Wednesday, January 8, 2014
Trickle-Down Economics: One lie to rule them all, one lie to find them, one lie to bring them all, and in the darkness bind them
(This woman doesn't seem to buy the "job-creator" myth. Image courtesy of Bartcop.com, retrieved from Examiner.com.)
In the Lord of the Rings, Sauron created an evil ring to control and dominate Middle Earth. It had the following inscription: "One ring to rule them all, one ring to find them, one ring to bring them all, and in the darkness bind them." Similarly, Republicans, Free Market Utopians, and their wealthy backers, have created an evil lie to control and dominate America: Trickle-down economics.
The basic (lie) idea of trickle-down economics is that we have to cater to the super-wealthy, primarily by (1) giving them massive tax breaks and (2) permitting them to, for example, pollute the environment with no repercussions (otherwise known as "deregulation"), because, you know, they're the "job-creators." (For a brilliant and accurate take-down of the "job-creator" myth, see Henry Blodget's op-ed, "Sorry, Folks, Rich People Actually Don't Create the Jobs")
And, before we go further, it's important to note that trickle-down economics has become a religion, not a temporary strategy. It's modern advocates push for it on a perpetual basis, regardless of the ability of consumers to purchase new goods & services, regardless of pollution, and regardless of the historical context of existing tax rates. For example, if top marginal tax rates were--over the years--dropped from 91% to 70% to 35% (hint: they were), then trickle-down purists would push for 25%, then 15%, then 0% (hint: they do). And even if the capital gains tax rate were dropped to 0% (as many Republicans have argued for--see, e.g., here), then trickle-down purists would next argue that we should offer tax credits to the super-wealthy, to subsidize their ability to invest in business. Hence, the super-wealthy would actually have a negative tax rate. Sound far-fetched? Think again. Some multi-billion dollar corporations already enjoy a negative tax rate (see, "GE, Exxon, 10 Other Major Corporations Paid Negative Tax Rate").
(When New Deal policy-makers wanted to create jobs, they didn't fret about what the super-wealthy would think, they just forged ahead and created them...with programs like the CWA and WPA. Image courtesy of the Library of Congress Prints and Photographs Division.)
So, let's proceed: The central tenet of trickle-down economics is to cut taxes on the super-wealthy. This is very convenient of course--even fraudulently convenient--if you happen to be one of the super-wealthy individuals who peddles trickle-down economics.
And the central (lie) idea behind cutting taxes on the super-wealthy is that it will give the super-wealthy more money to invest in new and existing businesses, which will, in turn, create lots of good middle-class jobs. One problem though: We've granted colossal tax breaks to the wealthy for the past 30+ years, they're enjoying historically low tax rates, and a historically high share of our nation's wealth, but are clearly not creating good middle-class jobs. In fact, many of the super-rich--despite their historically low tax rates--seem more interested in tax evasion and tax avoidance, than in creating good middle-class jobs. Also, for the past 30+ years, middle-class wages have stagnated and, today, well over 20 million Americans wish they had a full-time job but can't find one (http://www.njfac.org/).
(When the "free market" (a place where the amount of freedom you have is directly correlated to the size of your wallet) discarded American workers by the millions, during the Stock Market Crash of 1929 and the Great Depression, New Deal policy-makers created jobs for them, they didn't run around Washington, D.C., wringing their hands and crying, "oh my gosh, what will my campaign contributors think if I create a public jobs program for the unemployed??" Here, two WPA workers repair discarded toys, for subsequent use by disadvantaged children, thus giving the two women jobs, saving landfill space, and providing something for disadvantaged children to play with. Like so many WPA projects, it was a win, win, and win situation. Image courtesy of the National Archives and the New Deal Network.)
A second major tenet of trickle-down economics is deregulation, i.e., we have to deregulate so that business can thrive, unhindered by big bad government. According to the Free Market Utopians, this will allow business to be more profitable, and the increased profits will trickle-down to workers (in reality, however, the increased profits will go almost exclusively to owners, executives, and investors.). This is a very convenient theory, of course, for super-wealthy individuals who have a history of, let's say, environmental pollution (see, e.g., "Koch Industries has pattern of violating ethics, environmental laws").
So, Republicans, Free Market Utopians, and their wealthy backers, tell us that regulations are job-killers. Funny thing is, when McClatchy Newspapers reached out to small businesses, "None of the business owners complained about regulation in their particular industries, and most seemed to welcome it" (see "Regulations, taxes aren't killing small business, owners say"). And when Bruce Bartlett, former top adviser to Ronald Reagan (remember Reagan? He's the icon of the Republican Party, and also of the Free Market Utopians) responded to the idea that we have to deregulate business to create jobs, he said, "It's just nonsense. It's just made up" (see "Bruce Bartlett, Ex-Reagan Economist: Idea That Deregulation Leads To Jobs 'Just Made Up'").
The deregulation argument also seems to include the idea that we must sacrifice the cleanliness of our air & water in exchange for jobs. Sounds kinda ransomy or extortiony to me but, hey, who am I to say...
(Instead of looking for ways to make it easier for big business to pollute the environment, i.e., "deregulation," in a ludicrous attempt to create jobs, New Deal policy-makers hired the unemployed to improve the environment. For example, formerly jobless young men, hired into the Civilian Conservation Corps, planted 3 billion trees across America, and restored large areas of denuded forest. In the picture above, CCC boys in Ohio are relocating a tree. Image courtesy of the National Archives and the New Deal Network.)
In sum, the super-wealthy have become much more wealthy over the past 30+ years due to, among other things, gargantuan tax breaks and lobbied-for tax loopholes, yet they haven't created the tidal wave of good-paying jobs we were promised. So, why do so many people keep buying the trickle-down lie? Well, Andy Serkis, the actor who is behind the character Gollum in the Lord of the Rings movies, informs us that Sauron's ring "depletes (Gollum) physically, psychologically and mentally" (see "The Hobbit's Andy Serkis: 'Gollum is based on addiction'").
Trickle-down economics is a lot like that ring.
(Beginning about 1:30 into this video, watch and listen to Bill Maher speak about our ridiculous catering to the super-wealthy.)