Monday, October 03, 2016

Don't feed the trolls

I know, you aren't supposed to.
But because this is an election year, and because the potato sack empress brought this up at the debate right away, I feel compelled, as a public service, to correct the notion that seems accepted by an astounding number of supposedly intelligent people:  trickle-down economics didn't work!
A little background here might be instructive.  "Trickle-down" is a reference to the effect of a decrease in the highest marginal tax rates, which is obviously paid by the wealthiest among us.  The thinking goes that this decrease in tax rates frees up income previously taken by the government or tied up in relatively unproductive tax-avoidance "shelters".  This money can now find more productive use as capital for the creation or expansion of businesses, in the process creating new job opportunities and generating new wealth not only for the investor, but also the newly employed worker, who otherwise wouldn't have had that job.  It is in the generation of new wealth that this so-called "trickle-down" effect occurs.  It is a concept that is straightforward, and proven with spectacular improvement of the American economy in the early 1980s.  Of course, since the main proponent of lowering marginal tax rates was a Republican, the opposition party, tied to the idea of ever-expanding government and their own political power, sought out any way they could devise to discredit Reagan's obvious success.  The reality is a small cottage industry was born to try and explain away why Reagan's success was not success.  The masses had to be convinced Reagan did them wrong.
So in the years since the net positive economic effect of lower marginal tax rates was so effectively demonstrated to the world, a twisted new logic was conceived whereby trickle-down was nothing more than an evil plot to further enrich the wealthy at the expense of the rest of us.  Democrats have been demonizing Reagan since before he even left office.  In order to make this work, they first need to run the misdirection that a tax cut is the same as a subsidy. That somehow, letting a person keep more of what they have earned equates to greed or evil intent.   This notion can only be true if all income is the property of the government, and the government alone will decide what is fair in terms of keeping the income you made.  Of course, this notion is ridiculous, but the entire idea of trickle-down being a failure is built on it.  If your logical foundation is wrong you have no real logic at all.  Don't tell that to the stooges endlessly repeating the mantra of the modern Democrats of "tickle-down" failure.  If you call them out on their lack of understanding of what trickle-down is, expect to be called every name in the book.  They might even bring out a thousand little charts purporting to make their case.  But trickle-down is a very simple concept with plenty of actual data showing benefit for much more than the wealthy.
A lot of the heat generated on this topic has to do with more recent attempts at reducing marginal rates not having a benefit here in this country to the working classes, and there is some truth to that, but its not because trickle-down doesn't work. On the contrary, it still works as well as ever.  It is just that other factors are removing the trickle from American workers and towards workers from other nations.  The prime driver is without question the high cost of American labor, relative to the world market.  As difficult as it is to swallow here, labor is a commodity, and American workers don't want to work all day for what a Chinese or Mexican factory worker would make in that same day. Only by making productive hourly units less expensive here will the bleeding of jobs stop, otherwise "the invisible hand" Adam Smith refers to will do what it always does.  The increasingly global economy won't stop to let Americans caught off-guard catch up.  And you can blame trade deals if you want to but it won't change any of the underlying factors that have slowly eviscerated our manufacturing base.  Agreements like NAFTA only accelerated this, they were not the root cause.
A real academic or better writer might make a more persuasive argument.  But I am just another Joe SixPack who happened to have the benefit of actually studying this topic at the time it was being implemented.  So I'm not going to just sit idly by when leftists try to rewrite history for their own political benefit.  Of course, if we had some actual Republicans with the brains to make the case I might not have to play the part of the lone wolf howling in the dark.  But that's another topic for another day.

PS I am under no illusions that my commentary will have any effect on the aforementioned trolls, because they are normally so convinced of their own superiority that I can't even join the conversation without a PhD. I humbly, nonetheless, submit my text for your consideration.

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