Trickle Downers

The Prospect's ongoing exposé of the folly, dysfunctions, and sheer idiocy of feed-the-rich economic policies.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

Trickle Downers

The Poor Die Younger

Nito/Shutterstock
Nito/Shutterstock I ncome and wealth don’t trickle down. Neither do health and longevity. Last week, the Congressional Research Service (CRS) released a report on the life expectancy of Americans, and what that means for Social Security. What the CRS reported is that just as economic inequality is increasing, so is lifespan inequality. For men born in 1930, for instance, 50-year-old individuals in the highest income quintile (the wealthiest 20 percent) could expect to live 5.1 years longer than men in the lowest quintile. For men born in 1960, however, 50-year-olds in the highest quintile could expect to live 12.7 years longer than men in the lowest. Apparently, all the advances in medical science and healthy living that occurred during this rolling 30-year interval were visited upon the rich a lot more than on the poor. It’s the same story for women. For those born in 1930, the lifespan differential at 50 between rich and poor was 3.9 years. For those born in 1960, it had expanded to...

Trickle Downer of the Week: The American CEO

C-Suite compensation continues to grow while workers get left in the dust. 

(AP/Richard Drew) Charter Communications CEO Thomas Rutledge is interviewed on the floor of the New York Stock Exchange, Tuesday, Jan. 14, 2014. T rickle-down capitalism has determined that the average American CEO is 347 times more valuable than the average worker. That’s the main takeaway from the new Executive Paywatch analysis by the AFL-CIO. The labor union federation dug into the compensation levels of CEOs of companies on the Standard & Poor’s 500 Index. The average S&P 500 CEO pulled in $13.1 million last year, a 5.6 percent increase from 2015. Meanwhile, the average employee only made $37,362. Think about that: Your typical head honcho makes nearly as much in one day as his typical employee makes in a year. The compensation winners were the heads of corporate behemoths like Google, Charter Communications, Expedia, CBS, Nike, and Walt Disney. According to most recent data obtained by the AFL-CIO, Sundar Pichai, the CEO of Alphabet, Google’s parent company, is the...

Trickle Downers of the Week: The Republicans on the House Transportation Committee

AP Photo/Pablo Martinez Monsivais
AP Photo/Pablo Martinez Monsivais House Transportation Committee Chairman Bill Shuster speaks on Capitol Hill, where United Airlines CEO Oscar Munoz testified on May 2, 2017. O n Tuesday, May 2, America’s airline executives were hauled before the House Transportation Committee to justify their businesses’ conduct to the assembled representatives of the American people and the flying public. At least, that’s what the Democratic members of the committee wanted to hear. The majority Republicans, however, were happy to cut the airlines some mega-slack. As Dana Milbank noted in The Washington Post , Republican members, led by Committee Chair Bill Shuster of Pennsylvania, happily parroted airline management’s talking points. The problem at the root of the airline passenger experience, they said, is that the airlines are overregulated. “I don’t believe in overburdening our businesses,” Shuster said, while adding the codicil that Congress might seek to add a few more regulations “next time”...

Why a $15 Minimum Wage Is Good Economics

Opponents of minimum-wage increases have long focused on the wrong economic questions.

(Photo: AP)
(Photo: Kaitlin McKeown/The Herald-Sun via AP) Brandon Ruffin holds a sign during a Fight for 15 rally in Durham, North Carolina, on November 29, 2016. I n our last column , we offered two bold policy ideas: Medicare for All and a job guarantee. Now, we’re pleased to see Democrats in the House and the Senate step up with an idea of their own: raising the minimum wage to $15. The Raise the Wage Act of 2017, co-sponsored by Senators Patty Murray and Bernie Sanders and House members Bobby Scott and Keith Ellison, would hike the federal minimum wage to $15 an hour by 2024. It would then index the minimum wage to the median wage (to keep low-wage workers’ pay changing at the same pace as the pay of middle-wage workers) and would gradually phase out the loopholes in federal minimum-wage law that set subminimum wages for tipped workers, teenagers who’ve just started their jobs, and workers with disabilities. The value of the federal minimum wage peaked in 1968, at $9.68 in inflation-adjusted...

Trump’s Big Tax Cut Is Unadulterated Trickle-Down Fundamentalism

In a scramble to put his name on at least one success in his first 100 days, the president relies on an old supply-side standby.   

(AP/Carolyn Kaster) Treasury Secretary Steven Mnuchin, right, and National Economic Director Gary Cohn, arrive in the briefing room of the White House in Washington, Wednesday, April 26, 2017. D onald Trump has been in office nearly 100 days with little to show for it, save for signing a bunch of fancy parchment that orders the roll back of several environmental and worker protections. His fragile ego is driving his need to do something big. And so he’s doing what Republicans generally do when all else fails: propose steep tax cuts for the wealthy and corporations. On Wednesday, Trump’s Treasury Secretary Steven Mnuchin and chief economic adviser Gary Cohn unveiled their tax plan , one that, as expected, is centered on unadulterated trickle-down economics. Echoing his presidential campaign’s tax plan, Trump’s proposal calls for a 20 percent cut in the tax rate for corporations—from the current rate of 35 percent down to 15 percent. Furthermore, he wants to slash the rate for pass-...

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