Tag Archives: political economy

Universal Basic Income

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The Leftist dream of socialism won’t die, and neither will the Leftist dream of free money, which they masquerade as universal basic income, the steady handout of taxpayer money to everyone because—well, just because. The Left doesn’t care that handing out free money—one of the more extreme aspects of socialism—doesn’t work.

The Left simply doesn’t care about making lives better for Americans, only making their own lives better. Free money, this universal basic income, is just modern day bread and circuses offered in payment for votes so the Left can keep their Progressive-Democrat politicians in power, favoring them. They hope.

The editorial at the second link lays out a number of the ways that UBS fails us all.

Here’s another path to that failure. A UBS increases overall demand for goods and services beyond what producers can supply. This is textbook inflation. Eventually, production succeeds in getting supply increased to match that increased demand, and inflation abates. However, the higher price levels resulting from that bout of inflation remain in place, which means the handed-out money doesn’t have the buying power that it was represented as having: recipients can’t buy significantly more goods and services than they could before the handouts started due to that eroded dollar.

It gets worse. One of the areas of failure that the editorial pointed out was that recipients of free money took advantage of that largesse to work less. Since there is less work being done—this is a universal basic income handout, recall; all of us get it—it would take producers commensurately longer for production to catch up to demand. This would let that inflation run longer, elevating overall price levels even higher. That, in turn, would reduce the buying power of the handed-out money even further, leaving us recipients even less well off than before the handouts began, likely worse off in absolute terms.

Leftists and their politicians, of course, know this full well. They’re hoping us average Americans are too grindingly stupid to figure out that these folks are merely buying, and playing, us for their own power gains.

There’s an Answer to This

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It’s simple, straightforward, and deucedly politically difficult given the timidity and/or self-serving political power seeking of too many politicians to carry out. The lede and second paragraph laid out the problem:

As the Department of Government Efficiency and the One Big Beautiful Bill Act make painfully clear, any entity relying on federal funds for fiscal stability had best reconsider its future.
Recently released US Census Bureau data on federal funds flowing to states reveal that in 2023 the average state relied on federal sources for 37% of its revenue—nearly double the 1990 average. Some states were far more dependent, like Arizona (49%), Alaska (45%), Wyoming (46%), and Louisiana, which counted on federal support for more than half its budget. States have…made themselves vulnerable to the ideological proclivities of presidential administrations.

And this:

More pernicious are the ways federal agency ideologues hold those funds hostage to their agendas. …
A massive amount of federal spending isn’t even going to projects most people care about. It funds the priorities of federal agency bureaucrats.

The solution is to identify the total amount of Federal fund transfers to each State in 2026 (or 2027, but no later). Call that baseline year Year Zero. In Year 1, make a single, no strings attached block grant to each State in the amount of 90% of Year Zero. In each subsequent year, reduce the size of the block grant by an additional 10% of the Year Zero amount. In 10 years, there will be no more Federal funds transferred to a State, and all the States will be free of Federal strings on their own spending and taxing imperatives.

This would have the additional benefit for the citizens of each State in that State government spending and taxing would be subjected to greater citizen visibility and discipline.

The only time States need Federal funds transferred is during a State- or region-wide emergency, and those funds should be readily available—as they are currently, and potentially the more so with the cessation of unnecessary transfers done currently on a just because and it’s always done basis.

An Additional Angle

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There’s another approach to this problem that also would be highly useful, and in a much more general way. The problem is the apparent debanking of Conservative enterprises and others like Crypto by too many banks. President Donald Trump appears to be setting up an Executive Order that would direct[] bank regulators to investigate whether any financial institutions might have violated the Equal Credit Opportunity Act, antitrust laws or consumer financial protection laws for political reasons.

I would approach this from another direction, a more generic one, in addition to this apparent EO. I would require, via EO (with legislation to adjust and then codify the EO after a year to see how well the EO works) to the relevant regulators, all financial institutions that close an existing account or that reject an application for one—not only debt accounts—to provide the account holder detailed, concrete, measurable reasons for closing the account, those reasons to accompany the closure, and to provide the account applicant with the same kind of detailed, concrete, measurable reasons for denying the application, with that response required to be provided within one calendar week of the application.

In addition to this, I would require the financial institution, since it has already developed its position and underlying…data…to answer all requests for clarity of any of the reasons within 24 hours of the request being transmitted if done electronically or within one calendar week if the request was transmitted in writing: USPS, UPS, Fedex, and the like. In this context, email and fax would count as electronic transmittal.

In Trump’s putative EO, [v]iolators could be subject to monetary penalties, consent decrees or other disciplinary measures. So it would be here, with these clarifications: monetary penalties would apply both to the financial institution and to the relevant managers in the C-Suite and the business’ Directors, since those persons are the ones animating the financial institution. Additionally, disciplinary measures would include termination for cause of those managers and Directors found culpable enough to be fined.

This move is not tailored to political closures or rejections, but would apply to all such, and it would apply to individuals as well as to businesses with accounts or applications for accounts.

One more thing: my move would not require financial institutions to suggest avenues for correcting the reasons for closure or rejection. A properly detailed notice will provide the account holder/applicant with plenty of ways to correct via the explicit reasons contained in the notice.

There’s also this from the banks’ side:

A Bank of America spokesman said the bank welcomed the administration’s efforts to provide regulatory clarity. “We’ve provided detailed proposals and will continue to work with the administration and Congress to improve the regulatory framework,” he said.

If the bank has these detailed proposals already developed, there is no reason why it cannot implement one of them without waiting on Government to tell it what to do. That would be what used to be good old American initiative.

A Brief Thought on AI and Employment

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It seems that newly minted college graduates are having trouble getting those entry level, low-paying jobs that used to be virtual guarantees in most avocations. Employers are discovering that AI can do many of those entry level jobs just fine, so they’re only interested in hiring folks with a few (say 5-ish) years of actual experience into those jobs that need that experience.

The question becomes what to do after those 5-ish years when those relatively experienced employees move on. Having hired few to no inexperienced folks fresh out of college, there now is no pool of somewhat experienced folks from which to hire.

My thought: use AI to train those who are inexperienced, both new graduates and by now 5-ish years post-college and still inexperienced, to do the entry-level and the somewhat experience-needing work. Continue that cycle as AI advances into the work heretothen requiring more experience, using AI to train employees into those yet more experience-needing positions.

Humans are always going to be better than robots at doing work that requires actual thinking, including jobs that don’t require much thinking directly but do require interaction with other humans in teamwork and/or collaboration (which are not the same thing), with supervisors, even with robots. It also takes humans to train that thinking, and robots can be useful tools in that training.

Carlyle, an investment firm, already is doing this sort of thing, but it needs to get more widespread.

The investment firm Carlyle now pitches to prospective hires that they won’t be doing grunt work. Junior hires go through AI training and a program called “AI University” in which employees share best practices and participate in pilot programs, said Lúcia Soares, the firm’s Chief Information Officer.
In the past, she said, junior hires evaluating a deal would find articles on Google, request documents from companies, review that information manually, highlight details, and copy and paste information from one document to another. Now, AI tools can do almost all of that.
“That analyst still has to go in and make sure the analysis is accurate, question it, challenge it,” she said. “The nature of the brain work that needs to go into it is very much the same. It’s just the speed at which these analysts can move.”

TACO Trump?

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Trump Always Chickens Out goes the latest anti-Trump meme of the Left. This graph tells a different story.

All of those latest agreed/imposed tariffs are higher than the original tariffs.

Keep in mind that Trump is, from the beginning, a builder who learned his trade in the blunt-speaking, trash talking New York City environment and a marketer who learned negotiating in that same environment.

The best deals are made by a marketer who begins the negotiations with an already clearly understood price range within which he’s willing to close a deal and outside of which is willing to walk away. The marketer then begins with offers that are extremely low on proffered buys and extremely high on proffered sales and lets himself be talked up/down toward his already determined range in exchange for more things from the prospective seller or buyer.

This is what that graph illustrates.