Trickle down theory, did it work?

Wyzaard · Oct 30, 2008

KarateCowboy said:
Owners are not workers. They simply sit around taking money from the proletariat.

In vastly disproportional amounts, yes... can anyone state with a straight face that a CEO of a company REALLY does 1000+ times more work than his/her average employee? Hmmm... as the American worker of the bottom 90% is 4 times more productive than he/she was thirty years ago, yet brings home LESS now than then, I wonder where all that money went...

All attempts to create Social Alternatives and democratize the use of private property have been defeated.

Through horrific implementations of force... how noble.

However, why should owners be able to make the decisions about their property?

Why should there be a distinction between owners and workers at all?

It clearly goes against Our Leader's vision for the New Progressive USSA. It is time for the worker's Revolution. Let the streets run red! Obama for all!

Obama is a reform-mind centerist, and nothing anyone has said or posted has changed this very plain fact.

Wyzaard · Oct 30, 2008

atlasshrugged said:
There has never been any answer so eloquently given and yet so wrong at the same time. I could spend a lot of time ripping this Marxist diatribe apart. But I won't. I simply don't have the time or the inclination.

Nor the pertinent reasons why I am wrong... without them, you are most certainly not 'right'.

It is apparent that you hate the rich.

This has nothing to do with how I feel, but what I think.

The one chance that we really had for the workers to maintain control of a large portion of capital and the means of production is to privatise social security. Allow my DH to take the money that the government steals from us and invest it in our name in whatever way we want for our retirement.

Never mind how this would effect those for whom social security was designed for originally: those who have nothing to invest, and thus need a safety net.

KarateCowboy · Oct 30, 2008

Wyzaard said:
In vastly disproportional amounts, yes... can anyone state with a straight face that a CEO of a company REALLY does 1000+ times more work than his/her average employee? Hmmm... as the American worker of the bottom 90% is 4 times more productive than he/she was thirty years ago, yet brings home LESS now than then, I wonder where all that money went...

Da Comrade. Thousands of dollars and a Master's Degree, plus 30 years of turning startups into million dollar corporations does not justify a higher salary. Only mandate from Our Leader justifies an higher salary. I hope that once Obama takes office he immediately reduces the salaries of all executives to $30,000 (except Party Leaders, of course, who are a little more equal than the rest of us).

Through horrific implementations of force... how noble.

Rightly said! Capitalists *spit* don't understand that Glorious Revolution is only glorious when used for the right cause of stopping kulaks from having a Hummer when they should be driving a Volvo Bus.

Why should there be a distinction between owners and workers at all?

Glorious revolution!

Obama is a reform-mind centerist, and nothing anyone has said or posted has changed this very plain fact.

Da. That is the Current Truth. The borgeoisie will have no idea what hit them when we update it!

PastorJim · Oct 30, 2008

ArnautDaniel said:
I said it before and I'll say it again - exactly what one would have expected would happen happened -

The rich got more money and instead of spending it on creating jobs they spent it on more and bigger houses, more and bigger cars, more and bigger yachts and more and bigger parties.

So, where did those houses and cars and yachts come from if people didn't build them?

YoungJoonKim · Oct 30, 2008

I believe majority of American believe in more fairer income distribution.
Obviously, Mr. KarateCowboy, you don't seem to understand income distribution in Canada & United States have been widening by a margin of maybe 4 times to 40 times (in some cases, radically more).
When CEO bonuses hit the stratosphere, average income for middle class never actually went up. This means no matter how many jobs we create, people are going to struggle paying their health care insurance, mortgages, food, gas (every sort), etc.
Look, in the past, hard work DID make a lot of difference. It was the time of prosperity when middle class could afford to buy products and services at a fair chance. Now, tuition fees are skyrocketing (literally) and everything at inflation beyond affordable rating for so many Americans. I think something is flawed here.

PastorJim · Oct 30, 2008

YoungJoonKim said:
I believe majority of American believe in more fairer income distribution.

What, exactly, is "fairer income distibution"? Income isn't distributed. It is earned. Either you earned it or you didn't.
.

YoungJoonKim · Oct 30, 2008

PastorJim said:
What, exactly, is "fairer income distibution"? Income isn't distributed. It is earned. Either you earned it or you didn't.
.

The problem of the idea of "earning" is that...why should your top CEOs bet billions of bonuses when it is you whose work is more productive than any CEOs. I thought corporations meant different individuals to achieve a common goal..etc profit.

Its so awkward to me what this "earning" mean. The statistic obvious shows the "earnings" are frozen in middle class while top executives are "skyrocketing their bonuses & lovely income." I can only see another Great Britain of 1800s.

PastorJim · Oct 30, 2008

YoungJoonKim said:
The problem of the idea of "earning" is that...why should your top CEOs bet billions of bonuses when it is you whose work is more productive than any CEOs.

1. Because that is the salary they have negotiated for their services.

2. Because they have skills that the average worker does not.

In my business, I make more than my employees because I have skills and experience that they do not and because I'm taking a bigger risk than they are.

If my business fails, they just go and find another job but I lose everything.

I thought corporations meant different individuals to achieve a common goal..etc profit.

It does, but why should a college educated executive with twenty years experience earn the same as a twenty-two year old assembly line worker with a GED? If that were the case, what would be the incentive of the assembly line worker be to better himself and move up through the company?

YoungJoonKim · Oct 30, 2008

PastorJim said:
1. Because that is the salary they have negotiated for their services.

2. Because they have skills that the average worker does not.

In my business, I make more than my employees because I have skills and experience that they do not and because I'm taking a bigger risk than they are.

If my business fails, they just go and find another job but I lose everything.

It does, but why should a college educated executive with twenty years experience earn the same as a twenty-two year old assembly line worker with a GED? If that were the case, what would be the incentive of the assembly line worker be to better himself and move up through the company?

I am not arguing about CEOs make more than average workers. Its the disparity that concerns so many.

Wyzaard · Oct 30, 2008

KarateCowboy said:
Da Comrade.

I've been asked to be civil with you, and I expect you've been told the same thing.

Thousands of dollars and a Master's Degree, plus 30 years of turning startups into million dollar corporations does not justify a higher salary.

Certainly not 1000X as much, no... particularly not in this shoddily-run economy. And since when did I say educations shouldn't be provided to all?

Rightly said! Capitalists *spit* don't understand that Glorious Revolution is only glorious when used for the right cause of stopping kulaks from having a Hummer when they should be driving a Volvo Bus.

I was referring to historical brutalities capitalists have engaged in both here and abroad... but way to go with the issue-muddying.

Da. That is the Current Truth. The borgeoisie will have no idea what hit them when we update it!

The fact of Obama's centerist political alignment has still not changed.

reverend B · Oct 30, 2008

to address the op, the "trickle down theory" was the first salvo in the class war. the underclass was sold a bill of goods, while the wealthy were provided with a smorgasbord of new ways to watch their wealth grow. the little guy was sold on the idea that making rich people MUCH richer would benefit him. it was a lie then, but it has been reinforced for 25 years and expanded dramatically under george w. where reagan stole the livelihood of everyman with a great artfulness, george w. has been clumsy and obvious, and a percentage of americans have started to molt, shedding the old decayed skin of "trickle down" and demanding that the people that have made this tiny cabal outrageously wealthy with their labor be compensated. the rich had their turn. they abused it, and the low and middle classes are starting to emerge from a quarter century snooze.
that is why i agree that the obama tax plan IS patriotic. the wealthy have had a long run of unprecedented wealth growth while the rest have sacrificed their buying power more and more year after year. it's time to say "thank you" to all those little people who have been suffering while the extravagently wealthy partied.
as george w. bush said, "i don't understand poor people" and he was right. he doesn't, and neither did reagan. fortunately, this is a country by the people, and they are about to express their greatest power and their disappointment in how they have been cynically manipulated.
i look forward to it.

Jadis40 · Oct 30, 2008

Lockguy3000 said:
In McCain's economic policy,
the restaurant is closed
restaurant goer is out of work,
the waiter is now homeless
and the homeless guy is dead from starvation.

In Obama's policy;
the owner can now retire
the waiter buys the restaurant
the homeless guy now has a job at the restaurant
and the restaurant goer gets a bigger steak at the same cost as before

I think you have this backwards:
With McCain:
The restaurant is still open
The owner didn't have to pay Obama's tax hike, and decides to open a second restaurant or sells the first store to the employee.
The homeless guy ends up employed by either one.

With Obama:
The restaurant owner is forced to postpone opening up that second restaurant he dreamed of.
The server is still there, but gets paid a lower wage.
The homeless guy is still homeless.

overit · Oct 30, 2008

PastorJim said:
that they do not and because I'm taking a bigger risk than they are.

If my business fails, they just go and find another job but I lose everything.
quote]

You can say this with a straight face? LOL, Seriously? I mean, seriously!

If your bsns fails...you get a nice fat golden parachute, leave the company bankrupt, people on the street and jobless and possibly homeless (as no, they just can't go out and find another JOB...there are no jobs...check unemployment and outsourcing rates if you like)...the top execs go on to their protected group of comrades to another cushy top position w/just as high and probably higher pay. It happens every day!!! They are the "elite" group-they "lose" their company and go on to another position w/the fat bulky parachutes intact. Please, don't insult my intelligence Pastor. THey are REWARDED whether the company thrives or fails...the laborers are the ones that get the shaft.

JoyJuice · Oct 30, 2008

12 pages later and it's only Bootstrap that has objectively provided evidence. His evidence mirrors what we have experienced the last eight years that it hasn't worked. Everybody who asserted a positive, only offered water cooler opinion.

I think it safe to say history tells us it doesn't work, but yet people still continue to catapult the propaganda as if it has one kernel of validity.

Why?

JoyJuice · Oct 30, 2008

Jadis40 said:
I think you have this backwards:
With McCain:
The restaurant is still open
The owner didn't have to pay Obama's tax hike, and decides to open a second restaurant or sells the first store to the employee.
The homeless guy ends up employed by either one.

With Obama:
The restaurant owner is forced to postpone opening up that second restaurant he dreamed of.
The server is still there, but gets paid a lower wage.
The homeless guy is still homeless.

It would appear to me that under the pre-Bush tax breaks that has not created the jobs as advertised, that the Clinton tax structure makes your scenario amusing, but far from reality. Obama's plan to return to the pre-Bush tax structure won't make a dent in detering small business or the economy.

variant · Oct 30, 2008

Trickle down economics only "works" in that it represents a major cut in taxes with no corresponding cut in government spending, and is financed by long term debt.

Essentially, people today, are voting for, less taxes, and larger government spending, that is financed with debt that their children and grandchildren will have to pay off, with most of the benefits of a large economy going to the rich. Debt service costs us over 20% of our total tax revenues and it is only going up.

Sure major deficit spending does help in a crisis, but we haven't been in a crisis continually since 1980.

It's simply bad economics to never curve the steady stream of income up the hierarchy. Income stratification causes economies to stagnate, because fewer and fewer people can afford to spend money on things, and thus spend their money on necessities.

The restaurant senario is laughable, when you consider that the customer in the restaurant is what makes the whole thing tick, and eventually under trickle down economics, he can't go to the restaurant anymore, so the restaurant owner and the waiter end up without a job.

Here are some corollaries from the 1920's where the top marginal tax rate was 25%:

1920s (Decade)

During World War I, federal spending grows three times larger than tax collections. When the government cuts back spending to balance the budget in 1920, a severe recession results. However, the war economy invested heavily in the manufacturing sector, and the next decade will see an explosion of productivity... although only for certain sectors of the economy.

An average of 600 banks fail each year.

Organized labor declines throughout the decade. The United Mine Workers Union will see its membership fall from 500,000 in 1920 to 75,000 in 1928. The American Federation of Labor would fall from 5.1 million in 1920 to 3.4 million in 1929.

Over the decade, about 1,200 mergers will swallow up more than 6,000 previously independent companies; by 1929, only 200 corporations will control over half of all American industry.

By the end of the decade, the bottom 80 percent of all income-earners will be removed from the tax rolls completely. Taxes on the rich will fall throughout the decade.

By 1929, the richest 1 percent will own 40 percent of the nation's wealth. The bottom 93 percent will have experienced a 4 percent drop in real disposable per-capita income between 1923 and 1929.

Individual worker productivity rises an astonishing 43 percent from 1919 to 1929. But the rewards are being funneled to the top: the number of people reporting half-million dollar incomes grows from 156 to 1,489 between 1920 and 1929, a phenomenal rise compared to other decades. But that is still less than 1 percent of all income-earners

http://www.hyperhistory.com/online_n2/connections_n2/great_depression.html

Do any of these things seem familiar? In the 1920's we also had deregulated banks and a gold standard with further exacerbate the shifting of wealth to the top with deflationary economics, but we have a situation today that is nearly as bad as far as income stratification is concerned.

So, income inequality is hovering somewhere near where it peaked last in 1929. And look we have a credit crisis, where have we seen this all before?

Heres what FDRs fed chairman had to say about what caused the Great Depression in his memoirs:

As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery. [Emphasis in original.]

Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

That is what happened to us in the twenties. We sustained high levels of employment in that period with the aid of an exceptional expansion of debt outside of the banking system. This debt was provided by the large growth of business savings as well as savings by individuals, particularly in the upper-income groups where taxes were relatively low. Private debt outside of the banking system increased about fifty per cent. This debt, which was at high interest rates, largely took the form of mortgage debt on housing, office, and hotel structures, consumer installment debt, brokers' loans, and foreign debt. The stimulation to spend by debt-creation of this sort was short-lived and could not be counted on to sustain high levels of employment for long periods of time. Had there been a better distribution of the current income from the national product -- in other words, had there been less savings by business and the higher-income groups and more income in the lower groups -- we should have had far greater stability in our economy. Had the six billion dollars, for instance, that were loaned by corporations and wealthy individuals for stock-market speculation been distributed to the public as lower prices or higher wages and with less profits to the corporations and the well-to-do, it would have prevented or greatly moderated the economic collapse that began at the end of 1929.

The time came when there were no more poker chips to be loaned on credit. Debtors thereupon were forced to curtail their consumption in an effort to create a margin that could be applied to the reduction of outstanding debts. This naturally reduced the demand for goods of all kinds and brought on what seemed to be overproduction, but was in reality underconsumption when judged in terms of the real world instead of the money world. This, in turn, brought about a fall in prices and employment.

Unemployment further decreased the consumption of goods, which further increased unemployment, thus closing the circle in a continuing decline of prices. Earnings began to disappear, requiring economies of all kinds in the wages, salaries, and time of those employed. And thus again the vicious circle of deflation was closed until one third of the entire working population was unemployed, with our national income reduced by fifty per cent, and with the aggregate debt burden greater than ever before, not in dollars, but measured by current values and income that represented the ability to pay. Fixed charges, such as taxes, railroad and other utility rates, insurance and interest charges, clung close to the 1929 level and required such a portion of the national income to meet them that the amount left for consumption of goods was not sufficient to support the population.
This then, was my reading of what brought on the depression.

http://en.wikipedia.org/wiki/Great_Depression

snoopyloopysk8a · Oct 30, 2008

what? trickle down economics doesn't work? we have wonderful proof that it does. when aig took some of their bailout money, did they waste it righting their balance sheets? did they squander it paying dividends? no, they went right out and put it right back into the economy! what better way to stimulate the economy than to go on trips, which employed hundreds, potentially thousands of people or change some numbers on a balance sheet?
[/sarcasm]

Jadis40 · Oct 30, 2008

variant said:
Trickle down economics only "works" in that it represents a major cut in taxes with no corresponding cut in government spending, and is financed by long term debt.

This much I agree with. I think that the pork that gets heaped on bills to increase their odds of getting passed needs to stop. I agree that wasteful government spending needs to be pared down.

KarateCowboy · Oct 30, 2008

reverend B said:
to address the op, the "trickle down theory" was the first salvo in the class war. the underclass was sold a bill of goods, while the wealthy were provided with a smorgasbord of new ways to watch their wealth grow. the little guy was sold on the idea that making rich people MUCH richer would benefit him. it was a lie then, but it has been reinforced for 25 years and expanded dramatically under george w. where reagan stole the livelihood of everyman with a great artfulness, george w. has been clumsy and obvious, and a percentage of americans have started to molt, shedding the old decayed skin of "trickle down" and demanding that the people that have made this tiny cabal outrageously wealthy with their labor be compensated. the rich had their turn. they abused it, and the low and middle classes are starting to emerge from a quarter century snooze.
that is why i agree that the obama tax plan IS patriotic. the wealthy have had a long run of unprecedented wealth growth while the rest have sacrificed their buying power more and more year after year. it's time to say "thank you" to all those little people who have been suffering while the extravagently wealthy partied.
as george w. bush said, "i don't understand poor people" and he was right. he doesn't, and neither did reagan. fortunately, this is a country by the people, and they are about to express their greatest power and their disappointment in how they have been cynically manipulated.
i look forward to it.

You can put lipstick on a pig, but it's still a pig. Trickle down economics is a non-sequitur. I can take that it may not work, but enough with the expropriation. Socialists talk and talk about 'the poor' and all sorts of rot but it's a bunch of junk. I've said this an hundred times now: statistics find that people who are for expropriation are one of the least generous, most stingy groups in society. And people who are against expropriation are SIGNIFICANTLY more generous than the expropriators, DESPITE earning less. And yet the expropriators talk all this hypocritical bull about how selfish and cold hearted their opposition is. If THEY are cold hearted then what does that make the expropriators?

The fact is that with rare exception, the average "wealth spreader" is a royal hypocrite, following the pattern of The King Hypocrite himself, Barack Obama, who wants to 'spread the wealth'(other poeple's wealth), but won't lift a finger to crack open his wallet and help his blood brother in Africa living on a dollar a month. No wonder they love him: he embodies their hypocrisy with perfect purity and extremity!

They don't give a poo about stopping poverty. What they really want is to cut the head off every stalk until they all stand equal. Why do you think they never criticize Cuba? It's because they LOVE Cuba, that's why. And logically if they hated poverty so much they would hate Cuba, because virtually everyone there is poor. But that's exactly why they love Cuba: EVERYONE is poor. That's their sick, twisted idea of 'equality'. To them a society where EVERYONE is poor is better than a society where some people are poor because it's "equal". DUH! Haven't you people been listening? Their mantra isn't "Fight poverty" it's "Fight inequality".

So in theory "spread the wealth" means "I am a socialist". But really, every time they say "spread the wealth" it means "I'm a hypocrite".

source: Who Really Cares

variant · Oct 30, 2008

KarateCowboy said:
You can put lipstick on a pig, but it's still a pig. Trickle down economics is a non-sequitur. I can take that it may not work, but enough with the expropriation. Socialists talk and talk about 'the poor' and all sorts of rot but it's a bunch of junk. I've said this an hundred times now: statistics find that people who are for expropriation are one of the least generous, most stingy groups in society. And people who are against expropriation are SIGNIFICANTLY more generous than the expropriators, DESPITE earning less. And yet the expropriators talk all this hypocritical bull about how selfish and cold hearted their opposition is. If THEY are cold hearted then what does that make the expropriators?

The fact is that with rare exception, the average "wealth spreader" is a royal hypocrite, following the pattern of The King Hypocrite himself, Barack Obama, who wants to 'spread the wealth'(other poeple's wealth), but won't lift a finger to crack open his wallet and help his blood brother in Africa living on a dollar a month. No wonder they love him: he embodies their hypocrisy with perfect purity and extremity!

They don't give a poo about stopping poverty. What they really want is to cut the head off every stalk until they all stand equal. Why do you think they never criticize Cuba? It's because they LOVE Cuba, that's why. And logically if they hated poverty so much they would hate Cuba, because virtually everyone there is poor. But that's exactly why they love Cuba: EVERYONE is poor. That's their sick, twisted idea of 'equality'. To them a society where EVERYONE is poor is better than a society where some people are poor because it's "equal". DUH! Haven't you people been listening? Their mantra isn't "Fight poverty" it's "Fight inequality".

So in theory "spread the wealth" means "I am a socialist". But really, every time they say "spread the wealth" it means "I'm a hypocrite".

source: Who Really Cares

Well the "wealth spreading" does go mainly to those same states if you want to talk about hypocrisy.

http://www.giveupblog.com/2005/11/taxes.html

Trickle down theory, did it work?

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