Obama on ‘Trickle Down’ Economics: ‘It Doesn’t Work, It Has Never Worked’

[ProSense]

Obama on ‘Trickle Down’ Economics: ‘It Doesn’t Work, It Has Never Worked’

By Travis Waldron

In 1910, former President Theodore Roosevelt gave his rousing “New Nationalism” speech in Osawatomie, Kansas, where he called for new approaches to dealing with the problems the nation faced. President Obama visited Osawatomie today, and in his own speech — his first major economic speech since Occupy Wall Street protests began highlighting income inequality and corporate greed — Obama called for a new approach to addressing America’s current economic challenges.

In the process, Obama fired a shot across the bow of 30 years of conservative economic theory, a shot that was sorely needed but has been left in the chamber by Democratic presidents and political leaders, Obama included, far too often. 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:

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.

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.

Watch it:

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[louis-t]

1. He waits 3 years to start saying this?

Jeez, I was telling my family this 15 years ago.

[boxman15]

3. He's been saying this all along.

People are just now starting to pay attention.

[joshcryer]

4. I'm embarrassed our side doesn't recognize that.

[AtomicKitten]

25. Some people aren't listening.

Some people here have announced they don't/won't/can't listen to him, and have made a crusade out of being mad at him. That's cynicism at its worst.

[kenfrequed]

41. And yet...

He proposes borad tax cuts with every budget. The compromises with the Republicans on this have been absurd. Tax cuts, even targeted, progressive tax cuts, are really not good rational policy.

[patrice]

27. Presidents have more than their families to deal with, e.g. actual enemies out to hurt ANY good you

try to do and, e.g., a brand new actual black-hole in our economy.

A black hole of unknown size because it's in PRIVATE business contracts, so there's no official way to find out the damage, but estimated at from several 10s of trillions of dollars up to $670 trillion, so let's split the difference and say the losses in the Derivative Crash of '08 are only $335 trillion, with US GNP at something like $10 trillion and Earth GNP at something like $30 trillion http://www.scaruffi.com/politics/gnp.html you can see why this black-hole is sucking all value into it (including those contract based values that tie domestic and foreign equity together in international hedge-funds), so it is something different from what most of us think of when we talk about what this president should do.

Yeah, since our campaign/election systems are corrupt, PO was HIRED by Wall Street, they knew this black-hole was headed our way and had to have known that for at least a decade, so they hired this centrist with at least bi-racial popularity to take the hit for it and, because of that black hole and the fan-fare of blame our enemies are trying to generate, for him to be replaced by a fascist under any label that they can sell to an American public that, until recently, say about the last 2 months, just barely even knew anything significant had happened in our financial sector. Which fascist(S) would then start with a newly razed economy and a "mandate" to do whatever s/he is told to do by those who created the whole situation in the first place, or, more accurately, those who created this particular iteration of the whole situation this time.

[ClassWarrior]

38. So you don't want it now?

:shrug:

I'm just grateful he's finally frickin' saying it.

NGU.

[Life Long Dem]

50. Actually...

Rachel Maddow compared it to the speech Obama delivered at the 2004 Democratic National Convention. He's been saying this since at least 2004.

[Graybeard]

2. Folks don't like being trickled down on.

This is a clear winner for Obama and all Dems.

[Enrique]

5. a shot across the bow?

I thought the dems have been fighting against trickle-down for decades? And now we're sending shots across the bow?

I thought every single dem voted against the Bush tax cuts. Every single dem, including Lieberman. And now we're sending warning shots?

I thought every single democratic primary candidate promised to end the Bush tax cuts, in both 2004 and 2008, including Lieberman. I thought Obama promised that, and won.

I'm so sick of this hype. Coming out against trickle-down is not a shot against the bow, it's the Democratic party's position for decades.

My complaint is not with Obama, my complaint is whoever at TPM called this a shot across the bow.

[MannyGoldstein]

6. Then why was his "stimulus" plan primarily trickle down?

Has he changed his mind, or did he not understand his plan?

[phleshdef]

8. I think its more of you not understanding what trickle down actually means.

[MannyGoldstein]

9. Isn't it handing money to the 1% and believing that what you hand them...

and more... will be given to the 99%?

[ProSense]

13. Seems

"Isn't it handing money to the 1% and believing that what you hand them..."

...you're confusing Stimulus with the tax cut extension.

The President has been consistent in his rejection of trickle-down economics.

[joshcryer]

16. I like that comment by killbotfactory in the Obama's criticism of the extension thread:

Obama cares more about helping workers than hurting the rich

It's true. Some 'liberals' would prefer the rich hurt before helping people.

[phleshdef]

17. Yea, I told someone on here pretty much the same thing just a few days ago.

Extending unemployment and keeping middle class tax levels stable at the end of 2010 was a million times more important than sticking it to the rich on taxes. Its not that I don't want to stick it to the rich on taxes. We have to at some point. But it takes a back seat to those other 2 items I just mentioned.

[joshcryer]

20. More importantly, it was a lame duck congress, which passed it.

Obama couldn't have got it really any other way. I don't care what people say about "nuclear options" or "bully pulpit."

[kenfrequed]

44. I disagree a bit.

Had we 'stuck it to the rich' the budget deficit would not have been an issue the repukes could have claimed a stake on. While I do think the unemployment benefits were important I do not think that the tax breaks were a good idea or sustainable. They were a holdover from Bush policy and really should be done away with. The programs that could be sustained with the revenue from those tax cuts is far more important than the pittance that those tax cuts put back into the system.

[young but wise]

22. +1

[patrice]

30. BINGO!!! That'scalled base building & we're supposed to believe that our own concrete objectiveswill

be accomplished after the base is built. #1 WHAT exactly will those future objectives be comprised of???????????????? & #2 WHEN will they be accomplished, i.e. how many people will suffer and die waiting for the things we NEED ASAP, and if the principle that these "liberals" claim as justification for their ((resume building, nest feathering)) base-building is that it is unjust for people to suffer, why is it okay for those who could have benefited from more immediate and clear objectives NOW (even if somewhat imperfectly accomplished) . . . why is it okay for them to suffer and die for base-building that will produce exactly WHAT? WHEN?

Some "liberals" would prefer to hurt the rich before helping people; I think we see some people who may be like that around DU frequently.

[kenfrequed]

43. the problem is...

That money is either zero-sum or inflationary. Redistribution of wealth is required which means YES, we do need to hurt the rich a bit. I don't know why people don't get this. OWS gets it, and the American people get it, hell... Warren Buffet gets it! But somehow the third way dems keep telling us the same old myths about a tide raising all ships (which is only slightly better a metaphor than 'growing the pie').

[WildNovember]

39. Cutting taxes for the rich is only stimulating when there's not a lot of unused capacity.

Why would anyone invest when the capacity that already exists isn't being used?

So you might be the one confusing stimulus with tax cuts.

[phleshdef]

15. Sure. That works. But that wasn't what the recovery act did.

Too small. Yes.

But it was largely middle class focused regardless.

[joshcryer]

18. Slam againt the Bush tax cut extension that Obama opposed but compromised on.

Obama has been extremely consistently against trickle down.

Just because we handed him a lame duck congress doesn't change that fact.

He got what we gave him.

Things would've went down a lot differently had we held the Congress and gained in the Senate.

[phleshdef]

19. I KNOW that particular poster knows that the recovery act and the 2010 tax/ue deal are 2 diff things

But maybe they are conflating the 2 on purpose.

[joshcryer]

23. Definitely on purpose.

I wasn't implying you didn't realize their scheme or anything, I think we both know what's going on here. Just wanted to clarify to you and any other readers, the slam has nothing to do with the original stimulus, but the tax cut extensions also extended big chunks of the stimulus, so it's going to be conflated by the disingenuous.

[patrice]

32. Conflating - happens ALL of the time.

[progressoid]

52. +1

[Major Hogwash]

10. How many conspiracy theories do you actually adhere to??

It's getting to be that time where people either have to decide to wake up and smell the coffee or go back to their mother ship.
Seriously.

[MannyGoldstein]

11. Is there anything specific I've written that you'd like to refute?

Or is it just easier for you to yammer about conspiracy theories?

[Major Hogwash]

42. I'll take President Obama's word over yours any day of the week.

I have no idea why you're even here since all you do is criticize President Obama day in and day out.

[kenfrequed]

45. And I will stick to neither of your words

If either of you could post a few appropriate links describing which tax cuts, how they were targeted, and when they were passed then we can get passed all the inevitable 'conspiracy theorist/cheerleader' accusations.

[Major Hogwash]

46. President Obama's speech was about "trickle down economics", ken.

And President Obama doesn't believe in "trickle down economics".
Renewing the Bush tax cuts last year was not about "trickle down economics".

That's all there is to it.
You can use Google or Bing to obtain a dozen articles on it.

[kenfrequed]

49. I don't need a bloody article on a speech

I am talking policy, and if either of you can prove either way on whether there was a lot of 'trickle down' or not in the recover package or subsequent legislation, then I might be swayed on this.

Telling me to google a bloody speech doesn't prove a damned thing.

[joshcryer]

12. The Bush tax cut extension is basically unforgivable to them.

Nevermind that people were going to hemmorage if they got a payroll tax hike in the middle of a recession, that they had to pass it in a lame duck session and that without question the hands of the Democrats were tied (we didn't even have 60 votes in the Senate at that time). Nevermind that unemployment benefits were about to run dry. Nevermind that AMT and CTC were respectively being held hostage and got a boost.

Oh, no, Bernie Sanders does an 8 hour rhetorical slam against Obama and every single thing that helps is basically rendered irrelevant.

[Enrique]

21. it's not a matter of not forgiving the extension

it's a matter of not forgetting it.

[joshcryer]

24. Certainly parts of it are forgotten, as implied by snarky comments such as that.

You know, like billions to extend unemployment.

[Enrique]

26. that was just a pretext

right after he got elected, Obama started backing away from the idea of killing the Bush tax cuts.

[phleshdef]

29. He has still put many proposals on the table that involve raising taxes on the wealthy.

So if we are gonna formulate a theory on what Obama's thinking really is, there are many valid reasons to believe that he extended all of the Bush tax cuts because he cared more about the continuation of UE benefits and middle class tax relief while we are in the middle of a jobs recession. Sticking it to the wealthy is not important than those things. The whole thing was a last minute deal so it wasn't like he didn't hold out for a middle class only extension. Had they waited much longer, he would've been relying Boehner's tea bagger Congress to extend unemployment benefits, which means they never would have happened, as this Congress has most certainly proved with its other dealings.

[joshcryer]

35. Which is why he denied they would have any stimulus effect even as he was signing it.

Total revisionism.

[patrice]

33. AMT? CTC? & revoke DADT and The Dream Act were in the works about then too. nt

[Smarmie Doofus]

7. I dunno. I'm a p.s. teacher. *Someone's* trickling on me.

I dunno if it's Obama , Duncan, Bloomberg, the Koch Bros. or Gates.

But there's currently a lot of wet, stinky emanations on my head and on my shoulders.

[jody]

14. OK but Obama's stimulus packages don't work either. n/t

[bhikkhu]

36. What if, 21 months ago, someone asked if you'd be satisfied with 21 months of job growth?

No, its not everything everyone wanted, but I think, after this amount of time, that 21 uninterrupted months of positive job numbers and GDP growth might be called a "solid recovery". Not a complete recovery, but a solid one.

Ironically, the one thing on the horizon that might end the gains is completely beyond our control - that is the troubles in Europe.

[uponit7771]

51. Went from negative job growth to positive, that "works" for most adults

[mikekohr]

28. Here are the numbers on Tinkle Down Economics,,- also graphs-

http://bureaucountydems.blogspot.com/p/economic-record.html

THE PARTY WITH THE BEST RECORD OF SERVING REPUBLICAN ECONOMIC VALUES IS THE DEMOCRATS, AND IT ISN'T EVEN CLOSE!"
-Michael Kingsley-


FEDERAL SPENDING: since 1960 Republicans increased Federal Spending by 71% more than have Democrats

FEDERAL DEBT: since 1960 Republicans have increased the National debt by 100% more per year than have Democrats

GROSS DOMESTIC PRODUCT: since 1921, adjusted for inflation, Democrats outproduce Republicans by 43% . Starting in 1940 the Democratic advantage is 23% better.

REAL PER CAPITA INCOME: since 1960 Democrats have outperformed Republicans by 30%. (This is perhaps the most important economic statistic of all).

INFLATION: since 1960, Democrats outperform Republicans 3.13% to 3.89%.

UNEMPLOYMENT: since 1960 it decreases in an average Democratic year by 0.3% to 5.33%, and increases in average Republican year by 1.1% to 6.38%.

JOB CREATION: from 1945 to 2003, Democrats produced 174,200 jobs per month, Republicans have only produced 60,600 per month. Every time a Democrat succeeds a Republican, job creation soars. Every time a Republican succeeds a Democrat job creation plummets. NO EXCEPTIONS!

DOW JONES AVERAGE: since 1921 the DOW has increased by 52% more under Democratic administrations.
THE BOND MARKET: since 1940 the value of 10 year Treasury bonds rose 1.2% under Democrats and fell 0.5% under Republicans.

SOURCES-Bureau of Labor Statistics, Economic Policy Institute, "Christian Science Monitor," "The Los Angles Times" -Michael Kingsley-

by mike kohr 3/7/2006

RESULTS MATTER, VOTE DEMOCRATIC!

?

NATIONAL DEBT: http://bureaucountydems.blogspot.com/p/national-debt.html

?


WHY DO REPUBLICAN ECONOMIC PRINCIPLES EXPAND THE NATIONAL DEBT?
-The answer is simple mathematics. Reduced revenue + increased spending ='s increased debt-


?


The two biggest promises of "Trickle Down Economics" are it's greatest failings. Proponents of "Trickle Down Economics” claim that tax cuts, skewed to the rich, will create jobs and increase tax revenues. The graph above disproves the latter claim. Job creation plummets under "Trickle Down Economics
see: http://bureaucountydems.blogspot.com/p/job-growth.html

And nine of the last ten recessions have occurred under Republican leadership see http://bureaucountydems.blogspot.com/p/history-of-recessions.html

Two things are certain to grow when a Republican is in the White House, unemployment and the National Debt.


By contrast, "Bubble Up" economnic priciples practiced by Democratic Administrations put people to work, rev up the economy, and balance the Nation's ledger books. Every time. No exceptions.

[DCKit]

40. You are the inconvenient truth. Great post. nt

[craigmatic]

31. Until he changes the tax system we're still going to be stuck on trickle down.

[glowing]

34. Then why for the last 3 yrs has almost everything been said or done

with a policy geared towards trickle down? The financial industry and the debacle of Wall St has been protected and thrown money, while the avg American becomes poorer and towns are being destroyed by lack of jobs and tax revenue and home foreclosures? Start walking the talk.. Put up, or shut up.

[ClassWarrior]

37. Awesome speech. I loved this: “Those aren’t Democratic or Republican values..."

"...They’re American values, and we have to reclaim them.”

As Professor Lakoff said:

"Centrism" is the creation of an inaccurate self-serving metaphor, and it is time to bury it.

There is no left to right linear spectrum in the American political life. There are two systems of values and modes of thought -- call them progressive and conservative (or nurturant and strict, as I have). There are total progressives, who use a progressive mode of thought on all issues. And total conservatives. And there are lots of folks who are what I've called "biconceptuals": progressive on certain issue areas and conservative on others. But they don't form a linear scale. They are all over the place: progressive on domestic policy, conservative on foreign policy; conservative on economic policy, progressive on foreign policy and social issues; conservative on religion, but progressive on social issues and foreign policy; and on and on. No linear scale. No single set of values defining a "center." Indeed many of such folks are not moderate in their views; they can be quite passionate about both their progressive and conservative views.

Barack Obama has it right: Get rid of the very idea of the right and the left and the center. American ideas are fundamentally progressive ideas -- the ideas this country was founded on and that carry forth that spirit. Progressives care about people and the earth, and act with responsibility and strength on that care...

http://www.huffingtonpost.com/george-lakoff/no-center-no-centrists_b_60419.html

NGU.

[kenfrequed]

48. I sort of agree

There is no center. It is a delusion and one that does not serve us well. It could be argued there hasn't been a properly articulated left in many decades as well.

The problem is that the very 'third way' democrats that argue against the left and right in american politics are those self same pseudo-centrists responsible for creating the myth of the centrists in the first place.

If you went by issues, most Americans would be on the left on the majority of issues.

[Johnny2X2X]

47. A Winner

if Obama can make the debate even partially about the issues in this speech he will win reelection in a landslide.

Republicans wont touch this speech with a 10 foot pole, it's a losing topic for them and they know it. This topic isn't going away and OWS is 100% responsible for its rise.