Summations Only

The data I have posted thus far has been US economic data. I have been trying to find equivalent data for the UK. the closest I have found is this report: ReportThe report is discussed here: DiscussionThe data shows the same trend for escalating incomes of the wealthiest and the stagnating incomes of everyone else in the UK as has occurred in the US.Trickle down doesn't seem to have worked here in the UK either.

I would suggest that the ability of the private sector to flourish at creating new wealth is in large part dependent on the environment created by the public sector. Justice, the rule or law, a healthy and well educated workforce, research institutions, transport infrastructure etc. etc. etc are all essential components for a wealth creating private sector to flourish. So there is an inter-relatedness between the public and private sectors and a balance to be found between the two.But what does this have to do explicitly with whether the proclaimed benefits of trickle down economics are real or not? The data strongly implies that all the wealth created is being concentrated at the top with everyone else remaining static anyway.So in terms of raising the wealth of all (it's supposed benefit)- Trickle down appears to have failed dismally.Do you dispute the data on this? Is the answer to the disproportionate political influence that the wealthiest enjoy reallyto make them even wealthier in comparison to everyone else?That seems ridiculous.....

If trickle down economics works then increased income of the wealthiest would result in increased income for everybody else too.Yet the data for the US and the UK for the past few decades shows the incomes of the wealthiest rocketing whilst the incomes of everybody else remain stagnant.So the data definitely seems to refute the claim that trickle down economics works.No? The data shows that new national wealth has been indeed been created. It doesn't show that this wealth was created by the wealthiest. It does show that this wealth has been accumulated almost exclusively by the wealthiest. Look at the data...... I accept that the private sector is the principle creator of new wealth in an economy. That isn't the same as defining the wealthy as wealth creators. Some of the wealthiest are genuinely innovative and entrepreneurial and can be accurately described as "wealth creators". But equally many of the not-so-wealthy owners of small businesses are "wealth creators" on a smaller scale that collectively adds up to a huge amount of wealth generation that the wealthiest cannot lay claim to.Furthermore many of the wealthiest simply inherited their wealth. And increasingly many of the very wealthiest have done nothing other than play the financial system at the expense of everyone else. These people are extraordinarily wealthy but have arguably destroyed far more wealth recently than they have ever created.So, no, I don't accept that the wealthiest are necessarily the principle wealth creators at all. What evidence is there that they are? If you think trickle down economics works I think your belief in this blatantly contradicts the evidence available.Edited by Straggler, : No reason given.Edited by Straggler, : No reason given.

If the wealthiest in the US are effectively removing wealth from the local (i.e national) economy by investing their wealth in cheap labour elsewhere then on a national level trickle down economic theory isn't working.Because the proclaimed benefit of trickle down economics is that the tax paying society in which it is implemented will benefit as a whole by increasing the wealth of the wealthiest.That obviously isn't happening if they are investing the dividends of US economic growth elsewhere so that the US tax paying public never see any benefit of that created wealth.One of the advantages of cutting taxes for poorer workers rather than the richest is that the poorest are much more likely to spend any extra money they get in the local economy. Thus stimulating economic activity in the local economy.

I accept what you say. But this still seems more like theoretical argument regarding causation and correlation than hard empirical data that explicitly refutes trickle down theory.There are lots of nations/economies with data to look at. It seems that we should be able to find data from those which have implemented trickle down policies (the US and UK are obvious examples) to see if these policies have had the proclaimed effect. We should also be able to compare these to other countries which have implemented more progressive policies (Scandanavian countries spring to mind) to see how they compare in terms of rising living standards for the majority.That was more the sort of evidence I had in mind when I started this thread.

It shows that only the richest are seeing any significant benefit from increased productivity. This is the very opposite of what trickle down theory predicts. Thus it remains refuted by the data available. Median income rises and falls in rough synch with productivity per capita. That people's incomes rise the more they produce (and falls the less they produce) should hardly be a revelation to anyone.The problem is that the benefits of increased production over the last few decades are focused almost exclusively at the top. This directly contradicts the key prediction of trickle down theory. So you dispute that the data shows the wealthiest have benefited almost exclusively from increased national productivity? You think the steep rise in the graph for top earners is just a symptom of them revealing more of their income to the state rather than anything to do with them hogging the fruits of increased productivity at the expense of the majority? It isn't that simple but you are still clinging onto the (as yet evidentially unjustified) assumption that wealthy person = superior wealth creator. This assumption needs to be supported with evidence or abandoned. But why are the richest rather than the mass of middle or working classes best placed to make those investments?The premise of trickle down economics is that those who are wealthy are also the entrepreneurial innovators who drive the economy forward. Unleash their animal spirits and we all benefit. So we are told. If you accept that in fact this is not the case the entire rationale for trickle down falls flat on it's face. Why do you think extra money in the hands of a few wealthy investors is superior as a driver of the economy than that same money in the hands of small businesses or the consumers that small businesses depend on to grow? You keep trying to make this about public Vs private expenditure. Actually if we are going to cut taxes to stimulate growth that benefits all I would like to see sales taxes and income taxes that affect the middle and working classes and small businesses cut INSTEAD of taxes for the wealthiest. I think this is a superior method of stimulating the economy than handing the wealthiest even more wealth (and with it even more political influence).Because I think it is these things that create demand and thus jobs and eventually wealth that benefits the many rather than the few. Then why does the data show increased national productivity benefiting the rich almost exclusively?If nothing else will you answer that?Edited by Straggler, : Spelling and shorten post.

That is a question. But it isn't really the question of this thread.We have had a lot of talk about the right question or the real question or the veiled question. So let's state clearly what the question is here: The implicit assumption of trickle down economic theory is that the wealthiest are members of some sort of entrepreneurial elite who will lead innovation and wealth creation if freed from the shackles of tax and regulation.So the question of this thread is (to quote Mr Jack in an earlier post) whether setting up the structures of the economy so that the wealthiest are free to accrue as much wealth as they can is beneficial to people in general. That's what trickle down economics is about.Edited by Straggler, : No reason given.

Percy you still seem to be confused by exactly what the term 'trickle down economics' refers to.Do you think 'trickle down economics' refers to the simple fact that the rich spend money that is then received by those lower down the income scale?Or does 'trickle down economics' refer to the idea that specifically targeting tax breaks and policy decisions at making the wealthiest wealthier is a superior method of creating growth, employment and prosperity for all in society?The two are not the same thing. The first obviously and indisputably occurs. The second, according to the data, doesn't.Which do you think we are talking about here? If you really need to boil the question of this thread down into a neat little sound-bite of a question then try the following: Should we aim tax breaks and policy decisions at making the wealthiest wealthier in order to create the most prosperity for all? But that is not the same as trickle down economics succeeding in terms of it's proclaimed benefits being met. Is it? The wiki entry on trickle down economics discusses serious doubts as to whether trickle down economics actually works. Certainly it does not support your statement - "It isn't a question of whether trickle down works or not. Of course it works".Have you actually read the wiki entry in full? Wiki entry on trickle down economicsWhere in there does it say that trickle down economics works?

I agree.If nothing else Percy's flawed advocacy of trickle down economics has united you and I in common cause.

Then maybe you should credit Straggler (and president Obama) with a bit more intelligence. I am not asking if trickle down happens. I am asking if trickle down economics works.

quote:

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Trickle down economics, the conservative theory embraced by Ronald Reagan and virtually every conservative since, doesn’t work, Obama declared. And even as conservatives have clung to the idea in the face of overwhelming evidence against it, it has never worked, Obama added:

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"Now, just as there was in Teddy Roosevelt’s time, there’s been a certain crowd in Washington for the last few decades who respond to this economic challenge with the same old tune. The market will take care of everything, they tell us. If only we cut more regulations and cut more taxes — especially for the wealthy — our economy will grow stronger. Sure, there will be winners and losers. But if the winners do really well, jobs and prosperity will eventually trickle down to everyone else. And even if prosperity doesn’t trickle down, they argue, that’s the price of liberty.

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It’s a simple theory — one that speaks to our rugged individualism and healthy skepticism of too much government. And that theory fits well on a bumper sticker. Here’s the problem: It doesn’t work. It has never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible post-war boom of the 50s and 60s. And it didn’t work when we tried it during the last decade."

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LinkEdited by Straggler, : Add link and fix quotes.

A rising tide lifts all boatsNo no no.You are both changing the question again and attributing to me a position that I have not advocated in this thread again.What I have said is this - If we are going to cut taxes to stimulate growth should we focus tax cuts on the wealthiest or on the majority? Which will have a better effect on the economy to the benefit of all - Trickle down economic policies or a more Keynesian demand boosting approach? I have suggested the latter as superior.I suggest the latter because the data shows that 30 years of flirting with trickle down policies have blatantly NOT resulted in the benefits for all that are claimed by proponents of trickle down economics. The data shows that the richest have almost exclusively benefited from rises in productivity in a way that exactly contradicts the justification for implementing trickle down economic policies. The US data shows this. And the UK data almost exactly mirrors it.In short the data refutes the claim that trickle down economics works.

I still don't think you understand what the rest of us are talking about when we refer to 'trickle down economics' and whether it works or not. So let me try and provide a simplified real life current example.In response to the economic problems being experienced here in the UK (high budget deficit, low growth, high unemployment) the UK conservative led government has opened the metaphorical trickle-down-policy-text-book and done the following:1) Raised sales taxes that everyone pays (VAT as we call it) from 17.5% to 20%
2) Implemented historically unprecedented cuts in public spending
3) Lowered the top rate of tax (paid on income over 150,000) from 50% to 45%Then they have proclaimed that with regard to these austere economic times "We are all in this together".If trickle down economics works these are arguably the correct policies to pursue in order to spur growth, jobs and increased economic prosperity for all.If trickle down economics doesn't work these measures will be a poor method of achieving the desired effect of improving the situation for everyone and will in fact do little more than make the rich even richer and even more politically influential than they already are. If policies such as the above don't work then trickle down economics doesn't work. Question: Are these the sort of policies you would advocate in response to the UK's current economic woes?My position is that these are the wrong policies to pursue because history tells us that trickle down economic policies such as these do not work. Instead I would advocate a more Keynesian (i.e. demand led) approach to resolving the current mess.

Incomes for everyone, from the bottom to the top, rising significantly as a result of increased national productivity.What do you think the key prediction of trickle down economics is? The one by which is success or failure should be measured?Of every 100 rise in Britain’s national income since 1977, the bottom 50% of the population received 12. Meanwhile, the top 0.1% wealthiest received a 14 share.Is this what we would expect if trickle down economics works?

The graph shows that the minimum wage has fallen in real terms since 1970. How many people are on minimum wage? However you look at it trickle down has not worked for these people has it? Each person in the US economy has increased their production level by 100% but the median income has risen less than 20% whilst the incomes of the richest have risen almost entirely in line with GDP.This blatantly tells you that the fruits of increased productivity over the last 30 years or so have almost exclusively gone to the richest.This blatantly contradicts trickle down theory.Of every 100 rise in Britain’s national income since 1977, the bottom 50% of the population received 12. Meanwhile, the top 0.1% wealthiest received a 14 share.Is this consistent with the results we would expect if trickle down economics works? The rich get richer without moving the poor significantly in the same direction. Thus we can conclude that trickle down economics doesn't work.

The value of the minimum wage has decreased in real terms. The income of those on minimum wage has decreased in real terms. However you look at it trickle down has not worked for these people has it? It means that the productivity per person in the US has risen 100% Over a period of time you increase your productivity by 100%
As a result of this increased productivity you receive < 20% increase in income. Do you:A) Ask yourself who is benefitting from your increased productivity?
B) Thank the rich for trickling down a 20% increase in your income? Only if you attribute all (or nearly all) of the increased productivity to the top 5% does it make sense for you to think that wealth is trickling down.What or who do you think is responsible for that 100% increase in GDP per capita? Entrepreneurism and innovation across the income scale? Small businesses growing? Technological advancements made possible by publicly funded research institutions?Or do you think that the top 5% are responsible for nearly all that increased productivity and that you should be grateful for trickling down that sub 20% increase in income? The graph tells you that the proceeds of economic growth are not trickling down. They are accumulating at the top.I am bemused as to how anyone can dispute this.Edited by Straggler, : No reason given.