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Author
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Topic: Trickle Down Economics - Does It Work?
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New Cat's Eye
Inactive Member
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Re: Not sure what you're seeing
What would you expect that graph to look like if Trickle Down Economics did work?
| This message is a reply to: | | | Message 118 by crashfrog, posted 04-18-2012 9:51 AM | | crashfrog has not replied |
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New Cat's Eye
Inactive Member
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Message 127 of 404 (659767)
04-18-2012 2:46 PM
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Reply to: Message 125 by Rahvin
04-18-2012 2:36 PM
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Re: Not sure what you're seeing
I'm reposting the graph so I don't have to go to the previous page to see it again:
But that's not what we see. We see the wealthy leaving everyone else, especially the bottom 5%, completely behind as they receive vastly disproportional benefits that never actually get passed down to anyone else. The purple line is just the minimum wage. That's simply determined through legislation. We couldn't expect that to rise from Trickle Down Economics. I don't even know why its in there. And its never been decreased so what is the percent loss really telling us? That inflation has out paced the rise in minimum wage? Meanwhile the other earners are continuing to increase?
I'd expect to see GDP increase at around the same rate as the top 5%, and the median and bottom 5% also increase around the same, but delayed, as they receive the improved wages and lower unemployment from the trickled-down investments of the wealthy. It should essentially look like the wealthy are pulling everyone else up after them. Discounting the minimum wage, isn't that what we see going on with the median?
| This message is a reply to: | | | Message 125 by Rahvin, posted 04-18-2012 2:36 PM | | Rahvin has replied |
| Replies to this message: | | | Message 129 by Rahvin, posted 04-18-2012 3:11 PM | | New Cat's Eye has replied |
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New Cat's Eye
Inactive Member
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Re: Not sure what you're seeing
Incomes for everyone, from the bottom to the top, rising significantly as a result of increased national productivity. As I just typed to Rhavin, the Minimum Wage doesn't ride along with the economy, its simply legislated to be what it is.
What do you think the key prediction of trickle down economics is? I honestly don't know. I'm out of my league here. I never even took one single Econ class.
The one by which is success or failure should be measured? The fact that the median income has increased along with the top 5% tells me that the wealth *IS* trickling down.
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. It takes money to makes money. Or, you gotta spend money to make money. It a lot easier to make more money, the more money you already have. I would think that the top percentages *would* outpace everyone else.
| This message is a reply to: | | | Message 126 by Straggler, posted 04-18-2012 2:44 PM | | Straggler has replied |
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New Cat's Eye
Inactive Member
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Message 131 of 404 (659774)
04-18-2012 3:29 PM
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Reply to: Message 129 by Rahvin
04-18-2012 3:11 PM
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Re: Not sure what you're seeing
Both classes would be prospering at the same relative amount, separated only by time for the policies to affect different income levels. Wait, why? Is that even a prediciton of Trickle Down Economics? It seems to me: the more money you got, the more money you can make.
The rich got richer, a LOT richer. The middle class got a little richer That is exactly what I would expect from Trickle Down Economics.
and then plateaued (until 2008, when it started to fall again...). And the same happened to the top 5%, as expected.
The poor got fucked, as usual. The graph is just showing the Minimum Wage. That's not necessarily "the poor". This graph doesn't represent "the poor" at all. If anything, they should be reflected within the median income. As I said, I don't even see why minimum wage is in there.
If this is trickle-down working, then it's clear that the real goal of the policy is not in fact to increase the prosperity of everyone as stated, but rather to simply make the rich richer and fuck everybody else. You can't get that from the graph.
| This message is a reply to: | | | Message 129 by Rahvin, posted 04-18-2012 3:11 PM | | Rahvin has not replied |
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New Cat's Eye
Inactive Member
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Re: Not sure what you're seeing
The graph shows that the minimum wage has fallen in real terms since 1970. The minimum wage has never been decreased.
How many people are on minimum wage? However you look at it trickle down has not worked for these people has it? The minimum wage is determined by legislation. It cannot be raised from Trickle Down Economics.
Each person in the US economy has increased their production level by 100% What does that mean? What does that mean on an individual basis?
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. I'm not so sure... Everything has gotten better for everybody (except for minimum wage which is determined by legislation). That is the prediction of Trickle Down Economics, isn't it?
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? I dunno, I suppose.
The rich get richer without moving the poor significantly in the same direction. Thus we can conclude that trickle down economics doesn't work. Not from that graph. It doesn't represent "the poor". "Minimum Wage"  "The Poor" If anything, "The Poor" should be counted along with the median. Which rises with the top 5% as predicted by Trickle Down Economics.
| This message is a reply to: | | | Message 130 by Straggler, posted 04-18-2012 3:18 PM | | Straggler has replied |
| Replies to this message: | | | Message 155 by Straggler, posted 04-19-2012 7:25 AM | | New Cat's Eye has replied |
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New Cat's Eye
Inactive Member
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Re: Not sure what you're seeing
The fact that the median income has increased along with the top 5% tells me that the wealth *IS* trickling down.
It hasn't, though. The income of the top 5% has increased by more than 100%; the median income increased only by 30% over the same period. But they've both increased... We shouldn't expect it to be by the same amount.
"Trickle-down" doesn't work because, like I've already said, concentrating money in the hands of relatively few people wastes it, because there's too few of them to spend it. The only way that money benefits anybody else is if its spent. If it's lent or invested, it has to be paid back with interest, so it just winds up wasting even more money. But if that results in the median increasing, then the wealth has trickled down. It it didn't trickle down, then wouldn't we expect the top 5% to increase while the median decreases?
| This message is a reply to: | | | Message 133 by crashfrog, posted 04-18-2012 4:26 PM | | crashfrog has replied |
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New Cat's Eye
Inactive Member
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Re: Not sure what you're seeing
It it didn't trickle down, then wouldn't we expect the top 5% to increase while the median decreases?
Why do you think this should be a result? The top would be gaining at the expense of the median rather than pulling them along for the ride.
That the top 5% increases 100% in the period and the median increases 30% clearly shows it does not work. How so?
Look at the increase of both groups before any "trickle down" policies. The numbers were not so wildly different then. Yeah, and then when the top 5% starts taking off, the median goes up along with it. Isn't that Trickle Down Economics working?
The differences we are seeing now are showing an increasing flight of capital to the top percentages. This clearly shows that trickle down does not work. How so?
If this continues where do you see financial classes in 25, 50 or 100 years? If it continues, I'd see the median (which means everybody) keep on going up as long as the top does.
The top percentages are seeing huge increases compared to the median and you still advocate lowering their taxes? Where have I advocated anything?
| This message is a reply to: | | | Message 135 by Theodoric, posted 04-18-2012 4:56 PM | | Theodoric has not replied |
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New Cat's Eye
Inactive Member
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Message 138 of 404 (659789)
04-18-2012 5:46 PM
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Reply to: Message 137 by NoNukes
04-18-2012 5:25 PM
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Re: A closer look...
That said it does seem quite clear from the graphs presented that the lowest classes are not seeing any benefit of trickle down. I don't see the lower class represented in the graph at all. The minimum wage is not the lower class. The only thing that could represent them in the graph would be the fact that they're included in figuring the median.
Not necessarily. The median is not completely insensitive to changes at the extremes. The median is less sensitive to those changes than is the mean. But the median is more sensitive to changes at the upper and lower ends of a population than is the mode. It is possible that most or all of the increase in the median is due to the top few percent doing extremely well. And if it was at the expense of the poor, then wouldn't that bring it back down to a neutral change? The fact that the median continues to rise suggests the wealth could be benefitting everyone, doesn't it?
Of course it does follow that if there is an increase in the media, we have to do a bit more analysis in order to rule out trickle down to the middle class. I don't trust the graph at all. I think they threw the minimum wage in there just to trick people, by them assuming it represent the lowest class, into thinking that the gain at the top is at the expense of the bottom.
If it continues, I'd see the median (which means everybody) keep on going up as long as the top does. Hopefully I've debunked the idea that the median means everybody. If everyone rises, then the median must rise. But you're correct that an increase in the median could be due to the increase in the top alone. But, if that increase in the top was at the expense of the low, then we wouldn't expect the median to rise as it has.
| This message is a reply to: | | | Message 137 by NoNukes, posted 04-18-2012 5:25 PM | | NoNukes has replied |
| Replies to this message: | | | Message 142 by NoNukes, posted 04-18-2012 7:10 PM | | New Cat's Eye has replied |
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New Cat's Eye
Inactive Member
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Message 164 of 404 (659872)
04-19-2012 12:18 PM
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Reply to: Message 140 by crashfrog
04-18-2012 6:33 PM
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No, because the median is the value at the middle of the range. If the incomes at the top 5% increased while everyone else's remained the same, the median would increase because of growth at the top end. But that wouldn't be an example of a rising tide lifting all boats, but merely a statistical artifact of the increase in range of incomes. Wait a minute... here's some data: Person | Money A 10 B 100 C 1,000 Doesn't the median = 100? If the data changes to this: A 10 B 100 C 10,000 Then even tho the top got more, doesn't the median still equal 100? If the data had changed to this: A 10 B 120 C 2,000 Then the median has risen by 20%, while the top has risen by 100%, right? Is that how I'm supposed to be reading this graph? ABE: I just noticed something. The top 5% is only going to be 5% of the data no matter what, right? The median wouldn't be affected by an increase in their magnitude at all, would it? Well, hrm, is it measured by the top 5% of the income, and then figure out what households that represents or is it the top 5% of households that make the most money, and then figure out how much they got?
If the incomes at the top 5% increased while everyone else's remained the same, the median would increase because of growth at the top end. Wouldn't you have to increase the number of people who are in the top 5% to have the median increase because of growth at the top end? Just increasing the magnitude of those already there wouldn't do that, would it?
The fact that the median income has increased along with the top 5% tells me that the wealth *IS* trickling down.
It hasn't, though. The income of the top 5% has increased by more than 100%; the median income increased only by 30% over the same period.
But they've both increased... We shouldn't expect it to be by the same amount.
That's almost exactly what we should expect based on the model that the spending of the rich is income for everybody else, which for the most part it is; the problem is that the economy (and wage levels) are based on the spending of the middle class, not the rich. There's simply not enough rich people to base an economy on. How does that mean that we should expect them to rise by the same relative amount? Edited by Catholic Scientist, : see ABE
| This message is a reply to: | | | Message 140 by crashfrog, posted 04-18-2012 6:33 PM | | crashfrog has not replied |
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New Cat's Eye
Inactive Member
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Message 165 of 404 (659873)
04-19-2012 12:22 PM
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Reply to: Message 142 by NoNukes
04-18-2012 7:10 PM
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Re: A closer look...
First, nobody is saying that the rich are getting richer at the expense of the poor. A quick glance at the graph seems to suggest that it is trying to say exactly that: the top 5% are going up while the minimum wage is going down.
People are saying that giving more money to rich people does not help the poor. People are also complaining about trickle down policies that include tax cuts for the reach funded by cuts in social services under a theory that such is the way to help out the poor and middle class. None of that is comming from this graph tho, right?
The graphs do not say anything about social services provide to help the poor funded by taxes. It appears that if we benefit the rich by cutting social services to give the rich money, as best as I can tell, the poor never see any benefit and are worse off. Just what the hell *is* the point of this graph!?
| This message is a reply to: | | | Message 142 by NoNukes, posted 04-18-2012 7:10 PM | | NoNukes has seen this message but not replied |
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New Cat's Eye
Inactive Member
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Re: Not sure what you're seeing
Also there is evidence that when rich people feel warm (in July, for example) so do poor people. I can show you a graph if you like. Yes, please do.
It follows that we can keep the poor warm in winter by heating the rich. How is this in any way analogous?
| This message is a reply to: | | | Message 153 by Dr Adequate, posted 04-19-2012 12:35 AM | | Dr Adequate has not replied |
| Replies to this message: | | | Message 169 by Straggler, posted 04-19-2012 1:08 PM | | New Cat's Eye has not replied |
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New Cat's Eye
Inactive Member
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Message 167 of 404 (659880)
04-19-2012 12:34 PM
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Reply to: Message 155 by Straggler
04-19-2012 7:25 AM
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Re: Not sure what you're seeing
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? If I look at it from my own personal experiences: when I was making minimum wage I still lived with my parents and they made a lot more money so trickle down very well could have been working for us.
Straggler writes: Each person in the US economy has increased their production level by 100% CS writes: What does that mean? What does that mean on an individual basis? It means that the productivity per person in the US has risen 100% Re-arranging the words doesn't explain it... The meaning, what is it? On an individual basis, what does that mean?
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. I'm just not seeing it. Perhaps you could explain how the graph is telling you that?
| This message is a reply to: | | | Message 155 by Straggler, posted 04-19-2012 7:25 AM | | Straggler has replied |
| Replies to this message: | | | Message 168 by Straggler, posted 04-19-2012 12:53 PM | | New Cat's Eye has replied |
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New Cat's Eye
Inactive Member
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Message 170 of 404 (659904)
04-19-2012 2:18 PM
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Reply to: Message 168 by Straggler
04-19-2012 12:53 PM
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time for different data
Is that your idea of an counter argument to the economic fact that those on minimum wage have seen their real incomes drop rather than increase? It was an answer to a direct question, which I quoted just before answering. That the value of minimum wage has decreased doesn't necessarily mean that the person receiving that wage hasn't benefitted from TDE; if for example they still live with their parents who are. Too, being poor doesn't necessarily mean that you are making minumum wage. The value of minimum wage is irrelvant to TDE. And as I said before, its determined by legislation alone.
Simply put the GDP of the US is everything produced by all the people and all the companies in the US. Per capita simply means per person. So it is a measure of how much is being produced per person. On average. You erroneously said (bold added):
quote:
Each person in the US economy has increased their production level by 100%
If you had 10 people increase production by 10,000%, the other 90 people around them who did nothing didn't necessarily increase their production by 100%, even tho the GDP per capita increased by 100%.
Productivity per person increases. Okay.
The incomes of the richest rise in line with that growth. Not always. In the early 2000's, the Top 5% drops while the GDP rises.
This incomes of the other 95% don't. Sure they do. The median rises and falls right along with the Top 5%. All the peaks and valleys line up.
Therefore the graph tells you that the proceeds of economic growth are not trickling down. They are accumulating at the top. There's more at the top, but the median is rising with it. Its just at a lower magnitude. It looks to me like whenever the top 5% make more, the median makes more too.
OR we could consider the UK data One thing at a time, this post is long enough.
Is that clearer? Yes, thanks. I think the graph is deceiving you. The title of the graph is "Who Benefits from the United States' Prosperity?" The answer the graph seems to provide is "everybody except those whose household income equals the minimum wage". I don't think the prediction of TDE is that the government is going to legislate a higher minimum wage. I don't think this graph provides an answer to whether or not TDE works. Its time for different data. Do you have a link to the data for the UK stuff?
From Message 169:
It gets hotter = GDP per capita rises. The incomes of the top 5% richest rise = Rich people get warmer The incomes of the 95% majority rise = Everyone else gets warmer too. Conclusion that wealth has trickled down = Conclusion that everyone getting warmer is the result of the rich getting warmer (trickle down warmth) Okay, now lets look at what I actually said:
quote:
Yeah, and then when the top 5% starts taking off, the median goes up along with it. Isn't that Trickle Down Economics working?
If when the rich people get warmer, everyone else gets warmer too, wouldn't that be the warmth trickling down?
| This message is a reply to: | | | Message 168 by Straggler, posted 04-19-2012 12:53 PM | | Straggler has replied |
| Replies to this message: | | | Message 172 by Straggler, posted 04-19-2012 2:35 PM | | New Cat's Eye has replied |
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New Cat's Eye
Inactive Member
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Re: Whan the rich get warm we all get warm....
CS writes: If when the rich people get warmer, everyone else gets warmer too, wouldn't that be the warmth trickling down? Are you fucking serious? No. Of course it wouldn't. That's just mental. Well then just what would be a result of something trickling down? If its not the bottom going up when the top goes up then what is it?
Average GDP per person has risen significantly and yet almost all of that has gone into the pockets of the rich. What exactly has trickled down? The parts that caused everyone else to rise along with them.
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? Depends on the situation. I don't see how that represent anything since not everyone increased their product by 100%.
Did you really think that I meant every individual person is now producing a 100% more than they were 30 years ago? I was asking because it didn't make sense.
| This message is a reply to: | | | Message 172 by Straggler, posted 04-19-2012 2:35 PM | | Straggler has replied |
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New Cat's Eye
Inactive Member
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Re: Not sure what you're seeing
I really don't know how to respond to the absurdity of CS's question here. Is he talking a different language or is he just insane? Alright: You come up with an analogy that shows a trickle down effect. Edited by Catholic Scientist, : No reason given.
| This message is a reply to: | | | Message 173 by Straggler, posted 04-19-2012 2:44 PM | | Straggler has not replied |
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