Trickle Down Peters Out

The great idea behind the old “Trickle Down” theory was its prediction that if the people and government of the United States took care of the large corporations, those corporations would, after they had taken care of their own needs, take care of their workers and then all the rest of the people of America. There would be no need for a “new deal” of any “cards,” instead the great national economic “pie” would be increased so large that everybody would eat cake all the time. 

But the Reagan, Gingrich, Bush-Bush bit has tested that theory very thoroughly from the 1970s to the beginning of 2000. We found the pay of CEOs rose during this great Trickle Down Development Period from about 45 times that of the average worker to 300 to 400 times, even now passing through 600 times, that of the average worker. The “average workers” meanwhile, found out that what was really trickling down was their standard of living. They found that even two “average” incomes were not able to keep up with increasing costs as they experienced increasing personal debt, decreasing personal savings, and an income that by 2002, when adjusted for inflation, had actually fallen since the 1970s! (More Trickle Down!) 

The great CEO’s of the great corporations increased their profits by laying off workers.  Some of the more successful ones absorbed (“merged with”) some of the smaller corporations, thus “greatly improving service to customers” and laying off thousands of workers.  Some corporations declared bankruptcy, then “reorganized” (discarding their previous obligations to former workers in the form of retirement benefits and medical payments). Other great CEOs of the great corporations blew their bottom line beyond the realms of glory when they out-sourced the jobs of their American workers to Mexico, then to South Korea, then to Philippines and onward to China.  The “pie” became as large as the moon, and just as inaccessible to American workers who saw themselves falling out of the middle class as their retirement benefits vanished, their medical care was converted to an insurance game, and their pay dwindled in indirect proportion to the new hours of work then began to encounter.

So if anyone ever tries to tell you again, like John McCain did in 2008 for example, about how great the “Trickle Down” theory is, you could just tell them that after thorough testing it has been found to be an exact copy of what the military used to call the old “Slide Down Hill” theory, or without having to explain all those ramifications, you might just say that Trickle Down has Petered Out.

© John Womack, 2008. All rights reserved.