“Trickle Down Economics”–It’s the New “Racism”
Apparently, in advance of Congress tackling tax reform, the 80s called and offered Democrats their class warfare vocabulary for the debate. “Trickle down economics” is the new go-to sneer, more valuable even than “racist.”
Lower, flatter tax rates are just trickle down economics, sniffs Salon. Tax cuts are about nothing but trickle down, huffs PBS. Esquire, for variety, accuses Republicans of voodoo economics, and reserves “trickle down” for the search tags. The American Prospect intones that reducing U.S. corporate tax rates (among the highest in the world) just perpetuates the trickle-down myth.
Tax reform is a sticky wicket, with near infinite details to facilitate the mud wrestling of interests, industries, and politicians. But, the tired smear “trickle down economics” has always been an incoherent mess. What does it mean? That if we don’t tax the rich snotless, maybe they’ll pour some spare pennies down on the heads of the poor? Nonsense. Beyond achieving a miserly-sounding sneer, the pairing is exactly wrong in at least three different ways.
First, in the ordinary course of things, the wealthy don’t actually trickle anything down on anyone. They pay for things they need and want, with whatever effects that produces in the economy. They don’t trickle their wealth generously, they spend it selfishly. Meanwhile, people and companies make money providing goods and services. That’s how the economy works. The real trickle-down is what progressives seem to prefer–a system to wring the rich like a wet towel and politically drizzle the money on the poor—what’s left anyway after government waters its favored causes and cronies.
That’s the approach of the shake-down state economies of the Euro-moribund zone and of the great Peron-Castro-Chavez banana tradition of strongmen. They gain power, neutralize competing power centers–like checks and balances and media—and seize economic control, thus chocando the fortunes and freedom of formerly rising Latin powers. (“Chocar” doesn’t mean “to choke” but close enough).
That turns out to be the real “trickle down”: extract lots of money from the rich, feed it through the digestive tract of government and its many corrupt parasites, then dribble what’s left on the heads of the grateful, dependent poor, thus securing their suicidal votes. Come to think, “trickle down economics” also reasonably describes the redistributive obsession and promises President Obama powerfully and empirically debunked in an exhaustive 8-year field study. Bravo, Mr. Ex-President!
Second, what liberals call “trickle down” is just good ole’ “supply side” or “free market” economics. It means human freedom in commercial activity. Get out of the way of people’s pursuit of happiness and gainful labor, so free exchange and economic growth can build prosperity. Investors, entrepreneurs, managers, and workers build enterprises that hire employees to market goods and services. Opportunity spreads out from there.
Third, interestingly, if any vertical-spatial metaphor makes sense here, it’s not “down,” but “up.” “Trickle up economics” describes free enterprise far better than “trickle down.” The way to build wealth in a free economy is to satisfy the market, meaning consumers. That is, to get rich you have to offer goods or services for which A) people are willing to pay you; B) a price higher than your cost of providing; and C) in sufficient quantity that profits proliferate. And your offer has to be more attractive than your competitors’.
If people get wealthy in a free economy, it’s because the wealth trickles up as a result of others’ free choices pursuing their own benefit. All the related suppliers, employees, contractors and others also gain from the same flowing currents of wealth generation. Apart from charitable giving–a different subject–the rich don’t pour or trickle anything down on less fortunate heads; rather the middle and working classes earn income in the streams that trickle up toward profit.
Ever since this silly insult first trickled harmlessly off Ronald Reagan’s Teflon, its logic has been amiss. But when you hear it, be charitable. The speaker probably suffers from a public education and is innocent of any exposure to economics.