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The Con of Trickle-Down Economics

reaganomicsHere is a quick explanation of Trickle-Down Economics: The belief that as revenue increases for the wealthy, or big corporations, those excess revenues will then “trickle down” to the rest of us by the way of more jobs, increased pay and better benefits.

Sounds great, right?  In theory, yes it does.

However, it doesn’t take into account the one flaw we’ve faced since the dawn of humanity–basic human nature.  Human nature is often very greedy, and those who have the most, in many cases, tend to be the greediest.

The old saying “absolute power corrupts absolutely” in reality means power of any kind often corrupts.  With our society placing so much emphasis on money, it has made having money equal having power.  Trickle-Down Economics puts the health of a nation into the “generous” hands of the rich and powerful.

But you have to ask yourself, who benefits most from this philosophy?  Who stands to gain the most by shaping an entire economic ideology around this belief?  It doesn’t take rocket science to figure that out–the rich and powerful.  Whose power in politics has grown thanks to rulings such as Citizens United, which allows big corporations the freedom to give unheard of sums of money to any political candidate or party?  Yup, you guessed it—the rich and powerful.

Nearly all credible information you can find over the last 30+ years shows that middle class pay has remained pretty much stagnant.  This fact remains indisputable as the income for the top 2% in this country has skyrocketed, and never more so than in the last decade.  Yet even with that indisputable information, you have millions of Americans who accept this economic theory.

It’s a magnificent con.

The rich and powerful have convinced millions to vote against their own interest.  Right now, instead of supporting closing loopholes for individuals and big businesses that make millions (or billions), an entire political party has instead focused on cutting programs that mostly help lower and middle class Americans.  They’ve screamed “class warfare,” yet have not supported a single deficit reduction solution that includes a sacrifice from the top 1%—even opposing the elimination of a tax break for people who own corporate jets.

It seems insane to think that a middle class American would fight to protect the tax rate of someone who makes a hundred times what they make, all while advocating the slashing of programs they themselves benefit from.

And the worse things get, the more tax breaks they want.  Their talking point is near perfection:

“Well, how will raising our taxes create jobs?  We need lower taxes so we can create jobs and boost the economy!”

They’re right, raising taxes won’t help create jobs, but lowering them didn’t help either.  At least with increased tax revenue we wouldn’t need such drastic cuts to public employment like Republicans have pushed for the last 4 years

Republicans ignore the fact that we had historic economic growth, and all-time low unemployment, under President Clinton–with higher taxes.   They’ve also ignored the fact that we faced the worst economic crash in 80 years, and shed millions of jobs, while we had the lowest tax rates in our nation’s history.  These are two simple realities that easily prove the falsity of the Republican rhetoric that “tax cuts are vital for job creation”.

Ask yourself these questions: Over the last 30 years are most jobs gaining or losing benefits?  Are people gaining or losing their pensions?  Are they working less or more?  Are health care plans getting better or worse?

Keep in mind when you answer these, that over the last 30 years executive pay and benefits have hit historic highs and corporate profits have skyrocketed.

It’s a great scam because the terminology in both its application and rebuttal to its opposition make for great talking points:

“The more profits we get to keep, the more jobs we can create.” 

“How will raising our taxes help us create jobs?”

But if taxes were already low, and the economy went into recession, then the tax rates really had nothing to do with job loss or gain.

The choice is really about more tax revenue or less tax revenue—with the same amount of job creation.  Logic says a country should take the tax revenue if the tax breaks didn’t actually create jobs..

And they haven’t.

What Republicans have done is taken this ideology of greed, manipulated the American people by masking it in a cloak of Christian values and then successfully deceived a large portion of the American population to vote against their own best interest.  The astonishing part is— it has actually worked.

It’s one of the greatest cons in human history.  They’ve co-opted the Christian faith and twisted it into a hateful, judgmental, ignorant group of cult-like followers to support an agenda of greed.  They’ve built their economic base upon the idea that our best interests, and economic salvation,  are found by giving those with the most wealth and power  even more.

Now just sit and think about that for a second…

What a great con.

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Allen Clifton is from the Dallas-Fort Worth area and has a degree in Political Science. He is a co-founder of Forward Progressives, and author of the popular Right Off A Cliff column. He is also the founder of the Right Off A Cliff facebook page, on which he routinely voices his opinions and stirs the pot for the Progressive movement. Follow Allen on Twitter as well, @Allen_Clifton.

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  • Dave

    Raising taxes *does* create jobs. Both government jobs, and the jobs created when that money circulates again through the economy. It seems that the Mr. Clifton has been snookered too, despite his attempt to point out the problem.
    The reason that tax breaks for the rich don’t work is that the money either flows overseas or is left in savings. It doesn’t circulate.

  • Glen S.R. Woytuck

    It’s even worse than that, though. By denying those with less the assistance they need to survive, you actually inhibit spending, which inhibits economic/job growth. (When you spend all your income on health-care, and are still too sick to work, you have little to spend on things that will create jobs to make them.)

    Taxing those with much, and using it to help those with little to at least be ABLE to work, creates a snow-ball effect of jobs. More people able to work, making/spending money creates more jobs for others to provide the goods/services they wish to purchase with their wages.

  • Jeffrey Edmonds

    You are better giving… SIMPLY GIVING 100 billion away to the general population then GIVING this to corporations in the form of subsidies.

    Even the most simple minded person can understand the difference between a rich man hording their money and a poor person putting every last dime back into the economy.

    Perhaps a simple minded person can not understand that… There are still some republicans left…. I had forgot that.

    • ccws

      As one of those poor people putting every last dime back into the economy, I say: AMEN!

  • George W. Williams

    I remember when George H W. Bush said that Reagan’s economic plan was “Voodoo economics”‘. He was right!

  • George W. Williams

    I remember when George H W. Bush said that Reagan’s economic plan was “Voodoo economics”‘. He was right!

  • mike blender

    What a great comment, everybody in America should have to read this before they vote.

  • Jonah Arnot

    I consider it unfortunate that you mentioned neither that greed is good is a fundamental theory of business and successful businessmen, leading to the idea that perhaps they shouldn’t develop public policy, nor that taxation generally goes to fund works that help the public. In whatever way, they are a help, and in this world, people need all the help they can get just to make it. I hope your article convinces people that Republicans don’t have their best interests at heart.

  • Susan

    This article is a brilliant synopsis of the fallout from Reaganomics over the past 30 years. As Thom Harmann states, “Any successful business owner will tell you that being given a tax cut or credit does not give them any reason to hire people. Business people aren’t stupid, they hire people when there is a demand for the products or services they provide. If there is no one out there who is interested in or financially capable of purchasing what they are selling, then hiring employees is simply throwing money out the window. But when you give money to working people in the form of increased wages or tax cuts or any other form of income what will they do with it? They will spend it. This creates demand.” Couple this philosophy with shipping manufacturing jobs overseas, current U.S. trade policy that has led to a massive trade deficit, and lack of investment in education, and it’s no wonder that other nations no longer see the U.S. as the world’s leader.

  • Karen Hall

    Oh, yes, the unholy alliance of church people being used by BIG money. Trickle Down… sounds great? You must be joking. No. The very label is offensive. “Down” inherently means that we are beneath. Beneath means less than. So for starters we’re in our place of being less than. “Trickle” is a very small dribble… what part of THAT sounds good? So we are to be kept down and only deserve what little tiny bit gets to us. Just as offensive is the notion of “shared sacrifice”. Of course, it isn’t shared, the wealthy are exempt. But even if they were not, why should we share the sacrifice. We didn’t cause it. They did. They are the ones who should sacrifice, not us.

  • pam Miner

    the most telling bit was about how they, by way of media, by fox “news” by lying and cheating, these people have convinced millions to vote against their own self interest!
    They are sort of the opposite of Ayn Rand, they vote for the selfish desires of people who don’t need anything, who are devious, conniving, and who don’t give a rat’s tail about what happens to the rest of us.
    How they can convince people to do that is a crime! so cleverly done by invoking the GOd of love, acceptance and selfLessness, ( totally opposite) to vote for those who want to honestly want to take away ANY benefits.
    How did they mange that?? It’s so obvious that I don’t understand why the 90% can’t see it. But many of us can and that’s why we are progressives!

    • Susan

      I recommend, “Poor But Proud: Alabama’s Poor Whites” to shed some light on this issue.

      I am paraphrasing from an article in which the author was interviewed:

      Poor people and the working middle class vote for Republicans who are obviously anti-worker, anti-labor, and who are clearly bought and paid for by big corporations and their lobbyists because
      social “wedge” issues related to race and religion now play a more important role in voting habits than pragmatic economic concerns.

      “It’s partly because preachers tell them that the Democratic Party is a godless party,” Flynt said. “It’s party because the Democratic Party is made up of a large number of African-Americans, and working class whites just won’t vote that way.”

      • Paula Alderson Beard

        Even in Colonial times, before our Declaration of Independence was even a reality, the elites of the cities pit the lower white classes against the slaves and ginned up the racism factor. They did it for one simple reason. They did not want poor whites to collaborate with black slaves and revolting against the rich. The same thing is in play today. No difference from the beginning of our nation.

  • http://Facebook Steve Wittler

    Thank ‘God’ there are still people out here who aren’t afraid to speak out about the realities of the U.S. Economy. The cause and affect of our governments’ almost “brainwashing” theory that less creates more can’t be more clearly spelled out than this article. Now, where does this insight and knowledge take us? Should it be left up to the Supreme Court to decide? VOTERS HAVE THE POWER. And the truth shall set us all free!

  • Allen

    I certainly can’t speak for republicans or liberals and to lump all republicans into the “don’t raise taxes at any cost”, group is over simplistic. Most conservatives are for smaller federal government and more state control. The reason? The amount of waste and corruption. Is there waste in state and local govt,? Yes, but the people that live in the state have much more control of who is in office.

    • yzzlthtz

      They want that but they won’t agree, even amongst themselves, what federal programs to begin cutting, let alone how to efficiently transfer that power to the states. They have an idea, an ideology, but are entirely incapable of describing it cogently and personably, let alone planning and executing it.

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  • Bingo

    Karl Rove is an evil genius.

  • http://www.facebook.com/people/Michael-Linus-Pedersen/1374578921 Michael Linus Pedersen

    I’VE BEEN TRICKLED ON ENOUGH. RETURN TO THE SANE TAX RATES OF THOSE NOTED SOCIALISTS, EISENHOWER AND NIXON, IMPLEMENT A 2% WALL STREET TRANSACTION TAX, END CORPORATE WELFARE AND JAIL SOME BANKSTERS. (Then we will stop screaming).

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  • RoyWatson

    ‘The old saying “absolute power corrupts absolutely” in reality means power of any kind often corrupts’ – That might be why “the old saying” is in fact only the second half of the saying (coined by Lord Acton in 1887) “Power tends to corrupt, and absolute power corrupts absolutely”. But by leaving off the first half, you get to pass the insight off as your own.

  • Jess Manuel

    So, should we pray then that GOP Congressmen and Senators die? Because it’s damn near impossible to vote them out because of gerrymadering and dumb idiotic voters

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