Monthly Archives: October 2015

Why We Must End Trickle-Down Economics


The greatest lie of our generation is still being preached and practiced by Republicans.

Why We Must End Trickle-Down Economics


The greatest lie of our generation is still being preached and practiced by Republicans

If one thing has been made clear so far during this early battle among Republicans trying to stand out as a presidential front-runner, it’s that every candidate is trying to stand out by saying absolutely nothing new.

They drop Ronald Reagan’s name as though he had been their best friend, and tout “Big Government” as the biggest obstacle toward economic growth and prosperity for all Americans. They continue to be unwilling to address the growing crisis of economic inequality in the very country over which they hope to preside.

When Reagan took office in 1981, the wealthiest 1% of the population controlled 8% of the wealth, while the bottom 50% controlled 18%. Today, the top 1% controls 20% of the wealth and the bottom 50% only 13% of the country’s money.

This trend is continuing, and the gap between the elite rich and the rest of our struggling society is widening to a massively obscene chasm not seen since before the Great Depression. The middle class in America is looking for a candidate that will bring a fresh approach to the economic realities of the time in which we live. Harkening back to Ronald Reagan will no longer do.

The term “Trickle-Down Economics” refers to an economic theory that defined the Reagan presidency. It was such a ridiculous concept at the time that it was nicknamed “voodoo economics.” Trickle Down Economics is the theory where allowing the rich to have more economic benefits actually benefits a society as a whole. The theory postulates that upper-level income members of the society will invest that money into the general economy by spending more, investing in the creation of jobs, and so forth.

Essentially, the idea is that the wealth the rich possess will “trickle down” to the middle class and eventually to the poor. Over the last 35 years, conservatives have managed to turn the term “voodoo economics” into simply “economics,” and has since been practiced moderately (United States) to extremely (Kansas, most red states) across the country.

So, if TDE works so well, why are we sitting on the economic crapper? If you ask a republican presidential candidate, they will likely direct your attention to Benghazi, the Alaskan pipeline or the quarter that they just pulled from behind your ear.

Tackling head-on the simple truth that the great trickle down experiment has failed and embracing a more reasonable and sensible solution doesn’t seem to be something our politicians are willing to do; and it’s extremely frustrating. Whenever someone suggests that raising wages for the average worker will make significant strides toward straightening our wayward economic ship, Republicans turn apoplectic.

The real truth, however, is that trickle-down economics has never worked. Rich people simply do not buy enough to keep the economy humming. That might seem clear for most, but not if you listen to the Republican debates. Throwing Reagan’s name out, longing for the days before Clinton, as if those were the lost glory days gone by, it’s an actual Republican strategy, and it doesn’t make sense.

Nick Hanauer, entrepreneur, venture capitalist and self-proclaimed plutocrat, gave a TED Talk in 2014, suggesting that we need to take lessons from farther back than Reagan; he suggested we go all the way back to Henry Ford.

Henry Ford initiated the “$5 Day” in his factories in 1913. Ford realized that when his workers had more money, the demand for his product increased, which then increased the need for workers. He created an economic feedback loop that bolstered the economy as well as his own business.

Nick Hanauer calls this new Capitalist driven theory “Middle Out Economics.” It works from the basis that the Middle Class needs more money in order to contribute to the economy. It’s a notion that is realistic about what group of people truly drives an economy. It’s certainly not the top 1%. How much can they possibly spend day to day at small businesses and the like? It’s the Middle Class that is in the trenches, going to Walmart, eating at local restaurants and buying gas for their new and used cars.

For example, raising the minimum wage to $15 dollars per hour would create jobs by increasing demand. When the people have money, and yes, money they have worked for, they spend that money on restaurants, entertainment, goods and services, and more.

True economic growth comes not from the richest among us at the top, as Trickle Down Economics suggests, but from the middle, where this great country was born and raised in the first place. The 80’s were bad enough, if you’re a Republican presidential hopeful, or even a Democrat for that matter, put your Wham records and Trickle Down Economics away and give Middle Out Economics a try. It’s the New Capitalism, and that’s an idea you can move forward with.

I’d like to acknowledge SCOTT LANGDON for as the writer and thank him for his accurate assessment of the economy and the reason it’s not working for the middle class.