Andrew Yang for President?
April 17, 2019
The field in the Democratic Party has grown to 18, with a number of likely candidates still not formally announced. I have learned to withhold judgement, because, paraphrasing Will Rogers, I am not a member of any organized party – I’m a Democrat. Also, the enthusiasm of my warm embrace may harm my favorite’s chances.
That said, I am very impressed with the work of Andrew Yang, who is running for president in the crowded Democratic field. His plan, which is based on a very thorough assessment of the country today is available as a book, The War on Normal People or in cliff notes. He is popping up on cable news and in Ted talks promoting his ideas and, obviously, himself. Yang has done a lot of meaty stuff in his business career. A graduate of Brown and Columbia law school, he did corporate law at an elite New York firm for two years before jumping in to tech start-ups for a decade. On his third attempt he became CEO of Manhattan Prep which sold to Kaplan and therefore Yang enjoyed hitting the Geek Lottery. The money he gained became fuel for his next chapter: Ventures for America, a non-profit fellowship program. The mission was to bring start-up energy to declining areas of the country like Baltimore and Cincinnati. The exposure gave him great insights into an assessment of “real America” that is data-driven and hard to refute. He also developed a very needed strategic plan for the United States. My even cliffier cliff notes for his controversial but very readable book, begins with his assessment:
I. Where We Are:
- Normal People in America don’t have college degrees (only 32% do). Their median income is $31,099. They do not have $500 in the bank.
- They may not be in the workforce at all: one in six men between the ages of 25 to 54 is not working (10 million in total), adding to our low labor participation rate which is on a par with El Salvador and the Ukraine
- Automation is eliminating GOOD jobs more rapidly than they can be replaced. Technologies such as AI, robotics, smartphones et al, are far more powerful and being deployed faster than the internal combustion engine that ushered in the Industrial Revolution. That era, Yang notes, was accompanied by severe labor strife and turmoil and, importantly, the income inequality of the Gilded Age, which we are mirroring today
- The jobs being created are bi-furcated: highly paid jobs for highly educated, successful test takers (high IQ and SAT scores) and low wage service jobs comprised of Home Healthcare aides and gig economy jobs such as Uber account for 57 million people, 30% of the workforce
- These low wage jobs are frequently part time and lack fixed schedules, making it very difficult to raise families. Workers are essentially an “on-demand” resource. Employers seem to owe them very little beyond a small hourly wage
- In a chapter titled “Life in the Bubble”, Yang writes that there are six paths to six places. Elite college graduates will do one of six things: finance, consulting, law, technology, medicine or academia in New York, San Francisco, Boston, Chicago, LA or DC, creating a brain drain (my words) in many parts of the country
- Life outside the bubble includes cities that have been shrinking for decades and plagued by the lack of jobs and devastating drug abuse. White males are actually experiencing shorter life spans, unlike the rest of the developed world
II. Where We Want to Be: Achieving on a new Scorecard
We need a better measure of the nation’s health than GDP (if you can measure it you can manage it). This would be a balanced scorecard that might include factors such as longevity, educational levels, marriage and divorce rates, quality of infrastructure, income inequality and economic mobility.
III. How We Will Get There
- A Universal Basic Income of $12,000 annually for everyone over 18. Yang calls this the Freedom Dividend which will cost over a $1 Trillion and can be funded through a Value Added Tax (VAT) which is a tax on consumption used by most advanced economies. He targets a 10% rate that is half of the European level. Similar proposals were put forward by the Nixon administration and more recently by right wing think tanks
- Healthcare for All based on a single payer, given that today we have by far the most expensive system in the world with middling results. Medicare, a single payer, was once deemed radical socialism, is now a highly popular, highly effective program for the most difficult to insure
- Constrained tuitions (but not free) for higher education supplemented by stepped up vocational training
- And a whole bunch of other stuff on the Yang for President Website under the umbrella of Human Centered Capitalism
Andrew Yang has produced a plan that is based on an unblinking assessment of the United States today. We are not in good shape on so many important measures both internationally and domestically. We are failing our huge and proven potential of where we should be. We need clear vision and a good plan. Our current direction is a reactionary retreat that blames our problems on immigrants and a declining market for coal. Its major and only achievement is a tax bill that simultaneously worsens the deficits and income inequality while hamstringing the ability of the coastal states to fund good public schools through the cap on the deductibility of State and Local Taxes.
The current president has disabused many of us of the notion that a businessman can be a good president, if a frequently bankrupt reality TV star is in fact a real businessman. Yang will have ample opportunity to demonstrate that he has some of the right stuff in the grueling stamina contest to get the nomination. In the meantime, I hope that his ideas will lift the debate and result in positive change.