If people get more money in their hands, they’re going to serve themselves as best as possible. That’s true for poor, rich and everyone in between.
So my gripe with “trickle-down” economic policies over the past few decades has been that it’s an inefficient way to serve the overall good of society. The justification is to get as much money in the hands of job creators as possible. This was the basis for the huge tax cuts for the wealthiest Americans in the last two Republican administrations.
No doubt, job creators need money in their hands to hire people. That’s absolutely true. No argument there. But “trickle down” has always seemed like a backwards way to get more money in suppliers’ hands, because it doesn’t do anything to stimulate demand, which is what drives job growth, which is what also puts more money in owners’ hands. Basically, why would anyone hire more people without a need for it? Hiring employees without any demand for them is not something I’ve ever observed in a business. Have you?
I’m already annoyed thinking about the term “socialist” that is surely on someone’s tongue, the one-word retort so readily offered as a blunt conversation stopper. No! Capitalism is the way to go. It’s not a perfect structure, but it’s absolutely the best of all options.
And socialism is not even in the same galaxy as what I’m talking about. In fact, screaming “socialism” is an avoidance response to a legitimate debate over macro-economic, capitalist principles. I’m debating the best big picture economic structure for our capitalist country, which should be driven by supply and demand, right? Yes! But the question is: where should emphasis be put, on the supply side or the demand side? My argument is that too far in either direction can be bad. So we need balance in this way. But we’ve been too unbalanced for too long.
We’ve lived a generation of supply-side economics. Our national policy makers have been mostly focused on supply for the past 40 years. You doubt this? Well consider that the financial sector has ballooned over that time, while our manufacturing sector has shriveled. And these two things are intertwined and are a consequence of supply-side policy emphasis.
Am I wrong to say that maintaining shareholder price has been the governing economic principle in the U.S. over the past generation? Maybe so, but I think it’s tough to argue otherwise. The performance of Wall Street has been used as our primary indicator of the economic health for years, right? And yeah, I want my own investments to do well. Who doesn’t?
But I also don’t want my personal investment interest to blind me to the bigger picture either. And when it comes to shareholder price, there are only a few ways to increase it, with reducing employee expenses topping the list. Because of that, U.S. shareholder prices have been bolstered for a generation by cheap labor elsewhere. That’s just a fact — perhaps one of the most significant economic facts in American history. This has put a strain on American society for quite some time.
Meanwhile, politicians scream about this or that. There’s finger-pointing and scapegoating. But if you cut away the rhetoric, our overall wage stagnation and domestic financial issues are largely due to the emphasis of shareholder pricing over all other domestic, financial health considerations. This emphasis has so many ripple effects, including the erosion of American manufacturing and a slew of problems for many families. These strains have led to increased need for social programs to help those left behind. The best policy, I believe, is to keep as many people out of desperation as possible. That’s a capitalist goal, not a socialist one. It’s just a desire to see a more normal balloon, not one squeezed so tight in the middle, with high and low ends swelling. It’s a desire for big-picture efficiency.
Our current computer chip shortage certainly drives home the point that we need to bring more manufacturing back to the U.S. Why should we be reliant on China for chips to put in our cars and devices? That setup profits some, but it hurts the country. Every politician, left and right, should be of one mind on that goal.
Of course, our global dependency has led to perks, like cheap goods, and an explosion in global trade, where more items are available to us and where more U.S. items are sold. But globalism has also brought a real sense of loss in our country, too. For many, it’s become much harder over these past 30 years to pay our bills, which continue to rise while wages have stagnated.
Meanwhile, national politicians have been way too beholden to share prices, not citizens. They take contributions from those only interested in maintaining shareholder price, and thus, that also becomes their top priority. But this is a profound disservice to the citizens they’re supposed to support.
At least economically speaking, I’d like to live in Dwight Eisenhower’s America, where the economy isn’t as tied to shareholder growth as it is to widespread prosperity of households rooted in tangible growth, not in speculation over perceived future growth, which is what rules Wall Street.
And I’m furious that this wish is somehow reduced — like everything under the sun — to a partisan matter. I want to hear proposals from both parties for the economic health for this country, not wrangling over who should be most hated. I’m so terribly sick of that. And I don’t think I’m alone. I want real policy debate, not culture war.
And on policy, I think the “trickle-down” model has led to too much emphasis on the Dow, not enough on the downtown. I’m fine with “trickle-up” for a time, because the cynic in me sees “trickle-down” as a back-scratching arrangement between Washington and Wall Street, with culture wars being a nice distraction from the quid-pro-quo right before our eyes.
But maybe you think I’m wrong. Well, I don’t hate you for it. Don’t hate me for my outlook. For the good of us all, let’s duke it out over policy, not personality. Then let’s shake hands. Let’s realize we’re sailing on the same ship. And that boat needs us to float, not sink. Our hate is nothing but an iceberg.
There’s my volley. Now someone hit it back over the net from the other side.