The revenge of trickle-down economics

Thought this was a very interesting commentary/article that some would like to see and argue about. What I particularly love about it is how it calls out both "sides" that got us involved in the mess we're in today.

In the 1930s, capitalism's last major global breakdown, then President Roosevelt eventually pursued the alternative "bubble up" theory. Between 1934 and 1940, he created and filled 11m federal jobs with unemployed workers. Their incomes enabled them to maintain mortgage payments and buy goods and services that provided jobs to millions of others and profits to many US businesses. That alternative to trickle-down economics did not suffice to overcome the Great Depression. However, it certainly alleviated more of the economic damage and individual suffering of that breakdown than Bush's and Obama's trickle-down economics have achieved in this one.

www.guardian.co.uk...

Originally posted by ~Lucidity
Thought this was a very interesting commentary/article that some would like to see and argue about. What I particularly love about it is how it calls out both "sides" that got us involved in the mess we're in today.

In the 1930s, capitalism's last major global breakdown, then President Roosevelt eventually pursued the alternative "bubble up" theory. Between 1934 and 1940, he created and filled 11m federal jobs with unemployed workers. Their incomes enabled them to maintain mortgage payments and buy goods and services that provided jobs to millions of others and profits to many US businesses. That alternative to trickle-down economics did not suffice to overcome the Great Depression. However, it certainly alleviated more of the economic damage and individual suffering of that breakdown than Bush's and Obama's trickle-down economics have achieved in this one.

www.guardian.co.uk...

edit on 2/14/2011 by ~Lucidity because: oops...a link would help.

Same ol', same ol' that was debunked over fifty years ago by the likes of Rothbard and Mises and even before that by Bastiat. Totally ignores the role of the Fed, capital structure, opportunity cost, malinvestment. How you find this interesting or new is beyond me.

reply to post by JakeLeMaster

Just curious...did you read the whole article, or just the excerpt I posted?

I find just about everything interesting. I'm a regular sponge when it comes to reading all sorts of opinions.

That you find his comparisons of what's going on today to the same ol' same ol' is rather interesting to me too, because that's all virtually just happened and is most of the jist of the article. But maybe you're prescient or something.

The main reason (if I really need a reason) that I found this interesting was that I was working on a piece on trickle up economics when I ran across this, and I liked the way he did make some of the comparisons.

To each his or her own Thanks for your comment.

The final paragraph sums it all up:

The vast social and personal costs of this irrational economic absurdity – tens of millions unemployed, one third of US productive capacity unutilised (rotting and rusting), and vast quantities of needed output foregone and lost – are ignored lest they raise the uncomfortable question: why do we retain a system as dysfunctional as this?

S&F

Its long been established, and never disproved for truth isn't, that prosperity measures keep money circulating and for every working person there are 3 service jobs created, but that starvation, scrooge like belt tightening things, destroy economies, and everyone except for maybe 6% of the population, just become more and more impoverished. Countries with well cared for citizens have the highest standard of living. Oh, and lest I forget, no Federal Reserve Banks either, that is a big mistake.

reply to post by Unity_99


You triggered me go look for something (I was going to ask you if this followed along the lines of the top X% of the population holding Y% of the wealth and then thought I'd look up the recent numbers) and then I found this on NPR: [url=http://www.npr.org/templates/story/story.php?storyId=130395070 Americans Underestimate U.S. Wealth Inequality]Americans Underestimate U.S. Wealth Inequalityp/url] Sweden is mentioned near the end of the interview, as if it was thre just to reinforce your point.

What you mention also reminded me of a couple of stories from last year.
crooksandliars.com...

www.washingtonpost.com...

The Federal Reserve recently reported that America's 500 largest nonfinancial companies have accumulated an astonishing $1.8 trillion of cash on their balance sheets. By any calculation (for example, as a percentage of assets), this is higher than it has been in almost half a century. Yet most corporations are not spending this money on new plants, equipment or workers. Were they to loosen their purse strings, hundreds of billions of dollars would start pouring through the economy. These investments would probably have greater effect and staying power than a government stimulus.

Is this along the lines of what you were saying?

I think all the Fed is doing is propping up the economy long enough for them to amass whatever remaining wealth there is. Wouldn't it be a kick in their pants if we could somehow find a way to turn the tables? Money is all they can understand, so it would have to be some sort of monetary revolution, and step 1 would be to abolish the Fed for sure.

My only issue with the article itself (aside from me disagreeing with the idea of reliving the socialist policies of FDR) is that they are perpetuating the erroneous stance that the economic moves the government has made in the past 3 years are an example of "Trickle Down" economics. THEY AREN'T. If anything, they are a complete bastardization of trickle down. Reagan used actual trickle down policies and they worked quite well, Bush used them 10 years ago and, at the very least, they delayed the inevitable catastrophe we're in now and lifted the nation out of the dot com crash.

The disconnect comes in understanding the vast difference between tax breaks, hiring incentives, and investment credits and in the idiocy of corporate and bank bailouts consisting of essentially free tax dollars without any demands on how they be used. The banks, for example, just used all of that money to grab up assets and make more profits. Same with numerous too big to fail recipents of that free money. This was either because our government now consists of absolute retards or of very sly individuals who are on the take from corporate America and the banks. That is really the only way to explain the seeming lunacy of handing over trillions of dollars to "save the economy" without any demands or guarantees of what those dollars had to be used for. The banks sure as hell didn't lend them out to people needing loans. Most of them lended some of the free money to check into cash payday loan outfits at high rates which were then doubled as those legal loan sharks fleeced the dummies who took out $700 loans at interest rates nobody could possibly defend. The rest of the money was mostly used to gobble up smaller banks, properties, and invest in foreign currency markets. Again, to be considered trickle down economics, there have to be actual governmental controls in place that encourage or even force the money to actually trickle down in order for the benefit to be recieved by the corporation or bank in the first place.

I'd say a better term for Obushamanomics is "Suck Up Economics" Wherein the only movement of money in the eyes of the average citizen is their tax money (and that of their children, grandchildren, and likely further down the line) is watching it getting sucked up by the banks, never to be seen by the pleebs again. Certainly not endorsing FDR fiscal policy here, either. I just find it humorous that the linked article somehow manages to make it look like it has to be one extreme or the other (serfdom to the banks vs full socialism) while completely leap frogging the basic tennet of capitalism they misrepresent in the article's title.