There’s a great way to fight climate change and inequality, but since it leaves profiteers out, it will be opposed

I proposed a new $2 per gallon of gas tax. That, by helping to lower the consumption of gas, and thereby of carbon emissions, should be great in the fight against climate change.

And I also proposed that all revenues from that gas tax, should be paid out equally to all citizens, in a sort of first step of a Universal Basic Income scheme, which should be very good in a fight against inequality.

But, if so good, why are the chances that become a reality so slim? The simple answer is that it would not provide profit opportunities for the climate change and redistribution profiteers.

Friends, if we are serious about fighting climate change and inequality, we must be serious about keeping the profiteers at bay. 

Fighting against climate change and inequality takes a lot of money and, if we also have to satisfy profiteers while fighting, we simply might not have enough money.

PS. A concrete proposal for Mexico

http://teawithft.blogspot.com/2016/04/having-carbon-taxes-fund-universal.html

The wealthy and the poor should all be interested in a Universal Basic Income scheme

What is a Universal Basic Income? It refers to a payment, made for instance monthly, to all citizens, without any differentiations based on wealth and income.

The wealthy must know that' some voluntary redistribution must occur, in order to stop involuntary redistribution from happening, and so they know that some Pro-Equality Tax on wealth and income is lurking around the corners. In this respect they have a vested interest in that the redistribution is done as cost effective as possible, so that the redistribution needs are minimized.

The poor have also a vested interest in that the redistribution is done as cost effective as possible, so  they get the most out of the redistribution.

And to top it up, the redistribution could help the real economy, and so that the wealthy could perhaps fast recover what was redistributed from them.

And to top it up, with the resulting increased demand, the poor can help the real economy to provide them with jobs and, hopefully, with opportunities for also them become wealthy.

The direct cost of redistributing by means of a Universal Basic Income should be 2 percent… tops! What current distribution performed by any government can compete with that?

That some who received the Basic Universal Income might, because of wealth and income, not merit it? So what, they only gave a gift to themselves, at a cost much less than what they ordinary pay for a tip.

Consider Universal Basic Income to be a Societal Dividend, like a dividend you get when inheriting some shares in a corporation.

Now who could be against all that? The usual redistribution profiteers of course... the redistribution mafia.

Besides a Pro-Equality Tax, there could be are many other good alternatives to how to fund a Universal Basic Income scheme.

It could for instance be funded by carbon taxes, which would help us to align the fight against inequality with the fight against climate change… and thereby also keep the climate change profiteers at bay.

And since we can almost be sure there will be lot of structural unemployment in the near future a Universal Basic Income begins to respond to the needs for worthy and decent unemployments.

And all that would provide us one great additional benefit. By keeping the social redistribution functions separate, we could have a better and more transparent oversight over how the government is performing its other functions... and that would help us to keep the government profiteers at bay, and increase our chances of getting good governments. 

It’s a win, win, win! Of course, as long as it is paid out in real money... funny money would make all worse.

Question: If only 1 million produce all the food the world needs, should only they eat, or Universal Basic (Food) Income? Would the all the rest allow the food producers to dine in calm?

PS. In my country Venezuela the poor did not get more than tops 15%, of what would have been their per capita share of some incredible oil revenues. That is why I have had enough of redistribution profiteers to last me several lifetimes. That is why I have defended net oil revenue sharing among  all citizens for soon two decades, which is nothing but a (variable) universal basic income funded with oil revenues.

My Universal Basic Income blog

Rising global info-confusion

About a week ago, I took a humble and run-down taxi from the airport to the capital city of a small Central American country. During the ride, the equally as humble taxi driver gave me a masterly lesson about globalization. After having informed him about where I’m from, he asked in one long breathless phase, “Has Comandante Chavez managed to get rid of Magistrate Sosa yet? By the way, where exactly is Venezuela? Near Spain, no?”

The taxi driver had simultaneously shown a surprising knowledge about Venezuela’s internal politics and an almost embarrassing ignorance about basic geography. This incident prompted me to reflect about the matter of global information. To begin with, it is evident that when speaking about this confusing issue, more is not necessarily better. Greater quantity of information can simply mean more irrelevant data, more often than not at the expense of pertinence. Likewise, too much information can confuse things and plant so many trees that it becomes impossible to see the forests.

In Venezuela, for example, and without getting into details, it is surprising to see how most of the nation is still blind to the terrible implications that the taxes on oil products levied by consuming nations have on our country.

The above-mentioned example makes it tempting to establish priorities. However, who are we to determine whether the internal politics of a country are more or less relevant to someone like my taxi driver than that same country’s geographical location. What’s more, when you think about it, it could just be that in a globalized world, geography as I studied it is not really relevant any more.

Upon observing how fast the volume of information is growing, I remember that a few years ago I maintained the thesis that the lack of information could actually be valuable as a promoter of development. On occasions, ignorance of certain matters kept alive the dreams of finding the greener valley.

These dreams are the ones that drove Americans to invest in Italy, Italians to move to Venezuela and Venezuelans to find work in the United States. This generated economic growth all around.

The increasing speed of today’s information flow also raises some doubts. 

Although it is certainly advantageous to insure that correct and relevant information as well as good news is transmitted rapidly, it is also certain that this same speed is usually applied when propagating incorrect and irrelevant information, as well as increasing volumes of bad news.

For some not totally identified reason, I feel that the magnifying effect of speed upon bad information is somehow greater that on good information. Making peace, for example, requires time which is often not available. Provoking war often takes just a matter of seconds.

Just who the creators and receivers of information are is also deserving of reflection. There is no doubt that the foreign investors the country most wishes to attract are those that bring with them a long-term vision and who will therefore create many permanent jobs

Unfortunately, however, we frequently confuse economic policies that are positive and adequate for the country with the information that short term capital wants to see. The main reason for this is that it is precisely those short-term investors who pressure the most for urgent and globalized information.

As a result of this, we often see economic schemes based on high interest rates, a strong currency, fiscal equilibrium and economic puritanism. All the long-term investors really want and need however, is a good internal demand and a competitive exchange rate.

I write articles, and to achieve this I frequently use sources of information that, in spite of offering a lot of detail, are not necessarily relevant or complete. My taxi driver reminded me of this risk. I may have come off as an idiot in many of my articles and probably don’t even know it due to the cordial discretion of my readers. If this were the case, thank you. Remember that my ego is not as strong as that of the New York Times, and if I have sinned, I prefer not to know.

PS. In 2003, as an Executive Director of the World Bank, I formally warned: "Nowadays, when information is just too voluminous and fast to handle, market or authorities have decided to delegate the evaluation of it into the hands of much fewer players such as the credit rating agencies. This will, almost by definition, introduce systemic risks in the market"