Trickle down theory is supply side economics, a.k.a. let those who will invest (the rich) have as much money as they can so that they can invest and eventually put money into the system, allowing everyone else to have a job and a nice salary, etc etc. Okay, so it sounds like it makes sense. I mean, I'm not going to try and explain some bullshit formula that proves it is right or wrong. The point that those on the left always make is that it tends to increase income inequality. The point that those on the right tend to make is that either, no it doesn't (though i just don't trust them, I can read statistics for myself thank you) or everything equalizes in one way or another. The latter is the more interesting thing that I'd like to say. Stiglitz claims that trickle down doesn't work. Well, what i think the last 30 years have shown us is that it does "work." The real question is, what exactly does it mean for a theory to "work?" Through the massive deregulation of financial markets, the huge cuts in taxes that primarily came in the 1980s, and other such policies credited to the "supply siders," the United States experienced a huge boom in growth. Is this what it means for a theory to "work?" I'm fairly sure the right wingers don't care what the effect is on the average person - if the economy is growing than everything is all good.
What we have to realize is that trickle down economics does create product. It is just not product that is good for everyone. Think of all the technological advances since the 1980s, all of the products that have come out, all of the comforts that we have gained, all of the money that could have been made in the past 30 years. There was a lot of it out there. The thing that must be understood is that trickle down economics did not fail... it led to its logical conclusion. What was the logical conclusion of trickle down economics? Well, apart from the financial crisis and the recession, we are living in it. Think back to 2005.... that was the product of trickle down economics. The politicians and economists let the economy kind of just go wherever it wanted to go because their theories said, and probably were correct in saying that, markets are most efficient. What they didn't ask themselves was whether markets would really serve EVERY American best. The answer to that is undoubtedly no. The economy was allowed to go loose and, consequently, millions of jobs were lost in some sectors (by certain people), millions of jobs gained in other sectors (by different people), billions of dollars made by one small group of people, billions of dollars lost by a lot of other groups of people.
The market had spoken. Meanwhile, we had been seeing some of the greatest economic growth in human history. If the market knows best and there was simultaneously huge amounts of growth... did trickle down economics really fail the United States? Hmmmmm....
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