According to Paul Ryan in this Sunday’s New York Times, “We’re six years into the Obama economic policies. … The wealthy are doing really well. They’re practicing trickle-down economics now.” Trickle-down economics is, of course, the Republican view that giving tax cuts to the rich will let them hire more poor people and some of the wealth will trickle down to the poor. All along the Republicans have been accusing Obama of practicing class warfare against the rich, but actually he has secretly beendoing just the opposite. Who knew! So I say the Republicans owe him one big fat apology. And Ryan deserves to win the very next Nobel Prize in Political Scientology.
Seriously though, inequality has been increasing since Reagan took office, and it still is. Economists are not entirely sure why. But it’s likely that cutting the top tax rate from 90% to 38%, letting inflation erode the minimum wage, and reduced unionization have something to do with it.
Another telling feature of the cruelty of supply-side economics was made apparent to me recently when some Wall Street economic analysts were discussing the latest surge in the Stock Market. Despite record stock exchange highs in a bull market, sustained corporate profits, dissipating unemployment, and booming industry over a prolonged period now, wage growth is stagnant. The analysts were “puzzled” by this! Apparently those oats for the sparrows never made it through a very well-fed horse!
I’ve been a big fan of zfacts for a few years. Nice that we can finally add comments and get some vital dialog going.
So, I like the comments from Bob S. I wasn’t familiar with the “horse and sparrow theory”. Thank you.
Paul Ryan’s comments that the democrats are now practicing trickle-down economics is full of hypocrisy. He seems to be making a derogatory remark about the cornerstone of Reganomics, for which the republicans are always genuflecting. So, is it good or bad policy, Mr. Ryan? If it’s bad policy, doesn’t that undermine the belief that Reagan’s economic policies were so great? Or is he giving President Obama credit for implementing Reaganomics? 🙂
The economist John Kenneth Galbraith noted that “trickle-down economics” had been tried before in the United States in the 1890s under the name “horse and sparrow theory.” He wrote, “Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: ‘If you feed the horse enough oats, some will pass through to the road for the sparrows.'” Galbraith claimed that the horse and sparrow theory was partly to blame for the Panic of 1896.[13]