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This is one of those re-occurring strawmen that just won't die and it's hurting the debate. It becomes a self-fulfilling prophecy. Of course wealth does not tr

This is one of those re-occurring strawmen that just won't die and it's hurting the debate. It becomes a self-fulfilling prophecy. Of course wealth does not trickle down. That's why it's defined as wealth. The real discussion to be had is the difference between lazy wealth (ex. real estate) and active wealth (investing in your own company) The claim has never been that people like the Koch brothers somehow spend their wealth to the benefit of people "below" them and since it's their wealth then of course it's not trickling down. The claim is that a lot of the wealth that is created from the millions of businesses which then result in jobs, a couple here, a couple there benefits people. It's obvious that if you think about the ultra wealthy then the trickle down effect is minimal there is a limit to how many Bentleys you can own. But if you take the large majority of small businesses and entrepreneurs who create a little but in quantity then wealth does trickle down. Working wealth that is.

pmoriarty 11y ago
Do most people work for large, medium, or small businesses? I seem to recall reading somewhere that they work mostly for large businesses. If so, then "job creation" effect of small businesses is not that great.
- JoeAltmaier 11y ago
  And I recall reading that 50% of Americans are self-employed or work at small businesses.
- ThomPete 11y ago
  The job creation effect isn't the argument here. The argument is wether wealth is better while active rather than passive capital. People with great wealth don't spend proportionally as much as people with less wealth. I.e. it's true that the wealth of the 1% doesn't trickle down but the 99% does because it's active and thats what makes the economy go around (economic activity, spending money) But if you want to discuss that then: "...American Business is Overwhelmingly Small Business. In 2012, according to U.S. Census Bureau data, there were 5.73 million employer firms in the U.S. Firms with fewer than 500 workers accounted for 99.7 percent of those businesses, and businesses with less than 20 workers made up 89.6 percent..."
  - pmoriarty 11y ago
    That just shows that almost all businesses in America are small businesses. It says nothing about whether most employees in the US are employees of large or small businesses.
    - ThomPete 11y ago
      Because that's not important to this discussion. The point is that lots of small businesses are much better "consumers" because the they have much more needs than if you only had a few big companies. The number of employees aren't important, the number of companies are. The wealth which the trickle down economy critics talk about is not the wealth that is meant when talking about trickle down effects by most people. The wealth that is meant is the wealth of the many small companies rather than the few wealthy who have most of their wealth in ex. real-estate. The wealth of the few ultra rich isn't trickling down, but the wealth of the many small companies are because it's creating other jobs in other companies. In other words. If we live in a world were only 1000 people had any wealth their ability to stimulate the economy from their own needs aren't enough compared to their wealth. But if we lived in a world where 100000000 are sharing the wealth then that alone creates much more economic activity.
- mdorazio 11y ago
  Depends what you mean by "large businesses". The stats are in table [1]. Looks like the biggest companies (1,000+ employees) account for about 40% of private sector employment. Add another 7% if you think "large" is 500+. Of particular interest is that those numbers have been growing quite a bit over the last 20 years. [1] http://www.bls.gov/web/cewbd/table_f.txt http://www.bls.gov/web/cewbd/table_f.txt
usrusr 11y ago
Today's unbuilt factories do not stay unbuilt because nobody has the capital to build them, they stay unbuilt because they would not be profitable to operate. In that sense, the old standard defense of why we need capitalists has become much weaker than it used to be.
- ThomPete 11y ago
  Sure but again you are talking about the wrong kind of wealth owners here. You are talking about the few. It's the many little wealth owners that are important. This is why it's so much better for an economy with a huge middle class because that provides a lot of economic activity. In other words. Trickle down obviously doesn't work when we are talking about the 0.1% however it does work when we are talking the next 19.9% and it does work when we are talking the next 40%. Not all wealth is the same. Passive wealth is of course not creating any value for society because it's passive. But active wealth is and so the trickle down economics does work just not all the way up.

pmoriarty 11y ago

Do most people work for large, medium, or small businesses? I seem to recall reading somewhere that they work mostly for large businesses. If so, then "job creation" effect of small businesses is not that great.

JoeAltmaier 11y ago
And I recall reading that 50% of Americans are self-employed or work at small businesses.
ThomPete 11y ago
The job creation effect isn't the argument here. The argument is wether wealth is better while active rather than passive capital. People with great wealth don't spend proportionally as much as people with less wealth. I.e. it's true that the wealth of the 1% doesn't trickle down but the 99% does because it's active and thats what makes the economy go around (economic activity, spending money) But if you want to discuss that then: "...American Business is Overwhelmingly Small Business. In 2012, according to U.S. Census Bureau data, there were 5.73 million employer firms in the U.S. Firms with fewer than 500 workers accounted for 99.7 percent of those businesses, and businesses with less than 20 workers made up 89.6 percent..."
- pmoriarty 11y ago
  That just shows that almost all businesses in America are small businesses. It says nothing about whether most employees in the US are employees of large or small businesses.
  - ThomPete 11y ago
    Because that's not important to this discussion. The point is that lots of small businesses are much better "consumers" because the they have much more needs than if you only had a few big companies. The number of employees aren't important, the number of companies are. The wealth which the trickle down economy critics talk about is not the wealth that is meant when talking about trickle down effects by most people. The wealth that is meant is the wealth of the many small companies rather than the few wealthy who have most of their wealth in ex. real-estate. The wealth of the few ultra rich isn't trickling down, but the wealth of the many small companies are because it's creating other jobs in other companies. In other words. If we live in a world were only 1000 people had any wealth their ability to stimulate the economy from their own needs aren't enough compared to their wealth. But if we lived in a world where 100000000 are sharing the wealth then that alone creates much more economic activity.
mdorazio 11y ago
Depends what you mean by "large businesses". The stats are in table [1]. Looks like the biggest companies (1,000+ employees) account for about 40% of private sector employment. Add another 7% if you think "large" is 500+. Of particular interest is that those numbers have been growing quite a bit over the last 20 years. [1] http://www.bls.gov/web/cewbd/table_f.txt http://www.bls.gov/web/cewbd/table_f.txt

usrusr 11y ago

Today's unbuilt factories do not stay unbuilt because nobody has the capital to build them, they stay unbuilt because they would not be profitable to operate. In that sense, the old standard defense of why we need capitalists has become much weaker than it used to be.

ThomPete 11y ago
Sure but again you are talking about the wrong kind of wealth owners here. You are talking about the few. It's the many little wealth owners that are important. This is why it's so much better for an economy with a huge middle class because that provides a lot of economic activity. In other words. Trickle down obviously doesn't work when we are talking about the 0.1% however it does work when we are talking the next 19.9% and it does work when we are talking the next 40%. Not all wealth is the same. Passive wealth is of course not creating any value for society because it's passive. But active wealth is and so the trickle down economics does work just not all the way up.