I’m not a UBI guy.
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
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
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
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
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
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
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
The fact that there are broadband deserts
in a lot of America is
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.