The Mudcat Café TM
Thread #55269   Message #859375
Posted By: NicoleC
05-Jan-03 - 04:44 PM
Thread Name: BS: More Failed Trickle Down Economics?
Subject: RE: BS: More Failed Trickle Down Economics?
Yes, I mean the employers of the US goverment are the taxpayers. Who else?

Let me give you a business example. Say I start a bakery. I can give out coupons to drum up business. It's a tried and true technique. I make up a bunch of "buy one get one free" coupons. Basically, half price, but I'll probably get more business, right? But what if I give out coupons that say I'll give you a free loaf of bread if you buy one somewhere else? I might get a few new customers, but I'll be bankrupted in the process.

My objection is to the idea that taxpayers are supposed to give big business investment money by reducing taxes, but then we'll watch most of that money leave the country for factories in the 3rd world. The jobs -- supposedly the carrot for corporate tax incentives -- aren't being created here. Ergo, nothing "trickles down." Lower prices don't help if there are no jobs.

It's interesting that the blame is being laid on the workers in this thread for living in a country with high prices. It's just not that simple. Whether you make $10,000 or $100,000, a bag of potatoes still costs about $2.00. If the price goes up to $2.50 to increase profit margins, then the low paid farm workers have to make more money in order to afford the potatoes, or they don't eat. Profit margins go down a bit -- prices get raised again. Instead of saying it's caused by both sides of the equation, the anti-labor faction will always blame it on the workers. Meanwhile, companies are drastically increasing compensation at the highest ranks. I don't have it in front of me, but last year a study came out that noted that if minimum wage had increased at the same rate as CEO pay in the last 30 (?) years, the minimum wage would be over $25/hour.

Yet, it's all the fault of those damn unionized assembly lineworkers!

Economics of supply and demand is not a one way trip. Given an atmosphere of excess production, it makes no sense to create investment to increase production when we are already over capacity. *IF* we were suffering from insufficient capacity and excess consumer demand, it would make sense to help spur investment. Right now, however, that's just not the case.