Supply side economics doesn't work. "Trickle-up economics creates more demand."

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supply side economics trickle down peanuts cartoon via greekshares dot comImage via Greekshares.com

Supply side economics doesn't work. How do we know? We've tried it and look where we are today. That trickle-down theory that Republicans have bent over backwards to push has trickled down all right, the way dogs "trickle down" on hydrants.

And with that, here are today's Los Angeles Times letters to the editor, because our voices matter:

Re "Bring on supply side economics," Opinion, March 23

To quote Ronald Reagan, "There you go again." Ideologues like Brad Schiller tout supply-side economics once again as a possible cure for our economic woes.

Economists teach us about "supply and demand," but it really should be called "demand and supply," because without demand, supply is irrelevant. Demand is what drives everything, including job creation. If you have a line of customers snaking out the door, you will hire employees to meet that demand, regardless of taxes or regulation.

Our economy is about 70% consumer driven, so when median household income stagnates or drops, so do consumption and hiring. It's simple logic.

Trickle-up economics creates more demand than trickle-down because lower- and middle-income families will spend additional income, whereas high-income families invest their money. That's why the stock market has been booming while the overall economy has been weak.

You don't need a Nobel Prize in economics to figure that out.

Eric Geisterfer

San Pedro

***

Schiller's call to action is timely enough. It is just wrongheaded.

Yes, more attention to employment, and also wages, is critically needed. But Schiller fails to acknowledge the controversial nature of supply side economics, most starkly revealed in its desertion by the man who chaperoned its entry into the Reagan revolution. He ignores the already flush supply side, with corporations sitting on mounds of cash they won't spend to hire or expand.

Mostly, Schiller fails to realize that trickle-down Reaganomics remains the law of the land and needs no latter-day champion. The decimated marginal tax rate and the prevalence of stock-option CEO compensation remain and, along with corporation-friendly foreign trade deals, have hollowed out the middle class, creating monstrous wealth and wretched poverty characteristic of developing nations.

This piece would more appropriately have been published on April 1.

Curtis Selph

Lancaster

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  • paullwolborsky

    For this I have "The Cheetos" Scenario. If 500 people have jobs of roughly equal salary, and really like Cheetos, they'll buy a bag of Cheetos every week. That's 27,000 bags/year (they buy an extra bag or 2 on the Holidays).

    Now, due to some economic disaster like floods, tornadoes or GOP Tax Policy, 499 people lose their jobs, but 1 lucky contestant works moves up to Wall Street and rakes in the combined lost income of the other 499, does HE BUY 500 BAGS OF CHEETOHS A WEEK? And maybe donates 499 Bags of Cheetos to the poor, unemployed and Cheetos-deprived 499 he left behind?

    Or maybe he saves the floundering Cheetos factory for pennies on the dollar. That's an investment! Of course there's no demand for Cheetos so he has to shut the factory down and burn it for the insurance money while selling Cheetos to the Chinese who plan on marketing it in Indonesia.

    And did I mention that the bulk of wealth is in equity, not income? Supply-Side Econimics... BOO-YAH!

  • Albert DeAcentis

    Tax cuts for the wealthy does not encourage them to create jobs, On the contrary all they do with their money is invest it business outside this country, offshore accounts and stocks mostly foreign like China, e.g.