Rare News Desk
Every now and again, economic author Thomas Sowell challenges liberals to show him where any economist has proposed “trickle-down” economics. He’s just issued the challenge again after New York Mayor Bill de Blasio
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denounced people “on the far right” who “continue to preach the virtue of trickle-down economics.” According to Mayor de Blasio, “They believe that the way to move forward is to give more to the most fortunate, and that somehow the benefits will work their way down to everyone else.”
Sowell is wrong. All economics is a version of “trickle-down.” But politics is worse. Politics is trickle-down on steroids.
I first became aware of the trickle-down smear in the early Reagan administration, when liberals were sneering, at the start of the 20-year Reagan boom, that Reaganomics was trickle-down economics and would never work.
But let’s give our liberal friends the benefit of the doubt.
Orthodox economics says that the way to grow the economy is with hard money, low and simple taxes, simple regulations, and small government. This allows entrepreneurs to create new businesses and when new businesses grow they create jobs. Workers don’t get jobs until business is prospering.
Notice what is not happening. These entrepreneurs are not having to butter up some politician, they are not having to wade through reams of regulations before opening the business, they are not spending hours and hours figuring out their payroll taxes, their unemployment, their workers comp., their disability premiums.
But for liberals, this is trickle-down. The money isn’t going directly to the poor, it is going to businessmen and their profits and only then trickling down to the less fortunate.
So let’s look at things the liberal way. Let’s announce a program for Patient Protection and Affordable Care. This would bring health insurance to the 30 million uninsured: direct benefits and no trickle-down, right?
Except it doesn’t work that way. First, liberals have to buy off the powerful special interests, those deemed the most fortunate: big corporations, the big unions, big pharma, a “risk corridor” for the insurance companies. Then millions of people lose their health insurance and young people are forced to buy health insurance. And then millions of people get enrolled in Medicaid, a program in which health care may eventually trickle down through bureaucrats and health providers to the recipient, or maybe not.
All this has to happen before a single dollar of health benefit trickles down to the uninsured.
It gets worse. Look at Keynesian economics. First there is cheap money, known in polite circles as “monetary stimulus.” This goes directly to Wall Street and the rich by way of “quantitative easing,” a process that injects $80 billion into the economy; it gooses the stock market and eventually causes inflation, which hits the poor worst of all.
Then there is fiscal stimulus. In 2009, without a single vote from “the far right,” the government gave cash money to well-paid state and local government workers to avoid layoffs. Then there were the liberal pet projects on mass transit, bike paths, and green energy: money for well-connected contractors. Oh, and extended unemployment benefits, which seduce the laid-off into putting off looking for work.
When liberals sneer about “trickle-down,” they are complaining about the reality that before poor, unskilled people can get hired, all the skilled, eager job-seekers are bound to get hired first.
And they are disguising the ugly fact that big government is “trickle-down” on steroids. You want some free stuff? Take a number. We’ll call you after the big contributors, after the special interests, after the lefty activists, after the unionized bureaucrats have got theirs.
Capice?
