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Trickle-Down Economic Theory.

Do detractors even know what Trickle Down economic theory is? 

Those who condemn Trickle Down economic theory either don't understand it, or they are trying to fool someone.

Vic Biorseth, OWM; Thursday, December 26, 2013
http://www.CatholicAmericanThinker.com

"In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system." --Evangelii Gaudium, Pope Francis.

" ... analogous to the full cup overflowing onto the saucer below.  It has to be full before it can overflow. ... " --Anonymous commenter, referring to the Trickle Down theory. 

" ... Trickle-down is merely a mind trick to convince people that letting the rich get richer is good for the whole economy. ... " --Another anonymous commenter. 

What prompted this webpage were the comments by His Holiness Pope Francis in his Evangelii Gaudium, discussed in the Evangelizing for Communism webpage, and the related defending comments of Bishop Conley that were quoted in the dialogue following that article.  Almost every time I turn around I bump up against another example of a seemingly good man who is either ignorant of Trickle-Down theory, or who is trying to convince others of it's falsehood, for one reason or another. 

So what is it?  Trickle Down Economic Theory is nothing more than what was coined by Ronald Reagan as Supply Side Economics.  He proved the effectiveness of Trickle-Down theory, at least as far as a tax strategy goes, by implementing it and producing the results.  He cut taxes and brought about the longest lasting and greatest producing economic boom in American history. 

His successor, George H. W. Bush, proved the opposite, when he publicly condemned Reaganomis as "Voodo Economics", raised taxes and killed the boom.  His first 18 months in office slowed, stopped, and then reversed the Reagan boom.  It only took about a year and a half for him to turn the greatest economic boom in American history into a severe recession, by breaking his word and raising taxes.  It took me a long time to recognize the senior Bush as a Marxist of the Progressive variety, whether knowingly or otherwise.  And, it would appear, so is his son.  They both grew the government, and government expenses, enormously

You have heard the old saying that a rising tide lifts all boats.  It applies to economics.  Long before anyone ever heard of terminology such as Supply-Side or Trickle-Down, Adam Smith described it better than anyone.  In his The Wealth of Nations, and even more in his The Theory of Moral Sentiments, he described what he called an Invisible Hand of economic charity at work in the world as if directed by God. 

This Invisible Hand had a way of improving the condition of the lower classes of citizenry through no sense of charity, justice or even awareness of the higher classes.  Thus, the rich man, without intending it, without even being aware of it, was acting to the economic benefit of someone else.  Always.  Unavoidably. 

Now, all people are not equal in virtue, industry, interest, talent, capability, etc.  Some, especially the most prudent and the most industrious, are going to "save more pennies", which is to say, "create more wealth" than others.  They will earn more than they need to survive, and that excess is called profit, or wealth.  Some will even deprive themselves in order to increase profit.  Some will squander profit, some will drink it up, some will put it aside for retirement or some purpose, and some will invest it, so that they can earn even more profit, for themselves and for their families. 

When a farmer, through profit, acquires more land than he can personally plow, sow and reap, or more animals than he can personally feed, raise and slaughter, he will hire other men to work his land and care for his flocks and herds.  Younger, or less industrious, or less fortunate men will do this work for him for wages.  If the wages he pays are insufficient, the worker will go and work for the next farmer down the road who pays a better wage, putting employers in competition with each other for good workers. 

What Smith showed in his illustrations of the Invisible Hand was that even the most greedy, un-charitable, self-serving, stingy and even cruel rich man will, without intending it or even being aware of it, provide some sustenance for others.  And the more wealth he acquires, the more unconscious aid he will be to his underlings. 

He will have to hire people to clean and maintain his palaces and lands, to tend his prize animals, to dust his expensive baubles, and to guard his estates.  The more wealth he amasses, the more people will be in his employ just to maintain and safeguard his wealth, in some cases, a whole village of people dependent upon the meager wages he might pay.  And if his pay is insufficient, they will move on to the next rich man down the road who might pay them more, whether in money or in respect. 

Thus, there is a moral aspect of Trickle-Down, even though it may be unconscious and unintentded. 

The purely economic aspect of Trickle-Down addresses how employers intent on growing their businesses, and new entrepreneurs intent on starting their businesses, need to spend money to acquire more land / raw materials / work capacity / storage or warehouse space / employees / etc. in order to do it. 

Whatever is good for business may be expected to be good for the available workers.  Conversely, whatever is bad for business may be expected to be bad for the working population.  High taxes and restrictive regulations, and anything else that adversely affects profit - the ability to save a penny - hurts business and hurts employment.  Lower taxes and less regulation promotes profit - the ability to save a penny - and thus helps business and increases employment.  Very simple. 

In the broadest interpretation of all, every free market transaction, every commercial transaction, will trickle down, and trickle up, and trickle laterally throughout the whole of the market place.  Think about the simple transaction of buying a pencil, and how many people are affected by that simple transaction, all over the world.  Read the I, Pencil webpage for an excellent demonstration of tickle up, down and sideways. 

What made America great, in the first instance, was the globally accepted general knowledge that whoever came here would be left alone by the government and allowed to save a penny, which is to say, to make a profit, be it ever so humble.  Someone could hire himself out for wages in order to build up a nest egg for his own future.  In early America, outside the family, working for wages was considered by most people to be a temporary state of affairs. 

Within the normative family, of course, working for wages was working in the family business, which was a different thing.  In any family farm, ranch or business of any kind, the laborer was working on something that was multigenerational, inheritable, offering a personal interest in its ongoing success, and offering a long term prospect for a good livelihood for generations yet unborn. 

Outside of a family business, young men hired themselves out either to learn a trade or acquire a skill, or to save money to allow them eventually to do something else.  Few men thought of "getting a good job" as the end-all and be-all of what to do for a living, for life.  Most looked forward to starting something on their own, or to striking out in some manner to "make their fortune" on their own.  

All that changed with the adoption of Public Education, which was born of Marx's Communist Manifesto.  From the earliest days after the establishment of the public school system, the basic idea of a formative education changed to favor "the job" as the ultimate goal.  Previously, children learned at home, or near home, from hired teachers in Church or small community supported schools.  Well-to-do children, and scholastically gifted children who earned scholarships, went off to private schools for young ladies and for young gentlemen.  But what they learned, beyond the Three-Rs, was how to think

The public school system, which is to say, the government school system, was originally intended and designed to crank out good workers.  And that is all it does.  It changed the typical American mindset from one that wanted to "make my fortune" to one that wanted to "get one of the better paying jobs." 

Success was redefined to mean a good job. 

And that was a major step in the direction of citizen dependency.  The worker is dependent upon the employer for his livelihood.  It was the beginning of the creation of a lower class of American citizen.  If all you see yourself as is a wage earner holding a job, then you have taken a major step down from earlier generations of Americans, who saw all sorts of other possibilities

Add into that development Marxist-inspired organized labor unions, and you have the making of an alienated and hostile lower class of increasingly dependent citizens. And on-again off-again alienation and class warfare between employees and their own employers. 

All of this flies in the face of the original design of America.  We were designed to be a nation of laws, not merely of men, and that meant, in actual practice, a nation devoid of classes.  No nobility; no  privileged aristocracy; no titles; none of that.  Here, all stand equal before the law, from the lowest housekeeper to the President. 

American citizen allegiance is less to the nation than to the national Constitution, which is the supreme law of the land.  Thus, Constitutional America is more of a civic idea or ideology than a nation.  The Constitution leaves economics and religion alone, other than to free them. 

Today, what trickles down more than anything else, from one generation to the next, is ever increasing dependency; a loss of the uniquely American sense of individual citizen independence, from any employer, and from any level of government. 

For years and years I saw this as creeping Marxism.  It isn't creeping any more. 

Marxism, which is opposed to everything in our Declaration and our Constitution, is unmistakably ascendent in America. 

And that means trickle down impoverishment. 



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Smart-Assed Hover-Link Footnotes:  For the convenience of those readers using devises that lack a mouse, these footnotes are provided for all webpages, in case any webpage contains any hover-links.  (If you don't have a mouse, you can't "hover" it over a link without clicking.)

SLIMC1 Secularist Liberal Intellectual Media Complex
GESGOEAEOT2 Gradually, Ever So Gradually, Over Eons And Eons Of Time
PEWAG3 Punctuated Equilibrium's Wild-Assed Guess
TTRSTF4 Them There Real Scientifical-Type Fellers
TTRSPTF5 Them There Real Smart Perfesser-Type Fellers
TTRSJTF6 Them There Real Smart Journalistical-Type Fellers
SNRTACBT7 Surely No Right Thinking Adult Could Believe Today
STNSEACPB8 Surely Today No Serious Educated Adult Could Possibly Believe
WDN9 We Don't Know
BMDFP10 Baboons, Mongrel Dogs, Filthy Pigs and ...
HBAACOTE11 Human Beings Are A Cancer On The Earth
ACLU12 Anti-Christian Litigation Union
FLORMPORIF13 Flagrant Liar, Or, Mindless Parrot, Or, Innocent Fool
MEJTML14 Marxist Ends-Justify-The-Means Liar
IEJTML15 Islamic Ends-Ends-Justify-The-Means Liar
MPAV16 Marxist Principles And Values
WBESSWG17 Wise, Benign, Elite, Super-Scientific World Governance
TRMITM18 The Reason Man's In This Mess
IYI19 Intellectual Yet Idiotic

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Date:   Wed Aug 20 2014
From:  Vic Biorseth
Comment:  

Changes pursuant to changing the website URL and name from 
Thinking Catholic Strategic Center to
Catholic American Thinker.

Pulled the trigger on the 301 MOVE IT option June 1, 2014. Working my way through all the webpages.  . 

Regards,

Vic


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The Anti Capitalism Pages
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Do detractors even know what Trickle Down economic theory is?  Those who condemn Trickle Down economic theory either don't understand it, or they are trying to fool someone.

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