The Rights And Wrongs Of Andrew Yang

The Democratic Party has a heavy but pathetic line-up of 2020 Presidential contenders. With two exceptions.

These two exceptions are Tulsi Gabbard and Andrew Yang. Gabbard did two tours of the Middle East in a medical unit of the Hawaii Army National Guard and came home with some strong anti-war views. Although she labels herself a progressive, she is unlikely to make much headway and has already been smeared from pillar to post by the same vested interests who have attacked Donald Trump unremittingly since before he ascended to the Presidency. Leaving that aside, Gabbard is economically illiterate; she supports the minimum wage, something that always sounds good to the oppressed working class, but does far more harm than good.

Andrew Yang Andrew Yang is a different kettle of fish though. The first Chinese-American to run for the Presidency, he understands business, and also understands something about economics. Yang has captured the imagination of progressives including comedian Jimmy Dore because he advocates and says if elected he will institute universal basic income for American citizens. This concept, which is actually hundreds of years old, goes by a number of names including Social Credit — after the great Major Douglas — and in Yangspeak, the Freedom Dividend.

As might be expected, conservatives blinded by their wage-slave mentality claim it will never work, some even ridicule it, yet something they never seem to realise, and probably Yang doesn’t either, is that there is a vast army of parasites out there who are essentially paid for doing nothing. If some of them actually work hard, the only people who benefit from their money manipulations are themselves. If you still don’t understand, check out Tony Levene’s classic book The Shares Game, or ask yourself if share trading is so beneficial to the economy how a parrot picking out trades with its beak can outperform seventy percent of professional investors?

Yang’s championing of basic income is motivated by what many people perceive foolishly as the “threat” of automation. The reality is that automation and the resulting increased output of goods and services benefits society as a whole, but, and here is the big but, it destroys many traditional jobs that have provided people with good or even exceptional livelihoods. If you want to see this expressed visually, go to YouTube and view street scenes from around 1895 when the motor car as we know it first became a regular visitor to our cities. At first you will see only or mostly horses, but fast forward five years at a time and you will see more and more motor vehicles and fewer horses until eventually, today, in most cities the only horse you will see is a police horse or one drawing the occasional novelty funeral procession.

Horses were big business for most of human history, but now the blacksmith, the stable owner, the groom, the rider, these are all gone. The rise of the motor car destroyed the livelihoods of those working in an entire industry, yet who would go back? The reality is that a world of seven billion people and rising could not exist without modern technology including the internal combustion engine and cars galore. There would be mass starvation without them.

Although Andrew Yang recognises this, what he does not understand is money. When asked where is the money to come from to fund his Freedom Dividend, his reply is a value added tax. No, no, no!

Leaving aside the Libertarian observation that taxation is theft, taxation reduces purchasing power. The valued added tax foisted on the UK, Australia via Malaysia and so many countries both in between and elsewhere is not the way to do it. As is now recognised though it was long denied, the vast majority of money in existence comes from the banking system, which creates it out of thin air then lends (ie sells) it to the rest of us: individuals, businesses, corporations, and governments. As Alessio Rastani said after the last big stock market crash, “Goldman Sachs rules the world”. He has faced criticism for that statement, but if he had said instead central banks rule the world, no reasonable person would have been able to criticise him.

Currently, central banks including the Federal Reserve create money by a conjuring trick known as quantitative easing. They may dress this up by claiming corporations deposit securities with them in exchange for cash, but the bottom line is the money appears out of thin air. To finance his Freedom Dividend, Andrew Yang needs to abolish the Federal Reserve and restore the right to create money to the US Congress, where it belongs. Good luck with that project.

In fact, all governments create a certain amount of their own credit through the coin and note issues. Why can’t they create it all? The scare story we are repeatedly fed is that to do that would cause hyper-inflation. No! Inflation is not caused by increasing the money supply, it is caused by printing money (including electronically) out of all proportion to the goods and services in circulation. Furthermore, we have inflation already, and a certain amount is not bad for the economy. One of the roles of central banks including the Bank Of England, is to ensure a 2% limit of inflation by controlling (ie manipulating) the money supply.

Even if he were to win the Democratic nomination and by some miracle defeat Donald Trump in 2020, Yang would still have a mountain to climb. Trump hasn’t taken on the money creators, but the hatred and vitriol that has been spewed on him has been a wonder to behold. Yet the only alternatives to basic income are slavery and war. A full discussion of this would take us far afield, but back in the 1930s, Major Douglas explained how a continued shortage of purchasing power leads to war.

Also, the institution of basic income is the only way to truly liberate the underclass, the large and slowly increasing body of mainly men who are unemployable at a living wage because no employer in his right mind would employ them. Check out this half hour video for a comprehensive exposition.

[The above article was first published on Medium, April 21, 2019.]