Ask Me Anything about Universal Basic Income Today on Reddit

Today at 1 p.m. Eastern (10 a.m. Pacific), I will be doing an "Ask Me Anything" session on Reddit on the topic of universal basic income (UBI). Here is the general link to the page where my discussion will appear. I will post an exact link to the discussion itself when the time comes.


The IAMA sub-Reddit requires that people provide "proof" of who they are by posting something that no imposter could easily do. My "proof" is this little video clip inviting you to join me today on Reddit. Sorry for the poor quality--I'm not very good at videos, but you can match the image in the video to the one posted in my profile. I guess that will constitute "proof."

As readers of this blog will know, I have posted lots of stuff about a universal basic income over the past year. Here is a partial list:

• The economic case for a UBI
• Could we afford a UBI?
• Conservative, progressive, and libertarian perspectives on a UBI
• UBI and work incentives: Part 1, theory
• UBI and work incentives: Part 2, evidence

For more, you might check numerous contributions I made to the recent discussion of basic income on Cato Unbound, which starts here  or this short piece posted on Real Clear Markets  or this brief summary of my arguments in the Milken Review.

So please join me, and I look forward to answering your questions!

The Looming Blood Surplus: A Case Study in Supply and Demand

A market for blood? Many Americans, used to being rewarded for a donation with a warm feeling of talking to WPTV of West Palm Beach, Florida.
public service rather than cold cash, might see the idea as offensive. “I would guess 99 percent of people don't know that blood is sold,” says Ben Bowman, CEO of General Blood, a national blood brokerage firm,

Yes, there is a blood market, a big one with a turnover of $3 billion per year by some accounts, and it is entering a period of turmoil.

Demand

Just a few years ago, people thought an aging population, in need of more hip replacements and heart bypasses, would mean an endlessly rising demand for blood. In recent years, though, doctors have come to realize that transfusions, life-saving though they can be, have a downside. The cost of unnecessary transfusions is one consideration, but the risk of transmitting disease is the real negative.

As anesthesiologist, Josh Martini remarked to Minnesota Public Radio, "I was told in medical school, 'don't bother giving one unit, you should just give two if you're going to give any.'" Now, he says, the mantra is changing to "why give two, when one will do?">>>Read More

Follow this link to view or download a brief slideshow with supply-and-demand graphics that can be used as an in-class quiz or independent reading for students.

Broad and Long-Term Unemployment Fall in August Despite Slowdown in Job Growth

The Bureau of Labor Statistics reported Friday that the broad unemployment rate and long-term
unemployment have fallen to new lows for the recovery, despite a slowdown in the growth of payroll jobs. Payroll employment increased by 142,000 in August, significantly less than the 212,000 average for the previous three months. The standard unemployment rate fell fractionally, returning to the low of 6.1 percent first reached in June. The percentage of the labor force working part-time for economic reasons also decreased.

The standard unemployment rate, U-3, is the ratio of unemployed persons to the civilian labor force. Both the numerator and denominator of the ratio fell in August. The broad unemployment rate, U-6, also takes into account discouraged workers (people who would like to work but have stopped looking because they think no jobs are available) and involuntary part-time workers. As the following chart shows, that rate fell to 12.0 percent in August, a new low for the recovery. >>>Read more

Follow this link to view or download a brief slideshow with additional charts of the latest employment situation

Reading Recommendations for You and Your Students

Living with Water Scarcity, David Zetland. Back in April I posted a review of David Zetland's book that recommended it not only as a short, readable treatment of the high-profile issue of water scarcity, but as a case-study in scarcity and markets in general. Now David has reduced the price of the download version, from $5 to $0. If the $5 put you off when you first read the review, download it for free and read it today. (You can still buy the paper or Kindle versions from Amazon if you prefer).

A People's Endowment, Karl Widerquist. Recently I have posted several items on the idea of a universal basic income (See here and here). These posts have included suggestions as to how a UBI could be financed by replacing or cutting back on existing welfare programs, middle-class tax expenditures, and other budget outlays. Karl Widequist, another supporter of a basic income, is currently writing a book that is scheduled to come out next year. He has recently posted a draft chapter setting out his own views of how a basic income could be financed by setting up a people's endowment, similar to the Alaska Permanent Fund or Norway's Sovereign Wealth Fund. It makes good reading as it is, and the author would welcome comments as he works on a final version.

A Universal Basic Income and Work Incentives: What Does the Empirical Evidence Tell Us?

In Part 1 of this series, I outlined some basic economic theory regarding a universal basic income (UBI) and work incentives. By a UBI, I mean an income support policy that provides a set monthly benefit to every citizen. A UBI, as I define it, would to everyone, regardless of income, wealth, or employment status. In that respect it differs from means-tested income support policies (MTIS), such as current US welfare system programs or a negative income tax (NIT), which reduce benefits as the recipient’s income increases.

The fear that a UBI would undermine work incentives is among the most important sources of resistance to the idea. In Part 1, I argued, on theoretical grounds, that replacing the existing welfare system with a UBI would tend to increase average work effort. This part will look at several sources of evidence that support the theory, beginning with the famous income maintenance experiments (IMEs) of the 1970s and 1980s.

What we can learn from the IMEs and what we can’t learn

The income maintenance experiments in question followed a method known as randomized field trials. Each of the experiments enrolled from several hundred to several thousand households and divided them into two groups. They assigned one group to an experimental income support policy while a control group continued to be covered by existing welfare programs, including Aid for Families with Dependent Children (AFDC), food stamps, and others. IMEs testing various policies took place in New Jersey, Iowa, North Carolina, Indiana, Colorado, and Washington. They covered both urban and rural areas; both single parent and two-parent households; and various ethnic groups.

Universal Basic Income and Work Incentives: What Can Economic Theory Tell Us?

Everywhere you look, it seems, people are talking about a Universal Basic Income (UBI)—a monthly cash benefit paid to every citizen that would replace the existing means-tested welfare system.

Supporters maintain that a UBI would not only provide income support to people in need, but would also increase work incentives. That is because, unlike the current welfare system, it would not claw back 50, 70, or even 100 percent of the earnings of low-income workers who make the effort to get a job. Opponents are more skeptical. They fear that if everyone were given a basic cash income with no requirement to work, people would quit their jobs in droves and we would end up with a nation of layabouts.

Who is right? This post examines the relevant economic theory. Part 2 will look at the evidence.

Krugman vs. the Libertarians on Phosphorus, Freedom, and Environmental Economics

Paul Krugman is at it again with a stunningly ignorant NYT op-ed on libertarians and the environment, “Phosphorus and Freedom.” As the author of a book on the libertarian perspective on environmental policy, I would like to respond.

Phosphorus comes into the picture in the form of agricultural runoff that pollutes Lake Erie, recently making the Toledo water supply temporarily undrinkable. Krugman blames this kind of thing on libertarians, who, he says, endorse an idea of freedom that includes the freedom to pollute one’s neighbor’s water supply.

Sadly, Krugman’s knowledge of the libertarian position on environmental economics seems to be limited to what he hears on talk radio and what he reads on conservative web sites like Red State. That is problem No. 1: Krugman pretends not to understand the difference between conservatism and libertarianism. He should start by reading Friedrich Hayek’s classic essay “Why I am Not a Conservative,” but maybe he can’t tear himself away from Red State.

According to Krugman, libertarians believe that “anyone who worries about the environment is engaged in scare tactics to further a big-government agenda.” In truth, real libertarians care very much about environmental issues. They just see them through a different lens than Krugman does. >>>Read more