Trickle-down economics is a proven failure

[kpete]

Trickle-down economics is a proven failure

by David Atkins

It might have been excusable back in 1980 to believe that supply-side economics might work. There's no excuse for it today. It's a proven failure.


The money doesn't trickle down. Of all the failures of supply-side economics, this is the most damning. Conservatives often excuse poor wage growth and high unemployment as part of the global competitive marketplace, saying that everyone needs to tighten their belts. But not everyone is struggling--in fact, the rich are better off than ever. They control half of all the wealth, and the top 10% control almost 9/10ths of it. Corporate profits are at or near record highs, disproving the myth that the middle class must suffer due to competitive pressures. The Dow Jones index is threatening to burst past 17,000. Meanwhile, wages have stagnated since the Reagan era, even though productivity continues to increase. Corporate executives, in other words, are forcing workers to toil longer, harder and smarter than ever, but all the proceeds are going into the hands of the very rich while the people actually creating the wealth are struggling harder than ever to get by.

...

2. The rich aren't investing almost half of their resources.

This one is almost comical. In concept, supply-side economics is supposed to work by the corporate rich taking money gleaned by tax breaks and subsidies, and plowing it back into investments that theoretically employ people. Now, we already know that the economic life doesn't actually work that way: when wealthy individuals and companies invest, they tend to do it in financialized vehicles, mergers, acquisitions and interest-bearing accounts while employing the fewest people possible at awful wages.

But even if it did work as supply-siders theorize, the brutal reality is that the rich aren't investing almost half of their money (corporations aren't doing much better, as their record profits sit largely idle avoiding taxation). 40% of the assets of the wealthy are sitting in deposits: the rich person's equivalent of stuffing money into a mattress. Money sitting in deposits in Swiss and Cayman Islands accounts is essentially wasted wealth. It does as little good for the world economy as gold hoarded by a dragon in Middle Earth. It essentially sits there uselessly as an economic security blanket for the very people who need it least. By contrast, putting more money into the hands of the poor and middle class pays off immediately for the economy, as most people living paycheck to paycheck spend the money immediately or at least create a small backstop against bankruptcy and delinquency--thus creating immediate economic and social benefits. So not only does giving the rich more money not pay off when they do invest, it doesn't even have the opportunity to pay off at all since almost half of the money isn't even being invested.



THE REST:
http://www.alternet.org/economy/5-reasons-rich-are-ruining-economy-hoarding-their-money?page=0%2C1
http://digbysblog.blogspot.com/2014/06/trickle-down-economics-is-proven.html

[Thinkingabout]

1. Reaganomics was a failure from the beginning, of course the GOP still runs behind this.

Old, proven wrong and wore out. It did not work.

[eShirl]

3. As George H.W. Bush called it, Voodoo Economics.

[Uncle Joe]

20. Bush the Lesser was "only kidding," nothing about his demeanor when he made that statement

exhibited kidding, he was totally serious.

He uses strong emotion, even clinching his fist in the clip when making the voodoo economic statement.

Trickle down was and is "voodoo economics" with the vast majority of the American People being the doll.

[Half-Century Man]

2. Trickel down worked as designed, perfectly.

Deluge up, trickle down; that was the meme.
We deluged our collective asses off. We got trickled on. They just left out the part about the trickle being urine.

[starroute]

4. Trickle down was a known failure in the 1930s

When I was a little kid in the 50s, my mother told me how Franklin Roosevelt rejected the trickle-down approach of the Hoover administration in favor of a "prime the pump" policy. (And then she had to explain what priming the pump meant -- something about having to pour a little water into an old-time hand pump before it could bring up more water.)

I never heard about this anywhere else -- it certainly wasn't in the schoolbooks -- but I assumed it was well known to the people who kept track of such things. And when the Reagan administration brought back trickle down I was astonished that they were reviving a policy that was a known failure and not even bothering to change the name to make it more palatable.

This is something I don't understand to this day. Is our historical amnesia really that profound?

[hfojvt]

5. someday leading Democrats may figure that out

But then again, Obama is preaching against it, even while he practices it.

[KauaiK]

6. Trickle Down is redistribution of wealth UP!!

[Spitfire of ATJ]

7. "their record profits sit largely idle avoiding taxation)."

They keep saving for the future crash that the "experts" keep telling them about.

Those "experts" now NEED there to be a crash to maintain their credibility.

[stevenleser]

8. Yep. This is one of the arguments everyone on the left should be spending time making. nt

[laundry_queen]

9. Yes they should

Just finished my business degree and one of the things that was emphasized at my school was how trickle down has been roundly disproven and how Keynes has been proven right again and again. I think most economists know this - except the ones whose livelihoods depend on them ignoring it.

[MisterP]

10. never was supposed to--and they admitted this in 1981

http://www.theatlantic.com/magazine/archive/1981/12/the-education-of-david-stockman/305760/
it's an avowed scheme to ensure oligarchy: it has NOTHING to do with helping the economy, and was never planned to, no matter how fervently the Chicago School that created it believed it would

just like how "ed reform" isn't about improving education, or how Penn and Teller aren't actually freelance consumer-protection investigators

[cantbeserious]

11. Hard To Believe That This Is Still In Question Or Seriously Debated

eom

[Jackpine Radical]

12. It is not a failure.

Not, anyway, if you understand that its fundamental purpose is to increase the disparity in wealth between the few on top & the many on the bottom.

[pansypoo53219]

13. TINKLE down + there's no PEE.

i knew it was shit in 1979. + i was a teen. voodoo economics. + the rite is still clapping but tinklebell is DEAD.

[Populist_Prole]

14. This should be the sole talking point of the democratic party going into 2016

....And what with the republican party shooting themselves in the foot every other day, let them stand united on their vehement defense of it....even as the results prove it to be a failure and is becoming increasingly more obvious.

Let them run on it and paint themselves into a corner.

[Initech]

15. Nearly 95% of our world's problems can be traced back to Reagonomics.

And for that it's a colossal failure.

[JDPriestly]

16. The interesting question is: why are the very rich hoarding their money?

They are afraid. They are extremely fearful.

Rather than understand that money is merely a symbol of exchange and becomes more needed and more desired and thus gains in value when more exchanges take place, they see money as having inherent value that is independent of the marketplace. And they are afraid that they will lose either the money or their ability to make money.

Fear is behind the current hoarding by the rich. Fear of not making a profit. Fear of being swindled. Fear of paying too much in taxes.

The Republicans and Libertarians are afraid of becoming what the 99% already is. Even though some Republican and Libertarian supporters are far from rich, they identify with the fear of not having enough, or of not being able to earn enough, of being poor.

Thus they want to eliminate any restrictions on corporate and personal ability to make money (like EPA regulations or health care insurance for employees or minimum wage laws) even if their own environment or their city or their world will become a hell hole not worth living in if they get what they want..

They want to eliminate having to pay taxes except to make them safe. That's why they support the military but do not support food stamps or investment in public education or roads.

That may be why the very conservative states have a higher divorce rate than more liberal ones. That's why conservatives are fixated on guns and stand your ground and open-carry. They are terribly afraid. Race is a big issue for them because they fear people who they perceive as being not like them. (Absurd, absolutely nutty, but the fear is the thing, not the skin-color really. That's why a Strom Thurmond could have an African-American sexual partner and recognize his half African-American daughter, butt still be a racist. Other races scared him. Going against social norms out of passion or even love or parental pride (for example for his daughter) -- that's just terrifying. Homosexuals are terrifying for the same reason -- even to those conservatives who are gay or lesbian. The fear may spill over into areas of their lives other than money, areas that have to do with giving, sharing, trusting and loving.

It's all about fear. Republican fear is much deeper than just money. It's about feeling powerless -- impotent in the face of some huge monster wanting whatever it is they've got -- money, love, whatever -- the GOVERNMENT -- that bogeyman. That is why fundamentalist religious leaders appeal so much to conservatives and so little to liberals. Fundamentalist religion promises security.

"Just do what I say and believe as i tell you, and God will protect you. The rest of the world, those who don't believe as you do -- well, God will send them to Hell. Read Revelations."

Aspects of Catholicism are very similar especially on gender and sex issues. That kind of religion elicits, nurtures and creates fear.

And when the Democratic Party ad-writers begin to comprehend that to appeal to conservatives, you have to reach their fear and turn it around, then Democrats will win the Congress. But not until then.

[Gothmog]

17. Supply side economics have been a failure

Tax cuts are not magical

[Adrahil]

18. It's absolutely AMAZING to me....

that the morons on the right keep selling this same old, tired bullshit. There is MOUNTAINS of evidence that "supply side" economics is the "Voodoo economics" HW Bush said it was. He was fookin' right.

[Uncle Joe]

19. Kicked and recommended.

Thanks for the thread, kpete.