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Comment by q1w2 | Hacker News Reader

I haven't heard a politician advocate trickle-down since the Reagan era.

This seems like one of those strawman political football arguments.

Also, the methodology here is a bit flawed. I think that economic data that cherry picks the start of the covid-19 pandemic is deeply flawed. 2020 will always be known as an economic outlier. It's like selecting 2008, or September 2001. These are data points that should be eliminated from your data set - not highlighted in your conclusions.

Seems like just another anti-billionaire political hit piece, frankly. No real substance.

Also, a nitpick - the STUDY didn't take 20 years. The DATA was from a 20 year period. The title builds the study up to imply far more effort than was actually expended.

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I agree that "trickle-down" is usually how critics attack tax cuts for the rich.

However, we have seen several rounds of tax cuts for the rich and the language used to justify it is something like "these tax cuts will stimulate growth and that's good for everyone".

The general point of the article is that tax cuts for the rich lead to more inequality which is hard to argue with.

It’s not a straw man at all. The Fed explicitly justifies QE and the rest of their monetary insanity on the basis of the “wealth effect”. They believe asset price rises will create a feeling of wealth which will generate additional spending. They know that these asset price prices disproportionately benefit a wealthy minority. This is trickle-down economics.

>The Fed explicitly justifies QE and the rest of their monetary insanity on the basis of the “wealth effect”.

They do?? Do you have a source for this?

They’ve said this publicly many, many times.

It’s quite incredible that the Left have not made the connection between the Fed openly aiming to increase wealth inequality (which is what this is) while also keeping a watchful eye out for any wage inflation (which is the only way the common person can keep up).

https://digitalcommons.trinity.edu/econ_faculty/31/

Search for Bernanke wealth effect or any variation you like. The BIS and other central banks talk about it openly as well.

The central banks are the biggest engines of wealth inequality in the world, and it’s all done in the open with barely any pushback.

Not really. They used this term in the housing crisis, in reference to stabilizing home prices. They recognized that home equity loans were driving a lot of spending AT THAT TIME. It's not some general core principle.

Also, the stimulus checks are also a "wealth effect" mechanism, but no one would confuse that for "trickle down".

The title makes a false comparison.

That’s not the case. All the central banks and the BIS understand and use this terminology when discussing the relationship of asset prices to demand, and it’s not at all specific to the USA or even a specific time period or specific market in the USA.

Also, the stimulus checks are a fiscal measure and have absolutely nothing to do with the wealth effect induced by loose monetary policy.

This is your opinion. The Fed never "explicitly" said QE was for "tricke-down".

You are equating the "wealth-effect" with "trickle down" - they are not the same.

The Fed described the wealth effect of stable home prices because people, at the time, were re-financing their homes and taking home-equity loans, which created spending.

Another "wealth-effect" are the stimulus checks. Are you suggesting those too are "trickle down".

The reality is that having more money stimulates spending. Trickle down specifically means only giving the RICH more money (traditionally in the form of tax breaks).

You comment completely conflates these two different notions.

Philosophically it’s the exact same thing.

It is a mathematical certainty that deliberately raising asset prices gives much more money to the rich than to the general public (many of whom get nothing or indeed go backwards by taking on massive debt to keep up).

It’s no different to a massive tax break or any other way of giving wealthy people loads of money in the hope that some of it “trickles down”. And it fails to boost the real economy for the same reason - Bezos can only get so many haircuts, read so many books, eat so many meals.

>I haven't heard a politician advocate trickle-down since the Reagan era

Which country are you from? Certainly not the US, are you? It's called "cutting taxes" these days, with the tax cuts being mostly applied to the ultra rich.

The entire Republican party economic agenda still preaches trickle-down. If only because they are doing everything they can to prevent Reagan's trickle-down policies from being reverted.

> 2020 will always be known as an economic outlier. It's like selecting 2008, or September 2001.

Sounds like we're reliably getting an "outlier" every decade, huh.

Also, outlier by what metric? That's a non-sequitur. Every year is an outlier in some way.

2017 was the only year with a total Solar eclipse, for example. It's an outlier!

You need to specify the metric by which 2020 is an outlier, and how it can be biasing the study towards the conclusion that the paper reaches, otherwise it's no better than excluding 2017 for the Solar Eclipse reasons.

Any tax cuts are trickle down?

So the Democrat's push to reinstate the SALT tax credit (cut) are trickle down also?

Are tax cuts in any bracket trickle down?

When the GOP raises taxes - do they implode?

> Any tax cuts are trickle down?

Of course not, but when tax cuts for the top are billed to be wealth generating mechanisms for the middle and lower classes, that is literally the definition of "trickle-down economics".

I hope you understand that the SALT deduction that Dems want that he is referring to is a tax cut for the wealthy only. It exclusively applies to people wealthy enough to break the cap.

https://www.nytimes.com/2021/11/02/us/politics/salt-cap-tax-...

It seems a bit misleading to focus on just this SALT cap aspect when that is part of a broader tax policy change. It’s at least being pitched as a sort of political compromise to get the rest of the build back better plan through. Thoughts?

NYT is paywalled, but I found https://www.vox.com/2021/11/6/22766735/salt-deduction-cap-de... interesting

I was responding to the parent's remark that "any tax cuts are trickle down?". As I mentioned, tax cuts on the wealthy pushed as wealth generating mechanisms for the lower classes is the literal definition of "trickle-down economics". Furthermore, who is saying the Dems never push the "trickle-down" argument themselves?

To be fair, GP did use scare quotes to denote “tax cuts”. The specifics of the tax policy matter, to your point, but I do think it’s kind of common to frame this sort of trickle down attitude in terms of cutting specific taxes

>Any tax cuts are trickle down?

No, just the ones that benefit the massively wealthy individuals and corporations.

>So the Democrat's push to reinstate the SALT tax credit (cut) are trickle down also?

Irrelevant.

>Are tax cuts in any bracket trickle down?

You have asked this question already.

>When the GOP raises taxes [for the massively wealthy corporations and individuals] - do they implode?

Almost certainly.

Any further questions?

> I haven't heard a politician advocate trickle-down since the Reagan era.

That was the fundamental argument for Trump's tax cuts in 2017. "If we cut taxes on the wealthy then they will use that money to create jobs for the middle and lower classes." That mostly didn't happen of course. [1]

[1] https://www.pbs.org/newshour/economy/making-sense/did-trumps...

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