Six Years After Bankruptcy, Stockton Is Preparing To Start Handing Out Free Money

Almost six years after a judge declared Stockton, Calif the most populous US municipality to ever declare bankruptcy, the city has struggled through a painful Chapter 9 restructuring, but its primarily agriculture-based economy remains mired in poverty.

As KQED News explains, Stockton residents are struggling with stagnant wages, rising home prices due to the city's proximity to Silicon Valley and a loss of middle class jobs - all against a backdrop of the looming threat of automation. The city first filed for bankruptcy in 2012.

The pervasive poverty in his city is what led Stockton Mayor Michael Tubbs to announce last year that the city would soon begin an interesting social experiment.

Starting later this year, a random sample of 300,000 Stockton residents will receive $500 every month with no strings attached. The program is set to become the US's largest experiment with a policy that has become a favorite topic of Mark Zuckerberg and his Silicon Valley peers: Universal Basic Income.



Mayor Michael Tubbs

UBI was famously first proposed by Richard Nixon as a way to soften the impact of post-industrial job losses. But the American left is increasingly discussing it as one method for curbing widening income inequality. Tubbs hopes to begin making payments as soon as August.

And as mayor, Tubbs says it's his duty to help Stocktonites lift themselves out of their dire circumstances.

"I feel that as mayor it’s my responsibility to do all I could to begin figuring out what’s the best way to make sure that folks in our community have a real economic floor," Tubbs said.

“I think Stockton is absolutely ground zero for a lot of the issues we are facing as a nation,” Tubbs said.

To the relief of Stockton's taxpayers (and lenders), the project is receiving private funds: Dorian Warren co-chairs the Economic Security Project, which is contributing $1 million to the initiative. He told KQED that the goal is to gather data on the economic and social impacts of giving people a basic income. In addition to tracking what residents do with the money, Warren said they will be monitoring how a basic income affects things like self-esteem and identity.

“What does it mean to say, ‘Here is unconditional guaranteed income just based on you being a human being?’ ” Warren asked.

The hope is to demonstrate UBI’s potential and encourage other cities to give it a try.

Michelle Anderson, a Stanford law professor, said Stockton may discover it gets more economic stimulus by giving money to its citizens rather than corporations it hopes will bring in jobs and tax revenue.

“The UBI that is being proposed in Stockton now is very small compared to the big corporate subsidies that cities like that engage in,” Anderson said.

However, nothing has been said about the fate of the experiment once private funding runs out: And there's probably a good reason for that.

As the city's mayor admits, Stockton has racked up millions in debt on development projects in the past.

“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 said.

Tubbs thinks the UBI experiment will show that Stockton’s best bet is to invest in its own people.

But not everybody agrees.

* * *

In what he describes as a "radical critique of Universal Basic Income", Charles Hugh Smith explained in a post we published back in June how UBI - far from staving off widening income inequality - would instead lead to de facto "serfdom".

But a radical critique must go much, much further, and ask: is UBI the best that we can do? If we provide the basics of material security - the bottom level of Maslow's hierarchy of human needs - what about all the higher needs for positive social roles, meaningful work, and the opportunity to build capital?

This critique reveals the unintended consequences of UBI: rather than deliver a Utopia, UBI institutionalizes serfdom and a two-class neofeudalism in which the bottom 95% scrape by on UBI while the top 5% hoard what every human wants and needs: positive social roles in our community, meaningful work that makes us feel needed, and the opportunity to build capital in all its manifestations.

UBI is the last gasp of a broken, dying system, a "solution" that institutionalizes all the injustices of serfdom under the guise of aiding those left behind by automation. We can do better--we must do better--and I lay out how to do so in this book.

A radical critique must also examine the widely accepted assumption that automation will destroy most jobs. Is this assumption valid? It turns out this assumption rests on a completely false understanding of the nature of work, the economics of automation and the presumed stability of an unsustainable global economy.


Automatic Choke MarshalJimDuncan Wed, 01/31/2018 - 20:11 Permalink

An excellent idea !!!!

I think that Tom Steyer, Mark Zuckerberg, and all those other champagne liberals have a wonderful chance to show that their hearts and minds (and wallets) are behind what they say -- they should fund this project with everything they have.    Annnndddd, when the drunken hopheads barfing and sleeping in the streets need a place to get out of the rain and cold, they can open up their homes as well.


Well?    Tom?   Mark?  


In reply to by MarshalJimDuncan

inhibi MarshalJimDuncan Thu, 02/01/2018 - 11:26 Permalink

As I've posted on NC, UBI will basically allow corporations to lower wage growth even further.

I imagine the government will use tax money to fund a REAL UBI, not this BS silly-con valley feelsgood program.

So lets imagine the response to UBI:

1. Higher taxes

2. Higher prices of goods

3. Further depression of wages

If you want a real UBI, move to Norway.

In reply to by MarshalJimDuncan

manofthenorth Mazzy Wed, 01/31/2018 - 22:08 Permalink

No reservations in Alaska. All the natives in Alaska were bought out of their sovereignty in the 70's with FED bucks. Now they are native corp shareholders or "landless natives". I lived on the Yakima Res in the 80's, it was pretty great really. Good living cheap. The price for a carton of Camels in Topenish at the smoke shop would not pay the taxes on a pack in AK today. 

Gas in my town is back up to $3.69.

In reply to by Mazzy

kralizec manofthenorth Thu, 02/01/2018 - 07:43 Permalink

This clown is a pussy!  $6k/year?  Not even close to the FPL - 


The 2017 federal poverty level (FPL) income numbers below are used to calculate eligibility for Medicaid and the Children's Health Insurance Program (CHIP). 2016 numbers are slightly lower, and are used to calculate savings on Marketplace insurance plans for 2017.

  • $12,060 for individuals
  • $16,240 for a family of 2
  • $20,420 for a family of 3
  • $24,600 for a family of 4
  • $28,780 for a family of 5
  • $32,960 for a family of 6
  • $37,140 for a family of 7
  • $41,320 for a family of 8

Clown can't even do socialism right!

If they pay out on FPL they could crash faster...which is the only reason to cheer this on!

In reply to by manofthenorth

yvhmer RevIdahoSpud3 Thu, 02/01/2018 - 01:47 Permalink

Probably true.  It all depends on how such an experiment is set up. The theory is there and looks promising. The actual live trials are the issue because it constitutes interference in the real world, not in a vacuum. 

There have been more experiments in the past. And let's agree that corporate welfare is one big happy party whereas the care for what really constitutes capital is really pover..... ;-)


In reply to by RevIdahoSpud3

Herd Redirecti… evoila Wed, 01/31/2018 - 19:28 Permalink

If it is funded with debt... It will fail.  If it is created as equity, it is a good substitute for both existing corporate welfare and bankster's power to create fiat out of thin air.  Yes, it is still being created out of thin air, but the money will be circulated, as opposed to hoarded (when it is given to kleptocrats and cronies).


In reply to by evoila