By David Truskoff
23 April, 2007
Trickle down theory of economics has been a Conservative political anthem
for a century. Even though most economists admit that it doesn’t
work greed still prevails and old trickle down spreads around the world.
The theory is that if you
get investors, foreign and local to invest in companies and give the
companies large tax breaks, the profits they make will trickle down
to the workers. It’s like the old Wobblies song (International
Workers of the World) "there will be pie in the sky when you die
THAT’S A LIE!"
The folks that put words
and ideas into the mouth of Ronald Reagan in the economic insanity of
the 1980s cut the top tax bracket from 70% down to 50% and then down
to 28%. How well I remember Reagan’s budget director David Stockman
telling American workers that the tax cuts would stimulate the American
economy and benefit the workers.
Cold war profits soared,
but the number of people below the poverty level increased from (31.8
million) to (39.3 million) according to the Statistical Abstract of
the United States. The federal budget deficit grew from $74,000 million
in 1980 to $221,000 million in 1986 and what was called the greatest
collapse of U.S. financial institutions since the 1930s left the working
poor devastated and facing foreclosures on their homes.
From 1986 to 1989, 296 savings
and loan institutions with total assets of $125 billion were forced
to close and many workers realizing the American dream of home ownership
for the first time lost their homes.
An April 10, 2007, editorial
in the New York Times claimed a net loss of homeownership for up to
one million families and challenges Congress and state governments to
determine whom to hold accountable. It is not whom, but What."
Henry Wallace, vice President
under FDR and Presidential candidate then, said back in 1948 "War
preparations create record profits for big business, but only false
prosperity for the people—their purchasing power shrinks as prices
rise, their needs go unfilled, and they are burdened with new debts."
He was right then, as Harry Truman prepared for the war In Korea and
became the worst trickle down labor president in history, and Wallace
would be right today.
Trickle down has never worked;
it is not working now. It is a steroid for greed as Russian workers
have found out and the Chinese are beginning to understand. It has caused
the old cast system in India to be born anew. Countries, that allow
foreign investors to buy into their companies and control the workers
and the countries resources, quickly discover that trickle down does
not trickle. The rich get richer, the poor get poorer. That is always
a formula for social upheavals.
The major cheerleader for
Wall Street, the Associated Press gleefully reported on April 20, 2007
that "the signs of a surging economy are every where in China,
but Chinese leaders are trying to apply the breaks." It is not
the inflation that they have caused that they fear; it is the workers
In my book "The Genes
Of Gregoria" I quote a Russian economist who was old, sick and
dying. He earned many medals fighting the great war against the Nazis,
but after seeing the boorish drunk Yelstin give away the nations resources
and insert the trickle down, he shouts at his wife, "Is that what
so many of my comrades died for…so a few Russians could get rich?"
At a book show in New York
two years ago, a Chinese editor took my book home. Is that what you
fear for China?" she asked by email "Yes," I replied.
"Greed feeds on greed." Thousands of holocaust survivors living
in Israel live in shameful poverty, as Trickle down is a stanchion of
Israel’s economy. Some 80,000 of the 260,000 Holocaust survivors
in Israel are living under the poverty line, according to the Holocaust
Survivors' Welfare Fund.
Trickle down creates and
thrives on war. War profits do not trickle down they land on the workers
drip by drip, but inflation keeps them at the faucet trying to survive.
Those of us who call ourselves "peace people" do what we can
issue by issue. We try, but only if we can cut off the serpent’s
head will real peace arrive. The serpent is greed and it feeds at the
trough of Trickle down Economics.
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