income guarantee as a simpler and more efficient replacement for a relatively large and complex welfare state. Now they view it as the recreation of a safety net that they have been largely succeeded in shredding. Thus BIG has become a proposal supported only from the left, which means, these days, that we hardly hear about it at all.

BIG in the U.S. Media

The media in the United States, as the above discussion suggests, has had any number of terrific "hooks" that could have triggered articles about the idea of a basic income guarantee, hooks that range from the war on Iraq to the passage of an income guarantee in Brazil. USBIG has also held annual conferences featuring legislators, academics, and activists; and other events and press conferences about the BIG idea have abounded. Throughout this all, the media has remained distinctly disinterested.

Earlier this month, the Institute for Public Accuracy sent a press release to media recommending interviews with Senator Suplicy and with Steve Shafarman, the president of Citizen Policies Institute. A search in Google News for either of those names or for "basic income guarantee" finds no related articles. A search in the Nexis database for these and similar terms in the past 60 days finds nothing related to the topic.

Searches in Nexis over the past two years find little more. I could not find a single broadcast transcript or print editorial or column on the topic. I found one Associated Press article from February 2004 and one Los Angeles Times article from May 2003 on the congressional proposal for Iraq. I found extensive coverage of political changes in Brazil and Senator Suplicy (92 articles mentioning "Eduardo Suplicy"), but nothing from U.S. media about his BIG legislation. The two articles on Iraq, from the AP and the LA Times, were excellent. But neither broached the subject of a BIG in the United States. Thus, the media's blackout of the BIG idea as a possibility in the United States has been complete.

Or nearly so. Shafarman this month has done radio interviews on a college station in Boston, the Pacifica station in Los Angeles, and WHAS in Louisville KY.

Will the blackout be broken? The Fourth Congress of the U.S. Basic Income Guarantee Network will be held in New York City March 4-6. Details are available at http://usbig.net . Clearly this conference will generate a rich exchange of ideas, proposals, variations, and counter proposals. Will the media notice? Will newspapers begin accepting op-eds on the topic? Will the independent media push the idea until the corporate media is forced to place it squarely on the table of our public discourse? We shall see.

What's the BIG Idea?

There are a number of reasons why progressives should promote the idea of a basic income guarantee. For one thing, the public should be aware that we do indeed have a bold, positive vision to offer. BIG ought to be part of a wide-ranging progressive agenda that includes universal free quality education from preschool through college, single-payer health care, a living wage for all work, work for all who want it, affordable housing, the right to form a trade union, an environmentally sustainable economy, and the application of these same values in our foreign affairs.

If we had a basic income guarantee in the United States, no one would have to prove they are poor or unemployed to get a check. The checks would go to everyone, Of course, some checks would be wasted on awesomely affluent Americans who have absolutely no financial worries. But awesomely affluent Americans are already getting billions in tax breaks and giveaways from the public treasury. More importantly, by making the BIG universal, we would eliminate the need for a huge bureaucracy to determine who should receive it and also eliminate the stigma that has been attached to recipients of welfare. As with welfare, some will choose to live off the BIG and not seek employment at all. But those who do find work will not face a reduction in their BIG check.

That some small percentage of people, if a BIG existed, would not work cannot possibly be considered a fatal flaw in the BIG idea, not in a country where we already have a significant percentage of people not working, including those unable to work, those with no need to work and no desire to, those searching for work, those who have given up on searching for work, those who have calculated that they would spend more on child care than they would earn if they took a job, those who are behind bars as a result of crimes that tend to increase with unemployment and poverty, those working part-time who want full-time jobs, and those working full-time or more who would prefer to work part-time and train for other work if they could afford to.

And surely anyone's displeasure with people receiving a basic income without working should not outweigh their displeasure with the current state of affairs in which 35 million Americans, including 13 million children, live in poverty, and at least half a million Americans lack the most basic of life's necessities, a home.

Handouts based on "means testing" the poor too often create stigmas and bureaucracies -- and fail to reach many of the intended recipients. The earned income tax credit (EITC), for instance, only goes to those who know to apply for it. Corporate-funded opponents of living wage standards have taken to advocating for (or pretending to advocate for) the EITC as an alternative to a living wage, but there should be no conflict between decent wage standards and support for those in need.

A BIG should coexist harmoniously with a living wage law, but may conflict with the EITC and some of the remnants of the New Deal. One BIG proponent, Steve Shafarman, even wants to make BIG more appealing to conservatives by arguing that, with a BIG in effect, we could eliminate many existing social programs and maybe the progressive income tax as well. Is this wise?

I don't think so. Progressive taxes, unlike "flat taxes," serve the useful purpose of restraining disparities in wealth. We need to be strengthening the progressivity in our tax system, not eroding it further. We may even need a "maximum wage" along the lines proposed by labor journalist Sam Pizzigati, that is, a 100 percent tax on all income over 10 or 25 times the minimum wage. That would give our nation's most rich and powerful a personal incentive in enhancing the well-being of our nation's poorest workers. And the BIG, if enacted, would make sure that all those who can't work are guaranteed decency.

If we do not restore value to the minimum wage (and index it to automatically keep pace with the cost of living, as we must do with the BIG), the greatest disincentive to work will not be the BIG but the declining wages received for working.

What Will Get BIG into the Media?

The sorts of topics that almost never make it through the filter of the corporate media are generally those that have no serious corporate supporter (single-payer health care), as well as those that have major corporate supporters but no serious corporate opponents (the incredible waste in the Pentagon budget).

So what would it take to get BIG into the media? Probably no amount of spinning, compromising, or appealing to corporate self-interest will do it. It's also doubtful that the Bush Administration's PR approach -- blatant lying -- will help.

A basic income guarantee is not possible in the United States without serious media reform. The corporate media holds a tight grip on our political agenda. No one will ever be able to buy enough commercials for a BIG to make it happen. No one will ever be able to come with a "spin" on BIG brilliant enough to force the corporate media to sit up and take notice.

What we need is diverse and democratic media, media worthy of being considered a plural noun. We need to continue building the movement for media reform through Congress and the FCC. We need to restore some sort of fairness doctrine. We need to strengthen limits on media ownership. We need, ultimately, to divorce content providers from the controllers of the media pipelines. We need to invest in truly public media outlets, to support community-funded outlets. And we need to make it much easier for new media outlets to get started.

But, more importantly, we need to create our own media. Central to this -- because the labor movement has the resources -- must be the restoration in this country of significant labor media. A proposal for the development of labor media into a force to be reckoned with can be found on the website of the International Labor Communications Association at http://ILCAonline.org .

All this, of course, amounts to an incredibly ambitious agenda. Where do we start? How about working to create an alliance between the living wage movement, the media reform movement, and unions open to organizing at newspapers? Imagine if we were to target large chains of small local newspapers paying poverty wages and producing fourth-rate reporting. Imagine if we built a community movement for a living wage for reporters. We could focus on the link between low wages for reporters and poor-quality reporting on the issues that community organizations care about.

Imagine if then we used the strength of the coalitions we've built to advance our political agenda around issues like BIG. Improved local newspapers, I suspect, would be far better read than our current major media outlets, such as the ones in New York that will probably not notice the USBIG conference this coming weekend.

David Swanson is media coordinator for the International Labor Communications Association.

[mike_c]

1. kicked and nominated-- that is an excellent article....

Thank you for posting this, papau.

[papau]

2. I like David's work and he has emailed me permission to post!

We need to hear the union voice at DU if for no other reason than that voice has some very good ideas!

[Disfronted]

3. Did I miss the part where Democrats proposed BIG and were ignored?

Interesting idea - I could certainly use an extra $28,800 a year (me, wife, child x $800 a month each) - but the devil will be in tweaking the tax system to get the 2.5 trillion (275 million people X $9,600 a year each) needed. That would be as much money as the entire Federal budget.

But corporate media be damned - I think the article scapegoats them for lack of vision on the Democratic side. Yes, the corporate media is a problem, but the fact is, it's not that John Kerry proposed a BIG or Universal Healthcare and was ignored - he didn't have the guts to propose either. Complaining you don't have a good channel for your message is fruitless if you aren't even willing to broadcast the message itself in the way available to you.

[papau]

5. Proposed by Dems in 72 and media used silly numbers like the ones in your

post to dump on it. Indeed it - as mis-represented by the media - helped Nixon get re-elected.

Whether described as a demogrant, a guaranteed income, or one of a number of other labels, most advocates believe that BIG should be judged by the degree to which it reduces poverty. In the Standard Plan, all children up to age 18 receive a BIG of $2,175 per year; all adults between the age of 18 and 65 receive a $4,000 per year BIG. The elderly receive $8,000 or their social security payment. In all plans OASDI beneficiaries are held harmless, meaning that OASDI recipients receive either their OASDI benefit or BIG, whichever is higher. The BIG, in all plans, is taxable


Most of these plans fall into one of two categories: the Basic Income and the Negative Income Tax. The Basic Income gives every citizen a check for the full basic income every month, and taxes his or her earned income, so that nearly everyone both pays taxes and receives a basic income. Those with low incomes receive more in basic income than they pay in taxes and those with relatively high income pay more than they receive.

The Negative Income Tax pays the full benefit only to those with no private income and phases out the benefit as people earn more private income, but private income is not taxed until the negative income tax is fully phased out. Thus, the Negative Income Tax avoids giving people checks and asking them to send checks back, but the Basic Income gives people the assurance that their check will be there every month if they have a sudden loss of income. Despite their differences both of these plans guarantee some basic minimum level of income and ensure that people who make more money privately will be financial better off than those who make less, and therefore both are forms of BIG.

I think only the negative income version can work, so as to prevent or at least make less attractive the choice of downsizing lifestyle to whatever BIG would pay so as to avoid work. The amount "at risk" is indeed your rather silly number of 2.5 Trillion at 8000 per person per year - but the real effect is a fairer replacement for welfare and EITC and refundable child credits on the FIT - at a very modest increase in cost.


Wage subsidies such as The Earned Income Tax Credit (EITC) are essentially a form of negative income tax that do not provide a guaranteed minimum.

Conservatives such as Milton Friedman (1966) advocated a very small NIT—a refund of unused income tax deductions--as a substitute for all other social welfare programs.

James Tobin advocated a far more generous NIT—a universal tax credit or demogrant—as a substitute for only a limited set of existing programs. James Meade’s proposal for Great Britain was similar to Tobin’s. A fourth economist, Robert Lampman (1971), who unlike the other three specialized in income transfer policy, advocated a modest NIT not as a substitute for, but rather as an addition to, the existing set of income transfer programs.

There is little empirical evidence on the effects of variations in generosity on costs (because of the payback - or decrease in the negative income tax due to having income) or the effect of more generous features on poverty reduction.

[Disfronted]

8. I was just going by the numbers in the article

I was just going by the numbers in the article - why don't you tell the guy who wrote it they are "silly"?

[CindyDale]

4. The former Yugoslavia did that

I believe, and it didn't work. I met someone who came from there once, and he said too many people quit working. For instance, the telephones didn't even work because there weren't enough employees to fix them. He finally left Yugoslavia and came here because of it.

[papau]

6. Not designed as a guaranteed wage that you can live off of - not the YUGO

model.

It is much like the current Social Security discussion where private accounts are not bad -

but a system that obtains private accounts via a carve out from the current Social Security payroll tax destroys Socialk Security and the safety net now in place for middle class and poor.

While a system that obtains private accounts via an add on voluntary tax (with a 401k type match 0n an mandatory increased tax) from the payroll tax surplus would increase national savings and improve the economy and improve the poor and middle class safety net.

The Yugo setup was "bad"

This one is "good".

[applegrove]

7. Is this the same thing as a negative income tax?