Perhaps this topic could be linked up with income inequality. Two sources to consider that point to trickledown economics not working are as follows:
-- JamesPoulson ( talk) 16:21, 21 August 2013 (UTC)
Removed the following paragraph:
The idea that the "creative sector of the economy" created employment is rooted in the argument that the United States is successful because it is a free market and capitalist state, and that hatred of communism, and anything associated with the left in general, is a political virtue. Being a political, rather than an economic, term, both sides in the debate demonized the others as being heartless and in league with the forces of greed.
I'm not sure what the thesis of this paragraph is, but it doesn't seem to have much to do with trickle-down theory. It seems to state that supply-side economics is rooted in hatred of the left, while I would think that the converse is much more true. Either way, it's a partisan generalization, and a strawman slur on economic theory that has much more credible arguments against and for. 69.202.77.44 29 June 2005 08:08 (UTC)
== Read Smith before you quote him == and even then, do him justice; and even then, opinions and personal or political interpretations are not encyclopedic - they are political and belong on this discussion page, or on a politics site. I come just short of advocating a complete removal of all the Smith material, except that these sorts of argument have been made for two decades in mainstream politics. It is relevant because of the politics, not because of any genuine intimate connection between Nations and trickle-down. A genuine connection to Kurzets and Keynes is actually less problematic, but that's not how the politics fall.
The concept was also discussed by Karl Marx. For example,
Capital can multiply itself only by exchanging itself for labor-power, by calling wage-labor into life. The labor-power of the wage-laborer can exchange itself for capital only by increasing capital, by strengthening that very power whose slave it is. Increase of capital, therefore, is increase of the proletariat, i.e., of the working class.
And so, the bourgeoisie and its economists maintain that the interest of the capitalist and of the laborer is the same. And in fact, so they are! The worker perishes if capital does not keep him busy. Capital perishes if it does not exploit labor-power, which, in order to exploit, it must buy. The more quickly the capital destined for production -- the productive capital -- increases, the more prosperous industry is, the more the bourgeoisie enriches itself, the better business gets, so many more workers does the capitalist need, so much the dearer does the worker sell himself. The fastest possible growth of productive capital is, therefore, the indispensable condition for a tolerable life to the laborer.
I removed this section from the main article because I don't see the direct relevance. The only direct relevance of Marx is that anti-communist rhetoric is often used in advocacy of trickle-down. However, this is rhetoric, not reason. And this is actually relevant to the Soviet style of communism, not Marxism.
I originally added it to the text because it supports the economic thesis. When even your ideological enemies agree with you then you should give them a little room. Did Adam Smith vote for Ronald Reagan!!! Of course he did not. If there is no discuss on this within the next week I'll put the text back. TERJE 26-JUNE-2004.
=== There was no context supplied with the quote, === and it seams to me that this very quote is a counter-argument to trickle-down. Are you saying Marx's position was that the capitalists (owners) weren't getting a fair deal. The idea of trickle-down is relief for the upper classes. This is the first time I have ever heard someone say Marx wasn't saying the opposite: that the working class wasn't getting a fair deal - that he was advocating relief for the lower classes. This article has a lot on politics, but is sorely lacking in facts and theories. For example, improvements have historically manifested in the upperclasses before manifesting in the lower classes. P.S. "When even your ideological enemies agree with you then..." implies that your point is a point of debate, not a point of theory or fact. So if you're going to reintroduce the work are you going to give it context? and if that context is as a point of debate, will you label it as such? I'm not saying don't put it in, just it should be relevant. And maybe you should spell it out - for those of us who don't yet see Marx as a proponent of the idea that the upper classes (owners) aren't getting a fair deal.
I don't think the Marx quote makes any comment on who is getting what deal. It is first and formost an economic observation. Namely that an abundance of capital leads to a better wage deal for workers. As such it is a quote that supports the trickle down argument. Would you be happy for me to put the quote back in if I added some more context around it? TERJE 28-JUN-2004.
The idea that something can be good for everyone is not the question though. Trickle-down is very specific - that, by a process benefits to the upperclasses trickle-down to the lower classes. So if you could explain how Marx demonstrated trickling-down, that would make the quote a much stronger addition to the article. This quote seems to be saying that the relationship between labor (lower classes) and capital (upper classes) is reciprical - that there is no argument leaning trickle-up, nor trickle-down. Until the last sentence; to improve the working condition of the working classes is the fastest (I presume best) way of stimulating the entire economy. That sounds like trickle-up in that the capital will be more productive and profitable after an improvement to the conditions of the working classes. That, by a process, benefit trickles up from the masses into the upper classes. So if you could explain how this quote translates into the idea that incentives for the wealthy, by a process, trickle down to the masses, that would be great. Also, where is this quote from?
Many major economists have said that to improve the lowest ranks of the economy is the best and fastest way to improve the economy as a whole; that to benefit the economy is to benefit everyone. For example Smith in Nations said that apprenticeships were a drag on the economy; that labor would be more motivated to enter a trade and to work hard and often if only they were free to do so and paid in direct reward for the quality and quantity of their labor. Keynes is credited with "demand-side" economics, that more money in the pockets of the masses will stimulate capitalist growth in the economy as a whole. And here, in this quote by Marx, Marx advises us to improve the working condition of the laborer. But this is all trickle-up. What is the theoretical body of trickle-down? Who has said it? and what is the merits of this theory?   - For example, the quote of Smith; who said this is an advocation of trickle-down? did Reagan say it? and if so, when and where?
P.S. Kuznets was added back in by someone with the addition of that which made Kuznets relevant to this article - improvements have hit the upper classes before the lower classes.
== Horse and Sparrow Economics == I removed this from the article
I think it is humerous and has a point, but I don't think its encyclopedic - at least, not in this article. I have put a link to John Kenneth Galbraith because it is relevant to trickle-down, just not central. P.S. a web search for "Horse and Sparrow" finds a lot of articles on trickle-down.
I'm from europe, and sorry, but from my peculiar point of view i see Marxism a wee bit more important, than Reagan. Please, write less about american tax percentages, and more about the global aspect.
The difference between you and the person that quoted Marx is that he is interest in positive economics. What he said was correct. Marx said that more capital into investment for the factory will lead to higher wages and those a higher purchasing power for the workers. That is trickle down. If the rich can keep more to invest through lower taxes then you will have higher wages for workers. He admits that more capital investment leads to higher wages and if lower taxes leads to more money for capital investment then he is clearly agreeing that trickle down works. —Preceding
unsigned comment added by
Sabaton10 (
talk •
contribs)
10:43, 18 September 2010 (UTC)
The link you see above links to someone else's writing; while Galbraith is quoted in it, and I'll presume that Galbraith really did make the analogy, I think there is a better source of that information than the link above. I'm going to remove the link in the article. If you disagree, please tell me why and go ahead and readd the link to the article.
I think supadawg pruned a little too much. It now seems less balanced, and less NPOV than before. The points made to refute Adam Smith's endorsement are basically correct, and to compleatly remove them instead of improving them seem counter-productive to NPOV. Therefore I added these points back in, and I will make efforts to clean them up and improve them.
I think a better approach to improving NPOV of this article is to clean up and improve the position of both sides.
I did leave out the section "criticisms of the reaganite pitch". This part seemed redundant and less well written. I invite people to look at the history and read that part and add it back and clean it up. It is not entirely without merit.
Is the blockquote in the middle the source of NPOV problems? Who is this attributed to? Can someone point to or reproduce David Stockman's speach?
Is this really relevant to trickle down economics. Is it accurate to imply that he is anti-Keynes?
I removed this from the article:
Other variants include Kuznets' "Law", which says that increases in income inequality that occur in the early stages of industrialization are followed by increases in income equality. Ironically, this is close to some of Karl Marx's theories. A more general version argues that increases in gross domestic product are almost always good for the poor.
I doubt that Kuznets is directly relevant to trickle down theory and I doubt the characterizations here. Marx? A far more common characterization of Kuznets is that his work helped the "Keynesian Revolution". Yet, trickle down and supply side are anti-Keynes. A more appropriate place to mention Kuznets may be in the article on Keynes. Also, I think the wikipedia article on Kuznets is more 'encyclopedic'.
=== . . more kuznets' law === there is now relevant content form kuznets in the article: improvements occur first in the upper classes, then in the lower classes.
However, the history of kuznets in this article is a good illustration of a lack of differentiation; Kuznets has been repeatedly used as an argument for trickle-down. However,
P.S. Tell me how the average joe was induced to invest by Reaganomics. If you can do that you can validly cite Adam Smith as an advocate of trickle-down.
This is an interesting sentence, and I've seen similar sentiments for two decades:
To Smith, the "well-governed society" is one in which free markets replace state command as the main method of resource allocation. Smith's argument is that increased division of labor (specialization) raises labor productivity. This in turn leads to lower costs, which are passed on to consumers in the form of lower prices (correcting for inflation).
This blockquote may seem uninformed, but I believe its inacuracies are intentional and politically motivated.
== More from the Ministry of Truth == I pasted the following sentence from the article. It follows a line of reasoning that Smith advocated Supply-Side Economics.
A major variant of trickle-down theory would say that tax cuts for the rich, special benefits for them, subsidies for corporations, and in general, government/business cooperation would not simply provide direct benefits to business but would also help the middle classes and even the poor. In effect, it says that "what's good for business is good for the country."
Read the book! Incentives like these are EXACTLY what smith was critical of. It's the major theme of Nations. If an incentive benefits one group of producers over another, it's not a free market, and that's exactly what Smith's postion is.
Although we must contend that these two topics be comprised as one, we must hold for the individual user whose goals are to specifically atribute this to Reaganomics.
Did Stockman actually use the phrase "trickle down" in defense of the policies? What was the context? Trickle down effect should be merged here, but first I want to resolve that question. Gazpacho 19:32, 13 August 2006 (UTC)
It's come to my attention that the phrase "trickle-down" in politics comes from an earlier use of the phrase in regard to marketing (see trickle down effect, diffusion (business). "Trickle-down theory" can refer either to the marketing effect or the political catch phrase, so it should be disambiguated. Gazpacho 22:57, 20 August 2006 (UTC)
The article states "Economist Thomas Sowell wrote that the actual path of money in a private enterprise economy is quite the opposite of that claimed by people who refer to the trickle-down theory....."
Where should this paragraph go? Currently it is in the "Proponent's views" section. I do not believe it should go there because the paragraph is in fact a critique of the alleged trickle-down theory. Perhaps, then, it should go in the "Criticisms" section since it is a criticism. I did move it to that section, but 71.231.182.24 reverted my edit. I suppose the problem is that Sowell is actually a proponent of low taxes; he has merely critised the idea that wealth "trickles down".
This makes him both a proponent of "trickle-down economics" as defined by its detractors and simultaneously a critic of the fundamental proposition of the allged trickle-down theory. So which section do you think this paragraph should go in? -- 69.69.186.223 19:45, 13 June 2007 (UTC)
This makes him both a proponent of "trickle-down economics" as defined by its detractors and simultaneously a critic of the fundamental proposition of the allged trickle-down theory. So which section do you think this paragraph should go in? -- 69.69.186.223 19:45, 13 June 2007 (UTC)
Why exactly does this article kick off with an ideologue saying the thing it is talking about doesn't exist? It's not "context" so much as "well poisoning". Grace Note ( talk) 04:24, 3 December 2013 (UTC)
→→→→Because the thing this article is talking about does NOT exist. "Trickle down" is not a theory that exists or has proponents. It is a pejorative term used to mis-characterize and attack supply side economics. It would be like having an article which referred to Keynesian Economics as "Magic Money Out of Thin Air Theory." It's an attack on the theory itself to use the misnomer. AdamRSchuster ( talk) 06:01, 17 February 2016 (UTC)
Sowell rejects the name "trickle-down", not the overall theory. He claims that it would be more aptly named "trickle-up". According to Sowell, when an investment is made, the benefit to those lower in the economic food chain is immediate, while the initial investor may not see a return for years. - JackieRipper ( talk) 18:16, 27 March 2008 (UTC)
Those who imagine that profits first benefit business owners -- and that benefits only belatedly trickle down to workers -- have the sequence completely backward. When an investment is made, whether to build a railroad or to open a new restaurant, the first money is spent hiring people to do the work. Without that, nothing happens.
Money goes out first to pay expenses first and then comes back as profits later -- if at all. The high rate of failure of new businesses makes painfully clear that there is nothing inevitable about the money coming back.
Even with successful businesses, years can elapse between the initial investment and the return of earnings. From the time when an oil company begins spending money to explore for petroleum to the time when the first gasoline resulting from that exploration comes out of a pump at a filling station, a decade may have passed. In the meantime, all sorts of employees have been paid -- geologists, engineers, refinery workers, truck drivers.
This is in the Article:
Proponents argue economic growth flows down from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. However, there is very little proof that exist to show the correlation
Should there be a citation,or refrence or something on showing that it doesen't work? Edit: This article also seems overly critical of it, although as I am not an expert on economics (merely a 'passerby' :p) the Criticism may be well founded and true. Just pointing it out. -- Passerby25 ( talk) 03:49, 6 April 2008 (UTC)
Can we get a source that says that the tax rate is 18%? I guess I just want to know where this figure came from.-- Taybo20 ( talk) 02:15, 15 May 2008 (UTC)
The section "Criticisms" contains a couple of claims that Galbraith makes about trickle-down economics, and lists his book, "The Good Society: The Humane Agenda" as a source. However, I can't find either of these claims in the book. I checked the history of the article and found that the claim that trickle-down economics "was partly to blame for the Panic of 1896" was created by User:Griot. I left a message for that user, but discovered on their user page that they've been blocked for using about 12 accounts. It's not unlikely that Galbraith would criticise trickle-down economics, but we could really do with a page/different source for this claim. I'm checking to see who added the "horse and sparrow" claim by Galbraith now. Darimoma ( talk) 08:29, 24 July 2008 (UTC)
Okay, User:Gazpacho originally put the book in as a source, stating "I'm guessing this to be the source for Galbraith, based on the URL" (originally the quote unsourced; it was subsequently sourced, using a website - which is now down, and I assume was down at the time of Gazpacho's edit - with a URL ending in "goodsociety.htm"). However, I can't find mention of "horse and sparrow" economics in the book, and wikiquote has the quote as an unsourced quote. Can anyone can supply the page numbers of these two claims (or a different source)? Darimoma ( talk) 08:49, 24 July 2008 (UTC)
N.B. User:Gazpacho has also been blocked for sock puppetry. Darimoma ( talk) 08:51, 24 July 2008 (UTC)
Given what I've said in the above section (Galbraith), and also given that source three does not seem to back up the claim that Clinton cut taxes by 3%, I'm concerned that in the past some edits and sources haven't been checked thoroughly enough.
Is there any sort of banner we can put on the article to warn readers that this is the case? Darimoma ( talk) 08:23, 25 July 2008 (UTC)
Source 7 doesn't mention trickle down anywhere on the page. It seems unlikely David Stockman ever said the supposed quote. — Preceding unsigned comment added by Sdmitch16 ( talk • contribs) 14:55, 13 October 2012 (UTC)
If a rich American man invests in foreign labor then his tax levels won't effect American labor. Of course the free traders will say, "well products will be more expensive," but free traders lie.
The theory of trickle down economics revolves around investing in labor of your own country.
So if an Irish businessman, who owns stock in a company which employs Americans, gets taxed higher in Ireland it would effect those American employees.
If an American businessman, who owns stock in a company which employs Chinese, gets taxed higher in America it would effect those Chinese employees.
So tax the rich, in this global economy it won't effect Americans when the American rich are employing Chinese and Mexicans. Eat that free traders. 98.165.6.225 ( talk) 12:36, 4 September 2008 (UTC)
You are correct but they invest in foreign countries because the others countries have less regulatory costs, that is a fact. But if your solution is tax them then they will just leave the country as many are already doing to lower taxed countries such as Hong Kong and Singapore. Free trade is recognized by a good thing by 95% of Economist, from Adam Smith to Paul Krugman. If you want to publish an econ paper dismissing free trade then go ahead. You also realise that higher wages means higher production costs which means higher consumer costs right? Are you an advocate of inflation? —Preceding unsigned comment added by Sabaton10 ( talk • contribs) 10:48, 18 September 2010 (UTC)
Don't give Smith a black eye: aside from this being mischievously misleading, your not helping. I removed the following from the article Blablablob ( talk) 22:47, 21 September 2008 (UTC)
I wouldn't have a problem with the quote if there were reliable secondary sources making the connection between Smith's views and trickle-down economics more explicit. Otherwise, we have to be wary about primary sources and the possibility that the article might be engaging in quote mining. Perhaps Adam Smith was constructing only one side of an argument regarding the merits and demerits of taxation, for example. This is indeed quite a common device in fundamental philosophical and scientific works (and was so particularly in Smith's time). Anyway, until such sources can be provided, and the improved context that would hopefully come along with better sources, I don't believe that the quote should remain in the article. siℓℓy rabbit ( talk) 12:42, 3 October 2008 (UTC)
Ya I do because the Weekly Standard are a bunch of economic illiterates that think because one advocates a free market then they in turn advocate for tax breaks only for the rich. Adam Smith would have equally approved of cutting taxes for the middle class and lower class as Kennedy did. —Preceding unsigned comment added by Sabaton10 ( talk • contribs) 10:52, 18 September 2010 (UTC)
It seems to have been added to give credence to proponents of trickle-down economics, but this section doesn't say enough to add to the definition or understanding of the term, in my opinion. Scottishriver ( talk) 22:33, 14 November 2008 (UTC)Scottishriver
Since the term itself is a spin, I added the counter term to the beginning to neutralize it. —Preceding unsigned comment added by 209.6.113.78 ( talk) 03:43, 18 July 2009 (UTC)
This article needs a section about the results of real-world implementations of trickle-down economics. There's a similar section in the article about supply-side economics, but it focuses mostly on the effect that it had on government revenues. —Preceding unsigned comment added by 72.216.44.120 ( talk) 03:21, 9 February 2009 (UTC)
Discussing the real world effects/implications of trickle-down economics would make about as much sense as discussing the environmental impact of unicorn wrangling. Trickle-down economics isn't an idea that exists so it can't be a policy in the real world. AdamRSchuster ( talk) 06:10, 17 February 2016 (UTC)
I helped put the article into its current format some time ago, and looking at it now, I don't really like this point-counterpoint business. It has no coherence, and it violates POV by accepting the position of those who use the term "trickle-down" pejoratively. Trickle-down economics is not a theory. It is a political epithet and label used against certain policies, whose proponents do not refer to them that way. I think the article should focus on the phrase as a phrase, covering its history, the motivations for its use, and the criticism of the phrase. The "proponents' views" section must go. It attempts to dispute the label while at the same time admitting it, which is fundamentally against NPOV. WillOakland ( talk) 07:59, 2 May 2009 (UTC)
Uh, Im not an expert. But I dont agree, we learn about the trickling-down effect at University, check out Hirschman The Strategy of Economic Development 1958 —Preceding
unsigned comment added by
87.96.244.108 (
talk)
08:25, 10 May 2010 (UTC)
I'm pretty sure I remember Pres. Reagan using the term first. Dloh cierekim 13:40, 28 March 2010 (UTC)
This quote is referenced to Aghion and Bolton (1997:151), which is false. Aghion and Bolton do not even touch upon the terminology used to describe this economic phenomena in political circles, but rather make a down-to-earth mathematical model of wealth generation and redistribution under trickle down economics, showing it cannot lead to the most efficient outcome. Nowhere in the text is the word "Socialist" or "Conservative" even mentioned! Further, I doubt, in any case, that either Aghion or Bolton would ever use the US meanings of "Liberal", "Conservative" or "Socialist", as they both have European academic and professional backgrounds. As such, even if they delved into terminology, they would have probably used "American social-liberal", "Libertarian" and "Social Democrat" to describe the above mentioned political currents. I am thus removing this misappropriated dubious statement. -- Xanthar ( talk) 08:11, 5 July 2010 (UTC)
The reference to the Austrian School as those who considers the term "trickle down economics" to be wrong shows the editor is politically and not economically inclined. Anyone with a basic academic understanding of the term Austrian School will know how unrelated and non professional the sentence is. Not only is the edit itself wrong and openly biased it is also falsely marked with the minor flag. This is not a good faith edit. I kindly ask the editor Jmaximus to avoid disrupting the stable version of the article without further deliberation and consensus. -- MeUser42 ( talk) 10:22, 1 May 2012 (UTC)
I think the graph in the lede might be considered potentially misleading. The problem is that it combines real and projected data, not in itself a bad thing but with the projected data included it gives a fairy strong impression of an inverse relationship between the depicted revenue and spending. However, if you obscure the projected part, to my eye at least, the relationship is far less clear.-- IanOfNorwich ( talk) 11:49, 9 July 2012 (UTC)
IanOfNorwich said: "I think the graph in the lede might be considered potentially misleading". I agree. Let's remove the graph. If you want to introduce your changea, you need to find the sources, not send me to Google scholar. Please read WP:RS. As for Sowell, from our article: "Sowell further has made the case[8] that no economist has ever advocated a "trickle-down" theory of economics, which is rather a misnomer attributed to certain economic ideas by political critics.[9]". Which, I think you would agree, strengthen my point. -- MeUser42 ( talk) 01:13, 13 October 2012 (UTC)
t:::::::::1. Where did I say they are not factually accurate? 2. You might want to reread the discussion, I can't see how you can think that. -- MeUser42 ( talk) 10:53, 14 October 2012 (UTC)
Response to third opinion request: |
Hi. I have reviewed the graphs, and most of the removed graphs and captions are a clear case of expressing a POV and/or synthetic conclusions. The graphs can be factually accurate while still having this problem. As the examples at WP:SYN show, it is often raw factual data that is abused to synthesize a conclusion. We can't take a graph of raw economic data and draw a new conclusion about what caused it. This is especially true when the subject is nebulous and poorly defined like this one is. Even with secondary source analysis, these primary source graphs must be carefully presented in a neutral way that avoids weasel words. The same is true of MeUser's CBO graph that tends to indicate that trickle-down was never implemented as a macroeconomic policy in any meaningful way, and definitely not since 2008. We can't present that graph and say "look here this proves that trickle down never was policy" any more than we can present graphs of increased wealth imbalance and say "trickle-down caused this". Gigs ( talk) 15:36, 16 October 2012 (UTC) |
Sources relating trickle-down directly to net worth, top tax rates, and employment growth:
Robert H. Frank (April 12, 2007) "In the Real World of Work and Wages, Trickle-Down Theories Don’t Hold Up" New York Times Economic Scene: "Trickle-down theorists are quick to object that higher taxes would cause top earners to work less and take fewer risks, thereby stifling economic growth. In their familiar rhetorical flourish, they insist that a more progressive tax system would kill the geese that lay the golden eggs. On close examination, however, this claim is supported neither by economic theory nor by empirical evidence.... If economic theory is unkind to trickle-down proponents, the lessons of experience are downright brutal. If lower real wages induce people to work shorter hours, then the opposite should be true when real wages increase. According to trickle-down theory, then, the cumulative effect of the last century’s sharp rise in real wages should have been a significant increase in hours worked. In fact, however, the workweek is much shorter now than in 1900. Trickle-down theory also predicts shorter workweeks in countries with lower real after-tax pay rates. Yet here, too, the numbers tell a different story. For example, even though chief executives in Japan earn less than one-fifth what their American counterparts do and face substantially higher marginal tax rates, Japanese executives do not log shorter hours. Trickle-down theory also predicts a positive correlation between inequality and economic growth, the idea being that income disparities strengthen motivation to get ahead. Yet when researchers track the data within individual countries over time, they find a negative correlation. In the decades immediately after World War II, for example, income inequality was low by historical standards, yet growth rates in most industrial countries were extremely high. In contrast, growth rates have been only about half as large in the years since 1973, a period in which inequality has been steadily rising. The same pattern has been observed in cross-national data.... larger shares for poor and middle-income groups were associated with higher growth rates."
Joseph E. Stiglitz (May 2011) "Of the 1%, by the 1%, for the 1%" Vanity Fair: "Of all the costs imposed on our society by the top 1 percent, perhaps the greatest is this: the erosion of our sense of identity, in which fair play, equality of opportunity, and a sense of community are so important. America has long prided itself on being a fair society, where everyone has an equal chance of getting ahead, but the statistics suggest otherwise: the chances of a poor citizen, or even a middle-class citizen, making it to the top in America are smaller than in many countries of Europe. The cards are stacked against them. It is this sense of an unjust system without opportunity that has given rise to the conflagrations in the Middle East: rising food prices and growing and persistent youth unemployment simply served as kindling. With youth unemployment in America at around 20 percent (and in some locations, and among some socio-demographic groups, at twice that); with one out of six Americans desiring a full-time job not able to get one; with one out of seven Americans on food stamps (and about the same number suffering from “food insecurity”)—given all this, there is ample evidence that something has blocked the vaunted “trickling down” from the top 1 percent to everyone else. All of this is having the predictable effect of creating alienation—voter turnout among those in their 20s in the last election stood at 21 percent, comparable to the unemployment rate"
Mehrun Etebari (July 17, 2003) "Trickle-down economics: Four Reasons Why It Just Doesn't Work" United for a Fair Economy: "The past 40 years have seen a gradual decrease in the top bracket's income tax rate, from 91% in 1963 to 35% in 2003. It went as low as 28% in 1988 and 1989 due to legislation passed under Reagan, the trickle-down theory's most famous adherent.... 1. Cutting the top tax rate does not lead to economic growth.... 2. Cutting the top tax rate does not lead to income growth.... 3. Cutting the top tax rate does not lead to wage growth.... 4. Cutting the top tax rate does not lead to job creation." (The four of which are each illustrated by separate time series graphs.)
Christopher J. Niggle (June 1998) "Equality, Democracy, Institutions, and Growth" Journal of Economic Issues Vol. 32, No. 2, pp. 523-530: "inequality can reduce economic growth in countries with democratic political systems. Empirical work based upon those models confirms that hypothesis across countries and through time." (Mentions trickle down in the sixth paragraph as discredited, but doesn't make a good pull quote.)
I will work on incorporating these sources into the text and revising the captions for the graph so that they are in line with them when I get time later. TraderGail ( talk) 00:11, 17 October 2012 (UTC)
What's most reliable is if you'll bring an example of an economist advocating trickle down. The usage of "trickle down labor income" in the article (see included def. above) is very clearly different and unrelated to what this article deals with. -- MeUser42 ( talk) 00:50, 18 October 2012 (UTC)
This is in response to the question above by an editor if you are allowed to include graphs from published works. The answer is yes. "Charts, graphs, and tables are not subject to copyright protection because they do not meet the first requirement for copyright protection, that is, they are not “original works of authorship,” under the definitions in the Act." See the following link which gives a clear and concise explanation http://www.lib.umich.edu/copyright/copyright-info/charts-tables-graphs. Guest2625 ( talk) 11:15, 19 October 2012 (UTC)
MeUser42, I do not understand this revert which you have made twice without discussing it. The quote from the source is completely clear and consistent with the original edit:
“ | The hard part of the supply-side tax cut is dropping the top rate from 70 to 50 percent—the rest of it is a secondary matter," Stockman explained. "The original argument was that the top bracket was too high, and that's having the most devastating effect on the economy. Then, the general argument was that, in order to make this palatable as a political matter, you had to bring down all the brackets. But, I mean, Kemp-Roth was always a Trojan horse to bring down the top rate."
A Trojan horse? This seemed a cynical concession for Stockman to make in private conversation while the Reagan Administration was still selling the supply-side doctrine to Congress. Yet he was conceding what the liberal Keynesian critics had argued from the outset—the supply-side theory was not a new economic theory at all but only new language and argument to conceal a hoary old Republican doctrine: give the tax cuts to the top brackets, the wealthiest individuals and largest enterprises, and let the good effects "trickle down" through the economy to reach everyone else. Yes, Stockman conceded, when one stripped away the new rhetoric emphasizing across-the-board cuts, the supply-side theory was really new clothes for the unpopular doctrine of the old Republican orthodoxy. "It's kind of hard to sell 'trickle down,'" he explained, "so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory. |
” |
Since you have accused me of "edit warring" don't you think you should be discussing before making the same revert one after another? TraderGail ( talk) 22:01, 13 October 2012 (UTC)
"The Congressional Research Service has withdrawn an economic report that found no correlation between top tax rates and economic growth, a central tenet of conservative economic theory, after Senate Republicans raised concerns about the paper’s findings and wording." [Source: http://www.nytimes.com/2012/11/02/business/questions-raised-on-withdrawal-of-congressional-research-services-report-on-tax-rates.html] -- 80.226.24.7 ( talk) 09:05, 2 November 2012 (UTC)
I've started a centralised discussion here regarding File:Employment growth by top tax rate.jpg, which is used in this article. Gabbe ( talk) 09:59, 6 November 2012 (UTC)
There is further discussion of the deleted graph at Talk:Progressive tax#Why isn't causation supported? and the subsequent section. EllenCT ( talk) 01:56, 7 October 2013 (UTC)
I'm confused as to why the graph on the right was labeled as vandalism. Do you disagree on its inclusion in the article? If so why? Labeling the addition as vandalism is not productive. The graph addresses the trickle-down theory with actual empirical evidence. Do you feel the graph should be in a different paragraph of the article? What graph do you feel is reflective of trickle-doen theory? Guest2625 ( talk) 01:28, 12 November 2012 (UTC)
Guest solicited my input again. First off, stop edit warring. You all are treading very close to the three revert rule, which could get one or both of you blocked or the article protected, even without technically hitting three reverts in one day. The cited source for the top graph here does not even mention "trickle-down economics". If no one can agree on what the term even means, or if it's ever been implemented as a policy, then it's impossible to use this kind of data, at least not presented in Wikipedia's voice. Also, please do not call clearly good-faith edits vandalism.
I suggest going back to fundamental discussions about whether this article should even exist, and if it should, what the topic actually refers to, and whether sources support the idea that it has actually been in use as an economic policy in the united states. None of those things seem clear to me, and until those issues are settled, I think it's impossible to have a discussion on the finer points. Gigs ( talk) 13:59, 12 November 2012 (UTC)
Pope slams 'trickle-down economics'
“Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world,” Francis wrote. “This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.”
http://thehill.com/blogs/global-affairs/global-trade-economy/191561-pope-slams-trickle-down-economics -- accessed 2013/11/27; similar article appeared in Baltimore Sun credited to Washington Post
This Talk is more educational than most. What I found lacking was direct quatation of George W. Bush using the term "trickle down" to explain his own economic policies. It was the first time I heard the term. I think it should go to the latter part; even if no one before him used the term to defend ecomonic policies, but to attack them, he was the one who used it to explain that 'the money will trickle down'. It could have been around 2003 or 2004? But I find it fascinating how everyone forgot about it and how everyone forgot about that guy. Was he that unremarkable?
I'm skeptical of the claim and of the pertinence of the second paragraph about "Kenynesians generally argue for broad fiscal policies that are directed across the entire economy." Regardless, it should have a cite. Sorry for hiding this at the bottom but if I wandered too far into the talk page I got lost. WDRev ( talk) 00:12, 28 April 2014 (UTC)
I was surprised to find no mention of Margaret Thatcher in the article. This theory was prevalent in the UK at the time and was a major economic factor. Myrvin ( talk) 19:08, 19 January 2015 (UTC)
See the following: [8] [9] and [10]. Myrvin ( talk) 19:13, 19 January 2015 (UTC)
@ Myrvin: Now that Thatcher is mentioned in the lede. Perhaps this could be expanded upon or moved to the body of text. As the lede is supposed to summarize content of article.
@ DonPMitchell: Could you provide references for 'trickle down' not being a theory, and only used to negatively refer to certain policies? Jonpatterns ( talk) 09:53, 21 June 2015 (UTC)
References
@ RobinHood70: I'm surprised that you are questioning my use of a warning on this page after you stuck a verification tag on this article. (FYI - I couldn't find that phrase either.) But I also couldn't find what Absolutelypuremilk was talking about in relation to trickle-down economics. Unless it's - Don't pay taxes = More profit. Because I don't believe the, "In fact, free-market economics contends that additional wealth will be created when businesses are less hampered by government controls or high taxation, rather than existing wealth trickling down to the poor" nor was that expressly stated in the linked article. So, I'm inclined to warn readers after seeing these two erroneous sentences since I have little to zero faith in an accurate article on trickle-down economics, especially with an election year approaching. MurderByDeadcopy "bang!" 00:16, 4 October 2015 (UTC)
Can this page be deleted or at least renamed? Having traversed economic circles I can say that nobody seriously uses the term "trickle down economics". It sounds like some conspiracy theory or other imaginary idea, and thus should be treated as so. This page should be handled in the same manner as the former page on so-called "Cultural Marxism". 50.24.158.129 ( talk) 02:02, 22 October 2015 (UTC)
I have again removed a graph comparing income for different income groups over different Presidential eras. There was no reference in the graph showing that the Reagan era was the only trickle-down era, and it is only mentioned in the rest of the article in relation to a quote from David Stockwell. Not to mention the fact that the graph is extremely misleading, as it has FDR 1947-1979, Reagan 1979-2009 and Obama 2009-2015, which is clearly incorrect. Absolutelypuremilk ( talk) 09:02, 18 September 2016 (UTC)
This op-ed by right-wind pundit Thomas Sowell is used to support the statement at the beginning of the introduction that trickle down, "is a populist political term used to characterize economic policies as favoring the wealthy or privileged. There is no 'trickle down' economics as defined by economists; the term is almost exclusively used by critics of policies with other established names."
On the contrary, these are from the first page of a Google Scholar search with 55,000 results: [16], [17], [18], [19], [20]. Because of this overwhelming evidence, I have edited the article accordingly. 174.16.126.149 ( talk) 18:53, 25 November 2016 (UTC)
I shall argue later with my proper arguments on essay that the concept is not political but mathematical, scientifical.
The new title is Tricke Everywhere Economics.
Just because we have too many wealthy countries without fiscal policy or TAXING system at all.
Therefore I do argue that the economy (tenders, money, goods) spreads everywhere due to the spontanous interactions in marketplace of ideas.
Resouces are Infinite. Kartasto ( talk) 16:59, 8 January 2023 (UTC)
According to Finnish version Wikipedia tells about something like this:
"When the more wealthy people is under lover taxing policy the money will trickle down to the tax payers who earn less".
I think that upper and lover are only metaforas.
In democratic society with the rule of law capitalism - quite free market economy - tax payers interact and trade with each other so many many times per day. They all are free to choose with who they trade and interact: a but like the equality in markets.
Prices are negotation question often.
And because the monopolies are not allowed -therefore - there are no force by the shop keepers let alone rules by the wallet keepers who naturally do make the decisions to trade with who or when they fancy to.
With too bad habits you may be *not wanted customer or user*.
As we know You may buy Jaguar or Lada: since according to M. Porter within the all and every industry there are several different kind of competitors.
In wealthy countries the rich or high incomes people spend a lot and therefore the capital and equities spread everywhere in society: take a look at the places and lands where the taxing policy with a low tax percent concern only companies and enterprices.
Individual workers are freed and fled from taxing system.
Comments? Kartasto ( talk) 07:45, 1 February 2023 (UTC)
But = bit.
Sorry typo Kartasto ( talk) 07:48, 1 February 2023 (UTC)
This article is in need of recognizing the political grift of paying the electorate for an election. Thomas Sowell's "trickle down economic" recognition of the actuality of the political crime. The legislative violation of the Hatch Act. JohnPritchard ( talk) 14:38, 1 December 2023 (UTC)
When Donald Trump campaigns on "Tax Cuts For The Rich", the quid pro quo constitutes a political crime. Political grift in action. The truth of "trickle down economics". The legislative Hatch Act violation. JohnPritchard ( talk) 14:29, 18 December 2023 (UTC)
Perhaps this topic could be linked up with income inequality. Two sources to consider that point to trickledown economics not working are as follows:
-- JamesPoulson ( talk) 16:21, 21 August 2013 (UTC)
Removed the following paragraph:
The idea that the "creative sector of the economy" created employment is rooted in the argument that the United States is successful because it is a free market and capitalist state, and that hatred of communism, and anything associated with the left in general, is a political virtue. Being a political, rather than an economic, term, both sides in the debate demonized the others as being heartless and in league with the forces of greed.
I'm not sure what the thesis of this paragraph is, but it doesn't seem to have much to do with trickle-down theory. It seems to state that supply-side economics is rooted in hatred of the left, while I would think that the converse is much more true. Either way, it's a partisan generalization, and a strawman slur on economic theory that has much more credible arguments against and for. 69.202.77.44 29 June 2005 08:08 (UTC)
== Read Smith before you quote him == and even then, do him justice; and even then, opinions and personal or political interpretations are not encyclopedic - they are political and belong on this discussion page, or on a politics site. I come just short of advocating a complete removal of all the Smith material, except that these sorts of argument have been made for two decades in mainstream politics. It is relevant because of the politics, not because of any genuine intimate connection between Nations and trickle-down. A genuine connection to Kurzets and Keynes is actually less problematic, but that's not how the politics fall.
The concept was also discussed by Karl Marx. For example,
Capital can multiply itself only by exchanging itself for labor-power, by calling wage-labor into life. The labor-power of the wage-laborer can exchange itself for capital only by increasing capital, by strengthening that very power whose slave it is. Increase of capital, therefore, is increase of the proletariat, i.e., of the working class.
And so, the bourgeoisie and its economists maintain that the interest of the capitalist and of the laborer is the same. And in fact, so they are! The worker perishes if capital does not keep him busy. Capital perishes if it does not exploit labor-power, which, in order to exploit, it must buy. The more quickly the capital destined for production -- the productive capital -- increases, the more prosperous industry is, the more the bourgeoisie enriches itself, the better business gets, so many more workers does the capitalist need, so much the dearer does the worker sell himself. The fastest possible growth of productive capital is, therefore, the indispensable condition for a tolerable life to the laborer.
I removed this section from the main article because I don't see the direct relevance. The only direct relevance of Marx is that anti-communist rhetoric is often used in advocacy of trickle-down. However, this is rhetoric, not reason. And this is actually relevant to the Soviet style of communism, not Marxism.
I originally added it to the text because it supports the economic thesis. When even your ideological enemies agree with you then you should give them a little room. Did Adam Smith vote for Ronald Reagan!!! Of course he did not. If there is no discuss on this within the next week I'll put the text back. TERJE 26-JUNE-2004.
=== There was no context supplied with the quote, === and it seams to me that this very quote is a counter-argument to trickle-down. Are you saying Marx's position was that the capitalists (owners) weren't getting a fair deal. The idea of trickle-down is relief for the upper classes. This is the first time I have ever heard someone say Marx wasn't saying the opposite: that the working class wasn't getting a fair deal - that he was advocating relief for the lower classes. This article has a lot on politics, but is sorely lacking in facts and theories. For example, improvements have historically manifested in the upperclasses before manifesting in the lower classes. P.S. "When even your ideological enemies agree with you then..." implies that your point is a point of debate, not a point of theory or fact. So if you're going to reintroduce the work are you going to give it context? and if that context is as a point of debate, will you label it as such? I'm not saying don't put it in, just it should be relevant. And maybe you should spell it out - for those of us who don't yet see Marx as a proponent of the idea that the upper classes (owners) aren't getting a fair deal.
I don't think the Marx quote makes any comment on who is getting what deal. It is first and formost an economic observation. Namely that an abundance of capital leads to a better wage deal for workers. As such it is a quote that supports the trickle down argument. Would you be happy for me to put the quote back in if I added some more context around it? TERJE 28-JUN-2004.
The idea that something can be good for everyone is not the question though. Trickle-down is very specific - that, by a process benefits to the upperclasses trickle-down to the lower classes. So if you could explain how Marx demonstrated trickling-down, that would make the quote a much stronger addition to the article. This quote seems to be saying that the relationship between labor (lower classes) and capital (upper classes) is reciprical - that there is no argument leaning trickle-up, nor trickle-down. Until the last sentence; to improve the working condition of the working classes is the fastest (I presume best) way of stimulating the entire economy. That sounds like trickle-up in that the capital will be more productive and profitable after an improvement to the conditions of the working classes. That, by a process, benefit trickles up from the masses into the upper classes. So if you could explain how this quote translates into the idea that incentives for the wealthy, by a process, trickle down to the masses, that would be great. Also, where is this quote from?
Many major economists have said that to improve the lowest ranks of the economy is the best and fastest way to improve the economy as a whole; that to benefit the economy is to benefit everyone. For example Smith in Nations said that apprenticeships were a drag on the economy; that labor would be more motivated to enter a trade and to work hard and often if only they were free to do so and paid in direct reward for the quality and quantity of their labor. Keynes is credited with "demand-side" economics, that more money in the pockets of the masses will stimulate capitalist growth in the economy as a whole. And here, in this quote by Marx, Marx advises us to improve the working condition of the laborer. But this is all trickle-up. What is the theoretical body of trickle-down? Who has said it? and what is the merits of this theory?   - For example, the quote of Smith; who said this is an advocation of trickle-down? did Reagan say it? and if so, when and where?
P.S. Kuznets was added back in by someone with the addition of that which made Kuznets relevant to this article - improvements have hit the upper classes before the lower classes.
== Horse and Sparrow Economics == I removed this from the article
I think it is humerous and has a point, but I don't think its encyclopedic - at least, not in this article. I have put a link to John Kenneth Galbraith because it is relevant to trickle-down, just not central. P.S. a web search for "Horse and Sparrow" finds a lot of articles on trickle-down.
I'm from europe, and sorry, but from my peculiar point of view i see Marxism a wee bit more important, than Reagan. Please, write less about american tax percentages, and more about the global aspect.
The difference between you and the person that quoted Marx is that he is interest in positive economics. What he said was correct. Marx said that more capital into investment for the factory will lead to higher wages and those a higher purchasing power for the workers. That is trickle down. If the rich can keep more to invest through lower taxes then you will have higher wages for workers. He admits that more capital investment leads to higher wages and if lower taxes leads to more money for capital investment then he is clearly agreeing that trickle down works. —Preceding
unsigned comment added by
Sabaton10 (
talk •
contribs)
10:43, 18 September 2010 (UTC)
The link you see above links to someone else's writing; while Galbraith is quoted in it, and I'll presume that Galbraith really did make the analogy, I think there is a better source of that information than the link above. I'm going to remove the link in the article. If you disagree, please tell me why and go ahead and readd the link to the article.
I think supadawg pruned a little too much. It now seems less balanced, and less NPOV than before. The points made to refute Adam Smith's endorsement are basically correct, and to compleatly remove them instead of improving them seem counter-productive to NPOV. Therefore I added these points back in, and I will make efforts to clean them up and improve them.
I think a better approach to improving NPOV of this article is to clean up and improve the position of both sides.
I did leave out the section "criticisms of the reaganite pitch". This part seemed redundant and less well written. I invite people to look at the history and read that part and add it back and clean it up. It is not entirely without merit.
Is the blockquote in the middle the source of NPOV problems? Who is this attributed to? Can someone point to or reproduce David Stockman's speach?
Is this really relevant to trickle down economics. Is it accurate to imply that he is anti-Keynes?
I removed this from the article:
Other variants include Kuznets' "Law", which says that increases in income inequality that occur in the early stages of industrialization are followed by increases in income equality. Ironically, this is close to some of Karl Marx's theories. A more general version argues that increases in gross domestic product are almost always good for the poor.
I doubt that Kuznets is directly relevant to trickle down theory and I doubt the characterizations here. Marx? A far more common characterization of Kuznets is that his work helped the "Keynesian Revolution". Yet, trickle down and supply side are anti-Keynes. A more appropriate place to mention Kuznets may be in the article on Keynes. Also, I think the wikipedia article on Kuznets is more 'encyclopedic'.
=== . . more kuznets' law === there is now relevant content form kuznets in the article: improvements occur first in the upper classes, then in the lower classes.
However, the history of kuznets in this article is a good illustration of a lack of differentiation; Kuznets has been repeatedly used as an argument for trickle-down. However,
P.S. Tell me how the average joe was induced to invest by Reaganomics. If you can do that you can validly cite Adam Smith as an advocate of trickle-down.
This is an interesting sentence, and I've seen similar sentiments for two decades:
To Smith, the "well-governed society" is one in which free markets replace state command as the main method of resource allocation. Smith's argument is that increased division of labor (specialization) raises labor productivity. This in turn leads to lower costs, which are passed on to consumers in the form of lower prices (correcting for inflation).
This blockquote may seem uninformed, but I believe its inacuracies are intentional and politically motivated.
== More from the Ministry of Truth == I pasted the following sentence from the article. It follows a line of reasoning that Smith advocated Supply-Side Economics.
A major variant of trickle-down theory would say that tax cuts for the rich, special benefits for them, subsidies for corporations, and in general, government/business cooperation would not simply provide direct benefits to business but would also help the middle classes and even the poor. In effect, it says that "what's good for business is good for the country."
Read the book! Incentives like these are EXACTLY what smith was critical of. It's the major theme of Nations. If an incentive benefits one group of producers over another, it's not a free market, and that's exactly what Smith's postion is.
Although we must contend that these two topics be comprised as one, we must hold for the individual user whose goals are to specifically atribute this to Reaganomics.
Did Stockman actually use the phrase "trickle down" in defense of the policies? What was the context? Trickle down effect should be merged here, but first I want to resolve that question. Gazpacho 19:32, 13 August 2006 (UTC)
It's come to my attention that the phrase "trickle-down" in politics comes from an earlier use of the phrase in regard to marketing (see trickle down effect, diffusion (business). "Trickle-down theory" can refer either to the marketing effect or the political catch phrase, so it should be disambiguated. Gazpacho 22:57, 20 August 2006 (UTC)
The article states "Economist Thomas Sowell wrote that the actual path of money in a private enterprise economy is quite the opposite of that claimed by people who refer to the trickle-down theory....."
Where should this paragraph go? Currently it is in the "Proponent's views" section. I do not believe it should go there because the paragraph is in fact a critique of the alleged trickle-down theory. Perhaps, then, it should go in the "Criticisms" section since it is a criticism. I did move it to that section, but 71.231.182.24 reverted my edit. I suppose the problem is that Sowell is actually a proponent of low taxes; he has merely critised the idea that wealth "trickles down".
This makes him both a proponent of "trickle-down economics" as defined by its detractors and simultaneously a critic of the fundamental proposition of the allged trickle-down theory. So which section do you think this paragraph should go in? -- 69.69.186.223 19:45, 13 June 2007 (UTC)
This makes him both a proponent of "trickle-down economics" as defined by its detractors and simultaneously a critic of the fundamental proposition of the allged trickle-down theory. So which section do you think this paragraph should go in? -- 69.69.186.223 19:45, 13 June 2007 (UTC)
Why exactly does this article kick off with an ideologue saying the thing it is talking about doesn't exist? It's not "context" so much as "well poisoning". Grace Note ( talk) 04:24, 3 December 2013 (UTC)
→→→→Because the thing this article is talking about does NOT exist. "Trickle down" is not a theory that exists or has proponents. It is a pejorative term used to mis-characterize and attack supply side economics. It would be like having an article which referred to Keynesian Economics as "Magic Money Out of Thin Air Theory." It's an attack on the theory itself to use the misnomer. AdamRSchuster ( talk) 06:01, 17 February 2016 (UTC)
Sowell rejects the name "trickle-down", not the overall theory. He claims that it would be more aptly named "trickle-up". According to Sowell, when an investment is made, the benefit to those lower in the economic food chain is immediate, while the initial investor may not see a return for years. - JackieRipper ( talk) 18:16, 27 March 2008 (UTC)
Those who imagine that profits first benefit business owners -- and that benefits only belatedly trickle down to workers -- have the sequence completely backward. When an investment is made, whether to build a railroad or to open a new restaurant, the first money is spent hiring people to do the work. Without that, nothing happens.
Money goes out first to pay expenses first and then comes back as profits later -- if at all. The high rate of failure of new businesses makes painfully clear that there is nothing inevitable about the money coming back.
Even with successful businesses, years can elapse between the initial investment and the return of earnings. From the time when an oil company begins spending money to explore for petroleum to the time when the first gasoline resulting from that exploration comes out of a pump at a filling station, a decade may have passed. In the meantime, all sorts of employees have been paid -- geologists, engineers, refinery workers, truck drivers.
This is in the Article:
Proponents argue economic growth flows down from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. However, there is very little proof that exist to show the correlation
Should there be a citation,or refrence or something on showing that it doesen't work? Edit: This article also seems overly critical of it, although as I am not an expert on economics (merely a 'passerby' :p) the Criticism may be well founded and true. Just pointing it out. -- Passerby25 ( talk) 03:49, 6 April 2008 (UTC)
Can we get a source that says that the tax rate is 18%? I guess I just want to know where this figure came from.-- Taybo20 ( talk) 02:15, 15 May 2008 (UTC)
The section "Criticisms" contains a couple of claims that Galbraith makes about trickle-down economics, and lists his book, "The Good Society: The Humane Agenda" as a source. However, I can't find either of these claims in the book. I checked the history of the article and found that the claim that trickle-down economics "was partly to blame for the Panic of 1896" was created by User:Griot. I left a message for that user, but discovered on their user page that they've been blocked for using about 12 accounts. It's not unlikely that Galbraith would criticise trickle-down economics, but we could really do with a page/different source for this claim. I'm checking to see who added the "horse and sparrow" claim by Galbraith now. Darimoma ( talk) 08:29, 24 July 2008 (UTC)
Okay, User:Gazpacho originally put the book in as a source, stating "I'm guessing this to be the source for Galbraith, based on the URL" (originally the quote unsourced; it was subsequently sourced, using a website - which is now down, and I assume was down at the time of Gazpacho's edit - with a URL ending in "goodsociety.htm"). However, I can't find mention of "horse and sparrow" economics in the book, and wikiquote has the quote as an unsourced quote. Can anyone can supply the page numbers of these two claims (or a different source)? Darimoma ( talk) 08:49, 24 July 2008 (UTC)
N.B. User:Gazpacho has also been blocked for sock puppetry. Darimoma ( talk) 08:51, 24 July 2008 (UTC)
Given what I've said in the above section (Galbraith), and also given that source three does not seem to back up the claim that Clinton cut taxes by 3%, I'm concerned that in the past some edits and sources haven't been checked thoroughly enough.
Is there any sort of banner we can put on the article to warn readers that this is the case? Darimoma ( talk) 08:23, 25 July 2008 (UTC)
Source 7 doesn't mention trickle down anywhere on the page. It seems unlikely David Stockman ever said the supposed quote. — Preceding unsigned comment added by Sdmitch16 ( talk • contribs) 14:55, 13 October 2012 (UTC)
If a rich American man invests in foreign labor then his tax levels won't effect American labor. Of course the free traders will say, "well products will be more expensive," but free traders lie.
The theory of trickle down economics revolves around investing in labor of your own country.
So if an Irish businessman, who owns stock in a company which employs Americans, gets taxed higher in Ireland it would effect those American employees.
If an American businessman, who owns stock in a company which employs Chinese, gets taxed higher in America it would effect those Chinese employees.
So tax the rich, in this global economy it won't effect Americans when the American rich are employing Chinese and Mexicans. Eat that free traders. 98.165.6.225 ( talk) 12:36, 4 September 2008 (UTC)
You are correct but they invest in foreign countries because the others countries have less regulatory costs, that is a fact. But if your solution is tax them then they will just leave the country as many are already doing to lower taxed countries such as Hong Kong and Singapore. Free trade is recognized by a good thing by 95% of Economist, from Adam Smith to Paul Krugman. If you want to publish an econ paper dismissing free trade then go ahead. You also realise that higher wages means higher production costs which means higher consumer costs right? Are you an advocate of inflation? —Preceding unsigned comment added by Sabaton10 ( talk • contribs) 10:48, 18 September 2010 (UTC)
Don't give Smith a black eye: aside from this being mischievously misleading, your not helping. I removed the following from the article Blablablob ( talk) 22:47, 21 September 2008 (UTC)
I wouldn't have a problem with the quote if there were reliable secondary sources making the connection between Smith's views and trickle-down economics more explicit. Otherwise, we have to be wary about primary sources and the possibility that the article might be engaging in quote mining. Perhaps Adam Smith was constructing only one side of an argument regarding the merits and demerits of taxation, for example. This is indeed quite a common device in fundamental philosophical and scientific works (and was so particularly in Smith's time). Anyway, until such sources can be provided, and the improved context that would hopefully come along with better sources, I don't believe that the quote should remain in the article. siℓℓy rabbit ( talk) 12:42, 3 October 2008 (UTC)
Ya I do because the Weekly Standard are a bunch of economic illiterates that think because one advocates a free market then they in turn advocate for tax breaks only for the rich. Adam Smith would have equally approved of cutting taxes for the middle class and lower class as Kennedy did. —Preceding unsigned comment added by Sabaton10 ( talk • contribs) 10:52, 18 September 2010 (UTC)
It seems to have been added to give credence to proponents of trickle-down economics, but this section doesn't say enough to add to the definition or understanding of the term, in my opinion. Scottishriver ( talk) 22:33, 14 November 2008 (UTC)Scottishriver
Since the term itself is a spin, I added the counter term to the beginning to neutralize it. —Preceding unsigned comment added by 209.6.113.78 ( talk) 03:43, 18 July 2009 (UTC)
This article needs a section about the results of real-world implementations of trickle-down economics. There's a similar section in the article about supply-side economics, but it focuses mostly on the effect that it had on government revenues. —Preceding unsigned comment added by 72.216.44.120 ( talk) 03:21, 9 February 2009 (UTC)
Discussing the real world effects/implications of trickle-down economics would make about as much sense as discussing the environmental impact of unicorn wrangling. Trickle-down economics isn't an idea that exists so it can't be a policy in the real world. AdamRSchuster ( talk) 06:10, 17 February 2016 (UTC)
I helped put the article into its current format some time ago, and looking at it now, I don't really like this point-counterpoint business. It has no coherence, and it violates POV by accepting the position of those who use the term "trickle-down" pejoratively. Trickle-down economics is not a theory. It is a political epithet and label used against certain policies, whose proponents do not refer to them that way. I think the article should focus on the phrase as a phrase, covering its history, the motivations for its use, and the criticism of the phrase. The "proponents' views" section must go. It attempts to dispute the label while at the same time admitting it, which is fundamentally against NPOV. WillOakland ( talk) 07:59, 2 May 2009 (UTC)
Uh, Im not an expert. But I dont agree, we learn about the trickling-down effect at University, check out Hirschman The Strategy of Economic Development 1958 —Preceding
unsigned comment added by
87.96.244.108 (
talk)
08:25, 10 May 2010 (UTC)
I'm pretty sure I remember Pres. Reagan using the term first. Dloh cierekim 13:40, 28 March 2010 (UTC)
This quote is referenced to Aghion and Bolton (1997:151), which is false. Aghion and Bolton do not even touch upon the terminology used to describe this economic phenomena in political circles, but rather make a down-to-earth mathematical model of wealth generation and redistribution under trickle down economics, showing it cannot lead to the most efficient outcome. Nowhere in the text is the word "Socialist" or "Conservative" even mentioned! Further, I doubt, in any case, that either Aghion or Bolton would ever use the US meanings of "Liberal", "Conservative" or "Socialist", as they both have European academic and professional backgrounds. As such, even if they delved into terminology, they would have probably used "American social-liberal", "Libertarian" and "Social Democrat" to describe the above mentioned political currents. I am thus removing this misappropriated dubious statement. -- Xanthar ( talk) 08:11, 5 July 2010 (UTC)
The reference to the Austrian School as those who considers the term "trickle down economics" to be wrong shows the editor is politically and not economically inclined. Anyone with a basic academic understanding of the term Austrian School will know how unrelated and non professional the sentence is. Not only is the edit itself wrong and openly biased it is also falsely marked with the minor flag. This is not a good faith edit. I kindly ask the editor Jmaximus to avoid disrupting the stable version of the article without further deliberation and consensus. -- MeUser42 ( talk) 10:22, 1 May 2012 (UTC)
I think the graph in the lede might be considered potentially misleading. The problem is that it combines real and projected data, not in itself a bad thing but with the projected data included it gives a fairy strong impression of an inverse relationship between the depicted revenue and spending. However, if you obscure the projected part, to my eye at least, the relationship is far less clear.-- IanOfNorwich ( talk) 11:49, 9 July 2012 (UTC)
IanOfNorwich said: "I think the graph in the lede might be considered potentially misleading". I agree. Let's remove the graph. If you want to introduce your changea, you need to find the sources, not send me to Google scholar. Please read WP:RS. As for Sowell, from our article: "Sowell further has made the case[8] that no economist has ever advocated a "trickle-down" theory of economics, which is rather a misnomer attributed to certain economic ideas by political critics.[9]". Which, I think you would agree, strengthen my point. -- MeUser42 ( talk) 01:13, 13 October 2012 (UTC)
t:::::::::1. Where did I say they are not factually accurate? 2. You might want to reread the discussion, I can't see how you can think that. -- MeUser42 ( talk) 10:53, 14 October 2012 (UTC)
Response to third opinion request: |
Hi. I have reviewed the graphs, and most of the removed graphs and captions are a clear case of expressing a POV and/or synthetic conclusions. The graphs can be factually accurate while still having this problem. As the examples at WP:SYN show, it is often raw factual data that is abused to synthesize a conclusion. We can't take a graph of raw economic data and draw a new conclusion about what caused it. This is especially true when the subject is nebulous and poorly defined like this one is. Even with secondary source analysis, these primary source graphs must be carefully presented in a neutral way that avoids weasel words. The same is true of MeUser's CBO graph that tends to indicate that trickle-down was never implemented as a macroeconomic policy in any meaningful way, and definitely not since 2008. We can't present that graph and say "look here this proves that trickle down never was policy" any more than we can present graphs of increased wealth imbalance and say "trickle-down caused this". Gigs ( talk) 15:36, 16 October 2012 (UTC) |
Sources relating trickle-down directly to net worth, top tax rates, and employment growth:
Robert H. Frank (April 12, 2007) "In the Real World of Work and Wages, Trickle-Down Theories Don’t Hold Up" New York Times Economic Scene: "Trickle-down theorists are quick to object that higher taxes would cause top earners to work less and take fewer risks, thereby stifling economic growth. In their familiar rhetorical flourish, they insist that a more progressive tax system would kill the geese that lay the golden eggs. On close examination, however, this claim is supported neither by economic theory nor by empirical evidence.... If economic theory is unkind to trickle-down proponents, the lessons of experience are downright brutal. If lower real wages induce people to work shorter hours, then the opposite should be true when real wages increase. According to trickle-down theory, then, the cumulative effect of the last century’s sharp rise in real wages should have been a significant increase in hours worked. In fact, however, the workweek is much shorter now than in 1900. Trickle-down theory also predicts shorter workweeks in countries with lower real after-tax pay rates. Yet here, too, the numbers tell a different story. For example, even though chief executives in Japan earn less than one-fifth what their American counterparts do and face substantially higher marginal tax rates, Japanese executives do not log shorter hours. Trickle-down theory also predicts a positive correlation between inequality and economic growth, the idea being that income disparities strengthen motivation to get ahead. Yet when researchers track the data within individual countries over time, they find a negative correlation. In the decades immediately after World War II, for example, income inequality was low by historical standards, yet growth rates in most industrial countries were extremely high. In contrast, growth rates have been only about half as large in the years since 1973, a period in which inequality has been steadily rising. The same pattern has been observed in cross-national data.... larger shares for poor and middle-income groups were associated with higher growth rates."
Joseph E. Stiglitz (May 2011) "Of the 1%, by the 1%, for the 1%" Vanity Fair: "Of all the costs imposed on our society by the top 1 percent, perhaps the greatest is this: the erosion of our sense of identity, in which fair play, equality of opportunity, and a sense of community are so important. America has long prided itself on being a fair society, where everyone has an equal chance of getting ahead, but the statistics suggest otherwise: the chances of a poor citizen, or even a middle-class citizen, making it to the top in America are smaller than in many countries of Europe. The cards are stacked against them. It is this sense of an unjust system without opportunity that has given rise to the conflagrations in the Middle East: rising food prices and growing and persistent youth unemployment simply served as kindling. With youth unemployment in America at around 20 percent (and in some locations, and among some socio-demographic groups, at twice that); with one out of six Americans desiring a full-time job not able to get one; with one out of seven Americans on food stamps (and about the same number suffering from “food insecurity”)—given all this, there is ample evidence that something has blocked the vaunted “trickling down” from the top 1 percent to everyone else. All of this is having the predictable effect of creating alienation—voter turnout among those in their 20s in the last election stood at 21 percent, comparable to the unemployment rate"
Mehrun Etebari (July 17, 2003) "Trickle-down economics: Four Reasons Why It Just Doesn't Work" United for a Fair Economy: "The past 40 years have seen a gradual decrease in the top bracket's income tax rate, from 91% in 1963 to 35% in 2003. It went as low as 28% in 1988 and 1989 due to legislation passed under Reagan, the trickle-down theory's most famous adherent.... 1. Cutting the top tax rate does not lead to economic growth.... 2. Cutting the top tax rate does not lead to income growth.... 3. Cutting the top tax rate does not lead to wage growth.... 4. Cutting the top tax rate does not lead to job creation." (The four of which are each illustrated by separate time series graphs.)
Christopher J. Niggle (June 1998) "Equality, Democracy, Institutions, and Growth" Journal of Economic Issues Vol. 32, No. 2, pp. 523-530: "inequality can reduce economic growth in countries with democratic political systems. Empirical work based upon those models confirms that hypothesis across countries and through time." (Mentions trickle down in the sixth paragraph as discredited, but doesn't make a good pull quote.)
I will work on incorporating these sources into the text and revising the captions for the graph so that they are in line with them when I get time later. TraderGail ( talk) 00:11, 17 October 2012 (UTC)
What's most reliable is if you'll bring an example of an economist advocating trickle down. The usage of "trickle down labor income" in the article (see included def. above) is very clearly different and unrelated to what this article deals with. -- MeUser42 ( talk) 00:50, 18 October 2012 (UTC)
This is in response to the question above by an editor if you are allowed to include graphs from published works. The answer is yes. "Charts, graphs, and tables are not subject to copyright protection because they do not meet the first requirement for copyright protection, that is, they are not “original works of authorship,” under the definitions in the Act." See the following link which gives a clear and concise explanation http://www.lib.umich.edu/copyright/copyright-info/charts-tables-graphs. Guest2625 ( talk) 11:15, 19 October 2012 (UTC)
MeUser42, I do not understand this revert which you have made twice without discussing it. The quote from the source is completely clear and consistent with the original edit:
“ | The hard part of the supply-side tax cut is dropping the top rate from 70 to 50 percent—the rest of it is a secondary matter," Stockman explained. "The original argument was that the top bracket was too high, and that's having the most devastating effect on the economy. Then, the general argument was that, in order to make this palatable as a political matter, you had to bring down all the brackets. But, I mean, Kemp-Roth was always a Trojan horse to bring down the top rate."
A Trojan horse? This seemed a cynical concession for Stockman to make in private conversation while the Reagan Administration was still selling the supply-side doctrine to Congress. Yet he was conceding what the liberal Keynesian critics had argued from the outset—the supply-side theory was not a new economic theory at all but only new language and argument to conceal a hoary old Republican doctrine: give the tax cuts to the top brackets, the wealthiest individuals and largest enterprises, and let the good effects "trickle down" through the economy to reach everyone else. Yes, Stockman conceded, when one stripped away the new rhetoric emphasizing across-the-board cuts, the supply-side theory was really new clothes for the unpopular doctrine of the old Republican orthodoxy. "It's kind of hard to sell 'trickle down,'" he explained, "so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory. |
” |
Since you have accused me of "edit warring" don't you think you should be discussing before making the same revert one after another? TraderGail ( talk) 22:01, 13 October 2012 (UTC)
"The Congressional Research Service has withdrawn an economic report that found no correlation between top tax rates and economic growth, a central tenet of conservative economic theory, after Senate Republicans raised concerns about the paper’s findings and wording." [Source: http://www.nytimes.com/2012/11/02/business/questions-raised-on-withdrawal-of-congressional-research-services-report-on-tax-rates.html] -- 80.226.24.7 ( talk) 09:05, 2 November 2012 (UTC)
I've started a centralised discussion here regarding File:Employment growth by top tax rate.jpg, which is used in this article. Gabbe ( talk) 09:59, 6 November 2012 (UTC)
There is further discussion of the deleted graph at Talk:Progressive tax#Why isn't causation supported? and the subsequent section. EllenCT ( talk) 01:56, 7 October 2013 (UTC)
I'm confused as to why the graph on the right was labeled as vandalism. Do you disagree on its inclusion in the article? If so why? Labeling the addition as vandalism is not productive. The graph addresses the trickle-down theory with actual empirical evidence. Do you feel the graph should be in a different paragraph of the article? What graph do you feel is reflective of trickle-doen theory? Guest2625 ( talk) 01:28, 12 November 2012 (UTC)
Guest solicited my input again. First off, stop edit warring. You all are treading very close to the three revert rule, which could get one or both of you blocked or the article protected, even without technically hitting three reverts in one day. The cited source for the top graph here does not even mention "trickle-down economics". If no one can agree on what the term even means, or if it's ever been implemented as a policy, then it's impossible to use this kind of data, at least not presented in Wikipedia's voice. Also, please do not call clearly good-faith edits vandalism.
I suggest going back to fundamental discussions about whether this article should even exist, and if it should, what the topic actually refers to, and whether sources support the idea that it has actually been in use as an economic policy in the united states. None of those things seem clear to me, and until those issues are settled, I think it's impossible to have a discussion on the finer points. Gigs ( talk) 13:59, 12 November 2012 (UTC)
Pope slams 'trickle-down economics'
“Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world,” Francis wrote. “This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.”
http://thehill.com/blogs/global-affairs/global-trade-economy/191561-pope-slams-trickle-down-economics -- accessed 2013/11/27; similar article appeared in Baltimore Sun credited to Washington Post
This Talk is more educational than most. What I found lacking was direct quatation of George W. Bush using the term "trickle down" to explain his own economic policies. It was the first time I heard the term. I think it should go to the latter part; even if no one before him used the term to defend ecomonic policies, but to attack them, he was the one who used it to explain that 'the money will trickle down'. It could have been around 2003 or 2004? But I find it fascinating how everyone forgot about it and how everyone forgot about that guy. Was he that unremarkable?
I'm skeptical of the claim and of the pertinence of the second paragraph about "Kenynesians generally argue for broad fiscal policies that are directed across the entire economy." Regardless, it should have a cite. Sorry for hiding this at the bottom but if I wandered too far into the talk page I got lost. WDRev ( talk) 00:12, 28 April 2014 (UTC)
I was surprised to find no mention of Margaret Thatcher in the article. This theory was prevalent in the UK at the time and was a major economic factor. Myrvin ( talk) 19:08, 19 January 2015 (UTC)
See the following: [8] [9] and [10]. Myrvin ( talk) 19:13, 19 January 2015 (UTC)
@ Myrvin: Now that Thatcher is mentioned in the lede. Perhaps this could be expanded upon or moved to the body of text. As the lede is supposed to summarize content of article.
@ DonPMitchell: Could you provide references for 'trickle down' not being a theory, and only used to negatively refer to certain policies? Jonpatterns ( talk) 09:53, 21 June 2015 (UTC)
References
@ RobinHood70: I'm surprised that you are questioning my use of a warning on this page after you stuck a verification tag on this article. (FYI - I couldn't find that phrase either.) But I also couldn't find what Absolutelypuremilk was talking about in relation to trickle-down economics. Unless it's - Don't pay taxes = More profit. Because I don't believe the, "In fact, free-market economics contends that additional wealth will be created when businesses are less hampered by government controls or high taxation, rather than existing wealth trickling down to the poor" nor was that expressly stated in the linked article. So, I'm inclined to warn readers after seeing these two erroneous sentences since I have little to zero faith in an accurate article on trickle-down economics, especially with an election year approaching. MurderByDeadcopy "bang!" 00:16, 4 October 2015 (UTC)
Can this page be deleted or at least renamed? Having traversed economic circles I can say that nobody seriously uses the term "trickle down economics". It sounds like some conspiracy theory or other imaginary idea, and thus should be treated as so. This page should be handled in the same manner as the former page on so-called "Cultural Marxism". 50.24.158.129 ( talk) 02:02, 22 October 2015 (UTC)
I have again removed a graph comparing income for different income groups over different Presidential eras. There was no reference in the graph showing that the Reagan era was the only trickle-down era, and it is only mentioned in the rest of the article in relation to a quote from David Stockwell. Not to mention the fact that the graph is extremely misleading, as it has FDR 1947-1979, Reagan 1979-2009 and Obama 2009-2015, which is clearly incorrect. Absolutelypuremilk ( talk) 09:02, 18 September 2016 (UTC)
This op-ed by right-wind pundit Thomas Sowell is used to support the statement at the beginning of the introduction that trickle down, "is a populist political term used to characterize economic policies as favoring the wealthy or privileged. There is no 'trickle down' economics as defined by economists; the term is almost exclusively used by critics of policies with other established names."
On the contrary, these are from the first page of a Google Scholar search with 55,000 results: [16], [17], [18], [19], [20]. Because of this overwhelming evidence, I have edited the article accordingly. 174.16.126.149 ( talk) 18:53, 25 November 2016 (UTC)
I shall argue later with my proper arguments on essay that the concept is not political but mathematical, scientifical.
The new title is Tricke Everywhere Economics.
Just because we have too many wealthy countries without fiscal policy or TAXING system at all.
Therefore I do argue that the economy (tenders, money, goods) spreads everywhere due to the spontanous interactions in marketplace of ideas.
Resouces are Infinite. Kartasto ( talk) 16:59, 8 January 2023 (UTC)
According to Finnish version Wikipedia tells about something like this:
"When the more wealthy people is under lover taxing policy the money will trickle down to the tax payers who earn less".
I think that upper and lover are only metaforas.
In democratic society with the rule of law capitalism - quite free market economy - tax payers interact and trade with each other so many many times per day. They all are free to choose with who they trade and interact: a but like the equality in markets.
Prices are negotation question often.
And because the monopolies are not allowed -therefore - there are no force by the shop keepers let alone rules by the wallet keepers who naturally do make the decisions to trade with who or when they fancy to.
With too bad habits you may be *not wanted customer or user*.
As we know You may buy Jaguar or Lada: since according to M. Porter within the all and every industry there are several different kind of competitors.
In wealthy countries the rich or high incomes people spend a lot and therefore the capital and equities spread everywhere in society: take a look at the places and lands where the taxing policy with a low tax percent concern only companies and enterprices.
Individual workers are freed and fled from taxing system.
Comments? Kartasto ( talk) 07:45, 1 February 2023 (UTC)
But = bit.
Sorry typo Kartasto ( talk) 07:48, 1 February 2023 (UTC)
This article is in need of recognizing the political grift of paying the electorate for an election. Thomas Sowell's "trickle down economic" recognition of the actuality of the political crime. The legislative violation of the Hatch Act. JohnPritchard ( talk) 14:38, 1 December 2023 (UTC)
When Donald Trump campaigns on "Tax Cuts For The Rich", the quid pro quo constitutes a political crime. Political grift in action. The truth of "trickle down economics". The legislative Hatch Act violation. JohnPritchard ( talk) 14:29, 18 December 2023 (UTC)