It’s about time
People have only been saying that trickle-down economics is crap for decades.
To be more specific, trickle-down economics is just lovely for Jeff Bezos and Elon Musk but not so great for people at the bottom of that trickle.
Still, it is surprising to see Biden get a clue. He’s been a very conservative brand of Democrat most of his career.
The US president was a young politician when the idea that cutting taxes on the well off would be good for the poor first came into vogue in the 1970s. Now he has used his first address to a joint session of Congress to call on the US’s top 1% to pay for his $1.8tn American families plan – higher spending in areas such as education, childcare and infrastructure.
Anticipating pushback from Republicans on Capitol Hill, Biden had a simple message. It was time, he said, to build the country from the middle and the bottom outwards not from the top down. “Trickle down has never worked,” he said.
It sure hasn’t worked here. We have massive wealth inequality, massive rates of poverty, massive rates of homelessness, a huge chunk of the population in prison, and on and on. Unions are weak where they exist at all, corporations are strong, de facto segregation in housing and schools and neighborhood resources is everywhere – the US is a miserable place to be poor.
People who have obscene amounts of wealth have it for a reason, for one they don’t spend it unless they have to, and for two their focus is on accumulating more. Trickle down economics works to some degree, because people have to be employed for them to make more, and their spending does impact the economy, but only marginally. People with average resources have to spend more proportional to their overall financial worth, but this is not the case with the super rich, as their basic needs are a small fraction of their worth, and the rest is discretionary. That’s great if they are philanthropists, but from what I have seen, most of their philanthropy is due to social or societal pressure, not generosity, and this is why guys like Donnie Dipshit don’t pay their share, because they don’t give any of it back, ever. It’s never enough. Well it rather is enough for many generations of their families to be wealthy, and still have plenty left over to pay taxes proportional to their ability to pay. This is how trickle down doesn’t work. One the one hand I don’t agree with confiscatory taxes at all, but on the other hand, if I could afford to pay a huge amount of taxes I probably wouldn’t mind. Once you get beyond a certain threshold of wealth it becomes self perpetuating due to investment income, increases in property values and the like, and if a fair amount of taxes don’t significantly change that situation, then I don’t see why it isn’t more aggressively legislated. If they don’t like it, then let them give it to charity and place yourself in a more acceptable tax bracket. Becoming poor is really not that hard to do. :P
Trickle-down can work, in the sense that it is theoretically possible for reducing taxes to increase revenue. However, the necessary condition for that is that taxes are currently too high for the taxed demographic. Like, that’s basic. Remember the Laffer Curve? That’s what it represents. If you lower taxes on the captains of industry, and revenue decreases, then their new tax rate is too low and needs to be increased. It’s just a super easy hill-climbing problem.
Literally why are police unions so powerful when other unions are so weak?
For vastly different understanding of the phrase “have to”, perhaps. People of more modest means get by perfectly well spending far less. Sure, there are probably examples of obscenely wealthy people who live in apartments and have an economical car and all that, but there are others who spend a great deal, they just earn or inherit a heck of a lot more.
(I’ll plug again the book “Uneasy Street”, in which sociologist Rachel Sherman examines the views and attitudes of a set of obscenely wealthy people. Fascinating book.)
Sack @4, Proportionally miserly is what I was getting at, as you describe. What people in more average financial situations, and what the ultra wealthy think of as excess is much different.
Additionally, the math for excess spending is different as well, if some 100 people who can barely afford it spend $100K and one person in the top 1% spends $1M without batting an eye, then the bean counters see the sums, and tax accordingly, as there is 10X the gross there.
My assumption is that because policing tends to attract authoritarian types and authoritarian types are more likely to be R rather than D police unions don’t have to work as hard as other unions as in their case both employee and employer are on the same team.
If the police go on strike, the auto union workers are not going to try to force them back to work.
It is not “trickle down”, it pisses on from a great height.
A rising tide does lift all boats, but that only helps those who already own a boat.
If you want to get ahead, get a job. A good job. And work hard. The hardest workers in most economies are also the lowest paid.
Our state Treasurer has told us that if hospital orderlies and cleaners go ahead with industrial action “lives will be lost”. If that really is true, then they are worth many multiples of their current wages.
twiliter @5, I was primarily disagreeing with the idea that the ultra-wealthy are ultra-wealthy in part because they somehow are more frugal. They are not frugal, they spend huge amounts of money because they can. They don’t “have to” have second homes and mansions and extravagant cars and luxury vacations, but they want to and the have enough money to do so. They can save large amounts of money because they have even larger amounts of money.
I guess part of the problem, to me, is that people of more modest means are criticized because they don’t save enough; people say they should give up “luxuries” like watching movies or getting coffee out. I don”t think it’s reasonable to suggest that these people are not wealthy because they spent money they didn’t need to spend, when wealthy people buy the same things and way more; the wealthy people don’t need to buy those things, either.
As you said, the wealthy have a different concept of “excess”. One of the topics in “Uneasy Street” is what people mean when they talk about “cutting back” on their spending, and usually it’s abandoning extreme luxury items like yet another house.
Which brings to mind a book I was reading about doctors and the pharmaceutical industry. The doctor who wrote it was unhappy with how psychiatry had become just a medicine prescribing service, and were not doing the real work of psychiatry anymore. But at one point, he said that was because of necessity. If he actually did therapy, he could only see 2 patients an hour, and that would reduce his income dramatically. Then he said (not an exact quote, so I won’t put it in quotes) how can he possibly live on only $120 an hour? I could tell him how. I’ve been doing it for years, and expect to spend the rest of my life doing it. I live a comfortable life, and I eat well.
I have begun t realize from listening and reading that doctors believe they are poorly paid. They seem to think they are not making more than anyone else. Which might be why I have had doctors tell me things like anyone can afford $25 a month…this when my total income was only $750 a month, my house payment was $450, and I was raising a teenage boy.
Sack @9 I think it’s a matter of scale. Say someone in the 50th percentile of net worth has a $250K house and a mortgage, and someone in the 95th percentile owns two $1M houses outright. The 50th gal is still spending more of a percentage of her worth and income on a home than the 95th gal with a worth of $30M might only have 10% invested in luxury homes, yet has two different million dollar homes to live in, which the 50th gal would think is excessive. That being said, unless a wealthy person buys only the most expensive of everything, gasoline is still the same price, groceries are still the same price, electricity, etc., you get the idea. The scale of wealth is relevant as to what most people would count as miserly or excessive. Jeff Bezos pays the same price for a Whopper at Burger King as the rest of us, yet he could by a whole city’s worth of homes (depending on the city). I still think the ultra rich are much more careful about spending than the general population, even if they don’t have to be.