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Ahh, the good old trickle-down, aka "piss in my eyes and tell me it's raining" (which is the only way trickle-down actually works). It was pure mythology from
by romwell 5y ago
Ahh, the good old trickle-down, aka "piss in my eyes and tell me it's raining" (which is the only way trickle-down actually works).
It was pure mythology from the start; there's never been any basis for it to begin with. It's a pity we even have to debunk it like that.
Go figure, give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food.
Give a billionaire $20M, see the money go into the fintech machine and pour out into offshore accounts, as the billionaire holds on to whatever financial product they bought forever as long as it appreciates faster than inflation.
Oh, and they'll spend $200 on a fancy dinner.
Cue Pikachu face when the economy doesn't improve.
- refurb 5y agoLow quality post unworthy of HN.
- 271828182846 5y agoand your's is better, isn't it
- flooow 5y agoWhen someone makes a bad-faith argument, should one go to great lengths to refute it? Perhaps sometimes. Other times, it is better to dismiss it as nonsense and get on with one's day. "Trickle-down economics" is an extremely bad-faith argument, essentially boiling down to "rich people pay slightly less rich people to tell poor people it's better for The Economy if they stay poor". That it was ever given credence in the first place reflects very badly on the economics profession (or, as I would reframe it, shows that economics as a subject has been wholly captured by elites).
- refurb 5y agoTrickle down economics is a bad faith straw man argument against supply side economics. I see plenty of HN posts argue that “putting more money in the hands of low income individuals is good”, but suddenly that’s wrong because… Reagan?
- goohle 5y agoI assume, you are talking about Venezuela or Zimbabwe dollars. Right?
- xwolfi 5y agoWhat's a financial instrument ? Usually a debt (a stock, a bond) which makes others live. Even to buy a house you need to give money to someone else who uses it for their own retirement or whatbot. If the millionaire receives gold and bury it in his garden, sure, but if he puts it in a bank or an instrument, chances are you're paid by it. And sure, giving money to non value added non productive endeavour like you propose works, but who gives this money? Wait a bit eventually all people do is pay taxes to receive money to pay taxes: you need an escape valve, something more valuable to happen, than just feeding hoboes with money. But granted, trickle down has never been hosing down. A trickle it is and it's better if you can produce clear visible value that compensate you even if millionaires arent involved. Like say, make bread or cut hair...
- Applejinx 5y agoThe cleverest people around have gone into finance to invent instruments that are ever more abstract, specifically to avoid tying finance to inconvenient, fallible things like… business. It all has to perform way better than anything tangible could hope to do, and this starves out the type of investing to which you refer. Newest example: crypto. Like burying capital in pure abstractions, except they pollute (which gold doesn't)
- ianai 5y agoGold does pollute-but it’s probably a lot less polluting once it’s out of the ground. You make an excellent point about modern finance. Increasingly to me it seems modern finance should be considered for its affects on money supply and finance not dissimilar to actions of central banks and certain government spending. It’s probably gone unnoticed largely exactly because the corporate finance machinations are not anywhere near as visible and widely disclosed at a Fed decision.
- thinkcontext 5y ago> Gold does pollute-but it’s probably a lot less polluting once it’s out of the ground. How could you possibly think that? Most gold today is produced through hard rock mining, which involves either enormous pits or tunnels. Many tons of ore is crushed and processed with either cyanide or mercury to get a few grams of gold.
- q1w2 5y agoI haven't seen a politician advocate for trickle down since the early 1980s. Why is this strawman still the target for low-effort articles?
- garmaine 5y agoIt is alive and well under the title "supply-side economics" https://en.wikipedia.org/wiki/Supply-side_economics#Trump_years https://en.wikipedia.org/wiki/Supply-side_economics#Trump_ye...
- ianai 5y agoBecause it absolutely has been used by politicians and pundits since the 1980s into the present day and you’re the one spreading falsehoods.
- Wolfenstein98k 5y agoIt is talked about by its opponents. No one on the right uses the phrase except in response. Try and find some examples
- romwell 5y agoIsn't it great how, once the idiocy of trickle-down has become widely known, one can continue pushing the same ideas by merely calling it something else? Such a neat trick! We are not talking about which phrase the Right uses today. The idea of trickle-down is what our current taxes are based on. There's no need to call it anything; obstructionism suffices
- Wolfenstein98k 5y agoI am not American, but I assume you are. Your taxes are tremendously progressive. In most other developed countries they're much less progressive. Your tax and transfer system when combined is much kinder to the poor / harsher on the rich than basically any comparable country. https://mobile.twitter.com/amorygethin/status/1459159978342813702 https://mobile.twitter.com/amorygethin/status/14591599783428...
- chii 5y ago> give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. if there wasn't enough food in the first place, then the $20m just got inflated. This 20m will not go towards investment in higher food productivity when given to individuals like that. Give this 20m to "the rich", they will invest it in food creation machinery. At least there would be more food produced after the investment.
- iso1631 5y ago> Give this 20m to "the rich", they will invest it in food creation machinery. At least there would be more food produced after the investment. That's the falacy. Reality is nearer they'll buy an NFT of a hamburger and then ask for another $20m
- chii 5y ago> Reality is nearer they'll buy an NFT of a hamburger and then ask for another $20m let's say for argument's sake, that they ended up doing this - what's the difference than the food buyers in this case? Both is generating economic activity. And if the $20m was spent on food, wouldn't those people also then ask for another $20m after having eaten their food? My point is, gov't handouts are better off being invested into productivity producing investments, rather than consumption. The productivity investments would allow cheaper consumption in the future, and in the mean time, generate jobs for people to produce for consumption.
- TheOtherHobbes 5y agoYour point is still wrong, because "productivity investments" are more likely to destroy jobs - certainly stable, well-paid jobs - than to create them. In a very obvious and mundane way, how often do people find that when someone leaves a job they're suddenly doing their own work and the work of the person who left? But without a pay rise? That's a productivity increase. It is very much not a "generated job." Add automation to this and it's even more obvious. The only time jobs are generated is when new markets are opened and this allows new kinds of activity which weren't possible before. The textbook example is government seed funding of computing in the 50s, which created completely new kinds of business activity. But only after the initial research was paid for by the public. And at the cost of many traditional jobs. (Secretaries, clerks of all kinds, etc.) Traditional economic theory has almost nothing of value to say about processes like these. There's plenty of mythology, but nothing that will accurately quantify wider social costs/benefits in a strategically useful way. In reality technologies have downsides as well as upsides, not just in terms of direct externalities but in terms of job losses - and sometimes in terms of productive value losses. It's exactly this feature of "economic progress" which conventional economics fails to analyse, quantify, or - often - even notice.
- bottled_poe 5y agoWhile I want to agree with you, you’re comment is just hyperbole/rhetoric and no substance.
- cies 5y ago> you’re comment is just hyperbole/rhetoric and no substance. So what is unsubstantiated in your view? The fact that super rich use offshore accounts? That super rich make more money with moving assets than they could make with labor? That poor people will likely spend given money quickly?
- bottled_poe 5y agoShould I quote the parts in question? They seem obvious to me, as it’s every sentence.
- pegasus 5y agoShould he/she beg you to do so? They've already asked you once. And no, it's not obvious to me what your counterargument is.
- bottled_poe 5y agoFine.. > Ahh, the good old trickle-down, aka "piss in my eyes and tell me it's raining" (which is the only way trickle-down actually works). Clearly hyperbole. Where’s the evidence for this broad claim? > It was pure mythology from the start; there's never been any basis for it to begin with. Is this not “free market economics” ? Seems there’s a non-mythical basis there.. I could be wrong though if that’s a fictional concept? Would love to be enlightened. > It's a pity we even have to debunk it like that. This is opinion/conjecture. > Go figure, give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. Appeal to probability, evidence? > Give a billionaire $20M, see the money go into the fintech machine and pour out into offshore accounts, as the billionaire holds on to whatever financial product they bought forever as long as it appreciates faster than inflation. Again, speak to probability, evidence? > Oh, and they'll spend $200 on a fancy dinner. Is that illegal? What’s the problem here? > Cue Pikachu face when the economy doesn't improve. Must I comment on this one?
- JackFr 5y ago> as the billionaire holds on to whatever financial product they bought forever as long as it appreciates faster than inflation. Another word for that is investment. Where do you think that money goes? You don’t earn returns on money that isn’t doing anything.
- JKCalhoun 5y agoI assume it goes overseas.
- ImprobableTruth 5y agoWhy would you assume that? Most stock people buy is of American companies. And hell, even if it was true, what is wrong with investing in foreign companies (of presumably underdeveloped nations)? That money still isn't "doing nothing", but rather giving the funding to companies that need it.
- romwell 5y agoWhats wrong is that this money was generated domestically, and people who generated it are screwed by lack of healthcare, education, housing, infrastructure, transportation, etc.
- 5y ago
- xondono 5y ago> give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. That’s not a return, the economy doesn’t work that way.
- paulryanrogers 5y agoIt enriches food producers, distributors, and servers. Assuming those functions aren't already consolidated into a megacorp I'd say it has been more beneficial than pushing up numbers in some billionaires account.
- xondono 5y agoAnd it impoverishes those who you took those 20M$. You can’t assess real impact without taking that into account.
- romwell 5y agoA billionaire wont be "impoverished" by that. I'll play my tiniest violin to their loss.
- xondono 5y agoThe issue is that there’s an amazing amount of overlap between the people who pay and the people who receive, making the exercise quite pointless. Even if you took all the wealth of billionaires and found a way of liquidating that at that price (you can’t, but let’s assume you can), then divide by all US citizens , you’ll see a pretty insignificant number.
- paulryanrogers 5y agoWho says the hoarded bounty has to be evenly distributed? IMO it should go to those who need it most. And even if the individual bump is small there's also one less thumb tipping the scales. Combined with campaign finance reform, more rigorous enforcement of bribery laws, and dropping first-past-the-post elections and things could really turn the corner.
- titzer 5y ago> Cue Pikachu face when the economy doesn't improve. It was never about the "economy". It has always been about pumping up the profit-generating machinery. It used to be that profit-generating machinery had real meatspace jobs backing it, and real machines and factories to feed. But now, given that machinery is now fully virtualized, first in the stock market, then in financial instruments, then tech, now in the unholy marriage of finance and technology and crypto currencies, I think the money'd elites would consider everything "working as intended". The stock market is generating record profits, therefore nothing is broken.
- toss1 5y agoYou are right that it was never about "the economy". It was merely a trope to market the new rules as somehow being beneficial to the general public who was about to be fleeced, so they didn't protest and riot and let it go through. No different from the Grinch's claim to Cindy Lou Who that he'd be fixing the tree and bring it back - just say anything to keep someone who sees they're being robbed from raising the alarm. Except with the real story here, the Grinch's heart only keeps shrinking.
- titzer 5y ago100% agree with this.
- cplusplusfellow 5y agoCan someone please explain which billionaire has been “given” $20b, and how it was “given”?
- mbar84 5y agoThe term "trickle-down" was a pejorative from the start, so if you ever have the intent to convince somebody, then you're going to have to start by not using pejoratives as if that's what the opposing side is advocating for. It's like you started calling people f*ktards with a f*ktard-theory and have done so for so long that you've forgotten, that's not how they see themselves. Now you're confused that nobody on the side you call f*ktards is listening to you or taking your arguments seriously.
- numair 5y ago> Give a billionaire $20M, see the money go into the fintech machine and pour out into offshore accounts, as the billionaire holds on to whatever financial product they bought forever as long as it appreciates faster than inflation. I know someone who was given a couple hundred million in a GRAT, which grew well beyond $1B, in the exact manner you reference. They aren’t on any of the lists, but I can confirm this exact scenario does, in fact exist. > Oh, and they'll spend $200 on a fancy dinner. You forgot about the drugs!
- lordlimecat 5y agoIt does work if you rely on actual relevant data. Disparity is a terrible measure, especially when you consolidate the entire world into one pot. China has higher taxes than the US, and far worse inequality as well as far lower median incomes. Europe has substantially higher taxes and cost-of-living than the US, but lower median, PPP-adjusted median, and median post-tax post-government-transfer disposable incomes than the US. When you compare countries by their tax rate compared to what the average (median) citizen ends up with, it does not seem to be the case that higher taxes result in greater personal financial security. Frankly, whether lower taxes results in more billionaires is irrelevant to the question of whether it increases the quality-of-life or economic security of your average person. Imagine pointing at one of the richest societies to ever exist (across all quartiles) as an example of how bad its economic policy is.
- credit_guy 5y agoThe actual comparison is more like "Take $20 MM from a billionaire and give 1 million hungry people $20 each, or let the billionaire keep the $20 MM". The billionaire could invest in SV startups for example, and the hungry people could buy food. That's the first order effect. The second order effect is that the billionaire, if taxed, will see his future profits reduced, so next year you'll only tax $18 MM, and the year after only $16, maybe. If you leave him alone, next year he'll invest $22 MM in startups and the year after $24 MM.
- dang 5y agoPlease don't fulminate in HN comments, please don't start flamewars, and please don't perpetuate them. All this makes for discussion that is tedious, repetitive, and eventually nasty. We're trying for the opposite here. What you did in this thread (dozens of flamewar comments) was egregious. We ban accounts that do that. We've had to ask you not to do it in the past. Please don't do it again. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- romwell 5y agoFirst, thank you for moderating HackerNews, and keeping the discussions civil. I will do my best to avoid feeding flamewars in the future. I've been enjoying being a part of the community for over a decade in no small part thanks to your work in establishing and enforcing the guidelines you linked. My goal with this comment - as at least one other commenter understood - was to introduce the concept of Marginal Propensity to Consume[1] in a simple way, and with a bit of humor. One thing I have learned from many years of teaching and giving conference talks is that when a new concept is introduced to someone with a dry language, it will, in most likelihood, will be ignore, or immediately forgotten. This applies to college freshmen as well as tenured mathematics professors. My goal was to get responses like[2]. Alas, in my attempt to write thought-provoking comments, I ended up writing simply provoking ones. Note taken. I'm not writing this to disagree with you assessment of the thread, but to clarify the intent and put my account history in context. Thank you again, -r [1] https://en.wikipedia.org/wiki/Marginal_propensity_to_consume https://en.wikipedia.org/wiki/Marginal_propensity_to_consume [2] https://news.ycombinator.com/item?id=29488150 https://news.ycombinator.com/item?id=29488150