Trickle-Down Economics is a BiG FaT JoKe!

You ever notice that when you approach a conservative with the simple economic fact that if you stop revenue influx in one place, you're usually just getting it from somewhere else, there's rarely a compelling answer as to how this improves the US economic position?

The fact is the economic philosophy of the Reagan years is the same in principle as the ones that have placed us in the mess we are in now.

Smoke and Mirrors...

The Old Razzle Dazzle...

A reduction in taxes to businesses and the wealthy in hopes that they in turn create jobs...

Unfortunately, all we are ever left with is a large debt.

"Hey, I was able to save $12,000 in my savings account. Oh yeah, but I did it by racheting up a $15,000 debt on my credit card." That's Reagan. That's Bush. That's the Republican Party.

That's the myth of Trickle Down Economics, or Reaganomics, whose major flaw is in the belief that additional money to large companies leads to more jobs. It does not, my friends. All it's ever led to are larger executive bonuses, golden parachutes, and now, a 1 trillion dollar bailout of our banking system.

Under Reagan, his Supply-Side policies led to a large recession and, subsequently, a large debt. There's his legacy.

Under Bush Senior, his predecessor's Supply-Side policies led to a large recession and, subsequently, a.... Hey Wait a Minute! This Sounds Awfully Familiar!

Under Bush Jr., his Supply-Side policies led to a large recession and, subsequently, a.... OK, I think I see a pattern here...

In the spirit of objectivity and friendly discourse, I would love an explanation of why, with so many failures, the Republican Party continues to push this completely debunked theory. Is it because the American people have amnesia, and politicians can get away with it? Or do Repubs REALLY believe this crap?

Your Thoughts?

Originally posted by tommy_boy
Is it because the American people have amnesia, and politicians can get away with it? Or do Repubs REALLY believe this crap?

The American people don't have enough information to make any decisions whatsoever about the economy, and have no power to act on any decision they make, beyond the very limited power residing in their bank accounts and credit cards.

I attribute this entire mess to Rush Limbaugh, and Sean Hannity. They have demogogued a large segment of the population into total submission:

en.wikipedia.org...

It is a technique that dates back to the Athenians.

A demagogue is defined as "one who will preach doctrines he knows to be untrue to men he knows to be idiots."

If trickle down economics worked there would be no Billionaires and no poor. But it doesn't. The Billionaires get richer and now Bush & Co are trying to give MORE money to their friends. Yep, giving money to Cheney's pals in Halliburton and Bush's old friends in Big Oil wasn't enough.

You are absolutely correct. Trickle down economics is a complete fallacy. The reason it is a fallacy is that it does not hold true to the basic tenants of economics, supply and demand. A company only hires more employees or makes plant expansions if the demand for its products increases. It will only pay its employees higher wages if the supply of or demand for labor changes in a particular labor market.

To answer your question as to why Republicans continue to believe this requires some speculation. I believe it has to do with a few factors. First, they have a blind loyalty to their party and any ideas it propagates. Second, most people have little understanding of economics or the laws of supply and demand. Third, trickle down economics, like most conservative economic theories, make sense at face value (however, they crumble like a house of cards under any rational examination). Fourth, and lastly, some Republicans simply choose to believe trickle down out of greed as they, rich people, are the ones who benefit from trickle down economics.

I am sure that the conservatives on this site will attack what I have said with all kinds of high minded crap about this guy or that guy who "proved" that trickle down works, that it takes ten years or more to work. However, proof comes in the form of peer reviewed academic papers. To the Republicans, proof comes in the form of books written by other Republicans to sell to still other Republicans. You see, even the best economist in the world has never been able to prove that an economic lag took more than two years from start to finish. So this "ten year" stuff is complete BS. On a side note, the best economist in the world would never write a peer reviewed paper touting trickle down because he or she would know that a second year economics student could easily disprove his or her paper.

Lets face it, most Republicans live in a fantasy world where dinosaurs lived 4K years ago, Bush should be on Mt. Rushmore, Sarah Palin knows more about energy policy than any one in the country. Man, do I pitty them and their naive souls.

This entire thread is so misguided its sad.

In three posts I managed to find every liberal talking point spread throughout. Hallibruton, Big Oil, we've even got people blaming talk show hosts for the countries financial problems!

Priceless!

The problem here is not any economic policy or outlook. The problem with our current mess is corrupt individuals not being able to do their jobs. We have a select group of senators and investors who have been funneling money to their friends like it was growing on trees. We have lending institutions giving loans to people they know full well will never pay them back. The list goes on and on.

You want to point fingers and make this a partisan issue, but it's not. You want to blame this on Reagan? or Bush? or the Republicans?

No dice I'm afraid.

This problem goes much deeper than that. You'd be well advised to move past that and focus with the rest of us and trying to fix this.

reply to post by tommy_boy

Originally posted by tommy_boy
Your Thoughts?

You confuse fraud, waste and abuse with sound taxation policy-- which essentially means you have no idea what the real problem is.

You're barking up the wrong tree, imo.

EDIT:

While re-reading this post, I realized how condescending it appears. My sincerest apologies for that. I could have made the point far more eloquently. Accordingly, I felt it necessary to edit this post with this explanation and public apology.

[edit on 24-9-2008 by loam]

Originally posted by nyk537
The problem here is not any economic policy or outlook. The problem with our current mess is corrupt individuals not being able to do their jobs.

True, but inherent in MOST people who have climbed the economic ladder to corporate CEO (and other top positions) is greed. Power breeds corruption. So, the most corrupt, greedy people end up in the top positions. They keep the money for themselves and their cronies. The system doesn't work!

If people were honorable and let the funds "trickle down", the theory would work. But they keep the money. How can we say that a policy works if it only works in an ideal situation. which doesn't exist?

Just an example from a YEAR ago:

Wall Street bonuses up to $38 billion while valuation drops $74 billion

Bloomberg News reports that Wall Street firms will pay the best 2007 bonuses ever, despite massive loss in the public market value of their securities. Specifically, the five biggest Wall Street firms will pay 6% higher bonuses totaling $38 billion to be spread among their 186,000 workers -- an average of $201,500 per employee.

Any of these names look familiar?

That money, split among about 186,000 workers at Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos., equates to an average of $201,500 per person, according to data compiled by Bloomberg. The five biggest U.S. securities firms paid $36 billion to employees last year.

Bloomberg

And now we, the people are going to be paying their bonuses.

[edit on 24-9-2008 by Benevolent Heretic]

We cannot account for the greed of some. There are just as many who have worked hard to get where they are who have no problem sharing what they have earned.

What we get into now is a socialist policy of wealth redistribution. Do we really need to government to come in on those who have worked hard and earned their money and take it away from them? Do we really need a government who thinks they know better than we do what we should do with our own money? I don't think so.

That system wouldn't work either.

If we take away the drive to reach those positions, what would be the incentive for people to work hard and grow? Why would someone want to start a business with a great idea if they knew the government was just going to start taking from them once they made so much?

No system is ever going to be perfect. There will always be problems no matter what road we take. I strongly believe the free market is the best situation for this country though.

reply to post by Benevolent Heretic

Originally posted by Benevolent Heretic
...inherent in MOST people who have climbed the economic ladder to corporate CEO (and other top positions) is greed...

This position always confuses me when people assert it. Why is it viewed that most are motivated by "greed" as opposed to a simple ambition to control one's own circumstances?

Sure, unbridled "greed" MAY come into play for some at the top. But greed can be found ANYWHERE humans may be found, regardless of whether they are at the top or not. Moreover, what does greed really mean to you?

Just curious.





[edit on 24-9-2008 by loam]

This is a problem I've also had with this. Apparently, anyone who is wealthy is greedy. I find this to be borderline insulting honestly. Just because you have worked hard and earned what you have does not make you greedy.

I'm guessing greedy is rich people having money and not paying our bills with it. Is that it? Is it rich people having everything they want and yet they don't buy us anything? Is that it?

Originally posted by loam
Why is it viewed that most are motivated by "greed" as opposed to a simple ambition to control one's own circumstances?

I didn't say they are motivated by greed. Motivation comes before the ascent. Once they get there, once they buy their $5 Million homes and 8 cars, they become greedy. The power that corrupts causes greed.

"Inherent" may have been the wrong word. But what I mean to say is that most people, once they become wealthy and powerful, also become greedy and somewhat corrupt.

It's true that greed can be found anywhere, but when we're talking about a "trickle down" policy (which we are) and the money that's supposed to trickle down, according to the policy, goes in the executives' pockets, that's keeping for one's self what was MEANT to go to someone else. According to my moral compass, that's "wrong".

Moreover, what does greed really mean?

I know you know what it means. But in this context, I mean taking advantage of a powerful position in order to keep not only what's mine, but also to keep for myself what is rightfully meant for others.

Example, in 2005, HP executive Carly Fiorina's salary was $1.4 million along with a $1.7 million in bonus and other benefits. Her severance package was $42 million, while 20,000 people lost their jobs.



[edit on 24-9-2008 by Benevolent Heretic]

Point is BH that this type of greed is prevalent no matter what system you want to impose. Even those who advocate redistribution of wealth have this problem.

Take your VP candidate, Joe Biden for example. During the past few years when Biden was making between $215,000 and $320,000 a year, his total charitable contributions never exceeded one half of one percent of his total income.

On the other hand The IRS reports that those who itemize deductions on their income tax returns have claimed, since 1975, that between 1.6 percent and 2.16 percent of their income went to charitable concerns.

Seems a lot of redistribution only seeks to redistribute other peoples money.

As I've said. There are problems with either system.

I just feel that free market is the best fit.

reply to post by Benevolent Heretic

Originally posted by Benevolent Heretic
But what I mean to say is that most people, once they become wealthy and powerful, also become greedy and somewhat corrupt.

I'm sorry, but I flatly reject the "most" assessment you make. I know plenty of people with ample means, and almost NONE of them fit the "greedy and somewhat corrupt" label you would apply to them simply because of their wealth.

Originally posted by Benevolent Heretic
It's true that greed can be found anywhere, but when we're talking about a "trickle down" policy (which we are) and the money that's supposed to trickle down, according to the policy, goes in the executives' pockets, that's keeping for one's self what was MEANT to go to someone else. According to my moral compass, that's "wrong".

I understand your frustration with the grotesque examples we all hear about, but are those examples really the norm?

Moreover, for every grotesque example of "greed", I can produce numerous examples of significant and largely unrecognized charity. Where do you think the vast majority of money comes from for philanthropic and charitable endeavors?

My point is this: Be careful of throwing the baby out with the bath water. Wealth is not the problem here.

FRAUD, WASTE and ABUSE are.

Fix those.

Just the name alone tells you all you need to know... do you want your economy to trickle down?

They used to say a rising tide lifts all boats... which is true if the boat is sound.

Trouble is using that metaphor is all wrong because a tide rises... that would be a from the grass roots up economy... trickle down is like from an IV bag. It might keep you alive but you don't thrive.

Originally posted by nyk537
Take your VP candidate, Joe Biden for example. During the past few years when Biden was making between $215,000 and $320,000 a year, his total charitable contributions never exceeded one half of one percent of his total income.

1. Are you comparing Biden's salary to Fiorina's?
2. I'm talking about wealthy corporate heads. Million dollar salaries. Not 200K. I'm talking about corporations, whose profits are SUPPOSED to trickle down to the employees, who are, instead being laid off.
3. Charity is a TOTALLY different thing than taking care of one's EMPLOYEES.

I just feel that free market is the best fit.

The free market system is what got us into our current economic crisis! You seem to be confusing someone working hard for their money with keeping money that rightly belongs to someone else.

The free market is not what got us into this mess. Corruption and mismanagement is what got us into this mess. Having government control everything is not the answer for this country.

Regardless of your assessment of the average wealthy person in this country, I believe that people, if left alone, will do what is right. I believe they will give where gifts are needed, without government telling them they have to or simply taking from them.

Redistribution is the first step down a very dark road for this country. Not allowing people to keep what is rightfully theirs is not what we need.

When government decides that it knows better than you how to run your life, government has gotten much too big.

Also, please explain to me how someones money "rightfully belongs to someone else".

[edit on 24-9-2008 by nyk537]

Originally posted by nyk537
Regardless of your assessment of the average wealthy person in this country, I believe that people, if left alone, will do what is right. I believe they will give where gifts are needed, without government telling them they have to or simply taking from them.

Firstly, I'm not talking about the "average wealthy person" in this country. Take offense at what I've said if you want, but I kind of doubt that you are a large corporate CEO making a couple million a year.

Not allowing people to keep what is rightfully theirs is not what we need.

I have said several times that these people are keeping what is NOT rightfully theirs. Are you reading my posts???

Charity has NO place in this discussion! I'm talking about employees. You and Loam are both arguing with things I haven't said, so I'm actually not going to waste my time if you're not going to read my posts.

Originally posted by nyk537
Also, please explain to me how someones money "rightfully belongs to someone else".

I already did. You just aren't reading what I write. I'm not going to waste my time.

[edit on 24-9-2008 by Benevolent Heretic]

Well, see my last question to you. Please explain to me how someones money "rightfully belongs to someone else". Then we can continue talking about the things you want.

When did you do that? Scanning back through your posts I see several reference to keeping what is not "rightfully theirs", but I see no explanation of what you are talking about.

Not trying to get you riled up here. Just trying to have a discussion.

[edit on 24-9-2008 by nyk537]

reply to post by Benevolent Heretic

Originally posted by Benevolent Heretic
Charity has NO place in this discussion! I'm talking about employees. You and Loam are both arguing with things I haven't said, so I'm actually not going to waste my time if you're not going to read my posts.

Really, BH, I don't understand why you have to be so disagreeable.

You were the first to explicitly state greed was inherent in those with wealth. When I addressed that, you changed your position to they become greedy and somewhat corrupt when wealthy and powerful. When I addressed that, you now claim we can't talk about charity as a counter to your claim of greed???

How was I arguing things you haven't said precisely?



Sorry to have wasted your time.









[edit on 24-9-2008 by loam]

I feel the same way.

I don't want to argue here. I respect BH's opinion on political matters. Even though we disagree politically, I can usually count on a cool head and a respectful discussion.

Not sure what the problem is here.



On topic though, the OP was trying to make the point that our current free market economy is not working. My argument is that a system of wealth redistribution would be just as vile, if not much more so.

The answer for our country is to get government out of the way, not give them more control.