"Trickle Down" Is a Plutocratic Religion, Not an Economic Theory


Your Daily Dose of BuzzFlash at Truthout, via my pal Mark Karlin:

"Trickle down" is not an economic theory; it's a self-enriching religion for the wealthiest amongst us.

The economists and pundits are legion who have challenged the notion that the amassing of wealth by a privileged few results in more jobs being created in the US. After all, if this were the case - at a time the richer are becoming even richer - why did we nearly just reach a depression? [...]

One of [labor specialist, David ] Bacon's central arguments is that globalized corporate trade is conducted to increase the profits of large corporate entities. The result is the exact opposite, in many cases, of trickle down. Due to trade agreements that allow corporations to place factories in the lowest cost country, creating near slave-labor conditions - as BuzzFlash at Truthout has shown - for workers who, for example, make almost all American high-tech products overseas. [...]

Furthermore, in terms of NAFTA and Mexico, it dumps subsidized American products - particularly agricultural - south of the border and renders many small farmers in Mexico and Central America unable to compete. This is just one of the factors that results in increased migration to the US: the need to survive. [...]

So, if we look at the corner of the business world concerning southern sphere migration to the US, we are not looking at trickle-down economics; we are looking at increasing corporate and big agricultural profits through the exploitation of labor. [...]

The bait and switch here for the global multinationals is to cut jobs in the US, cut pay, make a bigger profit manufacturing overseas and sit on that profit or disburse it to shareholders. Americans consume the products, maybe assembled in a plant in Mexico that was formerly in the US.

Trickle down? The only thing that trickles down is wages in the US, and the decline of the manufacturing sector ... The salaries received by people who used to earn decent incomes have declined in far too many cases.

Please read the whole thing here.