Wednesday, August 27, 2008

It's the Voodoo Economics, Stupid

This essay is a good take-down of supply side economics:
Trickle-down economics died yesterday morning at 10AM. The cause of death was a data release from the US Census Bureau, but trickle-down had been ailing from lack of empirical support for decades. Also known as "supply-side economics," trickle-down was the love child of Ronald Reagan, Arthur Laffer, and Jude Wanniski. It is survived by Larry Kudlow and Co., and the editorial page of the Wall St. Journal.
The genius of this scheme is that the wealthy sell the middle class on tax cuts, and the promise of a rising tide, while funneling all of the economic gains upward to the top 1%. It would be interesting to see how this philosophy has fed the rise of our debtor culture by setting unreasonably high expectations of upward mobility while undermining the earning potential of anyone who actually works for a living.

[via Kevin Drum]