Trickle down or trickle up economics?

[tripods68]

The problem is people can twist the numbers however they like. Tax policies do not work in a vacuum. There are many many external variables that affect the economy. We will never really know who is right.

(Perhaps we are all right, or all wrong, for that matter. What if supply-side fiscal policy is appropriate in some circumstances and demand-side fiscal policy is appropriate in other circumstances. Or what if these policies have a negligent effect on the economy and things would've turned out exactly the way they did anyway.)

Edited to add: Note that I'm talking on a macroeconomic scale. At the micro level, tax policy changes have clear winners and losers, at least in the short run.

I don't dispute what you're saying.

I have no problem arguing with Facts. There is nothing I've said that were hearsay or untrue. Those are facts. I'm sick and tired of hearing folks complaining how they've continued to suffer because of lower wages and benefits in this country and for that government should "distribute wealth" while Executives gets their golden parachutes. You're only worth what you put in. I'd been laid off myself, but I don't ever rely on the government to give me handouts. Ever!



Here's more facts: Household income rose from $33,338 in 1967 to $48,200 in 2007 that because the affect of recessionary periods that affects the
95th and 20th percentile. These are highly made up of single earners, lower educated group of people.

Income in the period between 1967 and 1999 grew considerably faster among wealthier households than it did among poorer households. For example the household income for the 80th precentile, the lower threshold for the top quintile, rose from $55,265 in 1967 to $86,867 in 2003, a 57.2% increase. The median household income rose by 30% while the income for the 20th percentile (the lower threshold for the second lowest quitile) rose by only 28% from $14,002 to $17,984. As the majority of households in the top quintile had two income earners, versus zero for the lowest quintile and that the widening gap between the top and lowest quintile may largely be the reflection of changing household demographics including the addition of women to the workforce.

I read from this. Dual Earners makes up the fastest and highest growth in Household Median Income than single earners. Bottom line: Don't get divorce raise a child by yourself. Keep the family together as much as possible. But that's a seperate discussions altogether.


Data 2003 2000 1997 1994 1991 1988 1985 1982 1979 1976 1973 1970 1967

20th percentile $17,984 $19,142 $17,601 $16,484 $16,580 $17,006 $16,306 $15,548 $16,457 $15,615 $15,844 $15,126 $14,002
Median (50th) $43,318 $44,853 $42,294 $39,613 $39,679 $40,678 $38,510 $36,811 $38,649 $36,155 $37,700 $35,832 $33,338
80th percentile $86,867 $87,341 $81,719 $77,154 $74,759 $75,593 $71,433 $66,920 $68,318 $63,247 $64,500 $60,148 $55,265
95th percentile $154,120 $155,121 $144,636 $134,835 $126,969 $127,958 $119,459 $111,516 $111,445 $100,839 $102,243 $95,090 $88,678

SOURCE: US Census Bureau, 2004

[sweeps]

KGeary: I'm sorry but "free" markets are rarely efficient. The massive inefficiency in the labor market in particular is called "friction". Please, look it up.

Tripods: An interesting post, but not sure what that has to do with this thread?

[feh]

Pay isn't out of whack, that's impossible. Pay can never be out of whack in a free market. That statement is inherently false.

Of course, we don't live in a free market. Minimum wage, unions, tariffs, etc.

If an employer doesn't pay a competitive wage, then don't work there. If NO companies are willing to pay you more, it's because you're not qualified to receive the higher wage; in other words, you're not worth enough to them. That's not their fault, that's your fault.

The markets have had decades to even this out. The minimum wage set by the government is what throws the market out of whack. Companies pay what employees are worth, period. Competition between companies has leveled out the pay to exactly what it should be. Saying that companies pay too low is ignorant; I'd be far more inclined to say that workers aren't worth what they should be.

In a laissez faire environment, but that's not the case in America. As a country, we've decided people working full time should be able to afford food and shelter (hopefully).

[tripods68]

Tripods: An interesting post, but not sure what that has to do with this thread?

Sorry, I meant that figures for Feh to starts discussions on the median household income

[disneysteve]

Pay isn't out of whack, that's impossible. Pay can never be out of whack in a free market. That statement is inherently false.

I disagree. I don't believe that all employees are paid relative to the value they provide to their companies or to society, and I think the discrepancy has worsened over the years. Look up the data on CEO pay relative to the average employee wage. I don't have the numbers in front of me but it has gone from something like a 25:1 ratio to a 400:1 ratio (those aren't the actual numbers but you get the idea). Is a CEO today worth that much more than a CEO was worth 20 years ago? I think numbers like that are out of whack. The rich have seen their income rise much faster than everyone else. Heck, I've seen my income steadily fall over the years, as have folks in many other professions.

[feh]

Sorry, I meant that figures for Feh to starts discussions on the median household income

Sorry, Tripod. I'm not willing to invest the time.

It is my opinion (you of course may disagree) that the powerful and wealthy have done an astounding job of pulling the wool over the eyes of the middle class during the last 30 years. People vote against their own financial interests and don't even realize it.

If you're willing to invest some time, please read this Krugman article. Hopefully Reagan fans won't dismiss him out of hand, simply because he supported Obama this year; he is a Nobel prize winner, not a hack.

[tripods68]

Sorry, Tripod. I'm not willing to invest the time.

It is my opinion (you of course may disagree) that the powerful and wealthy have done an astounding job of pulling the wool over the eyes of the middle class during the last 30 years.

Ok. Who do you think at faults here?

[feh]

Ok. Who do you think at faults here?

I don't understand - at fault for what?

[tripods68]

You were talking in general and not specific. Tell me "why wealthy have done an astounding job of pulling the wool over the eyes of the middle class during the last 30 years?" I would really like to hear your perspective, if you don't mind.

[Snave]

Pay isn't out of whack, that's impossible. Pay can never be out of whack in a free market. That statement is inherently false.

If an employer doesn't pay a competitive wage, then don't work there. If NO companies are willing to pay you more, it's because you're not qualified to receive the higher wage; in other words, you're not worth enough to them. That's not their fault, that's your fault.

The markets have had decades to even this out. The minimum wage set by the government is what throws the market out of whack. Companies pay what employees are worth, period. Competition between companies has leveled out the pay to exactly what it should be. Saying that companies pay too low is ignorant; I'd be far more inclined to say that workers aren't worth what they should be.

I completety agree, KGeary. If you do not have the skills, why should you be paid anything but a minimal wage. There are many people with minimal skills that would be just as willing to do the job for minimal pay. Now, if you have skills or learn a trade, then you have an opportunity to be paid a higher rate. Where has accountability gone in our society? The problem is that many people don't learn this lesson until they are a little older in life. Then, it is easier to ask for a handout and say the world is not fair than it is to learn a trade or skill.

[feh]

You were talking in general and not specific. Tell me "why wealthy have done an astounding job of pulling the wool over the eyes of the middle class during the last 30 years?" I would really like to hear your perspective, if you don't mind.

By that phrase, I was referring to two things:

1. The turning of middle class (primarily white and southern) Democrats to the Republican party, primarily through the use of wedge/cultural issues like abortion.
2. Conservatives, in the 70s, realized the power of language to frame a discussion. A recent example of this tactic is The Patriot Act. Here's an article with a professor that has studied this strategy.

[tripods68]

I completety agree, KGeary. If you do not have the skills, why should you be paid anything but a minimal wage. There are many people with minimal skills that would be just as willing to do the job for minimal pay. Now, if you have skills or learn a trade, then you have an opportunity to be paid a higher rate. Where has accountability gone in our society? The problem is that many people don't learn this lesson until they are a little older in life. Then, it is easier to ask for a handout and say the world is not fair than it is to learn a trade or skill.

A Correctional Officer in California or CCPOA Union has secured the highest paid prison guard in the country at $73K per year plus excellent benefits and pension retirement (3.0 @ 50 years). The only education requirement is high school diploma or GED equivalents.

[cptacek]

I would like to know what "trickle up" economics means? Can someone provide a definition for us without injecting politics into it?

[Maismom]

I think this financial crisis started from trickle up effect.

Many average Joe stretched themselves to max, and could not pay their mortgage anymore when their mortgage started to get larger. That impacted the mortgage industry. That impacted banks that were selling mortage backed loans. That impacted AIG that issued options they had to cover the loss of othes.

Whole system collapsed when people "up" there could not suck up average Joe's money. There's no money to go around without average Joe spending.

[feh]

I would like to know what "trickle up" economics means? Can someone provide a definition for us without injecting politics into it?

I assumed the OP meant Keynesian economics, but I could be wrong, of course.