Bailout for the People: "The Cook Plan"

Basic Income Guarantee Network Annual Conference, New York , N.Y. , February 27-March 1, 2009

 

This system is not free enterprise, and it is not capitalism.

It is a cancer that is destroying the world.

 

Isn't it Finally Time to Enact a Basic Income Guarantee?

The lack of individual and family income security in the midst of a highly-developed economy is a travesty under any circumstances, but the basic contradiction of “poverty in the midst of plenty” that has plagued the world since the start of the Industrial Revolution is becoming much worse in the early years of the 21^st century as the Recession of 2008 picks up speed.

Winston Churchill spoke on the subject when giving the Romanes Lecture at Oxford University on June 19, 1930, a few months after the crash of the U.S. stock market that started the Great Depression. He said:  

“Who would have thought that it would be easier to produce by toil and skill all the most necessary or desirable commodities than it is to find consumers for them? Who would have thought that cheap and abundant supplies of all the basic commodities would find the science and civilization of the world unable to utilize them? Have all our triumphs of research and organization bequeathed us only a new punishment: the Curse of Plenty? Are we really to believe that no better adjustment can be made between supply and demand? Yet the fact remains that every attempt has failed. Many various attempts have been made, from the extremes of Communism in Russia to the extremes of Capitalism in the United States . They include every form of fiscal policy and currency policy. But all have failed, and we have advanced little further in this quest than in barbaric times. Surely it is this mysterious crack and fissure at the basis of all our arrangements and apparatus upon which the keenest minds throughout the world should be concentrated.

Evidently we've learned nothing since Churchill spoke. Isn't it shameful—or just surprising—that since the proponents of “post-modern” economics restructured the U.S. economy around the concept of a deregulated financial sector over the past 30 years, income and wealth disparities between rich and poor have become much worse?

Perhaps we are finally ready to reopen the question of whether human beings have a right to a sufficient income to keep body and soul together. This question has been mostly lost since President Ronald Reagan declared in his 1981 inaugural address that, “Government is not the solution to the problem; government is the problem.”

 But it is only government that can authorize and implement what is today called a Basic Income Guarantee (BIG). Otherwise, if government is trapped in the ideological straightjacket Reagan and his fellow conservatives put it in, then the only possible paradigm is Social Darwinism—survival of the fittest. Today it is not difficult to see that implementation of a BIG, had it been put in place when the concept still had political life in the 1960s and early 1970s, would have gone a long way toward ameliorating human distress from poverty along with assuring a degree of economic justice. And we would clearly be much better off today.

The last serious efforts at a BIG were President Richard Nixon's Family Assistance Plan, which passed the House but was defeated in the Senate in 1970, followed by implementation of the Earned Income Tax Credit for low-income families, enacted in 1975. Since then, every step toward economic “reform” has been one permutation or another of trickle-down economics, including the supply-side tax cuts of the Reagan and Bush II administrations.

Of course, the purpose of the move to deregulate the financial industry that has been going on for the past generation was supposed to have been to create a new “ownership” society based on having our money “work for us.” But the deregulated bubble economy has now blown up, exposed as the biggest fraud in history.

 Yet even in the midst of massive government bailouts for the banks and the as-yet-to-be-implemented economic stimulus proposals for the people, a BIG is never mentioned, not even by progressives. One problem with BIG is that its proponents always presented it as a transfer-of-wealth program, where a portion of the earnings of people with earned incomes would be diverted to support those in need. Even the idea of diverting military expenditures to a BIG could be viewed as a transfer program, since a smaller war machine would mean a reduction of salary and benefit payments to military personnel and civilian contractors.

In other words, even those in favor of BIG have viewed it as a kind of charity. As such, it is likely safe to say that BIG has little, if any, chance to be implemented within the U.S. at any time in the foreseeable future, at least in an amount to have an impact.

But there are other ways to look at the problem. One way is that of the Social Credit movement, where a regular dividend payment to individuals is seen not only as fair but is viewed as a necessary balancing force within a developed economy. But Social Credit concepts, while once a force in the British Commonwealth nations, is virtually unknown in the U.S. Another way is shown by the Alaska Permanent Fund (APF), where residents enjoy by right a share of the resource wealth of the state.

Both Social Credit and the APF as models for action will be discussed in this paper. The paper focuses on the U.S. , though the concepts are universally applicable, and proposes a method of providing a BIG as part of a program to rebuild the economy from the bottom up. I call this program, based on dividend-type approaches, a “Bailout for the People,” as opposed to the bank bailouts that are adding trillions of dollars to the national debt. I have presented it previously in articles on the internet as “The Cook Plan.” (Richard C. Cook, “How to Save the U.S. Economy,” Global Research, October 10, 2008 at http://www.globalresearch.ca/index.php?context=va&aid=10508)

Such a program is urgently needed. There is no time to waste in rescuing our citizens from the onrushing catastrophe that is befalling an economy where both manufacturing and family farming were long ago gutted to create today's anemic service economy. If things continue to go as they are today, there could be U.S. citizens starving within a year, and Congress knows it.   

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