Despite their arguments that there is no such theory as trickle-down economics, Republicans certainly seem to be adherents to its tenets.
“There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.” William Jennings Bryan, July 9, 1896, Democratic National Convention in Chicago
When I posted this quote from Bryan’s “Cross of Gold” speech on Facebook, I was immediately assailed by a very good friend who happens to be very conservative. In essence, his argument against Bryan’s assertion was that the theory of trickle-down economics is a Democratic straw man. He claimed Republicans have never ascribed to trickle-down economics, it was a phrase invented and used only by Democrats.
He stated that there is not and has never been any economic theory by that name. Democrats are arguing against a non-existent philosophy in other words. As I minored in political science in college and can recall writing at least one major paper on Reagonomics, I was fairly certain that he was incorrect. But to be fair, I decided I would do a little research before destroying his argument.
Turns out he could be right. According to Thomas Sowell, “No such theory has been found in even the most voluminous and learned histories of economic theories…” The term trickle-down has been attributed to progressive humorist Will Rogers, who said during the Great Depression that “money was all appropriated for the top in hopes that it would trickle down to the needy.”
Well, damn! I guess you learn something new every day. Guess I’ll just become a Republican and support… lower taxes? I know Republicans are all about lowering taxes. In fact, they have created a whole new identity for themselves called the Tea Party in the name of lower taxation. I know I’ve heard from Republicans that higher taxes on the wealthy – which they’ve managed to re-brand as “job creators” – is bad for the economy. Their reasoning is that higher taxes impedes job creation, and therefore is bad for the economy in general, but specifically for the people at the bottom of the pyramid (the masses).
Using their reasoning and the logic that I learned in school, I think we can apply this to an if-then statement of proof. If taxes are raised on job creators, then the economy gets worse for the masses. This is known in math circles as a conditional. If taxes aren’t raised on job creators, then the economy doesn’t get worse for the masses. This is known as a contrapositive. Therefore Republican logic seems to be that lowering taxes on the job creators would be better for the masses. Sounds remarkably like this theory/not a theory called trickle-down economics.
It seems like Republicans today are trying to distance themselves from the trickle-down economics or at least it’s name. The patron saint of modern conservatism, Ronald Reagan, campaigned on something essentially similar to trickle-down economics. However, like all good conservatives with snake oil to sell, he and his handlers gave their theory a more palatable and academic sounding moniker – supply side economics. In essence, the theory is that by reducing taxes (or as they called them, impediments to production), the economy will improve. Republicans supported a real theory (supply side) that in practice could be called trickle-down. Both rely on low taxes on the wealthy.
Perhaps the reason why some Republicans are distancing themselves from name (not the ideology) is that people are realizing the theory doesn’t actually work. Thirty plus years of the same policies have proven that. Reagan cut taxes on the wealthy in half after coming into office. He might have seen an economic boom in the mid-eighties following a bad recession, but by the end of his term more people had gotten richer while there was little sustained economic growth for most Americans. It’s also worth mentioning that poverty was higher when Reagan left and he had tripled the national debt.
George W. Bush tried to follow the same example and cut taxes on the wealthy when he got into office. Like twenty years earlier most Americans benefited little and we all know what happened at the end of his term. During Obama’s recovery, the wealthy have rebounded as Wall Street is at an all time high, corporate profits are at an all time high, but the economy for the rest of Americans has remained stagnant. No trickle.
Conservatives like to point out that it is government regulations preventing the rest of us from grabbing a piece of the pie. Tell me what regulations prevent a billion dollar corporation from handing out a livable wage or hiring the required workforce? They would rather hoard it in the Cayman’s.
Trickle-down, supply-side, call it whatever you like, it is a failure whatever name it is given.