Why America’s Struggling Middle Class Has Businesses Scared

[ThickStemz]

Wasn't the idea that through low taxes and relaxed regulations, corporations would be allowed to expand and grow the economy unmolested and with minimal government interference, and through that expansion all Americans would prosper? "If the whole pie grows, everybody gets a bigger share!" kind of idea? Because that's certainly what everybody was led to believe by the economic advisors..

Now we have 35 years of solid data that shows without a doubt that the rich got much richer while the poor and middle class stagnated or got poorer. We knew the Trickle-Down policy was bad in the gilded age when they called it "Horse and Sparrow" economics, "i.e., if you feed horses enough oats, it will pass through their digestive systems and their droppings will provide enough leftover oats to feed the sparrows. Regrettably, it's a pretty inefficient way to feed sparrows.".

Conversely, we know what does work; strong economic growth in consumer economies are dependent upon a strong middle class. This is the only thing that makes sense. 80% of our economy is based on the ability of people to make and sell products and services. If the majority of citizens inside the society don't have the ability to buy said goods or services, then nothing get's sold. The wealthy are doing just fine, they have plenty of money, the problem is there aren't enough of them buying enough goods to run that 80% of our economy that middle America depends on. Nick Hanauer gave a TEDTalk about this problem, I think it's worth checking out:

Exactly. All all evidence suggest it worked and would still worked had the bottom not been removed from the United states and sent to other countries.

The 80s through the early 2000s was a very impressive run.

Increasing through that time was the amount of outsourcing going on. How much better off would we be if those industries and services still located in the usa.

Free trade with countries who have peasants was never a trickle down agenda.

 

[ttystikk]

Trickle down works. And it is still working. It is just that currently thanks to NAFTA and free trade with China the wealth is trickling all the way down to China and other places.

Consider, the argument was always the rich will buy things that require manufacturing and services...

Well that is still going on. It's just that one manufacturer in an industry takes the step to relocate to a place with almost slave labor, all of their competitors are required to follow suit or be severely undercut in the market.

Our government gives incentives for this behavior and offers no deterrent to it. While both parties have done things to contribute to this, Clinton signed the most deviating piece of this into law, the giant sucking noise Ross Perrot called it in the 1992 election.

It's really quite simple. You want someone to fix this you might ought to listen to Trump. When Nabisco announced they would start making cookies overseas trump called for a boycott.

Yep. It's been working great to extract money from the middle class and direct it towards giving ever fewer people ever larger pieces of an economic pie growing ever more slowly.

So maybe it worked for YOU, but the other 99 out of every hundred people in this country? Not so much.

So the other 99% are saying that is time for a different approach, and their voices- being the vast majority and all- will not be ignored forever.

 

[ttystikk]

OK, then you're saying you believe that

-weak consumer spending isn't a risk factor to stock prices
-falling or flat incomes increase consumer spending and rising prices increases the amount of disposable income people have
-Low wages drive high demand and low unemployment

Only in fun house mirror land?

 

[ttystikk]

Exactly. All all evidence suggest it worked and would still worked had the bottom not been removed from the United states and sent to other countries.

The 80s through the early 2000s was a very impressive run.

Increasing through that time was the amount of outsourcing going on. How much better off would we be if those industries and services still located in the usa.

Free trade with countries who have peasants was never a trickle down agenda.

This makes exactly no sense whatsoever. Trickle down economics and offshoring jobs are compounding problems, but otherwise completely separate. Blaming one for the other is wrong.

 

[ThickStemz]

This makes exactly no sense whatsoever. Trickle down economics and offshoring jobs are compounding problems, but otherwise completely separate. Blaming one for the other is wrong.

I'm not blaming one for the other. No wonder it makes no sense to you.

The wealth is supposed to trickle down to those who manufactur goods and provide services. Those are overseas now.

When a rich man buys something now it isn't made in the United states anymore.

 

[Padawanbater2]

Exactly. All all evidence suggest it worked and would still worked had the bottom not been removed from the United states and sent to other countries.

The 80s through the early 2000s was a very impressive run.

Increasing through that time was the amount of outsourcing going on. How much better off would we be if those industries and services still located in the usa.

Free trade with countries who have peasants was never a trickle down agenda.

The 80s through the 00s saw the top 1% of earners make out pretty well for themselves, but as for everyone else, not so much..

Supply-side economic theory is a separate issue from outsourcing and free trade. It entails changing the domestic tax codes and regulation policies. Most economists agree free trade is beneficial to the US so long as there aren't considerable trade deficits, the problem is that those benefits aren't equally allocated throughout society and there are no protections for American workers who have to compete with foreign workers. Conservative rhetoric pushes the corporate agenda, so you're never going to see any of them supporting protectionist trade policies or increases in taxes on imports. They want to give corporations all these open doors and let them keep all the benefits so none of it ever goes to the people that allowed it to happen in the first place.

 

[ttystikk]

I'm not blaming one for the other. No wonder it makes no sense to you.

The wealth is supposed to trickle down to those who manufactur goods and provide services. Those are overseas now.

When a rich man buys something now it isn't made in the United states anymore.

None of which matters. You're still looking west, wondering why you can't see the sun rising.

I'm not going to continue this discussion with you, Pad has more patience for this.

 

[Fogdog]

So ask yourself, who put the trickle spigot in Beijing instead of Flint Michigan?

Big business did this through their lobbyist controlled congress and presidency. Trade with China began to expand with Reagan and expanded with every congress and president since then.

Are you suggesting that we need more protectionist trade policies so that our expensive work force can compete for, say, recycling Christmas tree lights? I'd rather that we focus more on education and making our workforce more competitive rather than scrap over low wage jobs with third world countries.

But stiffer steel trade tariffs would be something that might make sense. How about preventing export of our oil to China and do the refining here? Or perhaps a tariff on the import of Apple I phones and all their components from China to the US? Perhaps a tarriff on automobile components? Something like that might make sense. Are you ok with price increases due to this?

 

[Fogdog]

"analysis by the Center for American Progress"

BWAHAHAHAHA!

So, a gaggle of liberal halfwits decided they're right? Shocking!

L - freaking O - L

Next you'll be telling us how the hacks at MSNBC weigh in on the subject as further evidence. You can't possibly be this stupid.

That's a weak response, MNC. You are just pointing and laughing. Anybody can do that. Of course they only make themselves out to be jerks and don't contribute anything when they do.

Care to put something behind your point, assuming you have one to make.

 

[ThickStemz]

Big business did this through their lobbyist controlled congress and presidency. Trade with China began to expand with Reagan and expanded with every congress and president since then.

Are you suggesting that we need more protectionist trade policies so that our expensive work force can compete for, say, recycling Christmas tree lights? I'd rather that we focus more on education and making our workforce more competitive rather than scrap over low wage jobs with third world countries.

But stiffer steel trade tariffs would be something that might make sense. How about preventing export of our oil to China and do the refining here? Or perhaps a tariff on the import of Apple I phones and all their components from China to the US? Perhaps a tarriff on automobile components? Something like that might make sense. Are you ok with price increases due to this?

I wasn't advocating for it. I was simply stating the obvious. Trickle down economics works, it's working right now. The theory is that when rich people buy things it creates demand for labor. That's an oversimplification, but not incorrect.

Our trade policy and our monitary/political economic policies work against each other if the goal is to create a strong and vibrant middle class.

I'm all for free trade with advanced nations who also value a strong middle class. China doesn't do that. Mexico doesn't.

If we're going to leave the trickle down framework in place we need to stop the trickle, if not at our borders, than with nations like ours. Canada, Europe, Australia and a few more.

 

[Padawanbater2]

I wasn't advocating for it. I was simply stating the obvious. Trickle down economics works, it's working right now. The theory is that when rich people buy things it creates demand for labor. That's an oversimplification, but not incorrect.

No, it doesn't work. When the accumulation of wealth is faster than the creation of wealth, few people prosper. There aren't enough rich people in society to power the demand required to stimulate economic growth. If every rich person in America went out and bought a car, that still wouldn't be enough demand to kick start the economy because there simply aren't enough of them. Now, if every middle-class person went out and bought a car, that would create the demand required to stimulate growth because there are many millions more middle-class people than there are upper-class people. This is why raising wages is is an important step to getting out of the recession.

 

[ThickStemz]

No, it doesn't work. When the accumulation of wealth is faster than the creation of wealth, few people prosper. There aren't enough rich people in society to power the demand required to stimulate economic growth. If every rich person in America went out and bought a car, that still wouldn't be enough demand to kick start the economy because there simply aren't enough of them. Now, if every middle-class person went out and bought a car, that would create the demand required to stimulate growth because there are many millions more middle-class people than there are upper-class people. This is why raising wages is is an important step to getting out of the recession.

You have no way to substantiate that view point.

Suppose we had trade laws where manufacturers in the US were not competing with goods made in China where workers earn 5 dollar per day, but instead we were competing with only manufacturing in N. America and Europe, workers were earning significantly more.

There wouldn't be such a tremendous down pressure on the wages a company can offer and still compete in the marketplace.

Carrier just moved manufacturing from Indiana to Mexico. Just announced. As far as I know their competitors still manufacturer in the US.

Watch what happens over the next few years with that. Carrier will get a significant advantage over their competitors. How will those other companies react?

 

[Padawanbater2]

You have no way to substantiate that view point.

Suppose we had trade laws where manufacturers in the US were not competing with goods made in China where workers earn 5 dollar per day, but instead we were competing with only manufacturing in N. America and Europe, workers were earning significantly more.

There wouldn't be such a tremendous down pressure on the wages a company can offer and still compete in the marketplace.

Carrier just moved manufacturing from Indiana to Mexico. Just announced. As far as I know their competitors still manufacturer in the US.

Watch what happens over the next few years with that. Carrier will get a significant advantage over their competitors. How will those other companies react?

 

[Fogdog]

I wasn't advocating for it. I was simply stating the obvious. Trickle down economics works, it's working right now. The theory is that when rich people buy things it creates demand for labor. That's an oversimplification, but not incorrect.

Our trade policy and our monitary/political economic policies work against each other if the goal is to create a strong and vibrant middle class.

I'm all for free trade with advanced nations who also value a strong middle class. China doesn't do that. Mexico doesn't.

If we're going to leave the trickle down framework in place we need to stop the trickle, if not at our borders, than with nations like ours. Canada, Europe, Australia and a few more.

"Trickle down economics works". You've said that many times. Upon what do you base this statement?
This from @bearkat42 's post doesn't exactly make me think that trickle down economics does anything good for the 99% of the country.

 

[ThickStemz]

"Trickle down economics works". You've said that many times. Upon what do you base this statement?
This from @bearkat42 's post doesn't exactly make me think that trickle down economics does anything good for the 99% of the country.

Look at the rise of the economies of the countries who produce the goods we consume in America. Our wealth is trickling from us to them.

If, IF, you wanted trickle down to work to build a solid and prosperous middle class in the United States then you would have to confine that flow to the United States.

This trickle down theory was devised in an era when the United States still had its manufacturing base. If we had not exported all of that infrastructure overseas it would be working here. It is still working. Only now it is building the middle class of china.

I'm not saying trickle down is doing anything to help America. I'm simply saying that it does indeed work as a mechanism of moving wealth down the 'food chain.'

 

[ThickStemz]

Do you have any thoughts of your own?

You seem to always copy paste and link to videos.

 

[Padawanbater2]

Do you have any thoughts of your own?

You seem to always copy paste and link to videos.

Posts #3, #13, #26 & #31 are all original posts

I don't see the point in arguing that trickle-down economic theory works, it just works for other countries, not America, when the entire basis for the implementation of voodoo economics by the Reagan administration was that it would spread prosperity to all Americans. So if the idea was that all Americans would benefit, and all Americans definitively haven't benefited, that's a pretty good indication that no, in fact trickle-down economic theory does not work.

If I tell you to invest in my business and you'll be rich! Then the other guy gets rich and you don't, did my theory work, just not for you? That's the argument you're making.


Reaganomics, trickle-down, horse and sparrow.. whatever you want to call it, it doesn't benefit the poor or the middle-class which is what generates economic growth in a consumer economy

 

[Fogdog]

Look at the rise of the economies of the countries who produce the goods we consume in America. Our wealth is trickling from us to them.

If, IF, you wanted trickle down to work to build a solid and prosperous middle class in the United States then you would have to confine that flow to the United States.

This trickle down theory was devised in an era when the United States still had its manufacturing base. If we had not exported all of that infrastructure overseas it would be working here. It is still working. Only now it is building the middle class of china.

I'm not saying trickle down is doing anything to help America. I'm simply saying that it does indeed work as a mechanism of moving wealth down the 'food chain.'

That bit about China is totally changing the subject. Trickle down economics was sold as something that would benefit the people of the US. Trickle down economics was not just about trade either. It has always been about tax cuts, deregulation and trade policy. But they have never been about raising the status of people in China. The graphic posted by bearkat shows it was a colossal failure. What you say confirms this -- the benefit went to somebody else, except you mistakenly put it in China. The benefit went to the wealthy of the world, particularly the 1% in the US.

Why would we continue a failed experiment? Its time to experiment with trickle up economics.

 

[ThickStemz]

That bit about China is totally changing the subject. Trickle down economics was sold as something that would benefit the people of the US. Trickle down economics was not just about trade either. It has always been about tax cuts, deregulation and trade policy. But they have never been about raising the status of people in China. The graphic posted by bearkat shows it was a colossal failure. What you say confirms this -- the benefit went to somebody else, except you mistakenly put it in China. The benefit went to the wealthy of the world, particularly the 1% in the US.

Why would we continue a failed experiment? Its time to experiment with trickle up economics.

You're missing my point...

Trickle down theory actually goes back to Jean-Baptist Say, in the 18th century he was a French economist. In the United States the idea began to gain popularity in the early 20th century and Kennedy was really the first president to implement them. His tax cuts went into effect after he was assassinated, and was the one who famously said a "rising tide lifts all boats."

Reagan dropped tax rates again from 70% to 50%,. What American politics gets wrong is that their is blame for the downturn in economic cycles. No economic policy can change that.

Would you agree with me that government revenue would be about the same at a 0% tax rate as it would be at 100%? The government wouldn't have revenue if it didn't tax, and no one would work if they had to pay 100% tax.

So how does the China thing affect this, you ask.

It has nothing to do with how supply side (trickle down) economics has been pitched to Americans. I'm simply pointing out how this trickle down policy has been nerfed by our trade policies.

The tax cuts and regulations were said to benefit Americans because the wealthy would take this money and invest it, spend it, start business ventures and the like. THEY HAVE.

In the past this would have helped in America. But all too often now, those investments go into businesses that manufacture those goods in China. Thusly bypassing those in America who it would have helped as recently as the 1990s.

As to your comment about trickle up, we've tried it. Keynsian economics was the cornerstone of FDR. We didn't get out of that depression until the end of WW2, thanks to the rest of the world being destroyed and American factories being largely the only ones left to rebuild the planet. Obama has largely ran his policies off of this idea and this has been one of the worst recoveries in history.

For what its worth, Reagan lowered the taxes to 50%, Bush W. had them down in the mid-low 30s, I think that might be too low.

But the central question here is what is better for the middle class and poor, having money in the hands of the government, or allowing the wealthy to create opportunities for those lower on the ladder to advance and earn more?

Supply side seems to support merit based advancement. The wealthy business owner will reward his best employees.

Demand side (trickle up) seems to be just government giving money to the poor from taxing the rich. As someone else pointed out there isn't enough rich people to make that worthwhile.

 

[Fogdog]

You're missing my point...

Trickle down theory actually goes back to Jean-Baptist Say, in the 18th century he was a French economist. In the United States the idea began to gain popularity in the early 20th century and Kennedy was really the first president to implement them. His tax cuts went into effect after he was assassinated, and was the one who famously said a "rising tide lifts all boats."

Reagan dropped tax rates again from 70% to 50%,. What American politics gets wrong is that their is blame for the downturn in economic cycles. No economic policy can change that.

Would you agree with me that government revenue would be about the same at a 0% tax rate as it would be at 100%? The government wouldn't have revenue if it didn't tax, and no one would work if they had to pay 100% tax.

So how does the China thing affect this, you ask.

It has nothing to do with how supply side (trickle down) economics has been pitched to Americans. I'm simply pointing out how this trickle down policy has been nerfed by our trade policies.

The tax cuts and regulations were said to benefit Americans because the wealthy would take this money and invest it, spend it, start business ventures and the like. THEY HAVE.

In the past this would have helped in America. But all too often now, those investments go into businesses that manufacture those goods in China. Thusly bypassing those in America who it would have helped as recently as the 1990s.

As to your comment about trickle up, we've tried it. Keynsian economics was the cornerstone of FDR. We didn't get out of that depression until the end of WW2, thanks to the rest of the world being destroyed and American factories being largely the only ones left to rebuild the planet. Obama has largely ran his policies off of this idea and this has been one of the worst recoveries in history.

For what its worth, Reagan lowered the taxes to 50%, Bush W. had them down in the mid-low 30s, I think that might be too low.

But the central question here is what is better for the middle class and poor, having money in the hands of the government, or allowing the wealthy to create opportunities for those lower on the ladder to advance and earn more?

Supply side seems to support merit based advancement. The wealthy business owner will reward his best employees.

Demand side (trickle up) seems to be just government giving money to the poor from taxing the rich. As someone else pointed out there isn't enough rich people to make that worthwhile.

Again, the whole trickle down package sold to a naive US voter population contained policies to enrich the wealthy of the US. The wealthy in theory would then invest in ways that benefited the US working and middle classes. In the US, this policy was never about Chinese workers. We can definitely say that these policies have failed to deliver the promise to the US population. That bit about getting off a dead horse applies here.

Again, looking at the graph that bearkat posted, the middle and working classes have done worse than stagnate in their condition ever since your beloved trickle down theory was implemented in a grand experiment. The experiment failed. Compared to earlier years, we can now say that Keynesian, demand side strategies are better for the people of this country than the voodoo practiced after 1978. When an experiment shows a theory to be wrong why should we continue the experiment?

To answer your question regarding "is it better for the middle and lower classes to have more money going to the government or to the wealthy?", well, your own favorite experiment shows us that enriching the wealthy comes as a detriment to everybody else. Its time expand government funding to schools, infrastructure, jobs retraining, healthcare and so forth. Oh and cut defense spending and raise taxes on the wealthy to balance these extra expenditures. You want to call that demand side spending? I call it smart.