Trickle-down economics were always bullshit

This article does such a bad job of criticizing an already-unpopular theory that I found myself defending it. "The evidence is clear," "studies have repeatedly shown," and "analysis showed," would be a lot more convincing if the evidence, studies, and analysis were actually explained. Not to mention that focusing on income inequality doesn't disprove the idea of "a rising tide lifts all ships." It's possible the absolute wealth and standard of living of the poorest might increase while inequality also increases.

"Trickle-down economics" is not any kind of formal economic or political philosophy, it's a pejorative term designed to trivialise free market/laissez-faire economic policies.

It's fair enough to criticise free market/laissez-faire economic policies; they have their limitations and trade-offs, just like every other economic philosophy. But this article doesn't contain any serious economic commentary or insight, it’s a largely empty rant.

This article confuses several topics. It lures the reader in with the reasonable proposition that personal tax cuts for Bill Gates and other billionaires does not benefit the poorer class, but ends on the conclusion that high corporates tax rates and business regulation are thus good things. The topics are related in the sense many wealthy people own companies (as do most middle class Americans via stocks and 401K plans), but are distinct. In fact, several lines of economic thought criticize high corporate taxes on equality grounds: corporate taxes are blunt instruments and when they are raised, it’s not the CEO or board who takes the pay cut, it’s the rank and file worker the CEO and board decide to fire.

The article then tries to argue against business deregulation. Certainly there are industries that need more regulation (I.e. better privacy standards would benefit society), but the article makes no specific arguments against dysregulation other than a shallow pejorative association with Ronald Reagan, a politician the author clearly detests.

All in all, this is a poor, confused mess of an article that serves as more of a rant than any sort of analysis.

Will Rogers said it best in 1932:

>They [Republicans] didn’t start thinking of the old common fellow till just as they started out on the election tour. The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot. But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellows hands. They saved the big banks, but the little ones went up the flue.

The trickle down was never meant to trickle, and if it actually did, the people who advocate it would not advocate it.

It's not whether it works, but whom it appeals.

Trickle down economics is music to the ears of the rich. Despite people thinking that everyone's vote weigh the same, the rich has more influence than others, in the form of lobbying, or even through the sheer "legitimacy" that comes with wealth and fame, whether or not it's deserved. E.g. celebrities.

Politicians have more incentive to appeal to the rich and powerful, since those people hold the key to power. The vast majority of the populace are mere sheep who will fall in line.

The concept dates back to at least the 1890s ("horse-and-sparrow theory"):

* https://en.wikipedia.org/wiki/Trickle-down_economics#History

Some call "supply-side" economics just a relabelling of trickle-down:

* https://en.wikipedia.org/wiki/Supply-side_economics#Criticis...

From the article: *"Proponents promised it would jumpstart the economy and increase tax revenue, even at lower rates. Instead, budget deficits ballooned."

"Increasing tax revenues" and "ballooning budget deficits" are NOT mutually exclusive.

The use of the word "Instead" seems to imply that these things are mutually exclusive.

US median household income increased after the 2017 corporate tax cuts.

https://fee.org/articles/us-household-incomes-increased-more...

The system allowed (really still allows) the wealthiest people to keep more of their income every year, year after year. It was always a trickle-up system. All these years after Reagan, we see the level of inequality it created.

I’m not against people being billionaires if they pay a fair share of their wealth in taxes every year. The reality in America is that the tax system is lopsided.

Even in the lowest tax brackets, workers still have to deal with payroll taxes. On the other hand, if your income is derived from investments, you escape payroll taxes __and__ you pay less in capital gains taxes than you would in normal income taxes. In other words, we pay a higher share of our income that we earn from doing actual work than many billionaires do on passive income.

Not to mention all the loopholes tailor-made for billionaires and corporations.

Anyways, regarding the mechanics of trickle-down economics, concentrating more wealth in the hands of the wealthy is, from a morally neutral “let’s just grow our GDP” standpoint, bad for the economy. Folks who already have everything they need/want may, given a few more billion dollars, buy a mega yacht here or make a trip to space there, but most of it will be hoarded away or, worse, used to influence policy so they can rake in more billions. If you spread those billions among the less wealthy, they’re more likely to go out and spend it on necessities, which puts more money in the hands of people who need it, and so on. The faster that money circulates, the more GDP grows.

Source: https://en.m.wikipedia.org/wiki/Velocity_of_money

It’s shocking how many Americans can be persuaded to hand over their hard-earned money and worship the thieves at the same time. As if they’ll somehow be getting that money back.

People like Bill Gates, Jeff Bezos, and Taylor Swift became billionaires by creating new products that people benefit from -- increasing consumer surplus. Discouraging such people would make us worse off.