Trickle Down Theory Is Demonstrably And Unarguably Wrong

[R K]

Jam for London spreads out over the rest of the country.

We know this is true 'cause Boris says so.

[Mr Jib Fingers]

Well weve had the right wing propaganda/paradigm for the last 35 years, you want more of the same? more money at the top? more freedom for the bankers? stagnation for the rest of us, offshored opportunity.. socialism is what set people up in decent housing after the war, right wing cronyism is what has prompted the creation of this website... ie real people cant afford housing any more. The magic of banking capitalism has failed the majority, 'they' the bankers and associated city so-called capitalist collective need a jolly good socialist rogering up the poop shute.

Completely agree. Massive increase in size and scope of the state, massive government intervention in the markets, benefits extended to millions of middle class families, more difficulty in planning permission, more regulations than ever for ordinary people, huge government spending and deficits. You can't get more right-wing than any of that.

Seriously though, defining anything you don't like as "right-wing" (ie. bank bailouts) means that you can also discredit the good parts of it (such as the desire for a more free market) through intellectual dishonesty.

A real right-winger would have let the banks go bust, or at least regulated them properly.

People forget that the banking boom was centrally planned by Eddie George in cahoots with Gordon Brown:

http://www.belfasttelegraph.co.uk/business/exgovernor-george-says-bank-deliberately-fuelled-consumer-boom-28524833.html

Why did Brown want to do this? Firstly to keep the economy booming for his own personal gain whilst waiting for Blair to step aside and also because he wanted more money to splurge on public services and generally buying votes. To restrospectively try and brand this action as a form of Thatcherite neo-liberalism is complete and utter nonsense.

[cybernoid]

Lots of emotion here, less rational reasoned debate. No definition that doesn't contain an opinion has yet been forthcoming so I don't see how anyone can make any points without a clear definition of what it is they are talking about.

There are plenty of every day activities you can see in your local economy that could sensibly be described as trickle down. There is also the availability of cheap technology improving by the day that is only available today to the poor because someone got rich off it. There is the availability of medicines, safe water, cheap energy, cars. All with rich people at the top of it without whom the poor would have no access to. If you're talking about taxation, you need to address the other side of that equation. What government is going to spend that money better than the entrepreneur they took the money from?

Without a proper definition we just get ranting. I won't post on this thread again until the basis of the discussion is established clearly, its pointless.

Moderators, I suggest this thread be moved to the economics discussion area of the site. It does our reasonable calls for affordable housing a bad name.

Edited August 11, 2014 by cybernoid

[cybernoid]

The Bush Tax cut did enormous harm to the solvency of the US. Reagan, Clinton and Bush all put these ideas to work to differing extents. It was G.H. Bush who called it "voodoo economics" - hardly a Commie. How has it worked out?

[Democorruptcy]

Lots of emotion here, less rational reasoned debate. No definition that doesn't contain an opinion has yet been forthcoming so I don't see how anyone can make any points without a clear definition of what it is they are talking about.

There are plenty of every day activities you can see in your local economy that could sensibly be described as trickle down. There is also the availability of cheap technology improving by the day that is only available today to the poor because someone got rich off it. There is the availability of medicines, safe water, cheap energy, cars. All with rich people at the top of it without whom the poor would have no access to. If you're talking about taxation, you need to address the other side of that equation. What government is going to spend that money better than the entrepreneur they took the money from?

Without a proper definition we just get ranting. I won't post on this thread again until the basis of the discussion is established clearly, its pointless.

Moderators, I suggest this thread be moved to the economics discussion area of the site. It does our reasonable calls for affordable housing a bad name.

Epic fail.

[Billy soy]

Epic fail.

[ElPapasito]

How about we test trickle up theory for the next 100 years.

Reduce tax on employment to 10%, keep corporation tax where it is, create wealth taxes at 10% of total assets, and fund all private individual borrowing with QE direct from the treasury at 0.5% interest, with banks being forced to borrow at 3%.

Let's see how the bankers do in that scenario.

Brilliant! No really this is a good idea...

[Executive Sadman]

No, huge deficits did enormous harm to US solvency. The world would be a much better place if America had cut spending to match tax reductions, rather than just borrowing the money so they could continue bombing anyone they felt like that day.

Fractional reserve debt money did huge harm to US solvency. Or rather put it in a permanent state of negative equity. The accumulated deficits are barely 1/5th of our debt mountain.

Deficits are simply a function of the private debt not increasing fast enough. There is no bush/Clinton paradigm, no republican/democrat paradigm. Debt is debt, whether it is in the form of politically sensitive 'government deficits', or overlooked bank loan creation. Clinton was lucky enough to inherit an economy that was ready to be loaded up with private debt again after the early 90s recession and the first tech boom, making him look like a prudent prez when the reality was he was, as one would expect in an exponentially increasing debt system, better than bush 43, worse than bush 41.

Please, this is NOT a establishment right/left political thing. The politicians simply work within the debt money system and its requirement for exponentially increasing debt. The only parties that even question the debt money system are the so called 'extremist' parties (ie the BNP and the greens)

[byron78]

The Hewitt-Packard example in this thread is just awful.

Most of the money that funded that companies early (and continued) technological advancement has come from American defence contracts. Has bugger all to do with trickle down. If anything that's state investment, not private.

In fact most of our greatest technological advancements have come from our races liking for shooting or threatening to shoot one another come to think of it.

Depressing.

Edited August 11, 2014 by byron78

[TwoWolves]

Well weve had the right wing propaganda/paradigm for the last 35 years, you want more of the same? more money at the top? more freedom for the bankers? stagnation for the rest of us, offshored opportunity.. socialism is what set people up in decent housing after the war, right wing cronyism is what has prompted the creation of this website... ie real people cant afford housing any more. The magic of banking capitalism has failed the majority, 'they' the bankers and associated city so-called capitalist collective need a jolly good socialist rogering up the poop shute.

I've got new for you buddy. The whole asset price inflation/Globalization/Cronyism/Banking cartel setup came right out of the American Left Think-Tanks - its success came with cutting a deal with the right (which has been dying a death for 30 years so badly that it now resembles the centre-left). That's why the state continued to grow through every [cough] "right-wing" government both here and in the US. Politics is dead man, its a one-party system - no left and no right. Just them and us.

As Tony said... "a post-democratic era".

Edited August 11, 2014 by TwoWolves

[wonderpup]

No definition that doesn't contain an opinion has yet been forthcoming

To define is to express an opinion, surely? Unless the matter in question is so self evident that it leaves no room for differences of opinion-in which case you have no problem.

[Greg Bowman]

I have nothing to lose. I walk around my neighbourhood and I see more and more people who also have nothing to lose. We are biding our time.

You not biding anything, the mob will be bought off like any other point in history. If the last seven years weren't enough to create a backlash the next seven with moderately rising employment and wealth levels will see nothing happening

The problem is that the nothing to lose mob is the same size it has always been probably 3-5 million and benefits are the price of keeping them in place.

As the boomers die and their assets transfer the angry young mob will become the same as always the main stream with plenty to lose.

Missed the boat by a nautical mile if you think there is some sort of uprising on the cards

[Venger]

You not biding anything, the mob will be bought off like any other point in history. If the last seven years weren't enough to create a backlash the next seven with moderately rising employment and wealth levels will see nothing happening

The problem is that the nothing to lose mob is the same size it has always been probably 3-5 million and benefits are the price of keeping them in place.

As the boomers die and their assets transfer the angry young mob will become the same as always the main stream with plenty to lose.

Missed the boat by a nautical mile if you think there is some sort of uprising on the cards

A paper I read long ago, and can barely remember, suggested society is less at risk uprising during depressions - that it's painfully tolerated all the way to the bottom. That only when there is a period of genuine economic improvement, an energy comes for abrupt sweeping political change. (The French Revolution was one example.)

Not that I think we've had a depression, and if we have, it's been a smart carrying the stupid. Save the victims, to lock in the hpi for older owners, landlords, and reckless jumbo mortgage debtors. And there doesn't seem much sign of it ending.

Also I agree with you, the mob leaders can probably be bought off, and besides, the mob on benefits, have had it so good, generally, for so many years with benefits soaring under Brown - even after some recent cuts. Carried by the younger-smart, and a bit from the locked-in HPIers. Why some here are astonished some younger higher fliers now coveting homes of lower earners council-houses deals.

Edited August 12, 2014 by Venger