The only trickle down I see, are them marking my feet

A few thoughts and observations about Trickle down

When we hear folks talking about economic ideas, we have to understand that there are two kinds of misleading ideas out there. There are narrowly defined policy ideas that make economic sense in those narrow scenarios that they describe. And there are broad assertion about economics that are just put out to try to sell folks invisible cloth. Some areas of thought; Friedman's monetary ideas, other economists core ideas, even some of Marx's ideas, belong to the former category. Even if you disagree entirely with the general philosophy, some of the ideas are intriguing and true. And studying them is worth doing, especially if you disagree, because we all should learn to think critically. Being able to see both sides of every issue is important not only to lawyers and sophists, but also to those seeking genuine wisdom. I can't battle the abstract of "dogmaticism" if I myself hold dogmas and never challenge them. Ideas have to be examined and compared. Most good ideas make sense in their context, and understanding that context helps one to discard the nonsense. Can't get caught off guard by truth if one agrees.

But the other kind of stuff, is just invisible cloth. Trickle down is in that pile of steaming excretia. It is the notion that if tax and policy policies favor the rich somehow we'll all be better off. This sale goes back to the early 20'th century when many blue collar workers, or more often salesmen, who had no chance of "rising" were convinced by Horatio Alger stories to believe that they would one day be rich if they supported laissez faire policies and invested in the stock market. The grifters in the stock market stole their money and many of them were forced to ride the rails looking for a place where they could make their riches; but this "temporarily embarrassed millionaire" notion has never vanished among us Americans. It is why folks who ought to know better support such policies, even when the other folks are sharing nonsense arguments for why they should.

Again, at the core of trickle down is a truth. The King, because he has concentrated power has a vastly (geometrically in respect to his wealth or power alone) power to do good or evil, over an ordinary person. So loan your money to a rich person and, in theory, you'll get a better return than you'd get loaning it to someone poor. Except that history, and experience shows that that is not usually, actually in fact, the case.

Reality: Investors risk "Other People's Money", Not their own.

In actually, officers of any enterprise prefer to risk other people's money rather then their own. Kings held the crown jewels as a trust, and when they bankrupted themselves, they bankrupted their people. The only difference between some Wall Street investors and Bernie Maddoff is that Bernie guaranteed his investors a rate of return and that blocked him from being able to invest in actual risky ventures and reduced him to paying back his investors out of new investment and creating a ponzi scheme as a result.

Examine dozens of investors, companies, etc.... and their whole purpose is not reducing risk it is transfering risk. They will risk your money, pocket your fees, pocket any profits, and deduct any losses from your balance sheet. The results of investing in some stock funds or other Wall Street Instruments may be the same as with a Ponzi Scheme, but the Ponzi scheme was illegal, and the folks investing lost money on Wall Street are still working out in the open. A case can be made that it might be better to go back to keeping our money in mattresses, but then it would never do any work. At the core of the economic system we have has to be trust. Investors should not be risking other people's money while running "heads I win, tails you lose" games. There are a lot of folks who should be cooling their heels with Bernie. The idea of trickle down is related to the idea that if we invest in risky stocks we'll wind up with a giant retirement nest egg. Maybe, if the game isn't rigged as it was in 2000, or 2006 (and periodically since 1790). Sure, it trickles down, what is left.

And the investors will tell you while they are selling things to you that they are mavens who know so much more than you do. And when your money goes south and disappears, they'll say "you should have known better." The risk is on you.

Trickle Down Tax Policy is really transfering risks and costs.

Similarly, trickle down tax policy is part of a whole series of effects of naked aggression, legal bribery, extortion, and corrupt influence; that reflect more the power of sophistry and rhetoric, than credible policy.

If everyone is a temporarly embarrassed millionaire than I guess it might make sense to let the wealthy not pay their fair share of taxes, and to acquire more and more wealth. After all, a fair society floats all boats, and if the factory owner (nowadays usually industry owner) has immense wealth, that ought to trickle down to workers, traders, salesmen, and the guy at the corner store. No, that doesn't happen. On the contrary, wealth beyond a certain point is simply power. Power to buy influence, to buy followers, to buy allegience. It becomes a get out of jail card. And as with investors, it becomes about transfering risk. Think they can't afford to make their factories safe at Wallmart? It would cost them pennies on the dollars of their profits. Risk transfered to you and me means a sense of security and power for those in the offices.

It would be fairly easy to graph this using Maslowe's hierarchy of needs. The rest of us spend money fairly efficiently. It goes from us to banks, creditors, energy providers, stores, restaurants, and each other. The wealthy spend more than we do, but their entertainment needs to up arithmetically with their income, but their income goes up geometrically. A person making a million dollars might spend 10's of thousands of dollars on entertainment, but a person making tens of millions dollars will probably not be spending much more. On food, the curve will top out at even a lower rate. My income is close to the rate at which it makes no difference in how I spend for food at my current income level over a higher level. I might eat fewer meals at expensive restaurants, but I probably wouldn't eat many even if I were incredibly wealthy. The wealthy don't have a life-style difference that grows more costly at the same rate their wealth increases. That is why they insist on capping Social Security.

No, after that living wage, and then wealthy life-style premium, everything else becomes power and security oriented. It may be invested, but it won't be spent, on average. For every generous person giving away millions you find billionares giving away maybe a million; and mostly for quid pro quo.

No it doesn't Trickle Down, Joe

And finally it is worse than them simply not spending money when you let them keep more. They still spend money, but that money becomes more and more aimed at increasing their wealth and power. They invest investor money to corner the Silver Market (The Hunt brothers), or setup schemes to protect their nest eggs by creating derivative bets and making their own investors take the risk for those going bad. In this last swindle bubble, they actually set it up so that the risk fell on the taxpayer. In past times the wealthy tended to gamble their money away.

In the 1700's, Scottish Nobles, for instance, would gamble away land, that ideally shouldn't have been their personal property anyway, as the tenants on that property had been their for centuries and the nobles had essentially converted their trust as rulers into simple property thanks to the holes in "enlightenment" thinking. In order to make their gambling debts back, (or simply monetize their holdings) they'd wind up evicting their tenants and converting the property to raising sheep or industry. The wealthy come to own property simply because they have money, and with time, they come to own more and more property (as is happening here) until they own everything. Then people start getting evicted from property because they tend to be irresponsibility with those trusts.

Trickle Down or Oligarchy?

Our current generation of super-wealth is following that time worn track. Ceasar's triumvirate included people who got their wealth and power through the revolving door of business and government. Crassus for instance acquired huge holdings of lands by running the Roman fire-department. Caesar inherited the political machine of the Marius family. Crassus of the Sulla faction. And Pompeii represented the "new men" trying to horn their way into "old wealth." They initially were representatives of rival plutocrats, but eventually there were only three, and after that only one. Wealth comes to buy power, and power to buy wealth. Eventually these three came. And then there was one.

Anyway, it doesn't trickle down, but it can destroy our Republic.

Note, I've been so busy with a deadline my imagination hasn't been able to track to blogging, and a lot of ideas I was planning to blog on got side-tracked.