When Andrew Yang announced his candidacy for president back in November 2017, it was hard to imagine that the futurist and test-prep millionaire would offer up the most prescient policy of the Democratic primary. Throughout his campaign, Yang pushed the idea of a universal basic income — $1,000 a month for every American adult — to help reinvigorate the middle class and to offset job displacement due to automation.
Just over a month after Yang dropped out of the race, policies similar to his signature proposal have, at least temporarily, become mainstream options for both parties, as lawmakers try to support working Americans while the coronavirus lays waste to the economy. Though the proposals are bound to change as they flow through Congress, any enacted plan would put UBI money in citizens’ pockets years before such an idea were considered politically feasible.
Recode Decode is produced by Eric Johnson. Erica Anderson is the executive producer.
On March 18, Yang spoke with Recode Decode host Kara Swisher to discuss the newfound popularity of an “emergency version” of universal basic income and how the coronavirus is just one profound example of the economic disruptions that lie ahead.
Kara Swisher: Just this week, Congress is looking to give $1,000 to every American [who earns under] $65,000 to try to assuage the situation. Why don’t you talk about it? Because everyone’s suddenly like, “Andrew Yang was right.”
Andrew Yang: Well, the details have yet to be ironed out as to what the intervention or stimulus is going to look like. The last I saw is that they’re preparing two monthly tranches, one in early April — April 6 — and the second one on May 18. And it looks like the amounts that are going to be distributed to people are going to be means-tested and on a sliding scale.
But the main idea is very, very much identical to universal basic income, where the vast majority of Americans are going to get a check from the government in order to help us weather this crisis. And I’m for, obviously, a version of this continuing in perpetuity. I think it’s a good idea all the time. But in the midst of a crisis, it’s vital that we get purchasing power into people’s hands as quickly as possible. And I’m thrilled that the administration is making this move.
Talk about the differences, because you had a different proposal. Did you think about this in terms of a crisis?
I was arguing that we needed to humanize our economy as quickly as possible and start separating economic value and intrinsic human value. And the amount I had recommended was $1,000 a month immediately for every American adult. Now, if you think about this pandemic, in many ways, it’s like an accelerated version of sending us all home and making it so that we can’t actually command the living wage in the market, because there is no market, and you’re not allowed to leave the house. And if you worked in a restaurant or bar or hotel or airline, then your job isn’t there for you to go back to anyway.
Now it’s being laid bare that obviously there needs to be a way to get economic value into people’s hands when we’re trapped at home. And so a version of universal basic income becomes completely obvious in an accelerated fashion, but —
It’s kind of emergency universal cash payments. It’s different from, you’re proposing something that would give people breathing room. This is money because people have immediately stopped working at all.
But how long is this going to last? Let’s say it lasted six months. Then obviously, we would need to put money into people’s hands for quite some time. And this is one reason why, in my mind, doing this all the time would be wise, because in a country as wealthy as ours, we can easily afford to put enough into people’s hands, where they can meet their basic needs. And then if there is a crisis, or they lose their job, then they’re able to bounce back in a much steadier fashion. But you’re totally correct that what we’re looking at now is, in many ways, an emergency version of a universal basic income, because the consensus is so clear that this is something we have to do.
How do you assess what Congress is doing now — and what do you think they need to do, and what do they need to do more of? Because it’s right now, sort of on the fast track to happening, this economic stimulus package.
Yes. So cash in people’s hands is an absolute good at this point. We should just be moving cash into people’s hands broadly, quickly, dramatically. One of the metaphors I’ve been using is that if your house is on fire, you don’t really care about how much water you’re using to put out the fire. And at this point, our economy is on fire, and we need to put liquidity into people’s hands, to help put them at ease, make them able to feed themselves and their families.
But we also can’t fool ourselves into thinking that that’s actually enough. Because if you look at the economic impact in an average community — so first you have the people in the families being able to feed themselves. But then you have all of these small businesses that were operating essentially at a break-even point, even in normal times.
It was tough for a lot of people, that people don’t recognize that even though the GDP has gone up and everybody seems wealthy. “Well, there’s a lot of wealth out there.”
Yeah, there’s a lot of wealth, but it’s not like everyone works for Amazon. Like, the average small business, let’s say a restaurant or bar, is lucky to break even. And so then if you choke off their revenue for, let’s call it two to three months, they end up in a very deep, dark hole. And then even if you say, “Hey, great news: You reopen three months later,” The hole is still there.
So the question is, how do you recapitalize that small business in a way so that they reopen? Because if you’re a bar owner who was just scraping by, and then your bar now is in deep debt in the red because you’ve had to pay rent and other expenses and had no revenue for the last several months, you might want to walk away — because if you get back there, how are you going to dig yourself out of that hole? And then if you’re the government, how do you actually recoup that bar and make it so that the bar owner actually can reopen and start to make money for themselves again? That’s a very difficult thing to do with hundreds of thousands of food trucks, and cell phone dog walkers, and bars and restaurants, and catering businesses.
I want to talk about your run. How do you feel about what you did, and why did you drop out?
I got a bunch of votes, but I did not get any delegates, because I dropped out after New Hampshire and you needed 15% or more in each of those states to get delegates. And that’s why I ended my campaign.
And I still had originally planned to stay in the race the whole way because I’m a hardworking Asian entrepreneur, and why drop out? Let’s just take it to the limit. But some people sat me down and said, “Hey Andrew, if you drop out after New Hampshire, it will actually be better for your ideas and your movement over time than if you stay in and grind it out for a while, and here’s why.” And then they explained it to me and they convinced me.
The explanation was, if you continue to run, the press will see it as their responsibility to completely ignore you. And so then when you drop out, it will be just like a tiny blurb and no one will pay it any mind. Whereas, if you drop out now, then people in the press will respond to it as very principled action and you’ll actually get a bit of a moment to be able to promote your ideas and go out on something of a high.
Now, you backed Joe Biden. Why did you do that? Some people were disappointed that you did; it was interesting.
I decided to back Joe Biden because after he won Michigan, he became our presumptive nominee, and we can’t waste any time trying to unify behind the nominee to take on Trump in the fall. And I had already pledged that I was going to support the eventual nominee, and to me, at that point, Joe mathematically was going to become the nominee. So then I said, well, I guess I should get behind him and try and bring people together. And Joe had called me the week before and asked me to help his campaign and endorse him, and I put him off at that time, because I said, I think that the voting hasn’t really resolved itself in this way. And that was a hard conversation. But then when I felt like the voters had spoken, post-Michigan, I said, okay, let’s just move this process forward. And yeah, it was a hard thing to say, because I admire Bernie and his supporters a great deal. He inspired my run, honestly. I supported him in 2016.
Do you want to work for Joe Biden if he wins?
Well, it’s certainly hard to say no to the president.
What would you want to do if you had your choice?
I’d like to head up a new department of technology and innovation, because I think we need to try and drag the government into the 21st century. I’m very, very concerned that our government is asleep at the switch when it comes to many things. But particularly technology. And technology has been transforming our way of life for decades, and the government has been absent.
We need to speed up in terms of both the way the government is facilitating and enabling certain areas of development, but also in some cases saying, “Hey, you know what? Maybe we shouldn’t just have everyone competing to produce artificial intelligence as quickly as possible, because maybe something unforeseen occurs,” or, “Maybe we shouldn’t have social media apps that are completely dominated by financial incentives to the potential detriment of our kids’ mental health or democracy.” I mean, these are things that the government should at least have some ability to monitor at a minimum and then either help or say, “You might want to put the brakes on a little bit.”
So pretend you were president, Andrew. What would you do right now? Pass this stimulus package, or just pass $1,000 a month for everybody? Because it’s trillions of dollars. This was just like Medicare for All and everything else. It’s high-cost.
I think the stimulus packages are on the right track. If anything, I would go bigger. And I was with Anthony Scaramucci yesterday, and he made a comparison to being at war. And then at World War II, you had deficit spending of 20 percent of GDP over time, which given our GDP is like $21 trillion. You’re looking at something like $4.2 trillion in potential stimulus. And you have to look at it compared to the cost of a depression, which is a very realistic possibility, if you look at how many sectors of the economy have essentially stopped functioning at all.
And what’s the cost of a depression? Depending upon how long it lasts, it’s also trillions and trillions of dollars. And so I would say, “Look, we’re thinking about this too small. We should be going much, much bigger.” And Anthony’s plan, which I think has the right idea, is large cash transfers to people, yes. But also that the government starts serving as the buyer of last resort for small businesses, for big businesses, and businesses are going to end up taking a haircut on this in some way. But we have to try and make it so that they actually are able to resume functioning when the time comes. And you should spare no expense in that direction.
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