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Trickle down has failed again

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The phrase Trickle down Economics is an old economic theory that has been fostered on working people by those on top of the economic ladder. It says that reducing tax rates, especially for businesses and wealthy individuals, stimulates savings and investment for the benefit of everyone. The trick word is everyone. It has never been for everyone.

My sister used to say before every election, "David, do not say that it can’t get worse because it can and usually does." Taxes for the wealthy have been going down in this last half century and dropped as low as 28% during the Reagan years. It is no secrete who was doing the thinking for Ronny. Nor is it hard to imagine that someone must be doing the thinking for GW Bush who has again made certain that the wealthy pay less.

On February 27th, 2007 an accumulated Stock market drop of 500 points was a warning, not only that the American economy was beginning to shudder and shake and that trickle down was being exposed for what it is, but it also gave momentum to leftist movements like those in Venezuela. Media spinners wrote things after 2,27,2007 like, a cleaning out is good for the market and now is the time to buy and buy, but Wall Street has never been the same since and the shuddering and shaking continues.

Opposition to Trickle down is growing in America and is being exposed the world over even in China where the rich (how can it be in a so-called Communist country) have begun the practice of Trickle down. A tsunami of resentment is growing off our shores in Europe, Russia, Asia and Latin America. The shuddering and shaking is cracking the walls of the empire.

August 9, 2007

The European Central Bank injected emergency funds into the market for the first time since the aftermath of the Sept. 11, 2001 terrorist attacks -----In London the FTSE 100 index closed down 122.7 points, or 1.92 per cent at 6,271.2, while shares across Europe also fell after the European Central Bank (ECB) announced that it was pumping billions of pounds worth of emergency funding into the continent's banking systems.---The Dow Jones Industrial Average dropped 387.2 points at 13,270.7, The S&P 500 lost 44.4 points to 1,453.09, while the Nasdaq Composite fell 56.49 points to 2,556.49. ---It is no longer unusual to see the hour before closing producing mad gyrations in the market as huge buys by interventionists attempt to move it into positive territory.

On August 10,2007 the Federal Reserve System pumped $38 billion into credit markets to save the market. By doing so publicly It admitted that the capitalist system has been so abused as to render it out of order. The simple truth is it no longer works. The cracks get wider.

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The only thing GW Bush had to show for his eight years in the White House was the positive numbers of the stock exchange. If the market is going up and up then it follows that Trickle down is working. WRONG. When people can not afford to make their mortgage payments and are taking money out of their children’s education fund to pay their bills, and can no longer afford to buy houses, no intervention by the Government can save the market or the empire.

David Truskoff

www.erols.com/suttonbear

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