Republicans still going on about trickle down economics

Robert Reich..from Wikipedia

American political economist, professor, author, and political commentator.

He served in three national administrations, including that of Presidents Ford, Carter, and as Secretary of Labor under President Bill Clinton, from 1993 to 1997.

A graduate of Dartmouth College, Oxford University and Yale Law School, he has been considered one of America's foremost political economists.

Reich is currently Chancellor's Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley.

He was formerly a professor at Harvard University's School of Government and professor of "Social and Economic Policy" at Brandeis University.

He has also been a contributing editor of The New Republic, The American Prospect (also chairman and founding editor,) Harvard Business Review, The Atlantic, New York Times, and The Wall Street Journal.

In 2008, Time Magazine named him one of the Ten Most Successful Cabinet Members of the century, and The Wall Street Journal placed him among America's Top Ten Business Thinkers.

reply to post by maybereal11

We have no more "coping mechanisms" to keep our economy alive....no more band-aids to compensate for the massive wealth inequity in the untited states. We need to stop shifting the wealth to the top 5% via tax breaks, bailouts, deregulation of the financial industry etc. and get the middle class healthy again or we are all screwed...middle class, lower class and the wealthiest. I am not alone in this realization...economists of every stripe and political leaning are observing the same thing.

You have missed the actual mechanisms used to transfer wealth from the poor to the rich. Otherwise your post is great.

Note that the wealthy CEOs are well aware of how the scam works.

In 1976 A typical American CEO earned 36 times as much as the average worker. By 2008 the average CEO pay increased to 369 times that of the average worker. timelines.ws...

The typical American CEO is not about to take a pay cut, so he is actually paid five times MORE in “buying power” (gold) compared to 1976 while the rest of us are now paid a third of what we were paid in 1976. The price of gold indicates the steady devaluation of the US dollar as it's purchasing power is diluted by the ever increasing supply of fiat money.


Here is how the whole SCAM actually works. There are three methods:

The First Method - BANKERS AND THE GOVERNMENT
Most countries have a central banking system with fractional reserve banking. When politicians pass a new law they have to fund it so they either print government bonds (IOUs) they sell to private individuals or they borrow money from the central bank (Federal Reserve System). The Central Bank “creates” new FIAT money on the spot right out of thin air (can you say legalized counterfeiting?) The Central Bank lends this new fiat money to the government. Citizens then pay the bankers or bond holders the AMOUNT and INTEREST out of their WEALTH as taxes on their income.

Wealth is different from the bankers fiat money in that it represents a person's productivity, that is his labor and the resources he has turned into products and services. That is why the Federal Income Tax Amendment was created (It may not actually have been ratified) at the same time as the Federal Reserve Act of 1913. The American tax payer has been paying the bankers ever since, all the while thinking that his wealth was going to the government.


The Second method - Fractional Reserve Banking:
wakeupfromyourslumber.blogspot.com...

Money is also loaned out as mortgages, business loans and credit card loans. You know, those credit cards with interest rates that sky rocket to 30% or more if you miss a payment so in three years you've paid the bankers the entire amount you owed, but STILL owe the principle! www.basicincome.com...

Originally, according to the 1913 Federal Reserve Act, banks were supposed hold anywhere between 12 and 18% of their deposits in “reserve”. That is where the words “fractional reserve” comes in. Gradually the Fed has lowered the amount of “reserve” required until now the banks are operating on no reserve. www.marketskeptics.com...

Testimony by Mr. Morgan, the bank's president,First National Bank of Montgomery vs. Daly (1969)

Plaintiff admitted that it, in combination with the Federal Reserve Bank of Minneapolis, . . . did create the entire $14,000.00 in money and credit upon its own books by bookkeeping entry. That this was the consideration used to support the Note dated May 8, 1964 and the Mortgage of the same date. The money and credit first came into existence when they created it. Mr. Morgan admitted that no United States Law or Statute existed which gave him the right to do this. A lawful consideration must exist and be tendered to support the Note. www.webofdebt.com...

The Third method used to transfer wealth from the poor to the wealthy
Because money is not capital, that is WEALTH, Mises concluded that an increase of the money supply confers no identifiable social value.

When new money is created it does not appear magically in equal percentages in all people's bank accounts or under their mattresses. Therefore money spreads unevenly, and this process has varying effects on individuals, depending on whether they receive early or late access to the new money

It is these losses of the groups that are the last to be reached by the variation in the value of money which ultimately constitute the source of the profits made by the bankers and the groups most closely connected with them.
www.lewrockwell.com...

Did you get that? This is the key point. When money is devalued the first pigs to the trough steal the wealth of the late comers. Newly printed fiat money does not create new wealth it just transfers it from the poor, who are always the last to the trough, to the rich.

Originally posted by crankyoldman
reply to post by camaro68ss

 

There is one major fact that contradicts the trickle down theory - other than David Stockman the inventor of the meme who says it is bs: Currently corporations, those who are supposed to be stimulating the economy with jobs, are sitting on 1 trillion in cash. They are SITTING ON 1 trillion in cash. They are not spending it on jobs, or anything related to stimulating the economy. The are sitting on it and by doing so have effectively stopped growth.

This was one of the greatest tragedies of the "Bailouts". They were given without conditions.

The result is a waiting game. Where corporations horde money waiting for a recovery (consumer demand) before hiring more workers and investing...while the public is waiting for money and jobs before they begin spending again (recovery).

It's a supply and demand...chicken or the egg...stall.

It could have been avoided if the bailout money came with conditions on how it would be spent or invested and both the Bush and Obama administrations are to blame for giving what we now know to be trillions without any conditions.

Either the corporations and banks start taking some risks and invest...or their reserves will dwindle, consumption will remain stagnant and we will double dip. Consumers no longer have credit, so they can't consume until jobs and pay increase and they get to a safe zone where they are comfortable spending.

Chicken or the egg. The difference between consumers and corporations/banks is that consumers couldn't start spending if they wanted to, they have no money or credit. It's going to have to be risk taking by corporations.

That or a double dip, but I am thinking Corporations will realize they have to gamble on a recovery sooner or later or they will lose along with everyone else.

Why should the rich have to pay the salaries of teachers for poor children? This is America,land of the free and opportunity.Let the rich keep there money and make the poor get off there buts and work for there money.Why should anyone get a free ride? If I was rich and the government wanted 55% of my income I would be pissed!!! Also if you want to create jobs for the poor eliminate corporate tax!!

reply to post by debz325


"Let the poor get off there butt."

Wow really? really?

Originally posted by debz325
Also if you want to create jobs for the poor eliminate corporate tax!!

Seeing as how I posed pretty much the question as to how this works already, I would greatly appreciate it if you could elaborate. Thanks.

Brazil…They are in an economic boom right now, unemployment so low they are importing American workers..the last to enter the recession…the first to leave it…

And are on the verge of overtaking France and Brazil as the worlds 5th largest economy..

Here is the recent 60 minutes vid..

www.cbsnews.com...

Pres Lulu: Every once in a while I joke that a metal worker with a socialist background had to become President of Brazil to make capitalism work here because we were a capitalistic society without capital.

And if you look at the banks’ balance sheets for this year you will see that the banks have never made so much money in Brazil as they have during my government. The Big Companies have never sold as many cars as they have than during my government, but the workers have also made money.

Q: How do you do that?

Lulu: I have discovered something amazing…that the success of an elected official is in the art of doing what is obvious, it is what everyone knows needs to be done, but which some insist on doing differently.

reply to post by whaaa

Don't you see your hypocrisy? Who pays your salary and takes care of you. The Taxpayer!!

Reserves. I take care of myself.

Even so - the military exists and performs a job that is required.

And it's debatable as to whether the military is cost effective. With the welfare going to the likes of Haliburton, KBR etc. with their corruption ripping off the American Taxpayer. Yet you begrudge the poor a decent lifestyle.

My income last year was below poverty level. There is plenty of waste within the military - I have always said that. However, when it comes to knowing how to get the job done - there's no better team on the planet. As for whether or not the military is necessary? Nothing you have would exist without the Navy's projection of presence. It is vital to our nation's economic stability.

Perhaps if more attention was paid to the military ind. cplx and their corruption and stealing from the govt. we could train more of the poor to be productive. How about some solutions instead of Limbaugh rhetoric?

Already done. Within that post, even. It would behoove you to acquire some reading and comprehension skills. The simple irony being that I'm instructing you to learn how to read and comprehend through written communication, so I suppose I'm the one that's being silly, here.

reply to post by maybereal11

I'll stop you there. I had assumed during our discussion by your articulate and well constructed posts that you were older than you are.

I already have to grease the door frame down to get my head to fit through.... I'm going to have to start living in the garage, now .

I do get that a lot.

You were a teenager when this financial crisis began.

Depends upon where you start the clock. I'd place the beginnings of the financial crisis before I was born. Though it wasn't triggered until early 2008 or so - which would place me at 19.

You went from living at home and High School directly to military service?

High-school/dual-enrollment college and then enlisted contract reservist NPSB - which included a full boot-camp and about 7-8 months at NATTC, Pensacola for I-level Avionics training. Got back home the day my mom died and checked in at the NOSC following the weekend.

My uncle owns a die-casting factory back in my home town (my father helped start him up). My father was process engineering and quality control - eventually plant manager for ABM here, prior to the fire and subsequent decision by Production Castings to close the facility. I spent a lot of time with him at work growing up and practically learned to use CAD before I learned to write.

I never got the chance to really learn from my dad all of the dark arts of the industry - but I got to learn a few, and was quite privy to that manufacturing climate.

You are 21? 18 or 19 when the market began to collapse? 12 when GW was elected?

Something along those lines. GW was elected when I was in... 7th grade, I believe. Yeah - I was in 8th grade when the towers were hit, and trying to explain to my peers why "planes with guns and missiles on them" crashing into the towers didn't make any sense at all - nevermind I had no clue what the towers even were (I could operate an AWG-9 in a simulator but didn't know what the heck the twin towers were....)

Again...kudos for being bright for your age, but IMO you need to live in the world for a handful of years in a financially vulnerable way with folks depending on you and get a handle on your emotions before I can genuinely value your opinions.

I appreciate the advice - but fail to see how it applies to the concept of tax breaks being bad.

I can certainly understand the frustration - I've got a hell of a lot of ideas and no capital to back them. I've got more ideas than I am likely to ever live down. I could buddy up with a senator or something and see if I could get one of those line-item earmarks to back an idea, but I doubt I could make the sell (and would rather avoid government subsidies).

To me, however, the less money tied up in government programs, the more is available to be spent and exchanged in the markets. This happens whether it goes to a bank and ends up being loaned out to someone, or is spent directly by a wealthy individual. It ends up being more potential volume for every business (not must my own hypothetical one).

I'm certainly not against helping out the poor. However, there's a right and a wrong way to do it. You have to make a business out of helping the poor - it has to be capable of, more or less, standing on its own. A little propping up of the community here and there is fine - but you can't simply send people a check in the mail. This simply doesn't work, has never worked, and continues no to work.

I've hammered out the general framework for the concept in my previous post - but the overall idea is to have people in the system do one of two things - advance out of the system, or be productive and part of the mechanics of the system if they hang around. Those who wish to achieve more are given the tools they need to do so, and go on to benefit society in the free market. Those who are fine sitting where they are will at least be helping to rebound others back into higher wealth lifestyles.

The only danger I see with this is the possibility of a run-away of the system that has more people choosing to remain within that system (even though it is mostly self-sustaining) and creating a sort of two-class system of "resident volunteers" and "free workers." Perhaps the concern is misplaced.

I would worry about, over time, in more encompassing implementations of the strategy, a system like China's emerging - where you have the communist workers and the skilled workers (and business owners) existing almost on different ethereal planes of existence.

Funny story - when my uncle was in China on business, he was working with the Chinese to help them set up some kind of factory or another. To show his appreciation for their work - he got them some business shirts that were white. .... In China - a white shirt is a symbol of being promoted to upper level management (and being on that other plane of existence).... Talk about having to break some bad news.

My convictions were equally uncompromising at your age...and equally uninformed by real world experience...you will understand better what I mean in 10 years...for now you will think I am an a$#&**...and that's ok too.

Eh - I do go overboard.

The point I am trying to make, though, is that raising taxes on the wealthy isn't going to fix the problem. It may or may not contribute significantly to "trickle down" economics - but the more money is being exchanged on the free market, the better (even if it's put into a bank, it's still being exchanged on the market as it's being used to subsidize loans). Along with this is less government spending and allowing the free market and fiscal accountability to regulate banking practices (when a bank is basically insured by the federal government, it removes a lot of incentive to grant loans in a responsible manner - which is one of the primary reasons we've run into this problem).

Honestly, I don't see how backing off government control over capital resources is a bad thing - especially considered the amount that is being directly influenced by corporate lobbyists. Backing off government control and meddling of businesses and individual finance loosens the grip of those with the capital resources to invest in lobbyists. They can lobby all they want to, if no laws are being allowed through that attempt to engineer markets to favor lobbyists.... then there's no harm, and the incentive to lobby as fiercely as is done is removed.

At least for corporations. Groups like the NRA and ACLU will lobby with the intensity of a gamma-ray burst until the universe reaches maximum entropy.

In either case... I'm not seeing the causal link between higher taxes on the wealthy and less of an economic crisis for anyone. Perhaps that's part of the trigger for the intensity of my frustration regarding the matter. I don't understand things and start probing via tantrum until I yield a useful factor. Like Donkey-Kong pounding the ground in search of goodies, despite the fact I'm 140lbs soaking wet.

In either case - you do deserve a star from me on that one. Even if we disagree or... fail to reach agreement (not sure if that's technically a disagreement - just a lack of an agreement). That was a response I, honestly, did not predict. I suppose I'm a strange individual - angered by the predictable and calmed/bemused by the unpredictable. In either case, I will be working more on the idea I've presented in the previous post (and somewhat in this post). Who knows - it could actually be taken seriously some day, and I should probably go ahead and complete it rather than leave that up to other people.

reply to post by Southern Guardian


Trickle Down economics really seems to work for the big companies in the US. According to a report released last month, companies made the highest profits in the last 60 years.

Companies Post Record Profits

The nation’s workers may be struggling, but U.S. companies just had their best quarter ever.

U.S. businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released Tuesday. That is the highest figure recorded since the government began keeping track over 60 years ago, at least in nominal or noninflation-adjusted terms.

So trickle down works.....for the big companies, but wheres the help to the average worker? Didnt unemployment go up to 9.8% a week or two ago?

If a big company can lay off workers, and make a record profit at the same time, why would they hire more people?

reply to post by buni11687


www.bendbulletin.com.../20101124/NEWS0107/11240369/1011&nav_category=

Same source:

The government does not adjust the numbers for inflation, in part because these corporate profits can be affected by pricing changes from all over the world. The next-highest annual corporate profits level on record was in the third quarter of 2006, when they were $1.655 trillion.

This breakneck pace can be partly attributed to strong productivity growth — which means companies have been able to make more with less — as well as the fact that some of the profits of U.S. companies come from abroad. Economic conditions in the United States may still be sluggish, but many emerging markets like India and China are expanding rapidly.

Tuesday’s Commerce Department report also showed that the nation’s output grew at a slightly faster pace than originally estimated last quarter. Its growth rate, of 2.5 percent a year in inflation-adjusted terms, is higher than the initial estimate of 2 percent. The economy grew at a 1.7 percent annual rate in the second quarter.

Still, most economists say the current growth rate is far too slow to recover the considerable ground lost during the recession.

Nice to give a little context.

So trickle down works.....for the big companies, but wheres the help to the average worker? Didnt unemployment go up to 9.8% a week or two ago?

I don't see what helping the average worker has to do with unemployment. The problem would seem to be not what the average worker is doing, but what the unemployed are not doing, or able to do.

If a big company can lay off workers, and make a record profit at the same time, why would they hire more people?

I'm not aware of too many layoffs this year, actually. I know a number of places have been hiring - the manufacturing industry seems to be swinging back around, which is a pretty good sign for things to come. In either case - a lot of companies have learned how to do more with less in this recession. Those that didn't had to close their doors (and some were down to so little work that it was impossible, and had to close their doors regardless of how tight they made the belt).

This is good for American industry - but not so good for the wage laborer. If you can meet business demand with four people - hiring back the two jobs you had to cut, even though you could afford to, simply doesn't make sense. Bank that away to expand in a few years (or put down for the loan to expand). Which would have the goal of drawing more business and bringing in more employees - but at a later date than right-this-moment.

Of course - you could increase taxes, but that simply ends up increasing the price - so your profits don't really change a whole lot - kind of like how bumping up minimum wage doesn't really change the standard of living for those working for 40hrs on minimum.

Originally posted by Aim64C
Of course - you could increase taxes, but that simply ends up increasing the price - so your profits don't really change a whole lot - kind of like how bumping up minimum wage doesn't really change the standard of living for those working for 40hrs on minimum.

This is a very important point, that seems to be ignored. If taxes on the "wealthy" (aka producers), are increased, they are going to make up that loss in other ways.

1) They may reduce their workforce, putting more of the production burden on fewer employees. We have all seen this happen, before. Who gain? Who loses? Who continues the status quo?

2) They may increase prices. Who gains? Who loses? Who remains the same?

3) They may decrease employee benefits. Who gains? Who loses?

4) They may decrease quality? Who gains? Who loses?

5) They may just shut the doors. Who gains? Who loses?

In each of these scenarios, the big losers are the middle class. The only possible gains are to tax revenue, which will continue to be squandered by an out of control government. And, likely, those who were intended to be punished by tax increases will be unaffected.

reply to post by debz325


Wow. Talk about a troll.

-What exactly do you do for a living my dear? If you are a middle manager or paper pusher of some sort your job will be outsourced unless the country turns around.

If you are state or gov then you are the most dipicable sort of hypocrite.

Originally posted by WTFover


1) They may reduce their workforce, putting more of the production burden on fewer employees. We have all seen this happen, before. Who gain? Who loses? Who continues the status quo?

2) They may increase prices. Who gains? Who loses? Who remains the same?

3) They may decrease employee benefits. Who gains? Who loses?

4) They may decrease quality? Who gains? Who loses?

5) They may just shut the doors. Who gains? Who loses?

Apparently you have never been in business for yourself.

I have....I have owned and operated businesses in retail, manufacturing, and service operations for the last 30 years. I have also put into practice 1 thru 5 and never once was it because of raised taxes on any of my stores, galleries, machine shops, guide and outfitting services or film productions.

Any businessman worth his salt knows creative accounting or hires a firm that does, to make the tax codes work in his favor. I never begrudged paying my taxes as I always appreciated the fact that I could participate in this wonderful countries entrepreneurial spirit. The few times my businesses failed was never because of taxes or regulations; it was always because of my stupid decisions to grow to fast and invest more than I should have or because I got bored and didn't pay attention to the employees that were stealing me blind or when Bush and his oil cronies raised gas to 4 bucks a gallon and kicked all the profit out due to transportation costs. I eventually learned how to get around the latter.

I was always motivated by PROFIT. So who gained? The business and ultimately my bankaccount and often my loyal employees especially around this time of year with a very nice Xmas bonus.

Your agenda is obvious as is Aim64c...to promote the Rush Limbaugh/Glen Beck style of lazy logic and place blame. And to always find a scapegoat and never take personally responsibility. Adolescent and Pathetic....

Originally posted by Aim64C
I've got a hell of a lot of ideas and no capital to back them. I've got more ideas than I am likely to ever live down. I could buddy up with a senator or something and see if I could get one of those line-item earmarks to back an idea, but I doubt I could make the sell (and would rather avoid government subsidies).

Those line-item earmarks have a lot of back-story. That will never happen for the average Joe. They serve constituencies...garner votes..serve as something that senator or rep can use in his campaign when he goes back home for re-election, publicly visible initiatives that put lots of people to work or represents payola in terms of campaign contributions from a given industry. Never does a politician put an earmark in just because it is a great idea.

First...think impact. Not whether an idea is great or not, but vet your ideas in terms of public need, consumer/bus to bus demand and whether it is something that would give the gov. warm fuzzies. For example Alternative Energy is hot right now, also production innovations that lessen dependence on China, India etc. and make US workers more competitive ...job creation is hot right now too. Think like an entrepreneur, but also a policy wonk.

See Grants.gov....click "find grant opportunities" and do some searching...put together a thoughtful and complete pitch/bus plan. Not just "hey..I have a great idea"...but include a real-world plan, dollars and cents, rent and start-up costs, hiring projections, research numbers related to demand, cost/revenue projections, …why the real world impact will be profitable and good for the local/national economy. There are plenty of websites available that offer advice on putting plans together.

Take risks now, while you are young..when you have a family ..living off pizza and beer in a one room apt. while you try something new doesn't really work well.

Go for it. One of the graces of youth is courage in part premised on naiveté. Many of the most successful self-made people in this world attribute their success to being “too dumb to know it couldn’t be done” at the time they went for it….go for it. Do it now before you become entangled in larger life responsibilities and have less choices and before you begin to accrue the handicap of pessimism as we all do to different degrees as we get older.

I treasure the failures of my 20's as much as my successes. Those efforts were fearless and bold in a way that only youth affords. Just stop thinking and start doing...the rest will work itself out.

Edit to add: Also check the ego. You will need serious people skills. You might have an over-sized intellect, but most people stop caring once they smell big ego. Learn to like people in general and learn to check your ego...and until you can do that effortlessly, fake it. EQ is just as important as IQ in this world.

Just my advice...but then again..who am I but an anonymous poster on a conspiracy board

HELO..................... ..........

A camping ground is usually a site where you can stay overnight outdoors. There are two types of camping grounds - one is an impromptu area that you choose to bed down for the night when you are out hiking or backpacking. The other kind is one that is specifically set out for the purpose of camping out, where a fee is usually charged, with a few improvements and certain facilities. However, there are camping grounds where little or no facilities are available.
caravan parks

Originally posted by Aim64C

Depends upon where you start the clock. I'd place the beginnings of the financial crisis before I was born. Though it wasn't triggered until early 2008 or so - which would place me at 19.

Any credibility you had is now gone. The financial crisis didnt kick off til 08? Get real, you are obviously too young to know what happened.

So that the kids dont get confused and indoctrinated by communist propaganda, here's an easy and simple version of what trickle-down-economics means:

If I am doing good, I influence others positively. Others have nothing to gain from my poverty.

Hope that helps

Originally posted by Skyfloating
So that the kids dont get confused and indoctrinated by communist propaganda, here's an easy and simple version of what trickle-down-economics means:

If I am doing good, I influence others positively. Others have nothing to gain from my poverty.

Hope that helps

edit on 17-12-2010 by Skyfloating because: (no reason given)

Uhhhh.....isnt this reasoning based on feeling, something "liberals" are always accused of? Where are the stats/numbers/facts/etc.?

Trickle down economics was supposed to be "If I am doing good, I will spend it and that will spur the economy", but is this what has happened?

Originally posted by aching_knuckles
Uhhhh.....isnt this reasoning based on feeling, something "liberals" are always accused of? Where are the stats/numbers/facts/etc.?

Its a simple common sense fact of life. And its important to strip these complex issues down to their essence so that they are more widely understood.

Trickle down economics was supposed to be "If I am doing good, I will spend it and that will spur the economy",

Yes, thats what trickle down economics means essentially, and even more essentially it means that you have nothing to gain from my poverty.

but is this what has happened?

Yes, to some degree. But we are still far from the ideal.