A "Zombie Idea" makes an unwelcome return

No serious economist has ever argued in favour of "Trickle-down economics"

And no government has ever defended its economic policies by suggesting that they would work through a "Trickle-down" mechanism. 

The closest there has ever been to such a thing was a Treasury secretary in the US who resigned from the administration after coming to disagree with its policies and later described those policies as being "trickle down" - but he didn't take that view when he was supporting them and those who continued to support that administration disagreed with the label. The Vice President in that administration, later President himself, had famously described the idea as "Voodoo economics."

So why is the idea even being mentioned? Because some on the left keep claiming, wrongly, that US Republicans and British Conservatives believe in it.

We don't.

Sadly the "Zombie idea" that Republicans or Conservatives believe in "Trickle down," a myth which Dan Hannan has repeatedly debunked as I have quoted here before, keeps rearing its' ugly head, usually from people who really ought to know better.

Sometimes, as when the term is applied to the present UK Conservative government, this attribution is nothing short of ridiculous. 

I don't believe that there is any such thing as "Trickle-down economics" but if there were, a government whose most important economic policy is to spend £60 billion pounds on cutting the energy bill of every household in the country, and which is also paying an additional £1,200 directly into the bank accounts of the most vulnerable households to help with the cost of living, certainly would not be following it.

American economist Thomas Sowell has consistently argued that trickle-down economics has never been advocated by any economist, writing in his 2012 book "Trickle Down" Theory and "Tax Cuts for the Rich":

"Let's do something completely unexpected: Let's stop and think. 

"Why would anyone advocate that we 'give' something to A in hopes that it would trickle down to B? Why in the world would any sane person not give it to B and cut out the middleman? But all this is moot, because there was no trickle-down theory about giving something to anybody in the first place.

"The 'trickle-down' theory cannot be found in even the most voluminous scholarly studies of economic theories - including J. A. Schumpeter's monumental History of Economic Analysis, more than a thousand pages long and printed in very small type."

Sowell strongly opposes the characterization of supply siders as "trickle down," pointing out that supply-side economics has never claimed to work in a "trickle-down" fashion. Rather, the economic theory of reducing marginal tax rates works in precisely the opposite direction: 

"Workers are always paid first and then profits flow upward later – if at all," he wrote.

Quite

Comments

Post a Comment

Popular posts from this blog

Nick Herbert on his visit to flood hit areas of Cumbria

Please note that the post below was published more than ten year ago on 21st November 2009 Nick Herbert MP, shadow cabinet member for the Environment, Food, and Rural Affairs, was in Cumbria this morning to see the areas affected by the flooding. He writes on Conservative Home about his visit. Here is an extract. I’ve been in Cumbria today to see the areas affected by the floods. I arrived early in Keswick where I met officials from the Environment Agency. Although the river levels had fallen considerably and homes were no longer flooded, the damage to homes had been done. And the water which had got into houses wasn’t just from the river – it was foul water which had risen from the drains. I talked to fire crews who were pumping flood water back into the river, and discovered that they were from Tyne & Wear and Lancashire. They had been called in at an hours’ notice and had been working on the scene ever since, staying at a local hotel. You cannot fail to be impressed by the
Read more

Quotes of the day 19th August 2020

Image
"Wise men profit more from fools than fools from wise men; for the wise men shun the mistakes of fools, but fools do not imitate the successes of the wise."  ( Cato the Elder , who lived 234 BC - 149 BC, quoted in "Lives" by Plutarch.) There is a similar saying by Germany's Iron Chancellor, Otto von Bismarck: Benjamin Franklin is supposed to have put the same saying in a more humorous form: "Wise men profit by the mistakes of others, while fools will not learn even from their own blunders." See also this thread on the "Quote Investigator" website . Let us all be wise and learn from the events of the last few days.
Read more

Quote of the day 24th July 2020

Image
I was moved to put the passage below forward as a quote today when I saw a horrible post on twitter from someone writing that it was "excellent" that someone who took a different view from her about Brexit had died. I won't write which way round it was so that all the Remain supporters can assume the post was from a Brexit fanatic welcoming the death of a remainer and all the Leavers can assume it was a Remainiac welcoming one less Brexiteer. There's been plenty of nasty stuff on both sides but if you catch anyone of your own viewpoint  posting something like that who might listen to you, please do call them out on it - and point out that they're giving everyone on your side of the argument a bad name. Anyway, here's the quote from John Donne.
Read more