Trickle Me Elmo

(I originally wrote this in the summer of 2008 but didn't publish it. Sadly, it's as apropos now as it was then.)

What loon came up with the notion of trickle down economics? This notion that somehow if you give more money to the rich, it will benefit everyone? That somehow if you give businesses more money, they will "naturally" take that money and invest it in their operations, grow them, create jobs, etc.? Would you like to hazard a guess as to where the rich and business tend to put their excess money? Yes: they buy various investments from other rich people and businesses who think they've made enough money on whatever it is they're selling.

What is it that actually prompts businesses to invest in and expand their operations? Sales. What drives sales? The 95% of the country that aren't rich. Haven't we been hearing Didn't we hear for most of the Bush administration that it's "consumer spending that has been supporting the economy"? All the while the businesses were retrenching following the dot-com implosion, it was consumers buying what businesses had to sell that brought us out of that recession. It wasn't the rich buying stocks, or golf club memberships, or fleets of cars, or $10,000 shoes, or any of the things one tends to buy when one has more money than one can sensibly use.

It's a very simple concept any capitalist can get behind: businesses grow their business when they can make more money by doing so, and they can only do so if there's a market, and there's only a market if people have money to buy what's being sold. Giving a tax break to a business for which there's no market simply causes them to put more money in the bank, or pay the additional profits out as dividends.

Update: Goldy posted an eerily similar post on the SLOG today.