This election was lost four and six years ago, not this year. 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.
-- Will Rogers, Column 518: And Here’s How It All Happened, The Tulsa Daily World, 12/5/1932
Rich people create jobs.
That’s what the man said.
Give rich people more money, and they create more jobs.
This guy, Shane Porter, was responding to a comment I made yesterday on Twitter, which itself was a response to an article in The Hill which lamented a probable Republican loss in the House and Senate in coming elections.
The article says Republicans are worried that they will lose both the House and Senate in the next election.
I suspect this is a likely scenario, given Republicans’ record low popularity and the direction of recent elections in Virginia and Alabama.
But I’m not convinced congressional Republicans are as concerned about this possibility as The Hill makes them out to be.
You see, a lot of these power brokers, old white men like Mitch McConnell, are getting long in the tooth. And as I noted in my tweet, they are very much aware of their poll numbers.
They’ve had years to do something about it.
And they haven’t.
Ipso facto: they don’t care.
They don’t care, because they’ve gotten what they wanted: A huge cash payout.
Look here, they’re going to lose power sooner or later. They know this. That’s how it works.
Even in good times, Americans are pissed off. Americans are always pissed off. We’ve got it better than anybody else on the planet, but we’re still mad. Whether it be a legitimate problem or whether it’s outrage manufactured by politicians and the media, Americans are always mad about something. And whoever happens to be in power gets the blame, rightly or wrongly. And so, every few years, we toss the old bums out and install new bums. And the government goes back and forth like a kid petulantly flipping a light-switch up and down. Click. Click. Click. Click. You yell at the kid, stop it! and as soon as you turn your back, click! Click! Click!
So, Republicans know they’re going to be out of power soon, 2018, 2020, they’re history. Until the next time. Click. Click. Click.
Mitch McConnell is far, far too savvy a politician not to know this. He might or might not keep his seat, but he’s not going to be Senate Majority Leader much longer.
So he and the rest of his cronies are cashing out while they still have the chance.
And really, loss of power is a hell of a lot easier to stomach when you’re sitting on millions. Kinda takes the sting out of it, if you know what I mean.
And when it all falls apart – and it will – well, then the other guys are in power and they get stuck with both the blame and the responsibility for cleaning up the mess.
Repeat as necessary. This is the basic GOP formula since Nixon. This is the mindset of modern business, of wealth. They’re not interested in building a better world in perpetuity. They’re not interested in leaving anything behind. These aren’t the industrialists of old. This is modern business, run by the MBAs. They run the country the same way they run business: swoop in, liquidate, boost the stock, cash out to millions. Move on. They don’t care what happens to the company when they’re done with it, they don’t care about customers, or products, or employees. They’re not builders, they’re predators.
They don’t care about the consequences and they don’t care about tomorrow.
They care about stockholders – and their stock in particular.
They care about one thing and one thing only, money.
That was the gist of my snarky response to The Hill.
Which apparently struck a nerve with my audience, who spread it on social media.
Which brings us to back ‘round to Shane’s comment
Tell me whiny Einstein, who creates jobs in this country, the rich or the poor? The answer to that question is a fact of life. The more money the people who own the companies make the more likely they are to hire more employees, this is how you create jobs in a capitalist society
Who creates jobs? The rich or the poor?
Obviously from the context, Shane is pretty sure the answer must be: rich people.
And thus it follows that if rich people create jobs, then richer people must create more jobs. Right?
If rich people are richer, they’ll hire more employees. This, opines Shane, is how you create jobs in a capitalist society. And there it is: The Cardiff Giant, Reaganomics, AKA trickle-down economics, AKA the second-coming of supply-side economics. Now, Shane didn't get that from any basic economics class – or rather if he did, he slept through the rest of the semester (or got his degree from Trump University, whatever).
So where did he get it from? Who told him this?
Who keeps telling America this?
Rich people, that’s who.
If you give us more money, it’ll be good for you. Eventually.
That is literally the hook of trickle-down economics. You give us more money and somehow, eventually, down the road, it’ll be good for you.
Ironically, this is exactly how most religions work.
And most confidence games.
This is the same old warm piss wealthy conservatives have been peddling as lemonade since long before Reagan came along, since the 1930s in fact as pointed out in the Will Rogers quote that led off this article and that gives trickle down economics its name.
This is the same long con the wealthy have been pulling since the end of The Great Depression.
And it works. For them. Because there’s a sucker born every minute.
There’s a sucker born every minute.
You’ve heard this right? There’s a sucker born every minute. P.T. Barnum, yes?
Well, no. David Hannum actually. Though the quote is most often misattributed to old P.T.
And that is damned ironic. It is.
What does this have to do with trickle-down economics? Bear with me, you’ll see.
In 1869, a guy named George Hull, an atheist, created something called the Cardiff Giant after an argument with a bunch of Methodists regarding Nephilim, the supposed giants of Genesis in the Christian Bible.
Hull figured to put one over one the Christians. So he had a huge block of soft gypsum secretly carved into the likeness of a giant man (complete with enormous penis, for some reason that I’m sure Hull found hilarious). He used various chemicals and dyes to “age” his newly created petrified giant. Then he had it secretly buried on his cousin’s farm. He waited a year, for Hull knew the secret to a good prank was patience. After sufficient time, Hull’s cousin, William Newell, who was obviously in on the scam, hired some men to dig a well. And surprise, of course, they “found” the buried giant right where Newell wanted his new well dug.
Word got around fast. And Hull saw possibilities beyond putting one over on some gullible bible thumpers.
The cousin set up a tent and started charging admission and people came from far and wide to see a genuine petrified giant from the Bible.
Of course, it didn’t take long for science of the time, primitive as it was, to declare the Cardiff Giant a giant fake.
But predictably the preachers and the holy men and the religious nuts and the sensationalists dismissed science, just as they do today, and claimed the Cardiff Giant proof of whatever con they were using to bilk the wide-eyed suckers.
People didn’t care. They came and plunked down 50 cents apiece, which was a damned steep admission price in those days (the average wage was about $15 per month for unskilled labor in that part of the country, and remember most households were single income). 50 cents was a lot of money.
Eventually George Hull sold the giant to one David Hannum for what today would be half a million dollars.
Hannum moved the giant to Syracuse and started advertising. The resulting crowds – and profits – were so huge that it caught the attention of P.T. Barnum all the way over in New York City.
So, Barnum offered Hannum what today would be almost a million dollars for his giant.
Both men knew the giant was a hoax. But they were showman, and they considered this scam no more or less immoral than the Feejee Mermaid, the Bearded Lady, General Tom Thumb, and Jo-Jo the Dog Faced Boy, who were staples of Barnum’s American Museum.
Hannum refused to sell, so Barnum copied the Cardiff Giant in wax and had his own artisans fashion a copy. Which he promptly put on display in New York and which he declared the authentic giant and started telling everybody who would listen that Hannum’s original giant was a … well, a hoax. And given that it was indeed a hoax, Hannum couldn’t exactly prove it was an authentic giant, could he?
Hannum was none too pleased by this and retaliated by calling Barnum’s hoax a hoax, and saying of the crowds filing past Barnum’s giant, “There’s a sucker born every minute.”
This being America, eventually the matter ended up in court, where both giants were revealed to be fakes – and to add insult into injury, Hannum’s quote is often attributed to Barnum. So Barnum stole not only Hunnam’s con, but his words about the theft too. That’s business.
Even after both giants were revealed to be fakes, the crowds still came and paid their hard earned money to see the hoax – and the holy men persisted in declaring the fake plaster giants proof of their particular theology. And, in fact, you can still see both giants to this very day, the original is displayed in the Farmer’s Museum in Cooperstown, New York, and Barnum’s copy at Marvin’s Marvelous Mechanical Museum in Farmington Hills, Michigan.
That’s right, more than a hundred years later, people are still paying to see a hoax.
The original crowds, they had a pretty good idea they were being swindled, but they wanted to believe. They wanted the giant to be real. They wanted science to be wrong. And that’s why the hoax worked. Because there is indeed a sucker born every minute. And by the time the crowds wised up, Hull, Barnum, and Hannum had each cashed out with their fortunes.
And that’s why the hoax of trickle-down economics works.
Because it sounds plausible, providing you don’t look too closely. Because people want to believe even though all the experts are telling them that it doesn’t work. But the difference, you see, is that rich people like Barnum and Hannum know they're pushing a hoax and they also know most people are too goddamned stupid and gullible to realize it. And even if the marks do suspect a con, they still want to believe.
There’s a sucker born every minute.
But it’s not real. Trickle down economics does not work. At least not for you. Trickle down economics only works for the wealthy. And that’s by design, because these ruthless rich sons of bitches are the ones who came up with it back in the last century. And their rich descendants are the ones pushing it now.
Trickle-down economics works for them.
For a short time, anyway.
But that’s all they need. That brief moment, when all the gullible suckers hand over their money.
It's like an injection of nitrous oxide into an internal combustion engine. There's a brief burst of power, the machine surges ahead across the finish line. You’ve seen Fast and Furious, you know how this works. But that burst of power is not without cost. Nitrous can literally blow the engine apart. And nitrous is an oxidant, making it highly corrosive. That's why race car engines don't last long and why the average person doesn't have a nitrous-injected car in the family garage.
When you give rich people more money, rich people have more money.
That’s the whole thing.
Because the entire premise of trickle-down economics is predicated on one ridiculous idea: that greedy rich sons of bitches will use their money to improve the lot of those below them on the economic ladder solely because it’s somehow the right thing to do.
This idea is absolutely ludicrous on the face of it.
Rich people don’t reach down the ladder to help those below, they pull the ladder up after themselves and slam the door. Most of them anyway.
Rich people being richer does not create jobs. Quod Erat Demonstrandum. This is true no matter how many times you care to run the experiment and after Reagan this should be obvious to even the most obtuse, like my friend Shane up above.
But, of course, it's not.
When you give rich people more money, rich people have more money. That's it. That's the whole thing, right there. Most of them put that money in high interest investments, i.e. the kind of thing that makes them richer. But when the bubble bursts, you have to pay for it, not them. Rich people park their money in tax-havens, or otherwise lock it up where it does you no good. You can look this up for yourself, you don't have to take my word for it.
Watch for it.
Go on. Watch for it.
Every time old rich white men bring up the idea of trickle-down economics, or whatever they call this scam nowadays, the one question that never gets asked is this: Why?
Why would rich people create jobs?
Why? Why would rich people take their billions and create jobs? Because they’re what? Feeling generous all of a sudden?
Take the Walton family, their wealth is nearly unimaginable. The amount they’ll reap from this tax cut is astronomical. But they already can’t spend what they have, even if they live another thousand years. And they don’t spend their personal fortune on building new Walmarts anyway, that’s what investors are for. And if they did, well, there’s nothing stopping them from doing so now, without a tax cut, they’ve got plenty of money. But they don’t. Why? They could use their personal fortune to improve the lot of their employees, but they don’t. They could use their fortune to give their employees a living wage, healthcare, benefits, overtime. But they don’t. Why? Why should they? What’s in it for them? What’s the incentive? Altruism? Ha ha! Hilarious.
Giving rich people more money just gives rich people more money.
Giving rich people more money doesn’t create jobs. And it doesn’t encourage rich people to make lousy jobs better. That’s not how it works.
And the only people telling you this horseshit are … rich people.
Demand creates jobs.
See: build a better mousetrap et al.
The Waltons don’t build new Walmarts just to build new stores so as to make jobs for poor people, because they’re feeling generous. They only build new stores (and thus create new shitty low-paying jobs) if there’s a demand for one in a particular area. I.e. they can make money on it. Make money, not spend money.
Demand creates jobs...
... but not necessarily in the US of A.
If you build a better (or cheaper, anyway) mousetrap, people will beat a path to your door. Or rather you can wholesale your traps to Walmart and people will beat a path there. And then you'll need to produce a whole bunch of mousetraps, which you can do a hell of a lot cheaper if you don't have to pay your employees a living wage. So you build your mousetraps with child labor in Bangladesh. Or India. Or China. Or Vietnam. That’s where the jobs are, not here. And they are shitty jobs.
And rich people could have brought those jobs back to America long ago and paid their workers a living wage.
But they didn’t.
And they won’t.
Because there’s not one goddamned thing in it for them.
But … that’s not even the real scam. No.
Jobs. Jobs. Jobs.
Right? That's what The Man said. The Big Giant Orange Leader, that's his trumpet call, jobs, jobs, jobs.
That’s what this is all about, isn’t it?
Except, funny thing…
…unemployment is currently 4.1% and falling.
In December of 2007, right before the mortgage industry tanked taking the economy down with it, unemployment was … what?
And it had been at 5% or slightly lower for the previous thirty months.
And nobody was talking jobs jobs jobs. Unemployment didn’t send America into a recession and crash the global economy. There were plenty of jobs.
Just as there are plenty of jobs now.
Jobs are not the problem.
The problem is a living wage. One of the problems, anyway.
Those jobs don’t pay enough. They don’t include benefits. They don’t include enough hours. You can’t possibly make enough from those jobs to get ahead, to buy your way out of working poverty, out of the Middle Class. And why should they?
Donald Trump himself doesn’t even hire American workers unless he has to. The entire wait staff of Mar-A-Lago is foreign workers. You don’t have to take my word for it, you can look up their work visas on the State Department website.
Because the rich son of a bitch talking about jobs jobs jobs won’t pay enough to make it worth your while, unless you’re from some Third World country in Central America. That’s why.
This way to the giant! Just 50 cents, folks, step right up.
The rich don’t give up a single cent they don’t have to. Because they’re cold, greedy, ruthless bastards. That’s why they’re rich, most of them anyway. If they weren’t, if they weren’t cold ruthless greedy sons of bitches, we wouldn’t need environmental laws to keep them from dumping toxic waste from their factories into the rivers. If they weren’t, we wouldn’t need banking regulations to keep them from robbing us of every penny. If they weren’t, we wouldn’t need occupational safety regulations so they didn’t work us to death – or a Constitutional Amendment prohibiting outright slavery for that matter. We wouldn’t need unions. We wouldn’t need a minimum wage. We wouldn’t need to test food and medicine and toys for toxins and fraud. We wouldn’t have to specify they put enough fucking lifeboats on the ship for everybody, not just the passengers in First Class.
If you could trust these goddamned people to do what was right, well, you wouldn’t need the Second Amendment, now would you?
Ironic, isn’t it? The very same people, like Shane up above, who trust the wealthy to trickle down largess like manna from heaven, are the very same people who think they needs guns to protect themselves from … rich people in government.
And the real problem is that every single time the bubble bursts, the rich lose nothing. And the middle class? Well, the middle class and the poor lose everything.
The problem is that the profits are privatized, the risks are socialized. That’s the actual problem right there. When the bubble bursts, the working poor and the middle class have no choice but to prop up the rich, lest it all collapses and we all face another Great Depression. And that, ladies and gentlemen, in point of fact, is the lesson of the Great Depression. That's what the rich learned, the ones that survived. Socialize the risks, privatize the profits. Never, ever, risk your own money.
And that – that right there – that is exactly what trickle-down economics is.
This is the exact – the same exact – scam the mortgage industry pulled on you in 2007. Interest only mortgages, you remember. You pay the interest up front, the bank makes huge profits, and hey, don’t worry about it because you won’t have to pay off the balance for, well, don’t worry about that, it’s way in the future. You remember, right? And you remember what came next. It all fell apart, you lost everything, and they made millions.
We take all the risk. We risk our jobs, our savings, our homes, our retirements, everything, and the rich get all the profits.
Trickle down economics does not work, not for you.
It never has.
It’s a scam.
All it does is give a brief momentary burst of wealth to the already wealthy.
It gives the illusion of economic power.
For a while. For a few.
But that injection of money has to come from somewhere.
The huge tax windfall Republicans just gave to the wealthy, where did that money come from?
It doesn’t come from the rich.
It doesn’t come from industry or Wall Street.
Those are the people we’re giving money to. Right?
The government doesn’t just have it lying around, you know that?
And we’re already twenty trillion dollars in debt.
So, where does the money come from?
The costs to the government don’t go down.
The bills don’t go away. We’re still at war. So where does the money come from?
Where does the money come from?
It comes from the future.
That’s right. It comes from the future.
Sounds familiar, doesn’t it? Because it’s the same bullshit Countrywide was telling you back in 2007.
The money comes from your future, you, the middle class, the working poor.
When the bill comes due – and it will – then the money has to come from somewhere. So it comes from infrastructure, from healthcare, from Social Security, from foreign loans and a debt that your grandchildren will have to pay.
The rich in that future aren’t going to pay for it. You are.
And if there is a war between now and the day that bill comes due, if the stock market bubble goes bust again, if there is another hurricane or terrorist attack or other unforeseen disaster, well, then it all falls apart. And you’ve once again traded your jobs, your homes, your retirements, your college savings plans, everything, to give the wealthy more money. And it’s brilliant, it is, because they’ve privatized the profit and socialized the risk and sold the chumps on the idea. And you? You’re trapped. Every avenue of getting ahead is cut off, better jobs, higher wages, education, you’ll be lucky to keep your head above water while they row away in the lifeboats. The lifeboats you paid for.
You think I’m wrong?
Look at this GOP tax plan, look at who it rewards most. Not you. Not the people who lost everything in 2007. No, it rewards the very people who destroyed the economy and precipitated a global financial crisis. It rewards the very people who destroyed your retirement and college funds. It rewards the very people who repossessed your house after they imploded the company you worked for and sent your jobs overseas. It rewards the very people you had to bail out with your tax dollars. Don’t take my word for it, look up the names. Look up who helmed Lehman Brothers, Merrill Lynch, Bank of America, AIG. Look who led the charge on foreclosures in 2008 and 2009. Hint, it wasn’t just Countrywide (a unit of, that’s right, Bank of America). Look up who was running General Motors. Look up John Thane and his role in a disaster it took more than a decade to clean up. A decade of your sacrifice and not his.
While you were trying to figure out how the hell you were going to feed you kids, John Thane was buying a golden toilet for his office.
THOSE are the people this tax bill most rewards.
And those people, like Barnum and Hunnum, they’re going to reap millions from this scam.
What are you going to get?
You’re going to get what you always get.
And you’re going to get it good and hard.
Sure must be a great consolation to the poor people who lost their stock in the late crash to know that it has fallen into the hands of Mr. Rockefeller, who will take care of it and see it has a good home and never be allowed to wander around unprotected again. There is one rule that works in every calamity. Be it pestilence, war, or famine, the rich get richer and poor get poorer. The poor even help arrange it.
-- Will Rogers, Daily Telegram #1019, 10/31/1929
BOHICA, as always.ReplyDelete
My grandfather was born in NE Ohio on a dairy farm, to a couple from Switzerland, and didn't speak English at all until he went to grade school. Became an orphan at 10 and got a job as a farm worker until he was 13 and suffered an injury and lost his right leg. So then he was sent to the county orphanage, where they taught him typesetting, then a job you did on a stool letter by letter.Delete
He got up to a 9th grade education, sold things door to door on crutches, worked as a printer from West Virginia to New Mexico in 1911. NOT Rich, as poor a start as anyone could have.
By the time he was finished he had hundreds of employees, who were kept out of the printing trade unions by being paid above union scale, which is a method of fighting unions I can approve of. Kind of.
Anyway, my point here is to agree with the economics of your original post. Nothing trickles down from our current oligarchs. My grand-dad treated his people like he wanted to be treated. No CEO of a nation-wide company does that today.
Keep up the good work.
Rich people don't create jobs...people with ideas create jobs.Delete
Rich people create jobs. A handful of them. For bankers in Switzerland and the Cayman Islands.Delete
Exhibit A as to why middle class and poor people foolishly vote against their own interests, thinking that putting people in power who couldn't care less about them will magically make their lives better. Yes, the proverbial rising tide lifts all boats, but you need a lot of water to do it... and trickle / piss-down is never enough to do the job...ReplyDelete
Trickle down doesn't work, because the rich have moats to catch anything that manages to slip through their fingers...Delete
"the proverbial rising tide lifts all boats..."Delete
The trickle-down supposition (I don't give it enough respect to call it a theory) translates roughly as, "A rising boat lifts all tides."
I'm stealing this. Try and stop me!Delete
“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”Delete
― Ronald Wright, A Short History of Progress
Money (capital) that stays in the economy creates jobs for that country. Money (capital) that is sent out of the country will lose jobs for that country and add jobs for the country that the money is sent to.Delete
That is economic fact. Redistribution of wealth is a nice thing. However the more important thing (if you want to maximize wealth) is to have wealth in the country.
Amazing post. Very well put! Sadly, at this point you're preaching either to the choir or a brick wall. Hopefully you open some eyes, but I've become a pessimist about the state of our politics/economics etc. Either way, great job!ReplyDelete
What he saidDelete
WOW! I wish I could share this with every single American. They need to read it and ....... weep.ReplyDelete
The time for pitchforks and torches has passed. More drastic measures are required. Shed your wool, become wolves.ReplyDelete
The real problem here is that your voice comes in print. Those uf us who willingly read are the choir you preach to. No, I think you need to have these messages go out on audio, or better yet video. Add bikini babes and a laugh track. Maybe then some of the red-state voters might begin to pay attention. Maybe.ReplyDelete
You omitted flags. Lots of flags.Delete
You omitted flags. Lots of flags.Delete
Very good point. Podcasts are hot commodities and can be enjoyed during the commute to and from the inadequate job. Not that you don't already have a lot on your plate, Jim.Delete
Jim's got a good following, but it would be nice to see it go up exponentially. I wish we could get him on Bill Maher's panel.Delete
Ted, I like your idea, but I think that would detract from Jim's writing. I wouldn't like to see that. People who can't stop to read for a few minutes on important issues probably don't even have time for Jim anyway.Delete
I'd rather he publish a book.
But I would like to see the bikini babes, crude primate that I am. :)
Typo: "Those are the people we’re giving money too. Right?"ReplyDelete
Should be "giving money to".
To big to fail comes to mind. Trump worked this angle for years. Borrow so much money that when you can't pay the interest you can command the terms of the refinance.ReplyDelete
God I love you Jim. What a fine piece of writing.ReplyDelete
I agree, made me weep.Delete
I agree, made me weep, because I know it's true.Delete
Brilliant as usual. One minor nit: I think you have a typo where you wrote "... to prop up the rich, le͟a͟s͟t it all collapses ..." and I believe you meant "...to prop up the rich, l͟e͟s͟t it all collapses ..."ReplyDelete
Fixed. Thanks! // JimDelete
The result of glorifying wealth.ReplyDelete
Time to sharpen up the old guillotine.
I've been saying them exact same thing for decades. Not nearly as interestingly or eloquently, but this is the truth that is so obvious that you'd think it would be easy for most people to understand. Unfortunately the people who will be hurt the most when this tax scam has its inevitable impact are the ones who seem incapable of understanding that reality and defend it most vehemently.ReplyDelete
Here's a great cover of Leonard Cohen, right in line with Jim's post.Delete
It's not gloomy music-wise, but that's why I like this particular cover. I can enjoy my gloom whilst listening to it.
I have long been a student of economics and your treatise above stands out as the best short explanation of trickle-down econ I've ever read. Cogent, correct in every detail except possibly spelling, and easily accessible and understandable by anyone with an IQ higher than room temperature.ReplyDelete
Cheers and a Happy Holiday, Chief!
The problem is that "room temperature" in the US seems to be falling...Delete
Brilliant as always, Jim. As one of those who already understands the scam, the greed and the BIG LIE they are telling, and the catestrophic consequences we all will share (except them), I only wish this could get out to those who really need to know. Who need to stop believing. Maybe who can find a pitchfork and a torch in their barn and burn these bastards alive. But whatever happens next, thank you for a great article, well written, highly informative, and providing a very clear message. We've been conned, and not for the first (and presumably last) time.ReplyDelete
So how do we stop it? Why do I feel increasingly helpless?ReplyDelete
We stop buying into their hoax for a start. Helpless? There are days when I want to crawl into a hole and then pull in it after me. But there are people I gotta show up for. Running away from home didn't work when I was 13 and it's not gonna work 50 years later. People wiser than me also remind me that helpless is relative. Right with the stakes being so high, it feels overwhelming. What unnerves me is that these rich bastards now have private armies like the former Blackwater now calling itself Infiniti or Xi or whatever mask they're putting on now and they've got tech and weapons that the old Pinkerton's never had. And I fear that stopping it this time, is going to be just like it was back when the robber barons were siccing the Pinkertons on folks - putting our bodies on the line to stop it. That's part of the historic pattern too. Because, as Jim said, "Americans are always angry." What I would love to see is the pattern breaking entirely in favor of that ideal of true equality and freedom from want. In the meantime refresh some of your old skills, reconnect with the people closest to you and for goodness' sake, start teaching the kids, grandkids and great grandkids about WHY what we're going through has happened and what makes it so wrong and make a list a la Arya Stark. These rich bastards are our enemies. And always have been.Delete
I want to share this absolutely everywhere. Thank you.ReplyDelete
The article explains it all so clearly. I do feel better knowing that some people know and understand the truth, but I agree it won’t do much good. It was only ten short years ago that the Republicans tanked our economy. Ten! Ten years since I thought, “The Republicans will finally have some humility and feel a little shame about what they did because they were the ones running everything when this happened, so there’s no way they can blame the Democrats this time.” But the second Obama stepped into the White House, they had the nerve to blame it all on him. I couldn’t believe that people could be so stupid that they would believe something that was so obviously false. Even when I finally accepted that so many people are that stupid, I actually believed they couldn’t get any stupider. Yet here we are, with Donald Freakin’ Trump as President and the Republicans pushing trickle down economics through Congress again, and stupid people who are going to pay the price are calling Jim whiny for saying so. I’d say Americans can’t get any stupider, but I’ve fallen for that before.ReplyDelete
Hard to admit, but we have such a short span that it can only mean that we are all rubes in the long haul. No not all of us. " Tell your mother Joey, that there are no more guns in the valley." We do have a vision of a Shane cleaning the place out. With help from Jarrett.Delete
Yes to every word you just said, Jenny. After the crash of ‘08 I thought young people would get the message that people got during the Great Depression - be careful with you $$ and do NOT get into debt. My parents’ generation totally got this message and it scared them so badly that my generation got it too. But no. People increased borrowing, including running up credit card dept. They did not internalize a damned thing.Delete
And I was as shocked as you to find people blaming Obama for the disaster he inherited from the repubs. This is when I really understood that if the cold, heartless bastards repeat a lie often enough, people will just flat believe it.
"I couldn’t believe that people could be so stupid that they would believe something that was so obviously false."Delete
Most people believe what they want to believe--truth has little to do with it.
To my mind, the saddest thing is that at one time business profits did actually create some jobs and some investment in human capital. Seriously, I remember it. I started work in 1965, and I did see it happen. Corporations had a good year and did attempt to invest some of the profits in their employees. Then came the 1980s and mandatory reports to Wall Street and MBAs underfoot everywhere and it all went to hell faster than any of us could have imagined.Delete
Actually, the reason that profits went into investments is because taxes were high. Reagan fucked that all up. If companies are taxed on profits, they fold them into expansion or pay to avoid those taxes.Delete
The latest tax bill just makes it ever more likely that they will NOT plow profits into pay or expansion, but into dividends and buybacks.
While SOME companies are saying that they will be paying bonuses as soon as it is signed, don't hold your breath. Such companies promised job growth from low-percentage repatriation in the past, and few did so.
This way to the Egress!ReplyDelete
"Never touch the principal." - a rich person living on someone else's money.ReplyDelete
Reminds me of that meme going around. "Those who do not study history are doomed to repeat it. Those who DO study history are doomed to watch as everyone else repeats it."ReplyDelete
The only reason I didn't give you a "you are my god" checkmark is I just couldn't do it for personal religious reasons. For some unknown reason had you used "walks on water" instead, I'd have been able to checkmark it. I don't know why it makes such a big difference to me. Guess it's just one of those stupid individualized personal quirks. Anyway, I wanted you to know one of those "I cried" checkmarks should probably be ranked higher in terms of the quality of your work. I DID however, share your link on my FB page with my highest recommendation for people to follow you.ReplyDelete
Most, if not all, of these people extolling the virtues of the Republican Tax Scam claim to be Christians. I am too, but the God I follow would be ashamed to be associated with this fraud. May he/she have mercy on their souls.ReplyDelete
My exact sentiments, David.Delete
The late Harry Bridges, in his first term as president of the International Longshoremen's and Warehousemen's Union, sat through an hour's worth of talk by West Coast shipowners and finally stood up with, "Gentlemen, your companies do not exist to give my men jobs. They exist to make money.ReplyDelete
"That's fine...but my men don't work because they have nothing better to do, _They_ work to make money too. The day you realize that, we'll talk again." And left.
I remember reading that quote many years ago. Exactly what we need now. How about a general strike? We wouldn't get the knuckleheads who buy into the trickle-down bullshit, but we might get enough people to sit down and stop working long enough for the rich sons of bitches to cry uncle.Delete
I'm coping and stealing.Delete
And that sort of attitude, and power, is exactly why Reagan prioritised the destruction of the unions.Delete
I'd like to use that quotation, but can't find a source for it after a moderate search. Anyone have a reliable reference?Delete
I'm reading a book called Viking Economics by George Lakey describing how countries like Norway and Iceland and Sweden got it right. What do you think about the Scandinavian countries that are doing everything right for their people in terms of education, healthcare, jobs? Do you think we, as a counrty, could implement those high standards one day?ReplyDelete
Through steady, consistent political changes?Delete
Odds are low.
It will probably take a radical shift.
And those are painful. And usually come about because the pain of the current system has become to high for too many.
The question, as always, is where is the tipping point?
The GOP is trying to find it. They think money will make them safe if they do.
They are wrong.
Brilliantly reasoned and wonderfully written.ReplyDelete
I don't think a lot of people understand who "Rich" people are, they think of them as the people who drive Escalades and Mercedes but they're really the ones who own the dealerships and don't pay for the cars.ReplyDelete
Most of the truly rich don't need driver's licenses...Delete
If I remember correctly, George HW Bush campaigned on complaining about the voodoo economic plan that Reagan pushed.ReplyDelete
The term "voodoo economics" originates with G. H. W. Bush, yes. Not that Reagan felt terribly bound by ideology; when rate cuts led to a fall in revenue, Reagan raised taxes again. Which he did in seven of the eight years he was in office.Delete
Hence, G. H. W. Bush's campaign promise of "no new taxes". Unfortunately, it was a promise he didn't keep. Thus, Clinton.
(Yes, I oversimplified things there.)
Rich people don't create jobs, customers create jobs.ReplyDelete
To answer Shane Porter's original question: Who creates jobs - the rich or the poor. The final answer: the poor (and the middle class, but he gave us only two options). The poor (middle class) buy the products they don't need and could easily do without, but are brain-washed by advertising (paid for by the rich) to throw their hard-earned cash on useless junk. They'll stand in line in the cold and rain for 24-36 hours to get the latest smart phone because it has ONE new feature. They'll buy a computer every year to upgrade to the new OS (that will change in six months) that allows them to play the latest game. Advertising tells us not to be satisfied with what we have but to "buy, buy, buy" things we don't need, can't (or won't) use and will throw away in a short while. So, yes, customers (the poor) create jobs and keep the economy running. Once they realize they are the ones who have the power and their decisions matter, things will change. But I won't hold my breath.Delete
Why did this take you so many words? You made three points; 1. Rich people are evil. 2. Republicans suck and only care about themselves and 3. Trickle down economics don't work.ReplyDelete
why did you reduce his history lesson and warnings to three stick figure arguments? 1. "Not all rich people". 2. Plays well to the left but not the audience you want to reach and 3. Without the history lesson, all ya got is a soundbite they can ignore 'cause Fox tells them otherwise.Delete
Jesus, you're as thick as Emperor Joseph II when he said Mozart's music had too many notes. Well-chosen words give shade and meaning, son.Delete
He's telling a story Anonymous. Stories communicate more than facts. They engage, conjure memories and experience, and history and now. They are wisdom versus knowledge. Of course, there's no money in wisdom, which just might be a side bar to Jim's pint.Delete
Because this is a long form blog. Because I enjoy writing descriptive prose. Because my readers enjoy reading it. Because ideas and concepts don't always boil down to neat and tidy one-liners. That's why a quarter of a million people follow me across social media every day.
However, I do see your point.
And I acknowledged that in the second screencap, which includes my Twitter handle (@stonekettle). Twitter is short form. 280 characters.
That's how it works, the blog (here) is formal long form. Facebook is casual medium length. Twitter is short form vignettes.
If you find my essays here on Stonekettle Station contain too many words for your attention span, read my twitter. Simple. This is really on you. Nobody made you come here.
But I've probably said too much already // Jim
Now the question becomes "Can we get our money back?"ReplyDelete
That or "Who is Becky with the good hair?"
Very well written and explained. But I would add one thing. You said: "give rich people more money and they are richer, that's all" Not exactly: they will use that money to buy more political influence to insure that they continue to get even more money.ReplyDelete
Now how long before someone comes along to say, "They aren't giving money to the rich, they are taking less of what they earned"? If you think we should lower taxes so people can *keep* more of what they earned, then you know exactly why trickle down doesn't work.ReplyDelete
...and when anyone tells you that they got rich from hard work, ask them: "Whose?"Delete
Another great essay. I always learn something new reading your works.ReplyDelete
Last month, after walking past a Carnegie library, my daughter and I had a discussion about Carnegie's philanthropy versus the working conditions and wages his workers had that he could have improved with all of that money he was accumulating.
Ford may have been an SOB (debatable ad nauseum), but he realized that he needed to pay his workers well enough that they could afford the cars they were building.Delete
Trickle-down only works on paper. Like all other economic, political, social, and religious ideas, it falls apart when people get involved.ReplyDelete
Bitingly true. But the jokers have got the best PR folks around. Think of the tunes they sing in unison with those peppy lyrics like JOB CREATORS, DEATH TAX, HARD WORKING FAMILIES, THE SINGLE MOM they love. And you got to hand it to the power elite. The song is sung in unison by the two Republican majorities. It looks like something from Fraggle Rock. No, Fraggle was funny. Great analysis, sir.ReplyDelete
We have been schooled to think that rich=success, because rich=power. No one said you had to actually earn the money to have the power. Just convince others to give it to you in hopes one day you will give it back. And how often have you gotten money back after lending it to anyone?ReplyDelete
Up the comment list someone mentioned the increased exposure that would be possible if you read these aloud. I tried to comment there, but am new at this and don't know if comments are on a delay for vetting or whatever.ReplyDelete
So, as if you don't already have a full time job just researching and writing this wonderful stuff, would you consider reading the completed blogs as a podcast? I might be able to convince my good friend the conservative to listen to a taped version as he drives 20 miles to get to town, because he's never going to read it. That would take time he could use for other things, like cutting wood.
Comments are moderated. See the commenting instructions at the bottom of this page directly above the comment box. // JimDelete
"Trickle down economics does not work, not for you.ReplyDelete
It never has.
It’s a scam."
What's rather unsettling is that this nonsense has been in play for the Republicans for the past thirty plus years...
What has come of it?
Demand creates jobs, and one rich person wanting a shovel for their flower garden does not a demand make...but a million "poor" people wanting a shovel to dig their vegetable garden makes a demand.
Your Friend from Twitter, I'm afraid, is not only wrong, and not only an idiot, but he's a true believer.
Have we reached the point of no return? Unless and until we get Senators like those that served on the Banking and Currency Committee who in 1932 opened an investigation 'regarding practices with respect to the buying and selling and the borrowing and lending of stocks and securities'. For 11 months the committee was getting nowhere because the bankers simply refused to cooperate. It was at this point that Chairman Peter Norbeck (R-SD) made what he termed his 'happy discovery' in the person of one Ferdinand Pecora. Pecora became the new chief counsel in early 1933. In April of 1933, Senator Duncan Fletcher (D-FL) offered up Senate Resolution 56, expanding the scope of the investigation to include private banking practices. I'm somewhat obsessed with Ferdinand Pecora and all the great legislation that came from his investigation. (Glass-Steagall Act) (FDIC) (Securities Exchange Act) Where, oh where is our Pecora?ReplyDelete
Get Elizabeth Warren to chair the Banking Committee (Dems win control of the Senate) and you might see that again. It will be particularly delicious that since the gopers have completely eviscerated the filibuster they won't be able to stop it with their 60 vote threshold bs, not even for the SCOTUS next time up after 2020.Delete
If they Democrats fail to move towards the Warren/Sanders wing, well then maybe it will be time for torches and pitchforks.
It is extremely important you have a proof reader. ONE mistake in spelling, grammar or punctuation and the Russian Trolls will destroy you (average Americans on the Right are too stupid).ReplyDelete
Bah. Russian trolls haven't destroyed me yet. Or actual Russians for that matter. I'll risk it // JimDelete
I believe you mean, "I'll cross that bridge when I come to it" ;)Delete
This article sounds like you're planting the seeds of a socialist revolution.(socialist, folks-the sort of politics that began the National Health Service and a working wage in my country after the war,Too many times I see Americans confuse it with communism).But at the moment ,since Margaret Thatcher P.M.got her head together with US President Regan,the rich and powerful don't even try to cover up their plans(or disdain) for the working class or unemployed.We seem to be back to the culture that,if you're poor,it's your own fault.It's escalating.Not so long ago a chap could hope to buy a modest home and plan for the future because he had a living wage and his job was safe.Nobody can say that now.And the newspapers peddle the ideas that it's the fault of the immigrants coming here.No,it's because the rich have outsourced all the jobs to where they can get even more profit.Divide and conquer.We have done away with The Fair Rents Act ,so there are thousands of landlords free to charge what they like for substandard accommodation.We have already crushed the Unions,so we don't have to pay a living wage and can bring in an abomination called the Zero Hours Contract(that's a deal done with the devil,if you ask me).ReplyDelete
Think about any rich person you know.I know one.He's the one neighbour who turns up on your doorstep,halfway through a job and demands to borrow your stepladders.He could easily get in his car and go buy one,but no.He assumes you'll lend him what he needs.Having done the job ,he forgets to give them back.That is why he's rich and all his neighbours are not.That attitude.That sense of entitlement.Next thing,he's in the pub,criticizing those who have had a run of bad luck,or who are disabled,or whose job disappeared overnight,for being lazy and shiftless.He's quoting the media rags that those on benefits have an inflated sense of entitlement.In the 1950's and 60's ,I felt there was hope for the future in the UK ,but since then,I just want to weep.
No. I'm as much a capitalist (or a socialist, for that matter) as any other American.Delete
I like our society. I like democracy. I like a republic. I like capitalism -- so long as it's reasonably regulated. I think socialism has certain merits, such as social safety webs, social programs and infrastructure and common defense and so on, but, like capitalism, it can get out of hand and become tyranny. Any system can.
I think civilization exists to protect the weak from the strong.
I think civilization is a two-way street, you must put in to get something out. But you gotta get something out or there's not much point in putting in.
I don't think liberty is a finite resource and I think freedom works best when we are all free.
I think a rising tide does indeed lift all boats. But that's the problem, not everybody has a boat. I was a sailor most of my life, we don't leave people to drown in the rising water.
I am not sure that capitalism has much of a future any more. It was a good system for developing an industrial economy, but with the emergence of fast global transportation and global telecommunications, it is looking more and more like most large-scale production is centered in huge monopolies and oligopolies, which must be severely regulated to maintain any meaningful level of personal freedom. At that point, the question of whether it makes much difference if these very large powerful organizations are nominally private or governmental arises.Delete
So I wonder if capitalism and human freedom have come into conflict and if the resolution involves some form of socialism, though not anything a 20th century socialist would recognize.
We don't need outright socialism to build a fair society. Reasonably regulated capitalism nests very well inside social democracy. Capital, and return on capital (rent) can be put into balance, by careful and reasonable regulation, with return on labor (wages). Right now we have a government that care only for securing and increasing rent. If we don't get things back into some kind of balance between rent and wages, it will end in violence and then tyranny. Trump is already signposting the road to that catastrophe.Delete
Vaseline..........large economy 55gal drum size.........and the dumbing down of "We the People" continues unabated...........ReplyDelete
I took over a family business in 1994. The old owners had died and the kids were doctors and lawyers and other crap like that, but they were fine with me giving it a go. We made little rubber motor mounts gaskets, and seals. All of our products were components, nothing was an end user item. Our customers were either manufacturers, or other rubber companies who resold them to manufacturers. Two thoughts.ReplyDelete
First, our business thrived when there was demand for lawn mowers, refrigerators, fans, firs control sprinklers, and so on. A rich guy isn't going to build a new factory or upgrade his machinery just because he got more money. He will only do it when the demand for the product of that factory, or the upgraded equipment justifies the investment.
Second, I had access to the records of the business. In 1994, the employees were making (on the average) 5% more than they did in 1980. In the meantime the distribution payments the old guys were writing to themselves were staggering. The business was sending over a million dollars a year to two households.
We had a hodgepodge of equipment that was built between the twenties through the seventies. The last significant upgrade/purchase was in 1977. The way I saw it, the tax cuts of the eighties basically provided an incentive to get the cash out of the business while the tax rates were down. The only stimulus to add employees was attrition and demand. More household income for the owners didn't do a thing for the business or the employees.
Much of the U.S. economy could be fixed with two simple rules. 1) owners and executives of companies can only be paid X times as much as the lowest paid employee or contracted employee, whether they be direct or indirect employees (working for a subsidiary), including dividends and distributions, benefits, and salary. 2) a small tax be applied to very single stock market purchase or sale. These are hardly original ideas. The first would force companies to increase wages and would reduce non-taxable income of owners and executives. The second would stabilize financial markets by reducing speculation and auto-buying by algorithm. I am paid handsomely for what I do, but you can't convince me that ANYTHING I do on a daily basis is 400 or more times worthwhile than other professions whether it is picking fruit or acting as the CEO of a company. We all have our areas of expertise.ReplyDelete
Especially with how absolutely fucking incompetent some of these CEOs are. Contracts that reward them for short term gain need to die a quick death, as that nearly always leads to long term loss or death of the company.Delete
And if the company loses money under them, fuckem. No golden parachutes, no bonuses, and a penalty salary FAR below that of even just breaking even.
It's about time that the actual long term health of the company is the one and ONLY job of the CEO, not next quarter's results.
How does this change? Remove the BoD from the process of choosing a CEO. What is the BoD almost always made of? CEOs of other companies. Why are CEO contracts nearly always sweetheart deals? See the previous sentence...
Bravo Jim!! Just figured out how to comment on your pieces and hopefully I do it correctly. I've read quite a few of your pieces and find each one interesting, honest and most significantly, for me, a brilliant, easy to understand explanation of very complex issues. Thank you so much.ReplyDelete
Amazingly sad how Brazil echoes every movement from the American government -- but in a more corrosive, pernicious way.ReplyDelete
Your article is very enlightning. as HL Mencken put it, “no one ever went broke underestimating the intelligence of the American public.” I believe we can say that of the South Americans as well.
They're trotting out Arthur Laffer again. Arthur F. Laffer!ReplyDelete
It's essays, and especially passages like this: "This is modern business, run by the MBAs. They run the country the same way they run business: swoop in, liquidate, boost the stock, cash out to millions. Move on. They don’t care what happens to the company when they’re done with it, they don’t care about customers, or products, or employees"., which make me think (please pardon the presumption) we were separated at birth (despite our wildly divergent backgrounds). I've stated this very idea countless times, ever since those persons who earned MBAs, back when they were widely considered a 'joke' degree for those who hadn't gotten into law or medicine, began taking over the helms of, first, corporations, and then, government. As always, thank you for stating it in your inimitable style.ReplyDelete
And now - hospitals.Delete
Even worse, religiously owned hospitals. That are buying all the other hospitals, because they have a built in edge over them being able to skip most taxes.
When EVERY hospital in an area is owned by the RCC, women are going to start waking up to the fact that they are more screwed than ever. And men that want vasectomies.
This shift can be traced back to the advent of "shareholder capitalism". Thank you Mr. Friedman.Delete
I've saved the URL for this post to my "favorites" and I'm going to use it to reply every time someone like Shane tries to convince me that the recently enacted Republican tax bill is good for me and good for the country. I'll tell them to read it, every god-damn word of it, and then get back to me - I suspect there will few replies and none that make any sense. I think I'll start with Senator Susan Collins - she and her supporters might learn something.ReplyDelete
Somewhat off topic but an illustration of the limits of Christian beliefs by the Rich Business Owners. When Christians bemoan the commercialization of Christmas, the RBO do nothing to encourage less holiday buying and consumption of goods. To do so would be counterproductive to the most important goal of making the most money they can. So where does the value of their Christian belief fall? Far below their worship of the dollar. And no matter how well they do during the holiday season, the additional employees they brought on for that season will be sent packing after the season is over. Why? Because demand has declined. No amount of cash in their pocket will encourage the RBO to hire or keep employees if the demand is no longer there for the goods or services.ReplyDelete
As good as you've ever written.ReplyDelete
The paragraph that starts, "This is the same old warm piss..."
"being" should be "been"
Thanks. It's fixed. // JimDelete
Simply one of the best takedowns of trickle down economics I've read. Bravo.ReplyDelete
Nice writing. I miss only one thing.ReplyDelete
The last 100 years the people that have created most jobs did not start rich. They worked hard and created something.
The American dream!
Now closed since you cannot start anything becausethe rich control everything, your bank, your possible location, your possibility to get an education, the means of production one could say.
Dragons Den is a very clear example of that.
-You have a good idea son, I'll give you money but I want your company for it...
Quite simply the best opinion piece you've EVER written. Game, set, match. Period.ReplyDelete
Merry Christmas, Mr Wright.ReplyDelete
A small nitpick: Countrywide only became a unit of BoA when they went belly up. BoA may be vultures of another sort but once all the fraud was uncovered they assisted investigations and split up the Countrywide portfolio and sold it away within months. Signed, a former Countrywide customer whose servicing changed four times in about two years.ReplyDelete
The best thing i've done on TW, is to register to the Station, the sad part is, Shane won't read this and even he did, he wouldn't believe it because all his tiny world would collapse. You can transposed this in any country in the World of course, Well done Jim, well done.ReplyDelete
I shared this on Facebook and said it was a good read.....no it is an EXCELLENT READ! Maybe you should consider a run for the house!ReplyDelete
Bravo ! Well written! This needs to be said from the bully pulpit for all to hear!ReplyDelete
When I read your stuff, I want to comment that your ideas are spot on but your style is WAY too wordy for the fifteen-second-sound-byte attention span of the average internet troll. Sadly, when I think about this for a few more seconds, I realize that even if you DID communicate more succinctly, you would still be "fake news" to those who could most benefit from your message. :(ReplyDelete
Hey Jim! Loved this! But I wanted to add one thing. You say they've been doing this since the Great Depression but there is an older version of Trickle-down Economics. It's the same thing with a different name. It's from the 1890s and is called Horse and Sparrow Economics. Some believe this approach lead to the Panic of 1896. The metaphor goes, if you feed a horse enough oats some will pass to the road for sparrows to eat. Which I think is a much more fitting analogy, because it reveals the theory to be exactly what it is. Horseshit.ReplyDelete
The only jobs that will be created will be to service the robots that are taking over our jobs. To make REAL money, the rich have the big casinos. They don't "need" consumers anymore.ReplyDelete
Very good piece, especially the remarks about MBAs. That's the school where natural born sharks are taught to do it to others good and hard, with more efficiency.ReplyDelete
If you're more efficient, there's more money to steal!!
I'm hoping that the next 3 or 4 elections will give the worker bees a chance to take some away from the rich and useless, repair the safety net, restore pensions and unions... dreaming, but that's how we advance civilization, dreaming of a better future.
Keep up the good work, sir!
Meme/Pic I am unable to load/share reads "This is the natural predation cycle of the Republican Party (leadership): Blame any and all others for any Gov.imperfection - Get elected and immediately rob the treasury (trickle-down/borrow & spend) - Cry about obstruction until max damage/looting is done and people start realizing the con - Allow electoral loses so they can deny responsibility and begin again blaming liberals and POC for the situation they caused - ... as Democrats fix the economy and bring freedom/civil rights back; lie about what happened and campaign on revised/fake history... rinse and repeat as often as we the people are foolish enough to allowReplyDelete
Let's remember, please, that this is not only a GOP problem.ReplyDelete
"A Week After Virginia Election Sweep, Democrats Join Republicans for More Bank Deregulation
"In the wake of the Equifax scandal, Congress has been under pressure to act. But the price of modest reforms in Washington is often much larger giveaways elsewhere, and that pattern holds true in the agreement announced Monday between nine Senate Democrats and the top Republican on the Senate Banking Committee.
"The measure would roll back several key financial regulations, including sections of the Dodd-Frank Act. It does so under the cover of offering consumer protections and coming to the aid of community banks — though the financial institutions that benefit have not-so-obscure names, like American Express, SunTrust, and BB&T." – David Dayen, Nov 2017, https://theintercept.com/2017/11/14/bank-deregulation-bipartisan-senate-equifax/
Not sure what happened to this bill, but other bills are coming. When we hear "bipartisanship,” let’s remember that we are talking about the Democratic Party making deals with a Republican Party that has turned fascist.
(btw, I wish this blog had a larger preview window.)
Trickle-down economics in action: Clean up the streets of New Orleans after Katrina. A million dollar no-bid contract is awarded to a national firm. National Firm sub-contracts to regional firm and takes an "administration fee." Regional Firm sub-contracts to state firm and takes its "administration fee." Finally, after several sub-contractors take their fees out of the $1,000,000, a bunch of local guys with pickup trucks were finally hired to actually do the work for less than $100,000. Sure, it created a few jobs for a couple of weeks and got some needed work done, but mostly that money went to lining pockets of those above and the people already living on scraps got more scraps. This is how money "trickles down."ReplyDelete
Damn Jim, nice post. I was starting to worry about you. I don’t do the Facebook, so I’m sure I miss a lot. I’m glad that your absence here wasn’t a result of bad times. Though I can’t really speak to that. Welcome back! :)ReplyDelete
I myself (damn there’s too many “I’s” here) like the idea of a universal basic income (UBI) becoming real. But the wage-slavery model has taken full hold, and the rich will never relinquish their grip on it. Too bad it’s actually invisible to most people, given our Puritanical belief that work for work’s sake is a virtue. And of course you can’t live without money, over which we have no control other than our ability to make it, adding to the societal pressure to work, work, work!
If we were to join a UBI with access to education, maybe we proles could/would get somewhere we want to be.
And of course the corollary to this is simple: Soak the rich! Ah well...
Here’s a link to my first exposure to the idea of a UBI. The fact that it’s extensively linked helps the skeptic. Though I’m a skeptic in that I believe it will never, ever happen. Not without a revolution.
Actually, Jim, it goes back farther than the Great Depression. William Jennings Bryan was ranting about it in his "Cross of Gold" speech in 1894. And the tax plan enacted under Coolidge in 1923, which was set up by the richest man in America, Andrew Mellon (who happened to be Secretary of the Treasury), was exactly the same kind of tax plan as was just passed this past week. And it led directly to Black Thursday (because people had money to burn and they burned it on Wall Street) and then to the Great Depression. Just as this one is going to.ReplyDelete
Yes, but what do we do? You have described the problem- but what do we do about it. The people who read this- they already know it. But we arent even half of the population. How do we get out from under their thumb?ReplyDelete
I have said this for years. Someone making minimum wage is going to spend every penny they make, just living. If they received a $5/hour increase guess what? They would still spend every penny, but they would have driven the economy even more. it's only the wealthy that can afford to remove money from the economy and save it!ReplyDelete
Very well said Jim! keep up the good work!
Merry Christmas and Happy New Year, Jim. Let's all pray that 2018 will somehow be better than 2017.ReplyDelete
Do you need a research assistant?ReplyDelete
I am available essentially free of charge, and would be able to source and attribute your works, providing evidence, references, etc. for the various statements that can be attributed to such, and then create a list of sources for each work.
You should be able to contact me via FB.
Jim is dead on accurate, Trickle-Down is a scam. Although he pointed out that jobs start with demand, not supply, too many people still believe this nonsense. The idea of the trickle-down scammers is that jobs are created at the point of hiring. This is baloney. In reality jobs are created PRIOR to hiring. This is because jobs are created when, and only when, they become necessary. The act of hiring is just a reflexive response to this need, an act that employers would prefer to avoid if at all possible and they only do when competitive pressures force them to. So giving money to rich people is meaningless unless there is demand to justify hiring, and if the demand exists then there’s no reason to give them money. In other words, the entire strategy is nothing but a blatant money grab, a transfer from the less-rich to the more-rich. It really is that simple.ReplyDelete
So Mr. Porter from the tweet is, like many millions like him, completely clueless. I’d seriously doubt that if he were an employer he’d hire people he didn’t need, regardless of how much money we give to him. But if he did then, well, I rest my case.
The solution, and I believe there is one, maybe more, will require a massive community network of consumers and employees that uses it’s combined economic and political power to demand that the economy and the government works for them. This will shift power from suppliers to markets, resulting in the transfer of money and power from the mega-rich to the rest of us. But for that to happen we much change the rules of the game. Not by trying to reform Government, but by buying it back (taking it over) from wealthy elites. And for this to happen markets, which consist of millions of individually powerless consumers, must become organized in order to force a shift in the balance of power. Only then do we stand a chance.
BTW, this is an idea I’ve developed over some time and includes ideas I call Community Capitalism and a Civic Internet. But as this isn’t my blog it's not my place to promote them here.
Rod - That paradigm shift ("massive community network") started with the blockchain and Satoshi Nakamoto's whitepaper on bitcoin, which is why central banks are deathly afraid of what it is and what it represents. I've become a believer in its potential, but, for most people, it (cryptocurrency et al) appears to be a "bubble", a "ponzi scheme" and a fraud etc. thanks to CEOs like Jamie Dimon of JPMorgan and their ability to make their pronouncements main stream. Two books I am reading that align with Jim's essay: Fed Up by Danielle Dimartino Booth - an insider's perspective on the "Great Recession" - and The Creature from Jekyll Island by G. Edward Griffin - an historical and scholarly tome about the creation of the Federal Reserve; the private banking system that prints and owns all of our "money". There's a LOT more to this than politicians passing "tax cuts"; and, as Jim pointed out by quoting Will Rogers, and as others have pointed out going back to the 1890s, it has been their M.O. for over a century. Keep up the good work, Jim.Delete
WE need to organize internationally. We have the power of money. We have the power of productivity. If we, as an organized community do not buy or work or both for one, two, or three days or more, I wonder what would happen? Would this action harm some? It will unless the community prepares for this in advance.ReplyDelete
Here's my understanding of Republican tax policy:ReplyDelete
1. If times are good, and the government is running a surplus, you must cut taxes. You're taking money away from the real owners!
2. If times are bad, you must cut taxes. That will give job creators incentive to invest.
So it seems that you can never raise taxes; they must be cut in both good times and bad. The question I have is this: if we follow this prescription, after some number of recession cycles, we're going to get to a zero tax rate. What will they propose to do during the next recession? Borrow money to give to the rich in the hope that they'll use it to create jobs? (Remember, government job creation programs are also not allowed.)
Or maybe they'll just make the poor into serfs of the rich. Then the middle class, then the upper middle class....
I was long ago told that “there’s a sucker born every minute,” was only half of the comment. The rest? “ And two to take him.” Feels about right, no?ReplyDelete
Thank you for this essay.ReplyDelete
It explains the issue in terms that can be easily grasped by anyone with a high school education and vocabulary.
And it's applicable to other countries than the USA.
"Rich people don’t reach down the ladder to help those below, they pull the ladder up after themselves and slam the door. "ReplyDelete
Indeed - Stiglitz put it well in his book "Globalism and its discontents" - in the attached interview you can see that this goes WAY beyond what the Rethuglicans are doing here in the US, and it has been doing so for decades.
"What you hear in a lot of the rest of the world is that the U.S., having done so well, is pulling up the ladder to make sure no one else can climb up. " - Our international policy since the World Bank and IMF were formed is to aggregate wealth in the 1st World, and structure debt and controls in the 2nd and 3rd world to funnel wealth back to us. A time honored rape and pillage approach we're now seeing explicitly here in the US.
So besides gullibility and outright stupidity, greed is the primary reason we are in this fix. And in the case of those living at the margins it's even harder to preach the idea of sharing and sacrifice.ReplyDelete
Case in point, I work for Home Depot part time to supplement my "retirement", they recently increased base pay (at least in my area) from $10 to $12/hour which still is only $24,000 a year for full timers - maybe a bare living wage but not enough to move ahead.
I was assigned to work in the Christmas tree tent (pretty handy with a chain saw from my Adirondack farm days) and I watched as employees jockeyed to be the one to tie the trees onto the cars because that's where the tips (taking of which is discouraged by H.D.) were handed out. Now you might think that at the least there would be a sharing among the tent workers given that co-workers were moving and displaying inventory for customers, preparing the purchase and finally loading the tree. But that was very rarely the case. And then occasionally someone would boast about the "stupid money" they got (during their 8 hour shift - never more than $80 -$90 or about the same as a day's take home pay).
These are the things that make me concerned for the future, we have become a culture of "I've got mine, screw you" and it's trickled down to those who are most in need of Solidarity. If you can come up with a way to stem that trend, Jim, then you truly can be a god.
Only thing missing from this brilliant essay is the sparrow and horse comparison. Feed the horse enough oats, eventually the sparrow gets some.ReplyDelete
A couple things you touched on...ReplyDelete
Trickle down, which I loving call "Beat down"...
"Right to work for less"...Smashing collective bargaining by pitting one American against another.
They pour 'incentives' which I loving call "Bribes and payoffs".
Mississippi for example. Move your company there and they pay labor and moving costs for several years to attract jobs. Anywhere in coal country as well.
So why won't they (businesses) move? Because they are not educated. There's no work force to hire. They are stuck on "bring coal jobs back". Why? Because they fueled America for more than a century. So they deserve coal jobs they lost because they've always had the jobs in the mine. They blame minorities and "Libtards" are "stealing American jobs"...OK...For the sake of argument, let's say these red state Americans are correct.
First off...Stealing jobs = I can't compete.
"Trickle down" = Give me your money and I might hire someone and it might be you! Nope, it will never be them because they demolished education to balance the budget to give corporations "Are People Too" their money. How friggin stupid do you have to be to give someone your money and rest assured Wimpy will pay you on Tuesday? They won't give you or I the money so I can create jobs. They will give it to the rich in an instant, but not you me or anyone else...Unless it's the church. Because God will provide, eventually. All they have to do is say "I can't retrain, I'm 54 years old, nobody will hire me"
The friggin coal museum is solar powered. Why? It's cheaper than...wait for it...Wait for it...FOSSIL FUELS!
I'll sum it up...
Why does Walmart and McDonalds et al teach their employees how to get on welfare? Because Walmart pays shitty wages and dumps the rest on the taxpayers via DSHS. So give them billions to move, they move, get money, then hire and profit off the system, which is more money from the very taxpayers that payed Walmart to come to town.
Which brings me back to uneducated, no critical thinking or common sense. The BLUE STATES keep the red states afloat so at least they don't starve. Yet they put down "Coastal elites". Not the red states on the coast, just the "Libtard" states who are tax and spend while red team is the party of fiscal responsibility. They voted for Drumpf based on..."Trickle down economics. Second verse same as the first.
These people will tell you they don't believe everything they hear. But, in fact, they are easily swindled again and again and never learn. They just keep prostituting themselves and complain.
I don't know what your thoughts are on Bitcoin, or if you can accept them on blogger, but that might be something you might want to look into as a payment donation form for your web-site. Just an idea. Loved the article on trickle down. Thanks for your writings! Peace.ReplyDelete
Your email link doesn't work or there's too many moving parts and I'm too stupid to figure it out.
I've never posted here or even been here before so pardon my 'noobness'
Excellent essay, as always. I was expecting you to finish up with the usual exhortation to us to be better citizens, but I guess that only applies to elected officialdom. The real bosses are not elected, they only pay to have their flunkies elected; the quality of my citizenship is irrelevant.ReplyDelete
One additional travesty to this tax scam is that those of us in SALT states will begin to feel the burn immediately. Not being able to deduct all of my state an local taxes will cost many of us well over $1000. Then add that the fact that my state already only gets back 3/4 of what we pay in federal taxes... all the Christmas punch in the world is not enough to take the bitterness away.
And the truly horrible thought is that even if you "throw the bums out in 2018 the US voter will forget and vote them back inReplyDelete
You have already had the worst president ever - killed hundreds of thousands of people started unnecessary wars - caused a recession - finished with historically low approval ratings
How long was it before the voters voted his lot back in????
Goldfish have longer memories!
I think my biggest problem is that the dude wasn't even quick enough to combine whiny and Einstein to make WHINESTEIN.ReplyDelete
That part about asking why the rich would create jobs just because we gave them more money - that's a brilliant question that every single person should ask whenever they hear the claim.ReplyDelete
But the part about how pays for it? That's another red herring. We have the money. We have a fiat currency and the government decides how much money to put into the economy. If you put in enough to outstrip the availability of workers and product, that could turn out badly, but we are in the opposite situation - there is not enough work and not enough product because people don't have enough money. Deficits are a fiction to confuse people about how much money we actually can afford to spend. It's *not* like your household budget, because you aren't allowed to print legal tender. But the government can, and that's a policy decision, not a budgetary problem. We can afford jobs. We can afford education, health care, all of those things - if we decide we want them. The world is being run by people who don't want them. So they will lie to you about whether we can afford them, but we have the money.
"And the only people telling you this horseshit are … rich people."ReplyDelete
I don't know, Jim. How rich do you suppose Shane is? (Heh, at first I typed "Shame.") I hear not-rich people feeding me this horseshit sandwich (and telling me it's prime rib) all the damn time.
"Rich people don’t reach down the ladder to help those below, they pull the ladder up after themselves and slam the door."....and it was the poor who built them the ladder in the first place.ReplyDelete
Yes, as through this world I've wanderedReplyDelete
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.
And as through your life you travel,
Yes, as through your life you roam,
You won't never see an outlaw
Drive a family from their home.
-- Woody Guthrie
"Come back Woody Guthrie."
- Steve Earle
Here is something I wrote about the financial melt down. Many still have no idea as to what really went down.ReplyDelete
“I thought that it might be nice to try to put the reason for the whole economic mess into one paragraph that every one could understand. These real estate terms made me feel the need. The real estate industries term for insurance on mortgage bonds is credit default swaps. Term for mortgage bonds is mortgage backed securities. You would not believe how much misleading terminology exists. The whole real estate market seems to try to keep the average person in the dark. I wonder why? Some of this terminology is pointed out in a very enlightening book. The Micheal Lewis book “The Big Short”. Here is my one paragraph summation of the reason for our economic mess. “
“Free trade agreement caused jobs to go to China. American people did not stop buying cheap foreign products made in China by American companies, when they seen their fellow Americans were loosing their jobs. People loosing their jobs could not make their house payments. Banks and mortgage companies seen this coming so they package loans into bonds. They got the bond rating agencies to rate bonds as triple A. Bonds were bought by pension funds. Upon having found a way to lend risk free, (turning loans into bonds) the banks and mortgage companies lent money to anyone and everyone. Some seen it was all going to crumble, so they bought insurance on these bonds even though they did not own any of the bonds. Every thing soon came crumbling down when people were unable to pay their bills. Bond holders lost everything. Insurance policy holder made a killing. AIG and others that had sold the insurance policies on the bonds lost big time. Government steps in and bail out the insurance sellers. Banks, were not selling this insurance, but got bailed out anyway. Maybe so they would have the money to purchase all of those cheap bonds and foreclose on home owners for the purpose of making millions renting houses.”
I read this blog entry late, but I'd like to add some numbers to back up Jim Wright's demolition of "trickle down". In September 2012, the nonpartisan Congressional Research Service analyzed the previous ~65 years worth of information on the effects of tax cuts. Short version: No increased economic activity. No increase in government revenue. No increase in household income nor household wealth for the bottom ~80% of people in the US. Only the top ~10% gained much income and household net worth, with the vast amount going to the top ~0.1%. The GOP's response was to force the CRS to take back the report to re-crunch the numbers.ReplyDelete
I don't disagree with anything you wrote here, but what I don't see is a good way for me to do anything about it. I lived in a blue state, voted for people who were historically a lot less evil, and used my some of my time as the moderately charismatic head of a multi-thousand person international club to try to bend people's worldview towards being a bit more progressive.ReplyDelete
Pre-recession I could never have envisioned things being this current level of shit. Sure, I figured politicians were often self-serving bastards, but they all still had to pretend to not be evil. I had a home (paid for with a very conservative 30 year fixed mortgage) with 150k in equity, retirement account, stable job at a giant 'respectable' company, wife, kids, pets, etc...
Then along comes the recession. My employer opportunistically lays off a bunch of folks while everyone else is doing it (I think because this reduces their bottom line for a while without having to pay the price in bad PR), and I was out of work at the same time everyone else was. My house dropped in value such that instead of 150k in equity I suddenly had 100k in debt beyond what I could sell it for. I lasted two years scraping by on every sort of contract work, temp employment, etc.. I could find while continuing to just barely pay our mortgage, keep my family taken care of and the like. In the end, the kiss of death was medical insurance. With two kids and as a type 1 diabetic, I couldn't just stop having it (like we had for eye, dental, etc..) and the cost of private healthcare was insane.
And so here's the sad kicker for our 'land of opportunity'. I finally couldn't keep up any more. We'd survived two years waiting for things to turn around, liquidated our retirement to keep paying for the mortgage, and in the end it just broke. Rather than go into foreclosure until we had to go live under a bridge, I took a job in Germany (mind you, we had never been Germany nor spoke German) where there was work to be had. Sure, it paid less than I had made in the last 25 years, but it was a job, and with it I could keep my family fed and housed (in a crappy little apartment), and we could try to build again.
Life has continued. The US has gone to hell since I was gone (and my absentee votes in California aren't changing anything), and I have spent my time struggling to survive. The kids are headed to university, the wife is dead (cancer, fortunately we had access to German and UK healthcare which don't spit on you for being poor), and I'm back to oh 20 years or so ago career-wise, which at least is headed in the right direction.
But despite that, and despite knowing that everything is horribly screwed up and should be fixed, I haven't got the foggiest notion how to actually have enough empowerment to do anything about it.
I suppose you don't really have an answer either. You're doing your part - trying to make people in places where maybe voting might get rid of some of the criminals pay enough attention to vote against them. But other than that sort of shouting into the wind, I'm not sure what can actually be done.