Saturday, December 9, 2017

Trickle Down: Or Some rich guy gives you a golden shower, whilst telling you it is raining.

Back in the early 1980's we were all introduced to a “new” economic policy called Trickle Down Economics. It has since been referred to as Reaganomics, Trickle Down, Voodoo Economics, and in some very limited circles... “Oh great, the wealthy people are getting another round of tax cuts.” But like so many things, many people don't really understand the full scope of it. Just as Clinton and Obama grew one aspect of the economy, they fail to realize that policies that create jobs is only a portion of the economy.


Look, our economy has been sick for a very long time. Home ownership is down, prices are way up, income is stagnating, and I honestly haven't looked at car ownership, but drug and alcohol abuse is up, while smoking is down. Alright, I am digressing here. How many people can honestly say that they are better off today, than they were a decade ago, and if so do you believe that this is the case for all? I can say I'm better off today. In 2007, I had a business, in 2007 I was sitting on enough of a nest egg to buy a new truck, I was living in my own mobile home on the back forty of the farm. I had my own ATV, and could, if so inclined, afford to eat out every night, go to the movies, or any number of things. Today, just to have a meal a day is a stretch. I don't own that truck anymore, sold the ATV, ended up moving back home into a guest room with my parents. Forget about going to the movies, eating out, yeah, that happens once in a blue blood moon during a solar eclipse at midnight. I can't find a steady job that is more than twenty hours a week making the minimum wage that isn't seasonal. The economy has improved so vastly in many areas, that the one job I did land has steadily declined to the point that I get called in once every few weeks for five hours total, and yeah, they can't even keep the lights on at the place.

First lets talk about Reaganomics, because people have forgotten, or willfully ignore what the policies are all about. When Reagan first introduced his horror show, he had four pillars, these four things would be a boon for all. It would lower costs for business, and these costs savings would “trickle down” to employees, who would have more to spend, and they in turn would pass those extra earnings onto people like me, who resells used items to those who need something, but cannot afford to go somewhere nice to get it. Yes, I am a used furniture salesmen. You need a bed, we've got beds. You need a casket, we have that too, and no, I didn't steal it out of a grave, its actually new. Alright, so these four pillars... Pillar one: Lower taxes for corporations and the wealthy. See in Reagan's mind, if they had lower taxes, they would spend more. Honestly, that is a sound theory, but only when applied to the working class and poor. The wealthy already have what they need or want, well, outside of more cars and houses. Honestly, you can never have enough cars. Corporations, could then do whatever they wanted with these savings, which was add to their profit lines, driving up their value. Opposed to spending on better wages, benefits, and improvements to their business. Eh, now its automation, you know, those pesky machines work for pennies on the dollar, don't make as many mistakes, and do have to take breaks for stupid stuff like, sleeping and family emergencies. Here is where most people stop with the trickle down train, the rich get richer through tax cuts, but there is more to the story.

Pillar two: Deregulation. Stop me if you have heard this story before... A company lobbies congress and says, “Hey, these environmental regulations are costing us a ton, because we have to pay a special company to come in and remove our toxic waste.” Congress says, “Oh no! This will not do...” A bill comes along, after some wheels are greased, and by wheels I mean palms, and suddenly, the regulations are relaxed or removed. Now, the company can save tons of money, by dumping toxic waste into an onsite storage facility, which eventually leaks into the ground, contaminating the environment. But wait, there is always more. You can deregulate anything and everything, remember a time when you could turn on the news and actually get news? We get a minute of news, and twenty minutes of opinions about the news. Yes, Donald Trump Jr., did go have a closed door hearing before congress, that is news. Everything that followed that startling revelation was opinion based. Fox said something along the lines of “It's a witch-hunt!”, and I don't know what MSNBC or CNN had to say about the whole affair, but I can guess that it was because the Jr. Trump did something wholly evil, I really don't know... But at this moment, anything is possible. As memory serves, ten entities own the the vast majority of news media. Outside of blogs like this one, some reputable others more biased than Fox News, we are fed a steady stream of biased propaganda. Trump is evil, he is going to destroy America... Trump is the emissary of God himself... Trump is actually somewhere in the middle of that, being politically incompetent, but talking a big game. Trump isn't evil, he is just a carnival barker, a wrestling heel (a bad guy who says and does things to anger the audience). Being a bully is part of that.

Pillar three: Reduce government spending. This means reducing spending for all the programs you don't really like. Welfare and HUD, gut it. Social Security, gut it, then privatize it. Medicare and Medicaid, reduce its funding. Meals on Wheels and reduced price lunches, yeah can't do that. Military spending, well that should get cut too, but never does because we are a country all about war. Funny thing here, people like to talk about how Clinton and Obama both had balanced budgets when they left office. Yeah, about that, look at what got cut to achieve those balanced budgets, and I can tell you, the military still got their new tanks, hummers, planes, and ships. The troops still get paid crap, their medical treatment after they get home is about the same as those of us who still can't afford insurance.

The last pillar: Tighten the money (and credit) supply to reduce inflation. The less money (or credit) flowing, the lower inflation, or so my understand of the one of the theories goes. So, in the mind of the people who created this plan, the less money flowing around for things, the more stable everything would be. This in my mind is a dangerous mix of two economic policies, the “Gold Standard,” in which the value of the dollar is tied to the price of gold, which in and of itself is not static in value, and our current fiat currency, which is based on the government's ability to pay its liabilities (its debt).

Now, I said previously that Obama grew one aspect of the economy, jobs. They weren't decent paying jobs, they were service industry jobs. Low paying, dead end type jobs. Nothing that could actually support a family on, nothing that people could do more than survive on. Clinton had a little more to work with, but he also had the Dotcom era going for him. Lots of jobs would spring up overnight, and if you were a computer wiz, you could make a lot of hay, very quickly. But that is just a part of the economy, the rest comes from spending. Buying that new to you car, buying that house on the corner, getting a newer game console for yourself or you family members, going to the movies, eating out, going on vacations, or maybe even going to the home teams football game (or your local short track or minor league baseball team's home game). All those things are other portions of the economy. Jobs, do drive the economy, I won't deny that jobs are the very life blood of everything. Achieving full employment is the ultimate goal of everything economic. The more people working, the more money being passed around, the better off everyone is...

Except... Under Obama, and even Clinton, wages didn't grow. Certainly, more people were buying under Clinton, but that's because while the dead presidents club of America wasn't flowing, the credit certainly was. With Obama, nothing was flowing with ease. But there is a startling truth to be seen, one that most people will never want to see. Every since this insanity of trickle down Reaganomics began some thirty six years ago, every president we have had, every congress we have elected, has elected to continue the trend in some form or fashion. Wait, I hear some saying, Clinton nor Obama lowered taxes, and that is true, but trickle down is more than just lowering taxes for the wealthy. It is a set of policies directed to benefit the wealthy and corporations. It is the systemic deregulation of industry (even Net Neutrality), it is reducing government spending through reallocation of funds, defunding or privatization social safety nets or other programs (like the CDC, infrastructure, public education, etc.) and trust me, that is what the sequester did, it is removing protections from employees to unionize (and I am not a huge fan of unions). It is the restriction of cash and credit. Remember, the wealthy don't need credit, its just a tool they use, and one they can well afford to use. Under the guise of been a boon for all, we have watched income stagnate, real economic growth grind along slowly, and a host of other economic indicators lag behind. All the while, people who can acquire real property, earn more unearned income. Seriously, if you could come up with the money to buy three houses, and rent them, you'd have additional money in your pocket, just because rent.

Just think about this one. Under Obama, in the worst of situations, he managed to create jobs, the lifeblood of an economy. Every month, people watched the job's report roll in, and the numbers remained the same. Yes, jobs were being created, low wage, low hour jobs, requiring people to work more jobs. Eventually, the unemployment numbers went down, which meant that more people were finding work in more areas. But look at the quality of the work, it wasn't and still isn't that good, wages haven't grown, everything is slowly improving in most areas. But I have gotten away from my main point here. The truth of it all is, trickle down economics has never worked. It is not because the cuts in taxes aren't step enough, it isn't that too many regulations are in place, that there is too much money and credit flowing to the hands of the lower and middle class. It isn't because government spending is too high. Its because our elected officials are attempting to build a roof in mid-air with little to no foundation. If we are going to be honest, everything that is done in trickle down, be it the full platter, or just the sample sizes, serves to benefit the wealthy and the businesses they own, with the hope that these benefits will find their way down to us. They have yet to do so, and to ignore Clinton and Obama's complacency in this mess would be a disservice. Certainly, they tried to do good while in office, and they had little to work with, so they did what they could. The problem is, until we realize that these benefits will never come to us, and we demand that our elected officials end the failed experiment of Reaganomics, this trickle down theory of economics, things won't get better. Certainly when we call it off, things will go from bad to worse. I imagine many wealthy people will be very unhappy, they might even shutter the doors of their companies, or move them off shore to another country willing to play the game. But here is the American vision, the truth behind all the petty ugliness and lies. For every company that decides to take their ball and go home, there will be some enterprising fellow standing in line saying, I can do this. There are people out there who with a little time and help that would be willing to play ball, the problem is, the cost to sit at the table is beyond their means at this time. We just have to stop and understand, jobs aren't the sole indicator of an economies health, its the little things that most of us never think about, like dinner and a movie.

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