Trickle-down craps out again
How many times do we have to shoot down this same bottle of snake oil? You know, the one that insists that the way to improve the lot of the middle class and the poor isn’t to directly help them, but, instead, to shovel even more money to the rich. In this way, or so the story goes, the rich will be able to invest this extra lucre back into the economy, thereby producing more jobs and better wages.
Growing economic inequality, it seems, isn’t a problem: It’s a first class ticket to the Promised Land.
Only it doesn’t actually work that way — never has and never will. The only thing growing inequality breeds is even more of the same.
For the latest evidence of this immutable, if constantly abused, truth, check out Paul Krugman’s latest column:
(NY Times — warning Times Select wall) Another Economic Disconnect
Last fall Edward Lazear, the Bush administration’s top economist, explained that what’s good for corporations is good for America. “Profits,” he declared, “provide the incentive for physical capital investment, and physical capital growth contributes to productivity growth. Thus profits are important not only for investors but also for the workers who benefit from the growth in productivity.”
In other words, ask not for whom the closing bell tolls; it tolls for thee.
Unfortunately, these days none of what Mr. Lazear said seems to be true. In the Bush years high profits haven’t led to high investment, and rising productivity hasn’t led to rising wages.
It looks like there may be something to be said for a little old-fashioned class struggle after all.
April 30th, 2007 at 5:05 am
(for the ones without “Times Select” - at the moment you can find the article here)
one characteristic of religion is that it has to be believed, not to be proved
reminds me of one of my favorites about the origins of the power of the Religion of the Holy Free Market:
“Their money, for example, founded, and continues to support, such influential conservative think tanks and advocacy groups as the Heritage Foundation, the Free Congress Foundation, the Cato Institute, the American Enterprise Institute and the Center for Strategic and International Studies” (Little Green Pieces of Paper)
and that reminds me of two other quotes:
- Repetition is the lynchpin of propaganda. - Joseph Goebbels
- Only when the last tree has died and the last river been poisoned and the last fish been caught will we realise we cannot eat money. - Cree Indian Proverb
April 30th, 2007 at 4:49 pm
Trickle-down is such an appropriate phrase, it sounds as offensive as it should.
May 2nd, 2007 at 11:02 am
If I remember correctly, John Kenneth Galbraith called it ‘horse and sparrow” economics - the horse eats all the good stuff, and we sparrows are left to pick what we can out of its droppings. That osunds about right to me.
May 4th, 2007 at 1:46 am
The so-called “Trickle-Down” economics has always resulted in a flood of money into the pockets of the wealthy. The corporate fat-cats lap up all the cream, and leave diddly-squat for the workers. Meanwhile, healthcare benefits are being cut. Benefits across the board are being cut. Salaries for workers are stagnant. The middle-class is shrinking as the cost of healthcare, insurance, higher education, fuel, and food rises. Anxiety continues to rise, as more people lose their homes and their jobs. The rich get richer, the poor are forgotten, and the middle-class needs to wake up and quit voting Republican, unless they like a foot with a bullet hole in it.