Archive for trickle down economics

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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They feel it. You know it! Meet four Op-Ed poets

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poetry your poem here

The Los Angeles Times invited readers to submit Op-Ed poetry and ended up receiving more than 1,500 submissions. They printed some of them today, and they are a must-read, but a few of them were indisputable home runs that I feel compelled to share.

Please click over for the others, because every one of them was thoughtful and well-executed:

A Haiku

Top tier doing well

Their employees not so well

"Trickle down" didn't.

Sally A. Seven is a retired experimental social psychologist living in Claremont.

***

Untitled

Clippety cloppety!

Senate Republicans,

Stuck in a stubborn e-

Questrial phase,

Deaf to all factors not

Anti-Obamacal,

Greet all his bills with a

Chorus of Neighs.

Peter Larsena is a retired graphic artist and wood sculptor who also enjoys sculpting verse.

***

A Second Shot

When Washington listened to what Summers said

They shot the economy right in the head

But since evidently it isn't quite dead

They're thinking of making him chair of the Fed.

Barry Goldman is an arbitrator and mediator who lives in Michigan.

***

Untitled

The English language

has no more deadly cliché

than "Boys will be boys."

Laurel V. Corteslives in Riverside.

I will be posting one more poem, but it's longer and deserves its own page. Stay tuned.

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Mayday! Mayday! for America's middle class

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mayday mayday via Huckkonopackicartoons.com

Via

So struggling Americans, how's that GOP-supported trickle-down economics workin' for ya? Same here. It's not. It never has, but that doesn't stop Paul Ryan or Eric Cantor from sticking up for their rich buddies at the expense of those living in poverty and families barely able to make it on their minimum wage and/or multiple low-paying jobs and/or unemployment checks and/or food stamps and/or no income or assistance whatsoever.

The middle class (what little is left of it) is hurting badly as Republican lawmakers count their millions of corporate dollars from their corporate pals and lobbyists now that Citizens United is the law of the land. That's all that really matters to them, that and privatizing the entire country while pushing hard for more power over those who see their own influence and potency diminishing.

To repeat, “Post-Citizens United, conservatives look at [union decline] & smell blood.” Unions support Dems. ‘Nuff said.

Hedrick Smith, former Washington bureau chief for the New York Times, and author of "Who Stole the American Dream?" wrote an op-ed for the Los Angeles Times that goes a little something like this:

We have become two Americas — literally, the 99% and the 1%. We have what a Citigroup investment brochure called the most eye-popping concentration of wealth in a great power since 16th century Spain. The numbers are staggering. From 1979 to 2011, 84% of the nation's increase in income has gone to the wealthiest 1%, according to Alan Krueger, a Princeton economist who now chairs the White House Council of Economic Advisers.

As the president observed at Knox College in Illinois recently: "The average CEO has gotten a raise of nearly 40% since 2009. The average American earns less than he or she did in 1999." [...]

Based on Labor Department reports, economists tell us the productivity of the U.S. workforce rose 97% from 1945 to 1973, and the income of the average family rose 95%. In short, average workers reaped the benefits of rising U.S. efficiency along with their bosses. But since 1973, the picture has changed: Productivity has risen 80%, economists report, but the average family's income has risen only 10%, and that bump has come primarily because more women have entered the workforce, not because wages have gone up.... Three decades of going nowhere.

"Three decades of going nowhere." Let that sink in for a minute.

He then quotes "unambiguous" evidence from a report by Harvard economist Philippe Aghion: Multiple studies show that "greater inequality [of income] reduces the rate of growth."

Why? Well, think about it. How can we buy stuff if we make no money? And if we don't buy stuff, how will businesses survive? And if those businesses can't survive, how will manufacturers of what those businesses sell survive? And if manufacturers can't survive, they shut down. And we all know how that story ends.

But all that decline in growth and income inequality could be improved if only Big Corporations would stop sitting on their nearly $2 trillion in cash. As Smith points out, "instead of expanding production, they have been buying back company stock, rewarding shareholders while often imposing a wage freeze on workers."

Way to grow jobs, Big Corporations. America first! Create weak demand and you get a weak economy. And as a special bonus, you can blame President Obama! Weee!

It would be helpful if people like John Boehner, Eric Cantor, Paul Ryan, and their tea party colleagues would stop pushing for budget cuts, more tax cuts for the rich, government cuts, program cuts, deregulation, and that failure known as trickle-down economics. But, hey, they're just not into "helpful." Or you.

not into you smaller

Smith:

[S]pending is the engine that drives economic growth by pushing businesses to expand production, build new plants, buy new equipment, hire more workers.

He goes on to say that those in Washington better "shift their mindset" and get past all the gridlock so they can "set a new course." In other words, dump business as usual and start using their noggins, get real, and do what's right and productive instead of obstructing and stuffing their own pockets with donations. Get off your asses and rebuild this country already.

To paraphrase what Albert Einstein reportedly said at the dawn of the Atomic Age in 1945: You cannot solve a problem with the same thinking that created it.

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Brief encounter with Mr. & Mrs. Alan Greenspan: "Chairman Greenspan, how's that trickle-down economics working for us?"

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Photo by @Rousseau_ist

Photo of Andrea Mitchell in limo by @Rousseau_ist

Yesterday I posted Source– John McCain on economic inequality: “I don’t care, nobody cares.” That story was about and by one of my Twitter pals, @rousseau_ist, who came face to face with John Sidney McCain at the Alfalfa Club where he asked, “Senator McCain, what your your thoughts on the current state of economic inequality?” His response:

“I don’t care, nobody cares.”

Of course he didn't care. He has eleventy-two homes and is married to Mrs. Wealthypants.

Today Rousseau sent me the sequel to that story. This one involves Alan Greenspan and his wife Andrea Mitchell. It was another brief encounter that I will let him to describe in his own words:

MSNBC DC Bureau Chief Andrea Mitchell dove into her limo at the Alfalfa Club billionaires annual pow wow Saturday Jan. 26th, stranding her feeble husband to find his own way to the opposite side of the vehicle. Former Federal Reserve Chairman Alan Greenspan hunched over, appearing confused, is finally helped to the other door.

As they came towards me, I ask, "Chairman Greenspan, How's that trickle-down economics working for us?" ~ I would have offered an explanation as to how it was working for us, but I felt badly for him. (Imagine that) ~ Here is a guy barely able to stay on his feet and his wife expects a busy doorman to assist her husband. They people have the nerve to say poor people feel "entitled."

This was my moment of being discreet by not bullying a husband and wife I can't stand more than most individuals in this country.

Photo of Alan Greenspan by @Rousseau_ist

Photo of Alan Greenspan by @Rousseau_ist

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Dear Republicans, you've got fail!

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fail

Today's L.A. Times letters to the editor, because our voices matter:

Re "Time to grow up, GOP," Opinion, Jan. 15

Jonah Goldberg accurately describes some of the Republican Party's problems, but he is deluding himself if he truly believes its main issue is that it isn't doing a good job of persuading Americans.

The real problem for the Republican Party is the extreme ideological views of its core constituencies. The religious right believes God is on its side; economically conservative Republicans believe in failed policies of deregulation and trickle-down tax rules; climate-change deniers believe global warming is a hoax; the GOP money establishment maintains that giving money to politicians is free speech rather than legalized bribery; and the gun-rights wing is opposed to any sensible measures on firearms.

The problem is not that Republicans haven't done a good job of persuading but rather that their views are unpersuasive.

Michael Asher

Valley Village

***

Goldberg expresses his frustration that conservatism is not connecting with the masses. Could it be because many Americans rely on the basic government safety nets that the conservatives want to eliminate? And when the religious right hijacked the GOP, it turned off moderate conservatives.

Goldberg doesn't address these issues, but they are a big part of the reason voters have turned away from the GOP. And until the party realizes that the demographic changes in this country don't favor Republicans, it will continue to lose national elections.

Mike Lockridge

Mission Viejo

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"Trying to dupe voters by asserting blatant falsehoods does violence to our political process."

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Today's L.A. Times letters to the editor, because our voices matter:

Re "Ryan leads GOP assault," Aug. 30

After four years, Paul Ryan asks, isn't it about time that President Obama assume responsibility for the economy?

Ryan and his party conveniently ignore the fact that eight years of Republican economics produced a stock market crash and left the economy hemorrhaging millions of jobs. Now they want us to return to the same trickle-down policies that caused the problem in the first place.

Where's the responsibility in that?

Daniel J. Stone

Los Angeles

____________________________

Puffery, spin and hyperbole are all fair game in a political speech. Still, I was saddened to see Ryan, who seems a decent man, resort to complete inaccuracies, such as the claim about Obama gutting Medicare and blaming the president for a factory closure that started when George W. Bush was in the White House.

To depend on either the blind partisanship or plain ignorance of facts in your listeners is deeply cynical. If you are serious in your proposals, present them honestly and let's debate them. But trying to dupe voters by asserting blatant falsehoods does violence to our political process.

Michael Olson

Pasadena

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

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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.

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