“Trickle Down” Is a Plutocratic Religion, Not an Economic Theory

The Article: “Trickle Down” Is a Plutocratic Religion, Not an Economic Theory by Mark Karlin on Buzzflash.

The Text: “Trickle down” is not an economic theory; it’s a self-enriching religion for the wealthiest amongst us.

The economists and pundits are legion who have challenged the notion that the amassing of wealth by a privileged few results in more jobs being created in the US. After all, if this were the case – at a time the richer are becoming even richer – why did we nearly just reach a depression?

This is a very complicated issue to adequately explore, but a book that touches upon a flashpoint area of this debate is “Illegal People” by Truthout contributor and labor specialist, David Bacon. It is the Truthout Progressive Pick of the Week and available with a minimum contribution, shipped directly by Truthout.

One of Bacon’s central arguments is that globalized corporate trade is conducted to increase the profits of large corporate entities. The result is the exact opposite, in many cases, of trickle down. Due to trade agreements that allow corporations to place factories in the lowest cost country, creating near slave-labor conditions – as BuzzFlash at Truthout has shown – for workers who, for example, make almost all American high-tech products overseas.

This does not trickle down jobs to Americans; it exports American jobs and devalues the compensation and benefits of US jobs that remain. Furthermore, in terms of NAFTA and Mexico, it dumps subsidized American products – particularly agricultural – south of the border and renders many small farmers in Mexico and Central America unable to compete. This is just one of the factors that results in increased migration to the US: the need to survive.

The hue and cry about “immigration” (code word at this time for poor Mexicans and Central Americans) is not coming from corporations or the agricultural industry. They want more lower-cost workers that they can pretty much control with a minimal amount of regulation. In fact, there is currently a limited visa program for agricultural workers, and the Bush administration wanted to expand it to include a very large “guest worker” program. The translation of a guest worker is a migrant from south of the border who will work for just about any wage – and endure just about any working conditions – to survive, but they must leave the US after their “work” is done.

So, if we look at the corner of the business world concerning southern sphere migration to the US, we are not looking at trickle-down economics; we are looking at increasing corporate and big agricultural profits through the exploitation of labor.

Meanwhile, the Chamber of Commerce members — and their political shills — stir up resentment among Americans without jobs and those with very low-paying jobs by blaming US unemployment problems on Mexicans.

This is the political scapegoating of why dollars don’t trickle down to American workers, who have actually increased productivity since the ’90s, while wages have remained relatively stagnant. So, if the religion of trickle down doesn’t deliver, it’s the fault of “illegal immigrants” with brown skin, right?

Not really; it’s the policy of US globalized companies to maximize profits by minimizing labor costs. The global economy, unleashed by labor-unfriendly free trade agreements, offers them that opportunity, damn the American worker.

As BuzzFlash noted in a recent commentary that included coverage of how Apple exploits overseas workers and builds almost all its branded image products offshore, one Apple executive told The New York Times, “We [Apple] don’t have an obligation to solve America’s problems.” That was in response to Apple shipping so many potential US jobs overseas to slave-wage sweatshops; e.g., “90 percent of the parts of an iPhone are made outside the U.S.”

The bait and switch here for the global multinationals is to cut jobs in the US, cut pay, make a bigger profit manufacturing overseas and sit on that profit or disburse it to shareholders. Americans consume the products, maybe assembled in a plant in Mexico that was formerly in the US.

Trickle down? The only thing that trickles down is wages in the US, and the decline of the manufacturing sector (despite some recent indications of a small revival – most notably by US automobile manufacturers). The salaries received by people who used to earn decent incomes have declined in far too many cases.

That’s what comes of the Trickle Down religion.