Friday, February 1, 2019
It was sunny and above freezing when I departed early the next morning and drove out into the rural expanse of western Iowa. Specifically, I was headed to Carroll, a small farming community of just over 10,000 people. It was about a two-hour drive from Des Moines, and within 30 minutes I found myself zoning out, eyelids heavy, in need of high-powered stimulants or more sleep. One minute I’d be traveling 65 mph down a two-lane highway, the next slowing down at a four-way stop, creeping past a Casey’s General Store on the left, a Subway on the right, then hitting the gas and shooting off towards the next speed trap five miles down the road.
More than once, as I passed through one-dot blips on the map with names like Ogden and Beaver, I imagined a day when automated vehicle were ubiquitous and I was able to simply type in a destination, recline the seat all the way back, and close my eyes. Let the computer deliver me to the destination. That day is nearly upon us, experts say, which is a serious problem according to Andrew Yang. So serious, in fact, that he’s running for president.
Andrew Yang is not a career politician. He’s not a politician, period. The 44-year old entrepreneur is the founder of Venture for America, a nonprofit that trains young entrepreneurs and sets them up to work for startups in “emerging cities” (Cincinnati, Detroit, Pittsburgh, Baltimore, New Orleans, etc.). He’s a first generation Asian-American, the son of well-educated, high-achieving immigrant parents, and he went to an elite prep school that led to Brown University which was followed by Columbia Law School. After spending “five very unhappy months” as a corporate lawyer, Yang moved into the business and tech world where he had one early flop (StarGiving.com), followed by a string of hits culminating in Venture for America.
I don’t know exactly how “successful” he’s been, meaning I couldn’t find anything on his net worth, but I got the impression Yang was Congressman-rich — enough financial freedom to stop working and get a small campaign off the ground, but not nearly the resources to sustain anything without real grassroots momentum.
The event was a late-morning town hall at Des Moines Area Community College — Carroll Campus, one of six DMACC’s scattered throughout Iowa (think two hallways and an attached library). There were about 40 people crammed into the classroom by the 11:15 start time, mostly college and high school kids, and it was quite clear, by the way they hovered in the back loading up their plates, that they were there for one reason: Free Pizza Hut Pizza.
Yang came hustling through the door 15 minutes late in a knee-length coat and oversized American flag scarf — he was already on his third stop of the day — and shook hands with a few greasy-fingered kids before jumping right into the meat of his message:
“The reason Donald Trump is our President is that we automated away four million manufacturing jobs in Michigan, Ohio, Pennsylvania, Wisconsin and 40,000 right here in Iowa,” Yang told the students, his hands in his pockets, his delivery matter-of-fact. “And we’re about to do the same thing to retail jobs, call center jobs, fast food jobs, and truck driving jobs.”
Yang isn’t one for dramatic pauses, and he doesn’t affect a foreboding tone — the future he paints is terrifying enough. According to him, we’re entering the fourth-inning of the the greatest economic transformation in the history of the world.
The first-inning was the deregulation of the banks and financial services; the second was the loss of manufacturing jobs; the third inning, the one we’re closing out now, is the Amazonification of retail, the phasing-out of brick-and-mortar stores. Next up: Self-driving cars and trucks.
Within five to 10 years, Yang said, 1 in 10 truck drivers will be out of work. He asked if anyone in the room, by a show of hands, knew a truck driver, and half the arms went up. Yang nodded solemnly. The Great Displacement is what he’s calling it.
Yang told the kids that he’s friends with the people in Silicon Valley who are doing this, he’s socialized with them, asked them for money, and in private they admit to knowing they’re about to automate away millions of American jobs without offering an alternative. And they don’t care.
“It’s a very, very dark time, and it’s going to get darker,” Yang said with a small resigned shrug, hands still deep in his pockets. “I’m sorry I’m not more uplifting than this, but I was taught to tell the truth.”
Sitting there next to a pimply faced kid with four pizza slices stacked on his plate, I couldn’t help but think about what Marianne Williamson had said the night before: Our economy operates with the mindset of a sociopath, totally devoid of feeling, incapable of experiencing empathy; a self-serving system that’s caused us to view our fellow human not as potential relationships, but as transactions. Yang brought up Amazon again.
The company has decimated the retail industry in the name of convenience and efficiency, he said. And it’s true. In the past two years the sector has lost nearly 120,000 jobs while experiencing the closure of over 10,000 malls. Meanwhile, Amazon nearly doubled its U.S. profits and saw shares of its stock up nearly 30%. And that would all be well and fine, I suppose, if the company were at least paying the newly-lowered corporate tax rate. But they’re not. In fact, instead of kicking back what should have been $2.3 billion in taxes last year, Amazon coughed up $0.
As if that weren’t obscene enough, they then had the stones to claim a $129 million rebate, lowering their effective tax rate to -1%.
“Corporatism” is what Yang calls it — the control of government by corporate interests. And the solution to fixing it, he said, is to implement a “human-centered capitalism,” a system that works from the ground-up rather than the top-down, one that values the work of a stay-at-mom as much as it does that of a tech genius.
“The big idea that I’m running on is what I’ve called The Freedom Dividend,” Yang explained, without any drama or build-up. “Everyone in America gets a thousand dollars a month, free and clear, starting at age 18.”
This is the part I’d been waiting for; I was eager to see how Yang’s pitch of a Universal Basic Income, UBI, went over with this young set of voters. Yang asked the kids if $1,000 a month sounded too good to be true, and they all responded that it did. He smiled and nodded, expecting the response.
Universal Basic Income, he explained, is actually a deeply American idea. Thomas Paine was in favor of it. Martin Luther King Jr. was too. In 1968 the New York Times published a letter written by five famous economists (and signed by 1,200 more), that read, in part: “The country will not have met its responsibility until everyone in the nation is assured an income no less than the officially recognized definition of poverty.”
Richard Nixon, RICHARD FUCKING NIXON (I looked this up later), was in favor of UBI, going so far as
to champion a bill that would have guaranteed a family of four $1,600 a year (the equivalent of $10,000 in today’s economy). He called it an “unconditional income for the poor,” and the bill twice passed the House only to be voted down both times in the Democrat-controlled Senate.
Did you know, Yang asked the crowd, that the people of Alaska voted themselves a $2,000 yearly dividend back in 1982? It’s that simple.
The pitch was delivered in a tight 10 minutes and as he finished up, opening the floor to a Q&A, I half expected the kids, who I figured would be totally open and receptive to Yang’s far-out sounding idea, to break into spontaneous applause.
Man did I misread the room.
How are you going to pay for it?
That’s always the first question out of the gate, the one that follows every big idea ever proposed by anyone on the left (and yet never gets asked when the Republicans propose a trillion-dollar tax cut for the wealthy). Yang was obviously ready for the question, and had prepared a detailed, yet digestible answer.
The headline cost of the Freedom Dividend is $3 trillion, which is a lot of money, he acknowledged. But in reality, since the hope is that the “Freedom Dividend” will eventually phase out social security and disability and other social welfare programs, the true cost is more like $1.8 trillion.
The biggest chunk of that money will come in the form of a tax. Yang mentioned Alaska again, and how their dividend is generated by oil revenue. He’s proposing something similar: Tapping into the 21st Century version of oil.
“Who will be the biggest winners,” he asked the crowd, “in a world of artificial intelligence and self-driving trucks and software that can do all these jobs? Who wins?”
A girl in the front row responded. “The people that own the technology?”
“That’s right,” Yang said with a point. The biggest tech companies in the country will own it all—and none of them pay anywhere close to their fair share in taxes. “We need to get that money from these tech companies,” Yang said.
And the way to do that, he proposed, is through a Value Added Tax, which is something that’s already widely implemented in Europe. That would give the American public “a sliver of every Amazon transaction, every Google search, every robot truck mile,” which would kick back about $800 billion into the pot, leaving around a trillion in cost. That’s where “the magic” comes in, Yang said.
“If everyone in this room got another $1,000 a month, what would happen to that money?”
There was a long pause as everyone looked around the room, sizing one another up. Finally, a young man wearing sweatpants answered: “Spend it on Amazon?”
The room cracked up, including Yang, who conceded that a small percentage would indeed probably go back into the hands of Jeff Bezos. But the majority of that money would go back into the community, at the car mechanic or the local Mexican restaurant, and that in turn would grow local economies and produce a new organic tax revenue somewhere in the neighborhood of $400 billion. The rest of the money would then come in auxiliary savings, Yang said, systemic societal issues directly related to alleviating poverty, things like incarceration, subsidized housing, emergency room visits, etc.
“If we were to send Jeff Bezos another $1,000 a month,” Yang summed up, “it would have absolutely zero impact on the economy. He wouldn’t notice. It’s just like a blip in an account somewhere. But if we had $1,000 a month…”
I was sold. Hell yeah I was sold. I nearly jumped out my goddamn chair. If my wife and I had an extra $2,000 between us a month, that’s the mortgage, that’s childcare and a weekly dinner date, that’s a savings account; that’s me being able to travel to Iowa on a reporting trip without going into debt. Stress-relief is what that was, the freedom to pursue life without the prohibitive cost hanging over every decision.
The kids in the room, however, did not see it quite the same way. A young woman in her early 20s sitting against the side wall, elbow on table, head propped up by a hand, wasn’t convinced.
“$1,000 a month sounds grand and everything,” she said, “but you’re going to get a group of 10 people who’re all going to live in one tiny little apartment, and we’re going to live off this $1,000 a month, we’re not going to work anymore, we’re going to quit our jobs, and the money goes to drugs, alcohol and…” She trailed off. “What about that population? The ones who take advantage?”
Yang was ready for the question and enthused to answer it. That’s the best part of the “Freedom Dividend,” he said — there are no conditions to receiving it. It’s not like disability, where if you physically get better, you lose your benefits. What he was proposing was actually more of a safety net, a baseline level of existence that should, in theory, incentive people to work less stressfully, to create and pursue endeavors outside of the typical capitalistic structure. And besides, he added, perhaps naively, it’s not like $1,000 a month is enough to live on.
A round-faced red-head in the front row still wasn’t convinced. “Okay, so, I don’t know the validity in this,” she began, “but I was told…”
It was hard to decipher the point she was making, precisely, but it was something her friend had told her, and it involved Trump proposing tax cuts for corporations to retrain employees. I think. “Why not something like that,” she asked. “Instead of helping people who aren’t going to be self-sufficient?”
And so it went. One lady, an older woman who was quickly dubbed “Fox News Facebook Grandma” in my notebook, wasn’t buying anything Yang was selling. “You keep saying this is going to help the economy, but I’m more with you and you,” she said, jabbing a finger at the first two skeptics. “Right now we have raised — and it’s sad, because I see it with my own children raising my grandchildren — we’re starting to raise a population of people who feel they are entitled.”
The woman’s voice went into the high-pitched whine of a teenage girl, her granddaughter, apparently. “Mom doesn’t want me to have a part-time job because I’m too young, I’ll have to work the rest of my life, I’m entitled.” She returned to the disgusted tone of Fox News Facebook Grandma. “I just feel like instead of helping the economy this might be looked at like an entitlement. Because right now, you gotta be honest, we’ve got more people with their hand out wanting something than we have people putting money into the hand.”
The redhead jumped back in, wanting to know why we don’t just incentive big companies like Wal-Mart and Amazon to hire more people by subsidizing the cost of hiring?
“I have literally been in the room with the CEOs of many of these companies,” Yang answered, a bit snippily. “And they know that they are going to be cutting many, many workers.”
“So incentivize them —“ the redhead tried to cut in.
“And so if you go to them and say, hey, I’m going to make it cheaper for you to hire people, it does not solve the problem.” Corporations simply won’t employ humans once their work output is no long competitive with that of robots and software, Yang explained.
And still she persisted.
That’s not to suggest there weren’t some thoughtful questions for Yang, or legitimate concerns raised. One girl wondered if “Dreamers” would qualify for the “Freedom Dividend” (The answer: Citizenship is a requirement to receive the dividend, but he’s all for a path to citizenship), while another wanted to know about inflation (Yang argues that because the UBI funds are being generated by a tax on money already in the economy, inflation would be minimal, with any added costs being offset by the $1,000 a month).
Mostly, though, it was like being trapped in your Dad’s cousin’s Facebook feed.
Finally, mercifully, the Q&A came to an end with Yang quoting Game of Thrones. “It’s coming,” he warned of The Great Displacement. “It’s coming and we need to build the future as fast as possible.”
Yang and his small team, which consisted of his Iowa Campaign Coordinator and a social media photog, were being shepherded through Carroll County by Douglas Burns, a fourth-generation Iowa journalist and the co-owner of The Carroll Daily Times Herald. Their next stop was the tiny town of Templeton for a tour of a whiskey distillery, and I asked to tag along, naturally. Carroll, with its golf course and movie theater and main drag full of fast-food restaurants, was a bustling metropolis compared to Templeton, with its post office and two churches and single Main Street restaurant. The population, according to the 2010 census, was 362.
The Templeton Rye distillery sits just outside the city proper, identifiable from a mile away by a huge stack of whiskey barrels, 20-feet high and made to look like a Christmas tree, complete with lights and a star on top. As I followed Yang and his crew into the distillery, a massive, sparkling-new facility that housed a museum dedicated to the town, I asked Burns, the local newspaper man, about the Carroll County demographics. Rural and blue-collar, he told me. Lots of German-Catholics. “So big Trump supporters then?” I asked, with an ignorant laugh. Burns looked at me a little queerly: “This is Steve King Country,” he said.
The scene back at the DMACC made a whole lot more sense now. Congressman Steve King. Representative of Iowa’s 4th Congressional District. A man so openly backward in his thinking (read: racist) that he was censored and stripped of power by his own party back in January. Of course, that was after he’d won his ninth-term to Congress the previous November. It was no surprise, in other words, that the youth of Carroll County were skeptical of a brown-skinned man selling what sure must have sounded like socialism. I made a note to do my research in the future.
The story of Templeton Rye is the story of the town of Templeton itself, which is to say that much of its history is built around bootlegging. Templeton Rye, known simply as “The Good Stuff,” didn’t even hit shelves legally until 2006 (it’s purported to have been the preferred brand of Al Capone). The whiskey has since become an award-winning, internationally-known brand that sells for $39.99 a bottle. Hence the new $35 million distillery and adjacent barrel-aging warehouse.
As Yang got the tour from co-owner Keith Kerkhoff, a big bear of a man, bow-legged like a cowboy (his grandfather was the creator of the original prohibition-era recipe that’s still used today), I followed along, noting, with some amusement, the inevitable awkwardness of the situation: Two strangers from totally different worlds forced to make conversation while being followed and watched by two staffers, a pair of journalists, and a couple employees.
It was nothing significant, a missed joke here, a misinterpreted reference there — at one point an overly excited Yang got a little too handsy with the scoreboard from the old town high school, a reverent artifact judging by the slightly aghast look on Kerkhoff’s face. But it wasn’t long before they found firm footing using the intergalactic language of Business, at which point I lost interest and became fixated on the automated bottling line.
It was mesmerizing to watch the mechanized synchronization of clear glass bottles being filled with the golden-brown whiskey, sealed and corked and ready for sale all within a matter of a minute. Interestingly enough, the line wasn’t completely automated. There were two people working it — an elderly woman sitting on a stool at the front, putting the bottles onto the belt, and an even more elderly man, hunched over and smiling, who appeared to be wrapping a sticker around the neck of the bottles as they passed by. Another employee stood off to one side building boxes. Their presence, I had to admit, seemed rather unnecessary.
Later, I asked the manager of the distillery, Chase Prebeck, a Templeton native, about the bottling line. He said when the company went legit back in 2006, they originally used a hand-bottling process. It was time-consuming and labor intensive, and in order to get the work done they took out an ad in the town’s church bulletin asking for volunteers. That system worked well-enough for a few years (“a bunch of German-Catholics sitting out there bottling whiskey,” as Prebeck put it). But by 2008 the novelty had worn off and volunteer enthusiasm had begun to wane. Trucks were almost literally starting to back up.
And so the company invested in the automated system. At the time there had been eight paid employees, along with the volunteers, who worked the line, and six stayed and continued to work the line afterward (the two who left were “well into retirement.”).
“We could definitely have our line fully automated. That wouldn’t be tough to do,” Prebeck told me. “But we don’t plan on doing that because we like having these jobs around for people.” He talked about visiting Jim Beam and seeing their entire process automated, from bottling to boxing. There was one employee on the floor who pushed a button. “We really don’t want to do that,” he said. “Right here is the most automated we want it.”
The tour concluded with a taste of The Good Stuff, a 6-year special reserve, the first batch to be aged in Templeton. The group gathered around the bar in the tasting room as Prebeck took us through the process of savoring the whiskey. It started with a tilt and a slow spin, to give the liquor legs and open the aroma. That was followed by a small sip, just enough to warm the taste buds and prepare them for what was to come. “You might get a little tingle, a little burn,” Prebeck warned. And I did. To my right, I heard Yang cough, ever so slightly. The next two nips went down much more smoothly.
Afterward, walking through the gift shop I pulled Yang aside and asked [trying not breath hot whiskey breath into his face] about the Q&A back at the DMACC in Carroll. I had anticipated the How Much Will It Cost? question, the socialism concerns, but I hadn’t foreseen people needing to be convinced to take their own money. Was that proving to be a struggle, convincing us —
“That we deserve it?” Yang cut in, his head nodding. “I think that’s really the challenge. I spoke to a neuroscientist in Seattle, and he said to me, ‘The enemy of universal based income is the human mind.’ We’re programmed for resource scarcity, to think there’s not enough to go around. We’re programmed to think if you get it, I can’t have it. We’re programmed to think we don’t deserve it.”
What’s required, he said, is a total shift in mindset. We need to realize that we have the power and ability, as the owners and shareholders of this country, to declare ourselves a dividend. There’s literally nothing stopping us. “We 100% deserve it,” Yang said, as he was waved toward the door and back out into the frigid cold, his American flag scarf blowing behind him, on to the next stop, and the next one, and the one after that.