September 20, 2019

Andrew Yang

2020 presidential candidate and entrepreneur Andrew Yang joins Firing Line to detail his signature proposal to give every American adult $1,000 each month. Yang also discusses his growing concerns about robots and artificial intelligence replacing American jobs, and explains his goal to shift the country’s economy toward a new human-centered capitalism.

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He’s the entrepreneur turned candidate who is raising the stakes in this presidential race. This week on Firing Line.

RALLY SOT: And I’m the right man for the job because the opposite of Donald Trump is an Asian man who likes math!

He’a a newcomer to politics but that didn’t stop Andrew Yang from making the cut for the September debate. His signature proposal: give 1000 dollars each month to every adult American

DEBATE SOT: This is how we will get our country working for us again, the American people.

NATS Crowd surfing “Andrew Yang! Andrew Yang!”

The idea is popular with the so-called #yanggang…

NAT Kamala laugh from Debate Stage

…but not everyone is sold. 

BUTTIGIEG SOT: [Harris laughing] It’s original, I’ll give you that.

The former CEO is banking on an unusual strategy—

RALLY SOT: I’m going to be the first President to use powerpoint at the State of the Union // 

CROWD NAT: Power point! Power point!

What does Andrew Yang say now? 

‘Firing Line with Margaret Hoover’ is made possible by… Additional funding is provided by… Corporate funding is provided by…

YANG RALLY SOT: Yes! This is the nerdiest presidential campaign in history!

OPEN TRT: 59

HOOVER: Andrew Yang, welcome to Firing Line.  

YANG: Oh, it’s great to be here. Thanks for having me. 

HOOVER: When you decided you would run for president did you ever imagine you would be ahead of people like Senator Cory Booker? And Beto O’Rourke?

YANG: Well when I decided to do this I’m not sure Beto was famous yet. (laugh) But I was confident that if I made my case the American people that we would do very well. And so I’m probably less surprised to be here than some observers.

HOOVER: So you’re, I mean you’re a thinker and you, when you go to your website you have you have more than 100 policy proposals. 

YANG: Yes.

HOOVER: Everything from, make Election Day a holiday to the penny makes no sense. 

YANG: Yeah, it doesn’t. (laugh)

HOOVER: But your signature policy is the Freedom Dividend. You reminded people in the last debate what the Freedom Dividend was by telling them that you were going to give a thousand dollars away. Let’s take a look. 

SOT YANG AT DEBATE: It’s time to trust ourselves more than our politicians. That’s why I’m going to do something unprecedented tonight. My campaign will now give a freedom dividend of 1000 dollars a month for an entire year to 10 American families, someone watching this at home right now. This is how we will get our country working for us again, the American people.

HOOVER: All right. So explain in more detail what exactly it is that you’re proposing.

YANG: I’m proposing what has traditionally been called a universal basic income, which I’ve rebranded the Freedom Dividend, of 1,000 dollars a month for every American adult starting at age 18. And this seems dramatic, but if you look at our nation’s history it’s actually a very American idea. 

HOOVER: It was an idea you point out Thomas Paine had supported.

YANG: Martin Luther King in the 60s. It passed the U.S. House of Representatives, a version of it, under Richard Nixon In 1971. It was called the Family Assistance Plan.

HOOVER: Which had been supported by Milton Friedman. 

YANG: Yes and a thousand economists and a study saying this would be tremendous for our economy. And Alaska has had a dividend in place for almost 40 years. Wherever you went in Alaska gets between one and two thousand dollars in oil money every year. So if you’re a family of four you might get eight thousand dollars. And what I’m saying to the American people is that what oil is to Alaska, technology is to America. And that we can easily afford a thousand dollar dividend for every American adult out of technology money. Our data right now is worth more than oil, and no one watching this remembers getting their data check in the mail, and no one watching this is going to see the benefit of artificial intelligence doing all this work.

HOOVER: How did you pick a thousand dollars? 

HOOVER: OK. So I want to go brass tacks and figure out exactly how you’re going to do this. But first let’s talk about why you’re doing it. The reason you’re doing that is because you’re concerned about the future of the United States economy because of automation and artificial intelligence.

YANG: I’m concerned about the future and the present where if you look at what happened in 2016, Donald Trump is our president and he won because we’d automated away four million manufacturing jobs in Michigan, Ohio, Pennsylvania, Wisconsin, Iowa, all the swing states he needed to win. And if you go to those communities, as I have, you see that many of them have never recovered from what happened to those manufacturing jobs. So that’s the biggest victim of automation to date. But now you see the exact same forces eliminating hundreds of thousands of retail jobs as 30 percent of stores in malls clothes. Fast food workers are being replaced by self-serve kiosks. And soon it will get to call centers and truck drivers and limo drivers. And so  these are the most common jobs in the country. None of this is speculative anymore. I’m concerned about the future, yes. But I’m equally concerned about our present. 

HOOVER: There have, for many, many years been concerns that technology and modernization will displace people permanently from the workplace. Right? I mean this is the argument of the Luddites. 

YANG: Yep. 

HOOVER: I mean, this is the argument about the horse and buggy and where are all the stable boy is going to go when you have the car, and the automobile come to place. This notion that ATMs were going to close down banks. Are the robots really coming for us? Or, is this just a transitional moment in our economy where in the end we’ll have just as many jobs if not more. They’ll just look dramatically different.

YANG: There are new jobs being created all the time and there are many new jobs that will be created by this fourth industrial revolution.* The problem is that the new jobs will tend to be for different people with different skill sets in different places than the jobs that are being lost. And so if you’re a trucker in Nebraska and you lose your job, are you going to move to Seattle to become a web designer? No, you’re not. Are there going to be some new web designers that get minted in Seattle? Of course. So, I’ve dug into the numbers on what’s happening and our labor market is not transitioning. 

And the easiest example is if you look at the manufacturing workers that lost their jobs in the Midwest almost half of them left the workforce and never worked again. And then half of that group filed for disability and you then saw surges in suicides and drug overdoses in those communities to the point where American life expectancy has declined, declined for the last three years. *So this is not a situation where time is healing all wounds. Time is actually pushing more Americans to the sidelines in disastrous fashions.

HOOVER: So then explain what would happen to the people who are on government assistance when they have the opportunity to have the Freedom Dividend. Do they have to choose or, and how do they go about choosing?

YANG: So, every American is eligible for the freedom dividend but if you opt in, it’s optional because you obviously we aren’t going to force money on you. But if you do opt in then you’re choosing to forego cash-like benefits things like, heating oil assistance, food stamps, housing assistance, things that are essentially cash substitutes. 

HOOVER: So, how do people figure out which is going to better for them?

YANG: Most every American immediately knows whether it’s going to be better for them. Because if you’re not on assistance you say, hey do you want the dividend of a thousand dollars and that’s a very easy call. And then if you’re on assistance you generally know whether you’re getting more or less than a thousand dollars a month. And then it’s a fairly easy calculation. 

HOOVER: So the Freedom Dividend would distribute a thousand dollars to those people who really need it, who don’t have jobs, but also to everybody. 

YANG: Yes. 

HOOVER: So why not target it to the people who, who need it. Why does Bill Gates or Jeff Bezos or Mark Zuckerberg need a thousand dollars a month?

YANG: One of the reasons why I’m unconcerned about giving Jeff Bezos a thousand dollars a month is that if we pay for it by having a tax on Amazon, which is my plan, then just going to end up paying hundreds of millions or billions into the system. And then if we try and give him a thousand dollars a month to remind them he’s an American. That’s probably a win. And you know it’s. So it’s it’s immaterial to us whether Jeff takes or doesn’t take the thousand dollars a month.

HOOVER: You’ve proposed paying for it by a VAT. 

YANG: Yes. 

HOOVER: A value added tax, which is very common in Europe and other countries. But it’s a consumption tax. And one of the questions you get is that it’s people at the lower end of the economic spectrum who end up paying more. I mean, the hit against it is that it’s a regressive tax. So how do you account for that?

YANG: Well, there are a few things. There’s a saying, like, why did you rob the bank, because that’s where the money was. So where is the money today? The money is all in the Amazons and Googles and Facebooks and Ubers of the world, like these billion-trillion dollar tech companies that are paying very, very low tax rates. Amazon literally paying zero in taxes last year. And that’s not unusual for them—they generally pay zero or near zero. And so then you look at it and say OK, how do we change that? Because they’re very, very good at avoiding our current corporate income tax structure. And so if you have this value added tax you end up generating hundreds of billions of dollars in new revenue.

CROSSTALK

*HOOVER: But how do you generate that.. I mean you’re not taxing Amazon in order to pay for this, you’re taxing consumption.

YANG: Well, you’re taxing every Amazon sale and transaction, including a lot of the business-to-business stuff that goes on that doesn’t even touch consumers. But, in the absence of the dividend, it is true that people’s prices might go up a smidgen. But in this case, we’re going to increase the buying power of like 94 percent of Americans by delivering this dividend into their hands.

HOOVER: And how do you, more broadly, on a macro sense, prevent inflation, because everybody knows there’s more money, because everybody knows everybody’s got twelve thousand extra dollars.

YANG: So if you look at the sources of inflation in our economy right now, they tend to fall into three categories, unfortunately the three things that make us miserable: housing, education and health care. If you look at other categories like food, clothing, electronics, media, books, the prices are staying more or less the same or the quality is improving. So, putting money into our hands is not the thing that’s causing inflation right now. Let’s say I’m a business, and then I’m like, ‘Ooh, everyone has more money to spend’ and I decide to like ratchet up my prices. All it takes is one business in my category, let’s call it a restaurant, that does not raise the prices for there to be pressure on me to bring my prices back down because just because I have a little more money does not all of a sudden make me cost insensitive.

HOOVER: You’re saying competition is what’s going to create price stabilization.

YANG: Yeah. In dynamic markets, in these consumer categories, yes. Because if you give me an extra thousand bucks a month, it doesn’t mean all of a sudden—I don’t like bargains or I don’t like good values—people will still be sensitive to the fact that meals cost a certain amount.

HOOVER: So there are some studies that suggest that this kind of a policy would actually hurt productivity of the nation overall, that it would hit GDP.

YANG: Oh this is… I love this question so much. You know, our kids are about the same age. My wife’s at home with our boys, 6 and 4, one of whom is autistic. And right now, her work counts as zero in GDP. Except I think most people watching this would agree that her work is among the most vital and difficult work that’s being done, and it’s immensely valuable. If she were to go to, let’s say, to work and become a management consultant, that would be great for GDP. But (laugh) I would suggest that might not necessarily be that good for society. And so to me, looking at GDP as your measuring stick is actually one of the things that’s getting us into trouble right now. Where you have something like self-driving trucks would be great for GDP, but they’re going to be very bad for the three and a half million Americans who drive trucks for a living, or the 7 million who work in truck stops, motels and diners. So we should replace GDP with measurements like childhood education and success rates, mental health and freedom from substance abuse, our own health and wellness, environmental quality. GDP is almost 100 years old and it’s driving us off a cliff…

HOOVER: …So, GDP needs to be modernized, right?

YANG: Yes, that’s exactly right.  If we persist in following GDP in these capital efficiency measures, we’re going to turn on each other. We’re going to wind up following them off a cliff, *because we can’t win. We’re in a race we cannot win. Our only way out is to change the race to one that optimizes for our own well-being, our own society, our kids’ success, our environmental quality. If we change the race to something that we can all actually participate in, then there are massive opportunities. *There’s an alternate world where we’re celebrating the liberation of hundreds of thousands of truck drivers from a job that’s frankly brutally punishing and demanding and takes them away from their kids, and that they’re high-fiving, saying, ‘hey I don’t have to drive a truck anymore, I’m going to do these other things.’ Instead of that world, we’re in a world where truckers are going to be protesting the automation of their job next month in Washington D.C. 

HOOVER: This idea of universal basic income which has, by the way, been supported by people on the right and on the left, and despised by people on the right or left, as well.

YANG: Yeah. Very bipartisan. (Laughs)

HOOVER: I mean, one of the hits from the right is there’s something about having a vocation. There’s something about working. In your book, you do write that some people might work less as a result of a freedom dividend. In your book you call it UBI—it was before for your clever rebranding. (Yang laughs) But let me just read to you from it. You say: ‘to the extent that people spend less time working, they tend to be young mothers and teenagers whom we might not mind working a little less if they’re taking care of their kids or going to school.’  What about other people who aren’t returning to the workforce, besides mothers? What is the answer, ultimately, to reigniting the work force so that there are more jobs?

YANG: This is the central challenge of our time. And, again, to me, Margaret, Donald Trump is a symptom of this fourth industrial revolution, and Americans need to understand that it’s certainly not immigrants, it’s technology that’s causing these disruptions. And the transition is going to be messy almost no matter what we do. If you look at the industrial revolution at the turn of the 20th century, which for some reason we seem we’ve forgotten,we inaugurated Labor Day in response to riots that killed dozens of people. We originated labor unions. We implemented universal high school in 1911. And so there are some people who lazily say, ‘it’s like we’ve been through this before.’ It’s like, yeah we did go through this before and it was terribly difficult and messy and even violent. And the best projections say that this industrial revolution will displace 2 to 3 times as many workers as that industrial revolution in a shorter time frame. The examples I use are the ones that we can always already see around us. Being a retail clerk is the most common job in most of the country. The average retail clerk’s a 39-year-old woman making between 9 and 11 dollars an hour. 30 percent of stores are closing. We can see it around us all the time.* And the way they’re closing is not that a robot all of a sudden came in and took the clerk’s job. It’s that the robot is in the Amazon fulfillment center that is sweeping away all of the malls and stores. 

HOOVER: You have said that humans will be indistinguishable from robots within a number of months. So I want to show you something. We used the chat function on your campaign website. And we asked it, ‘Are you human?’ And it said back to us, ‘Please provide your email address and we’ll get back to you.’ So we asked again, ‘Are you a robot?’ It said, ‘I’m afraid I didn’t understand. Could you please try again?’ So is it a robot or a human on your campaign website?

YANG: Oh that’s definitely a robot. Because that would be a pretty bad human who…[laughs].

HOOVER: How many jobs are you displacing in your campaign with robots? 

YANG: Well, we’re hiring like mad, so we’re definitely an example of humans and machines working together to try and make a society that works for humans entirely. So our machines are the friendly kinds.

HOOVER: One of the things I’ve noticed is that you like to point out that conservative economist and Nobel laureate Milton Friedman supported something similar to universal basic income — the negative income tax, which means that if your income is below a certain level you actually get money from the government.  So why not a negative income tax? 

YANG: Well, negative income tax is like the sibling to the dividend. And so if we came out with a negative income tax, I would be thrilled. I prefer a dividend to a negative income tax because of some of the administrative reporting and the timing of payments issues. 

HOOVER: Your argument is it’s more efficient, it goes directly to individuals who need it.

YANG: Yeah. It gets rid of all these both reporting requirements and the incentives to say you make less money. Because if you have a negative income tax, I have a feeling you’d have all these people, you know, mysteriously finding that they made below whatever the threshold was.

HOOVER: Milton Friedman was a guest on Firing Line—Firing Line which is a program that William F. Buckley Jr. hosted for 33 years from 1966 to 1999 — and William F. Buckley was on this program talking exactly about that idea, and you even tweeted a clip to that link. You may or not may not know this, it could’ve been a robot from your campaign offices.

CROSSTALK

YANG: No, I remember this. 

HOOVER: Let’s take a look at what Milton Friedman had to say about universal basic income and a negative income tax.

SOT MILTON FRIEDMAN CLIP 

BUCKLEY: Would you insist that you would not endorse the negative income tax, unless it were agreed that a whole lot of other existing programs be repealed as part of the same reform? 

FRIEDMAN: Well I would definitely be opposed to a negative income tax which was simply piled on top of our present welfare program. Now as a long run matter, I would hope that, as we saw that this solved that problem, we could eliminate a lot of the other bad programs that we have such as minimum wages, such as agricultural subsidies, such as urban renewal, such as public housing, and so on—all of which are programs intended to help the poor, but which hurt the poor. And I think that if we could really handle the problem of poverty by this one general measure maybe we can get rid of some of these others.

HOOVER: Another sort of version of the Universal Basic Income is that it should just eliminate all of the social welfare programs that exist already, partly for these efficiencies, right. If we got rid of all of Social Security and all of the Social Security disability payments and food stamps that actually you would have a high degree of savings by eliminating the administrative costs of those programs. And that would actually help pay for something like the freedom dividend. Why are you not in favor of that?

YANG: The last thing you want to do is pull the rug out from under people. And so, to me, to the extent that there is any transitioning from existing programs to the freedom dividend, it would be over an extended period of time, and almost entirely voluntary.

HOOVER: Look, you were getting at something and a second ago which I want to just return to briefly, which is this idea that there’s a kind of capitalism that’s gonna be more inclusive, that is going to be able to modernize for this fourth industrial revolution, you call it industrial revolution/technological revolution. You refer to something called human capitalism. What is human capitalism?

YANG: So capitalism is working almost exactly as it’s designed to. It’s designed to maximize returns on capital. The problem is that we’ve assumed that human workers would be central to the process of optimizing our capital. What do I mean by that? So, in the 20th century, if I had a big successful company, I would need to hire lots of people, I would need to pay them enough so they could buy my stuff. I would need to care about what happens in my hometown, and the economic benefits get distributed throughout society. Now, I can have a very successful company, I do not need to hire lots of people. If I do hire them, I don’t need to treat them well or give them benefits. I can turn them all into gig workers or Uber drivers. I don’t need to care about what’s happening in my hometown because I don’t sell just to my hometown, I’m a global company, and so the benefits are not being distributed the way that we assume. But, our system is working exactly as it’s designed because it’s still maximizing returns on capital. So the capital is getting hoarded in the hands of fewer and fewer organizations and individuals, and the average American is just looking up saying like, I’m not participating.

HOOVER: So you put the emphasis on people because you want to be able to incorporate all these other elements into capitalism that you think our system is excluding or leaving behind?

YANG: Well, our system is not designed to include them. What I’m saying is, the system is working exactly as it’s designed.

HOOVER: So here’s what I find very curious about your approach, is that you’re still talking about capitalism. And you are now, in most polls, fifth or sixth in the Democratic primary, but you’re third amongst young voters –18 to 29 year olds, 18 to 34 year olds.

YANG: Oh, good [laughs].

HOOVER: This is a very… You’re talking about capitalism, you’re not running from it. It’s a very different message from democratic socialism. Do you intend to defend and improve capitalism? to combat—I mean, do you intend to provide an alternative to democratic socialism that has so captured the imagination of so many youth?

YANG: Well, I think that the socialism-capitalism dichotomy is extraordinarily out-of-date and unproductive. And what I do is I quote my friend Eric Weinstein who said that we never knew that capitalism was going to get eaten by its son, technology. That’s where we are right now. 

HOOVER: Well you’re arguing that capitalism just needs to be made more human. 

YANG: I’m arguing that capitalism needs to evolve and change its very goals and that if we can actually turn capitalism’s energies towards making us healthier and stronger and happier and mentally healthier, then that would be a win.

HOOVER: A couple other things have popped on the campaign trail over the weekend. The New York Times published a new allegation of sexual misconduct about Supreme Court Justice Brett Kavanaugh, and several of the Democratic candidates—your competitors—have called for him to be impeached. Do you join them in calling for his impeachment? 

YANG: Yeah. I think that, to me, it’s a shame that he was ever confirmed. And if we can get him out of there then I am all for it. To me, the fact that he got essentially crammed on to the Supreme Court and Merrick Garland was blocked, to me suggests that we need to have term limits for Supreme Court justices. And I would look to expand the number of Supreme Court justices as president.

HOOVER: Do you know what happened last time they tried to pack the court?

YANG: I do. And you know, it’s been a long time since then. But if you look at our history, we’ve had five Supreme Court justices, we’ve had twelve or thirteen. There’s nothing anywhere written that it needs to be a particular number.

HOOVER: So you would want Justice Kavanaugh out, not because of his behavior, but because of the process that put him there and the breakdown in the process?

YANG: I think his confirmation was a mistake.

HOOVER: Because of his judicial philosophy or because of the fact that Merrick Garland didn’t get a vote?

YANG: I just don’t think that Brett Kavanaugh belongs in the Supreme Court, There’s no entitlement to be a Supreme Court justice—it’s a job interview. And so, and it’s one of the most important job interviews in our country. And so, if you have very, very clear question marks at a minimum about a person’s character, you wouldn’t give them that high impact a job.

HOOVER: He was confirmed through a normal process.

YANG: You know, that to me that process still was relatively hasty. There was this sort of hurry-up investigation that clearly was not terribly thorough. And so, I had problems with both the process and the outcome.

HOOVER: One more question. You were asked a question about charter schools in the debate and you weren’t really given the opportunity to answer it. But why don’t parents who are stuck in school districts that aren’t performing—why shouldn’t they be able to choose which schools they can take their children to?

YANG: Well, I said on the debate stage, I’m pro good school and that there are good schools of every type that I’ve seen. And that’s all what—you’re a parent, I’m a parent—that’s all we want. We just want to be able to send our kids to a school that we’re excited about. 

HOOVER: So you’re in favor of charter schools?

YANG: I think that there are many charter schools that are doing fantastic work and that we should not somehow paint all of these schools with a broad brush. 

HOOVER: You said one thing in the debate that I’d love to have you take a look at real quick. Here’s what you said about how people should start businesses. 

SOT YANG DEBATE: I was an unhappy lawyer for five whole months and I left to start a business, and I’m going to share with you all one of the secrets to entrepreneurship. If you want to start something, tell everyone you know you’re going to do it, and then you won’t have a choice.

HOOVER: That struck me because we met a couple of years ago, and one of the first things you told me is that you were going to run for president. And, I wonder,  if you were telling people you were going to run for president because, at that point, if you tell enough people then you have to do it.

YANG: [laughs] Well, I meant what I said, which is I discovered a long time ago that if you tell everyone when you’re going to do something then you’re going to do it. And so when you become certain you’re going to do something that you should tell the world. And sometimes they even drop everything and help you.

HOOVER: Andrew Yang, thank you for coming to Firing Line. 

YANG: Thank you. It’s great to be here. 

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