Thursday, February 1, 2018

Stockton and Universal Basic Income

"If we build it, they will come."  -Kevin Cosner in Field of Dreams (movie)

"If people don't want to come out to the ball park, how are you going to stop them?" -Yogi Berra

Two different perspectives of people opting out.  Which is right?

Stockton, California
Stockton, California recently made the news.  They were given a private grant to fund Universal Basic Income with a portion of their population.

This effort is being framed as "an experiment".

Here is the justification:

“The Universal Basic Income that is being proposed in Stockton now is very small compared to the big corporate subsidies that cities like that engage in,” Anderson said.
Stockton racked up millions in debt on development projects in the past, which got the city into trouble, Mayor Tubbs said.

“We’ve overspent on things like arenas and marinas and things of that sort to try to lure in tourism and dollars that way,” he (Mayor Tubbs) said.
 The mayor has a point.

Nothing stimulates private investment like starting a publicly subsidized businesses to compete against an existing, private, tax paying businesses that provided those public funds.
Arenas have a horrible track record for stimulating the overall community's economy.  They put a bunch of money in the team owner's pocket but do little for the community.

It is a joke in the business community:  Sponsoring a stadium or a bowl game is the equivalent of breaking a mirror.  It is followed by seven years, or more, bad luck.

Presumably the public sector funds sunk into stadiums and arenas could have been used more productively...or left in the tax payer's wallets.

I am fine if it is an experiment, but....
Experiments are run to gather information and that information is already out there.

Another source of information would be to compare successful (expanding) communities and less successful communities for percentage of the city's GDP going to city workers in the form of wages, benefits and pensions.  While city workers are not exactly being paid for "doing nothing" they can be a reasonable proxy for them.

A decent statistician will point out that growing cities invariably have lower legacy costs while shrinking cities always have large costs associated with older municipal work forces and pension costs.  But isn't that the point?  If those "costs" were investments the problem should be self correcting.  The hypothesis on the table is that "investing" in people regardless of their productivity is a viable substitute for private enterprise.

The funds being sponged up by Universal Basic Income are funds that are not available private enterprise because the governmental unit funding UBI by selling bonds and private industry are all competing for the same investor's dollars.

I applaud Stockton for figuring out that arenas, stadiums and marinas are black holes for money.  I also applaud the desire to "do something".  But I don't think this experiment will have the outcome they are hoping for assuming they can resist the temptation to fudge-the-data.


  1. Nope, those experiments never end well!

  2. A comment by Pawpaw that was not posted in the correct place:

    "Other than the fact that Universal Basic Income has failed everywhere it's been tried, it will be interesting to see how the additional income affects local prices for basic commodities (bread, milk, sugar, gasoline)."

  3. If I was mayor of any city I'd have the local popo arrest any vagrant they find. Have them take a shower and dust for lice, new clothes and haul them to the airport for a one way trip to Stockton. I'd lose a low life and Stoctkon would get to help another unfortunate. Win Win.


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