I'm not a UBI guy.
Not now.
And the reason is basically, it's a lot of money.
And given that there are constraints, political constraints on how
much money we're going to be able to get together for social
programs. Trouble with UBI is that either it's going to cost an
amount that's beyond what I expect is to be politically possible
and in the next several decades. Or it's going to be way inadequate.
And so more targeted programs, programs that that focus on people with
real needs and that includes everything from of course universal
health care, which we can should do right away one way or another, to
various kinds of income supports for families with children and so
on. There's a whole lot.
If you ask what we can do with a sum substantially less than
UBI would cost, it's a lot.
And to say well no we must have UBI.
That would only make sense if we were right on the verge of the point
where the robots take all of our jobs and that doesn't look, there's
no sign that that's actually happening.
A starting point is finish the job that the, that the Affordable Care Act began.
Now, I would I'm, I'm very enthusiastic about this new proposal to ACA 2.0 to reinforce it.
That's not the that's not the end point.
I mean, I'm a I'm a Medicare for America guy which is Medicare is
available to everyone but you can also keep private insurance but
something like that.
But start with that.
We need aid to families, we need child care.
Universal child care is it's something that it's crazy not to have
given what it means for the country's future.
There's a there's a list of things you start to add up things that
are huge benefits to America that would cost a few percent to GDP.
And that's a significant but not crushing sum and we should just do
them.
You could have a very extensive progressive agenda for no more than
the amount of money that a Republican Congress just blew out a
completely pointless tax cut.
Right now two trillion dollars over the next 10 years would buy you a
lot of social progress.
So, let's start from there.
Anything up to that point, I would say let's not even worry about
where the money is coming from.
If we're going to have a recession, it's gonna be a smorgasbord
recession. It's going to be no one thing but just a bunch of different things.
I mean short run economic forecasting is a is a black art.
Nobody does it very well.
For what it's worth.
People who are tracking are feeling moderately depressed right now.
They're seeing slow growth right now and the markets, the bond market
is acting as if there's a pretty good chance of a recession sometime
in the next year or so but who knows.
There are all kinds of things that could be going wrong.
China is clearly struggling.
Europe may very well actually already be in recession. They probably
are suffering the deflation of the tech bubble, corporate debt has
gotten it. I've been saying there's no one thing this is if we're
going to have a recession it's going to be a smorgasbord recession.
It said now that our economy is the strongest it's ever been in the
history of our country.
Well even even his own numbers, right?
I mean it's not.
He's been boasting about the greatest economy ever and it's actually
turns out that we've had the highest growth rate since 2015.
Right? It's not it's not exceptional.
What we've been seeing is just kind of in the normal range of
fluctuations.
People don't live on GDP.
People live on their paychecks and paychecks have not at
best kept slightly ahead of inflation and not even that.
And that's for a long time.
People... So, you say whatever, whatever people may say about the
growth number, the fact that the matter is people are looking and
saying I don't feel like it's any easier to pay my bills this year
than it was last year.
The absence of faster wage growth despite low unemployment is
something of a mystery.
But you know the economy is always changing.
The way we measure the unemployment rate is always the same but what it means
in terms of how tight our labor markets, how much bargaining power workers have.
That can change a lot depending on what the economy is like and it
looks as if we have an economy right now where between
and maybe factors we just don't understand, what looks like a historically low
unemployment rate isn't actually translating into the kind of
bargaining power that workers used to have.
I actually think that the answer to what will replace unions is
unions.
In the end, something like organized you know if union means organized
labor that is able to bargain collectively, there's a reason that we
hit upon that solution and it's a solution that we managed to lose a lot of.
Largely because of a political environment that's hostile.
I mean we...unions are a very small factor in the U.S. economy right now.
But you know there's two thirds of the workforce in Scandinavia.
So there's nothing about the 21st century that says that you can't have extensive unionization.
America has made policy choices that have led to low unionization.
Policy choices can change.
Denmark is absolutely as exposed to the winds of global competition as America is.
Two thirds of them are in unions.
And remember also most of our economy by the way is services which
are not traded at all.
So no this is, this is an excuse. We made we made the decision
not to have unions in America.
We didn't lose them because they became obsolete.
The whole question of income inequality and growth is a very tortured
one. It's not one with a simple or clear answer.
Income inequality at the bottom means that a lot of children don't
get the essential nutrition, health care or other support that they
need to realize their potential.
So that's a drag on growth.
There is some very ambiguous evidence about whether high income
inequality is that hurts consumer demand.
I'm not fully convinced of it myself.
So I think the reason to be worried about income inequality is not what it does to GDP.
The reason to be worried about income inequality is what it does to
people, which is ultimately what we care about.
We have what amounts to controlled experiments.
We know what happened when food stamps were brought in.
We know what happened when Medicaid was brought in because those were
both programs that didn't go into effect all across America at the same time.
They rolled out across the country and we can look.
We have what amounts to an experiment in what happens to children who
did get nutritional aid when they were very small.
What happens to children who did get adequate medical care compared
with those who did not.
And 20, 30 years later, they are more productive, they are healthier
more productive, more successful citizens of our society.
So there's no question that alleviating hardship at the bottom is
good not just for the individual but for, for the broader society and for the economy.
So we now have a large part of the influential elite in the United
States that has simply opted out of public schooling.
That has to be really bad for social cohesion.
And so those are the sorts of things I think that you really want to
worry about on inequality.
Beyond just adequacy of material standard of living.
Are we a society or are we not?
And increasingly here we are not.
Look, if we take the extreme.
The Cuba at the height of Castro's
regime, where your income was the same regardless of what you did.
You can't be a card carrying economist and not believe that that has
some adverse incentive effects.
But the notion that we are that, this is a prime concern in
America right now, it's just not supported by the evidence.
And look I would say when we talk about tax rates it turns out that
if you are a person who lives in New York City and earns your income
through wages and salary but you have a high salary.
So you're a highly paid New York person.
You probably pay 55 to 60 cents of each additional dollar you make
in extra taxes.
So we have a pretty high, not as high as Alexandria Ocasio-Cortez
wants it to go.
Or Peter Diamond, the great economist thinks it should go.
But we have a pretty high marginal tax rate in New York.
Does the city out here look to you like a place where people you know
just don't really work very hard because taxes are too high?
It doesn't strike me that way.
So I think we have a pretty good pretty good evidence that the
incentive effects in America right now are not something to be
worried about.
I think it's one of those any anything to prescribe any
kind of progressive in some sense social policy they'll find a way to
make it sound like an ugly thing and I think that I think the reason
that redistribution.
managed to acquire a bad resonance among some people is that they've
managed to convince basically convince white people that taking your
money away and giving it to people with darker skins.
That's really what life that's like a lot of things in America.
But that's not certainly not what experts think that redistribution
is collecting money in taxes and using it to finance various kinds of
social programs that tend to help people who are more in need.
Child care, early development crucially.
That's crucial both for the children and for the parents because we
live in a society where in fact
lots of people...
lots of families require two working parents or you have single parents who must work.
And I'm not violently opposed to you know baby bond things where you
give people assets but the fact of the matter is we are going to be
as a society in which people the great majority of people make a
living by work, by selling their labor.
And so trying to spread asset ownership can help maybe a little bit
but ultimately if you want if you want America to be a more equal or
more middle class society you have to be increasing the rewards to
work not giving people assets.
That is a genuinely hard problem.
I spoke about that.
I've wrote about that.
I mean there are there are things I know.
I think we know a lot about how to make inequality less.
We know a lot about how to make children's lives better and make
their make them more productive adults.
If you ask me what you can do, I spent my early years in Utica, New
York. I got in trouble with the mayor of Utica by saying some of
this. But if you ask what can we do to actually make lots of people.
It's a decaying industrial city.
One make lots of people want to move back to places like Utica.
I don't know how you do that.
There are you can try.
But the historical record of attempts at, attempts to revive
depressed regions as opposed to helping the people in those regions
which we do a lot of but actually reviving them is not great.
So there are going to be there are going gonna be parts of America
that where it made sense to locate a lot of stuff.
Given the economy we had in 1890 and there is not a lot of reason to
do that in the year 2020.
And if people are determined enough to try and stay then we should
give them every opportunity that things like broadband should be
available everywhere.
The fact that there are broadband deserts in a lot of America is
that's unnecessary and unforgivable.
So I'm not giving advice to people but we should make housing
affordable. You have an economic dynamo like the city of New York.
It shouldn't be a place where only people at the 98 percentile can
afford to actually have a place to live.