“If you’re in this room,” Andrew Yang said during a combination book signing and campaign stop at Prairie Lights Bookstore on Wednesday afternoon, “it’s quite likely that what you know about me is this: there’s an Asian guy running for president who wants to give everyone $1,000 a month.”
“And yeah, those things are true,” he said, as the capacity crowd laughed.
The event at Prairie Lights was Yang’s second stop of the afternoon. He’d come to the Iowa City store from an event at IDx, a Coralville company working on systems that use artificial intelligence (AI) to diagnose diabetic eye conditions. As soon as he was finished signing books and talking to potential supporters, Yang left for the Yacht Club, where he was recording an episode of the Political Party Live podcast.
The back-to-back events were part of Yang’s ninth visit to Iowa. It’s the first time the 44-year-old entrepreneur has run for public office, but even with the busy schedule, he appeared perfectly at ease.
Yang is an engaging speaker, witty and with a clear command of his message and platform. The last part is more impressive than it sounds, since his platform covers more than 70 topics. But, as he pointed out, the one issue he’s known for — to the extent he’s known — is the proposal that the federal government give every American, 18 and older, $1,000 a month.
The reason Yang advocates such payments, which economists call a universal basic income program, is directly related to the reason Yang thinks Donald Trump was elected president in 2016.
He quickly lists the most commonly cited reasons for Trump’s election: racism, Russian interference, FBI interference, Facebook misinformation, all of which he says are valid.
“But I think those explanations miss the fundamental point,” he said. “To me, the reason Donald Trump’s our president today is this: we automated away 4 million manufacturing jobs in Michigan, Ohio, Pennsylvania, Wisconsin, Missouri and 40,000 right here in Iowa.”
Yang said there’s a strong correlation between an area of the country losing jobs to automation and people in that area voting for Trump. Studies published by the National Bureau of Economic Research and the Oxford Review of Economic Policy support this claim.
Trump’s election “is a manifestation that we’re in the greatest economic and technological transformation in the history of the country.”
The improvements to automation, and especially AI, that caused the loss of manufacturing jobs aren’t over, and are starting effect other parts of the economy.
According to Yang, “what we did to the manufacturing workers, we will now do to the retail workers, the call center workers, the fast food workers and, most disastrously, truck drivers in the years to come.”
He pointed out there’s a lot of money to be made developing, for example, self-driving trucks.
“There’s $168 billion [in potential financial incentives] to automate truck driving. What’s the financial incentive to improve the lives of the three-and-a-half-million truck drivers [in the United States]? Zero.”
“We’re in the third inning of the greatest economic and technological transformation in the history of the country,” Yang said. “And the third inning has brought us Donald Trump. He is not the cause, he is a symptom. He’s a manifestation.”
Yang said he’d had discussions with friends who work in Washington D.C. about how to help people handle the changing economy, and the closest anyone came to a useful suggestion was recommending retraining programs for workers who lost their jobs. But those programs have success rates of 15 percent or less, according to independent studies, Yang pointed out.
Yang said he couldn’t find anyone in Washington who would advocate for anything bolder than retraining.
“The only way we will do anything about this is if you create a wave in the rest of the country and bring it crashing down on our heads,” Yang said he was told. “I remember that meeting, and I said to myself, ‘Challenge accepted.’”
“And that is why I’m here with you all today.”
Yang’s solution is guaranteeing a basic income of $1,000 a month for all American adults. After focus-group testing, he dubbed it the “Freedom Dividend.” The audience at Prairie Lights laughed and nodded, as Yang explained, “Americans just like the word ‘freedom’ a lot.”
Establishing a universal basic income program as a way of coping with large-scale job loss in a changing economy is supported by economists across a wide ideological spectrum. Yang’s method of financing the program doesn’t have that level of support.
Yang wants to pay for the Freedom Dividend with a value added tax (VAT) of 10 percent. That means there would be a 10 percent tax on an item, every time that item or the parts that make up that item is sold. (Parts to a manufacturer, 10 percent. Manufacturer to wholesaler, 10 percent. Wholesaler to retailer, 10 percent. And any other time the parts or the item change hands, 10 percent.)
The cost of the tax is, of course, ultimately passed on to the consumer. Like a sales tax, it’s a regressive tax, because lower-income people have to spend more of their total income. In countries with a VAT — common throughout Europe — it takes the place of sales taxes. That wouldn’t happen under Yang’s plan. State and local sales taxes would remain in place.
Following his appearance on Political Party Live, Little Village asked Yang about the regressive nature of the VAT.
“That’s one way of looking at it,” Yang said. “As a proportion of their [lower-income people] current income in a vacuum, would it be a bigger share? Yes.” But he said the impact of the monthly payments of $1,000 would more than balance out the impact of the VAT.
“I’ve looked at the math,” Yang continued. “The vast majority of states and communities would be net winners at a very huge level.”
Yang told the audience at Prairie Lights he believes people would spend most of their monthly Freedom Dividend locally.
“This is going to grow your consumer economy by 15 percent,” he said. “It’s going to 40,000 new jobs right here in Iowa.”
The second major issue Yang is running on is providing universal health care. Like many of his fellow Democratic candidates, he favors a Medicare-for-all single-payer system.
“It is messed up that in the richest, most advanced economy in the world, when we get sick or injured we’re more worried, stressed out, about paying for it, or navigating the crazy health care bureaucracy, than we are about actually getting well or getting healthy,” he said. “It does not have to be this way.”
Like the Freedom Dividend, Yang’s third major issue is unique to him. He wants to replace the Gross Domestic Product (GDP) — a century-old metric that estimates the total value of goods and services produced during a year — with a new standard measure of the country’s well-being.
“I like to bring up my wife, who’s at home with our two young boys, one of whom is autistic, what is her work included at in GDP? Zero. What is the market value of her work? Also, zero,” Yang said. “And we know that’s also messed up. We know that the work she’s doing is as important and challenging and vital to the future as the average hedge fund analyst or software engineer.”
He pointed out, “Robot trucks are going to be great for GDP, but it’s going to be terrible for Iowans, terrible for many, many Americans.”
Yang proposes replacing the GDP with “the American Scorecard,” which would measure quality of life issues — life expectancy, mental health and freedom from substance abuse, “proportion of retirees that can retire in decent circumstances” — as well as measurements of environmental health, such as the state of the air and water.
“Believe it or not, we can actually make those the measurements of our societal progress,” Yang said.
He explained, “As a CEO, I tell you, if you have the wrong measurements, you can’t win.”
Most of Yang’s positions match those of his fellow Democrats in the race. For example, he’s pro-choice, wants to reduce student college debt and favors the Green New Deal, as well as a humane border and immigration policy.
But during the question and answer session following Yang’s prepared remarks, a couple of the questioners addressed some of Yang’s more unusual positions.
One of the questioners asked about the candidate’s plan to divert a 10th of the military budget to a new agency that would work on infrastructure programs that Yang has named the Legion of Builders and Destroyers — “a really manly sounding group of people. People will be excited about joining the Legion, it sounds really hardcore. And then we would start rebuilding Puerto Rico or tearing down [blighted property in] Detroit, and doing the things we know we need to do.”
According to Yang’s website, “The Commander of the Legion would have the ability to overrule local regulations and ordinances to ensure that projects are started and completed promptly and effectively.”
Another questioner asked about Yang’s plan for creating the position of “News and Information Ombudsman” at the Federal Communications Commission. The site explains, “We must introduce both a means to investigate and punish those who are seeking to misinform the American public. If enough citizens complain about a particular source of information and news is demonstrably and deliberately false, there should be penalties.”
“Don’t you think there’s a problem if the government is telling whether or not certain news articles are true or not?” the questioner asked.
“We have to start trying to fight fake news,” Yang replied. “We have to start asking ourselves: what is the bigger danger? That the government is somehow going to censor tens of thousands of news organizations online, or that we tear ourselves apart because we can’t tell fact from fiction, and we’re in, like, polarized information silos?”
Yang said the office would be aimed at stopping foreign actors, such as the Russian troll farms that were active in the 2016 election.
“So, we need some kind of means to tell fact from fiction,” Yang said. “If we can tell that there’s some kind of news organizations — really just foreign bots — that are spreading misinformation, then we have to be able to come after them with some sort of fines or regulation.”
Neither of these programs came up during his appearance on Political Party Live on Wednesday night, and most of Yang’s responses centered on his Freedom Dividend plan. Problems from racial disparities in education to combating climate change to the need for a rational foreign policy will all be easier to address “after we have this boot of scarcity off our throats,” by introducing a universal basic income.
Yang also addressed the purely political aspects of his campaign on the podcast hosted by Misty Rebik, Simeon Tally and Stacey Walker, saying his path to the Democratic nomination runs through Iowa. He believes if he is one of the top three vote-getters in the caucus, he will be the top story coming out of Iowa, which will dramatically boost his chances of winning the nomination.
“There are going to be about 250,000 Iowans who caucus in 2020… [It’s] going to be a crowded field, let’s call it 15 to 20 candidates,” Yang said. “So, my challenge is I need to get approximately 40,000 Iowans who go to the caucuses on board with the fact that if we put $1,000 a month in your hands this economy will function better.”
“Now, can I do that? We’re going to find out, but I think I can do that.”