Trump offers socialism for the rich, capitalism for everyone else

[GURPS]

In the conservative mind, socialism means getting something for doing nothing. That pretty much describes the $21bn saved by the nation’s largest banks last year thanks to Trump’s tax cuts, some of which went into massive bonuses for bank executives. On the other hand, more than 4,000 lower-level bank employees got a big dose of harsh capitalism. They lost their jobs.

Banks that are too big to fail – courtesy of the 2008 bank bailout – enjoy a hidden subsidy of some $83bn a year, because creditors facing less risk accept lower interest on deposits and loans. Last year, Wall Street’s bonus pool was $31.4bn. Take away the hidden subsidy and the bonus pool disappears.

Trump and his appointees at the Federal Reserve are easing bank requirements put in place after the bailout. They’ll make sure the biggest banks remain too big to fail.

Trump is promoting socialism for the rich and harsh capitalism for everyone else in other ways. GM has got more than $600m in federal contracts, plus $500m in tax breaks. Some of this has gone into the pockets of GM executives. Chairman and CEO Mary Barra raked in almost $22m in total compensation in 2017 alone.

Trump offers socialism for the rich, capitalism for everyone else | Robert Reich

It’s the wealthiest Americans who are getting something for nothing, writes Robert Reich, a former US secretary of labor

www.theguardian.com

 

[This_person]

In the conservative mind, socialism means getting something for doing nothing. That pretty much describes the $21bn saved by the nation’s largest banks last year thanks to Trump’s tax cuts, some of which went into massive bonuses for bank executives.

Whenever I read these things, I can never make it past a sentence as stupid as the last one above.

Keeping your money is not "getting something", it's "not losing something".

I have no idea why socialists/progressives/liberals/some conservatives just can't understand not having money taken from you is not "getting" something. It's really a very simple concept - called "reality".

 

[vraiblonde]

People act like bazillionaires stuff their money under the mattress and don't spend it. Which is not to excuse the graft and greed that our largest companies engage in, but when some fat cat gets a $10m payday, what does he do with it?

He buys houses, which enriches real estate agents and lawyers and construction workers and the ton of people involved in that industry.

He travels, which enriches hotel workers and restaurant employees and airlines and those in the entertainment industry.

He buys cars, which enriches auto dealers and mechanics and detailers and folks in that industry.

He employs help around the house and to keep his yard spiffy.

Trickle down, bitches.

J. Paul Getty was a notorious miser, but the rest of them live large and spread it around. Those with the ability to create wealth do so, and the rest of us work for them and sell them things. I would rather see them control where their wealth goes than the government take it and dispose of it.

 

[TCROW]

Trickle-down works for the gullible and uneducated.

 

[This_person]

J. Paul Getty was a notorious miser, but the rest of them live large and spread it around. Those with the ability to create wealth do so, and the rest of us work for them and sell them things. I would rather see them control where their wealth goes than the government take it and dispose of it.

I'd rather they control where the wealth goes for a very good reason - it's THEIRS. Whether they shove it under the mattress, put it in the offering plate, buy planes and cars and illegal drugs, or live in a modest home and spread it to their underlings....or any of an almost infinite things they could do with it. It's theirs to make that choice.

I fully understand that trickle down actually works. But, whether you think it is only for the uneducated or you're educated enough to know it works it really doesn't matter - it's THEIR money to do with as they see fit.

 

[vraiblonde]

Trickle-down works for the gullible and uneducated.

Why do you say that?

 

[TCROW]

Why do you say that?

Because in an economy as complicated as the world's today, it's an overly simplistic view. National economies are't closed systems where money would have no place to go but down. There's not a single economist who uses this term "trickle down". Near as I can tell, the term came into wide use during Eisenhower to describe his ideas.

Furthermore, to believe this as valid economic theory, you'd have to believe that the rate of capital consumption is greater than the rate of consumer consumption. Companies have access to all sorts of other places they can put excess cash which don't increase their debt or their labor costs.

Instead, this is a term of class warfare, divide and conquer politics. If "trickle down" is so good and so effective, then EVERYONE would benefit by being able to keep more of their money to spend, not just "the rich", whatever that means.

With all that said, it's great people are able to keep more of their money. Just don't fall into the trap of supporting because "trickle down". It has never, ever, ever worked in the manner in which it was intended.

 

[vraiblonde]

If "trickle down" is so good and so effective, then EVERYONE would benefit by being able to keep more of their money to spend, not just "the rich", whatever that means.

Everyone DOES benefit by being able to keep more of their money. There is nobody so poor that they won't trickle down to someone else on some level.

With all that said, it's great people are able to keep more of their money. Just don't fall into the trap of supporting because "trickle down". It has never, ever, ever worked in the manner in which it was intended.

How do you think it works? Someone makes a crap ton of money....and then what happens? Where does it go? Someone gets a $10m bonus...and then what? What does he do with it?

That's a real question. I'm willing to rethink my position.

 

[GURPS]

Someone makes a crap ton of money....and then what happens? Where does it go? Someone gets a $10m bonus...and then what? What does he do with it?

That's a real question. I'm willing to rethink my position.

depending on wealth before the 10 mil bonus, it sits in the bank

... companies have been instituting stock by backs that money goes somewhere, back to stock holders, brokerage firms in the form of fees


although Transporter complains it is not spent on workers like Trump said it would

 

[This_person]

depending on wealth before the 10 mil bonus, it sits in the bank

... companies have been instituting stock by backs that money goes somewhere, back to stock holders, brokerage firms in the form of fees

So, buy backs goes to stock holders - like 401(k)s, and the like? When the brokerage firms get the fees, do they pay their employees?

It sounds like you're describing just another way trickle-down actually works.

 

[GURPS]

It sounds like you're describing just another way trickle-down actually works.

but but but that is not what Trump Promised with the Tax Cuts / Overseas Wealth Transfers

 

[vraiblonde]

depending on wealth before the 10 mil bonus, it sits in the bank

What do you mean "just sits there"? Like piles of cash in a vault? Scrooge McDuck stuff?

 

[GURPS]

What do you mean "just sits there"? Like piles of cash in a vault? Scrooge McDuck stuff

in the bank now being spent ... although on 2nd thought, I would be investing that 10 million dollar bonus

 

[SamSpade]

Because in an economy as complicated as the world's today, it's an overly simplistic view. National economies are't closed systems where money would have no place to go but down. There's not a single economist who uses this term "trickle down".

It's used as a pejorative since Reagan to ridicule his economic plans.
But it's somewhat descriptive in that the very wealthy put their money where it will earn MORE money -
back into the economy.

This versus what happens when the Democrats get hold of all the money - they piss it away.

Who would you trust with wealth - the guy who made it, or the guy who's taking it from him?

 

[TCROW]

i also think that the tax cuts were targeted as they were (“the rich”) to prevent so much capital from fleeing this nation’s economy. And it absolutely will help: all else equal, high taxes will cause capital to flee. It’s a natural and rational reaction to government wanting to steal more of your money. Trump and key admin officials understand this and they should be lauded for recognizing this, and taking action to prevent it. I think the re-patriation efforts might not be going as planned, but this is absolutely a sensible and practical reason to lower taxes on “the rich”.

I think of trickle down this way: caveman hunts one day and has a banner day. He brings home three animals. Most days, he’s be lucky to get one. Now he’s thinking what to do with his windfall. Perhaps this was at a time when food preservation techniques weren’t know. So he knows that his family, as voracious eaters that they are, won’t eat it all before it spoils.

He knows is neighbor has been poorly of late, and hasn’t been able to hunt. The most he has been been able to do is chop wood.

So the successful hunter sees an opportunity to trade some meat for some firewood. So they work a deal which favors both parties. And so on and so on.

But the reason this model of trickle down I don’t think applies in today’s economy: we live under a form of highly constrained capitalism and a highly planned economy which is highly dependent on consumers spending dollars controlled by a government that can will them into and out of existence. This trickle down just class warfare and another wedge issue to divide and conquer. It pits the non-rich against the rich, whatever the definition of “rich” is.

This is why I am a fan of fair taxes and the few plans out there.

I submit that there is absolutely nothing wrong with letting people keep more of what they earn. I further submit the previous statement is not incompatible with thinking that anyone who believes in “trickle down” as any sort of serious economic theory in light of all the above is just part of the problem. Just pick a side and then blame the other side.

 

[TCROW]

Who would you trust with wealth - the guy who made it, or the guy who's taking it from him?

Indeed, I don’t want government to take any more of anyone’s money.

I just want them to quit trying to be social architects is all.

 

[GURPS]

It's used as a pejorative since Reagan to ridicule his economic plans.

If I Recall Correctly 'Trickle Down Economics' WAS Reagen's Economic Platform in 1980

Also refereed to as 'Supply Side Economics' or Reaganomics

called Voodoo Economics by Bush before he lost the nomination to Reagan


Surprise Surprise Surprise ... originally a Democratic idea from 1896 Interesting

Trickle-down economics - Wikipedia

en.wikipedia.org

Trickle-Down Economics: Theory, Policies, Critique

Trickle-down economics employs policies that include tax breaks and benefits for corporations and the wealthy that trickle down to benefit everyone.

www.investopedia.com

Trickle-Down and the Laffer Curve
American economist Arthur Laffer, an advisor to the Reagan administration, developed a bell-curve style analysis that plotted the relationship between changes in the official government tax rate and actual tax receipts. This became known as the Laffer Curve.

The nonlinear shape of the Laffer Curve suggested taxes could be too light or too onerous to produce maximum revenue; in other words, a 0 percent income tax rate and a 100 percent income tax rate each produce $0 in receipts to the government. At 0 percent, no tax can be collected; at 100 percent, there is no incentive to generate income. This should mean that specific cuts in tax rates would boost total receipts by encouraging more taxable income.

Laffer’s idea that tax cuts could boost growth and tax revenue was quickly labeled “trickle-down.” Between 1980 and 1988, the top marginal tax rate in the United States fell from 70 to 28 percent. Between 1981 and 1989, total federal receipts increased from $599 to $991 billion. This empirically supported one of the assumptions of the Laffer Curve. However, it neither shows nor proves a correlation between a reduction in top tax rates and economic benefits to low- and medium-income earners.

Does Trickle-Down Economics Work?

Trickle-down economic theory says business and investment tax cuts benefit everyone. Instead, most tax cuts worsen income inequality.

www.thebalance.com

Trickle-Down Economic Theory
Trickle-down economic theory is similar to supply-side economics. That theory states that all tax cuts, regardless of whether they are for businesses or workers, spur economic growth.

Trickle-down theory is more specific. It says targeted tax cuts work better than general ones. It advocates cuts to corporations, capital gains, and savings taxes. It doesn't promote across-the-board tax cuts. Instead, the tax cuts go to the wealthy.

Both trickle-down and supply-side proponents use the Laffer Curve to prove their theories. Arthur Laffer showed how tax cuts provide a powerful multiplication effect. Over time, they create enough growth to replace the government revenue lost from the cuts. The resulting expanded, prosperous economy provides a larger tax base.

But Laffer warned that this effect works best when taxes are in the "Prohibitive Range." This range goes from a 100 percent tax rate down to an unspecified rate around 50 percent.

If the tax rate falls below the Laffer Curve's prohibitive range, then further cuts won't stimulate economic growth enough to offset the lost revenue.

 

[SamSpade]

If I Recall Correctly 'Trickle Down Economics' WAS Reagen's Economic Platform in 1980

But I am pretty sure it's what his CRITICS called it, just as Reagan didn't call it "VooDoo" economics.
(You know, that phrase is only seared in my memory because of "Ferris Bueller". I'd long forgotten
it until the movie came out).

 

[GURPS]

But I am pretty sure it's what his CRITICS called it,

well yes ... Bush did when he was running against Reagan

 

[SamSpade]

well yes ... Bush did when he was running against Reagan

well yes ... Bush did when he was running against Reagan

You know, kind of like when Nancy Pelosi was calling the tax cuts "crumbs" for the working people.
It's easy to call it crumbs from your ivory tower, living with millions, and ridicule those of us for whom
another 100 bucks in the paycheck is actually pretty nice.