Trickle Downers

The Prospect's ongoing exposé of the folly, dysfunctions, and sheer idiocy of feed-the-rich economic policies.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

Trickle Downers

Gary Cohn: Trickle Downer of the Week

In which Goldman Sachs deregulates itself—and tells you it’s for your own good. 

AP/FEREX Gary Cohn, Trump's head of the National Economic Council, in the lobby of Trump Tower. L ast Friday, Donald Trump signed two dramatic—albeit largely symbolic—executive orders that outlined his plans to pick apart Dodd-Frank financial regulations and review Obama’s conflict-of-interest rule that require retirement advisors to act in their clients’ best interest. The move is unsurprising (Trump campaigned against Dodd-Frank) but the president’s rationale for rolling it back borders on the comically absurd. In a room full of billionaire business leaders, Trump said, “We expect to be cutting a lot out of Dodd-Frank, because frankly I have so many people, friends of mine, that have nice businesses and they can’t borrow money. They just can’t get any money because the banks just won’t let them borrow because of the rules and regulations in Dodd-Frank.” The man behind this deregulatory scheme is Gary Cohn, the former chief operating officer at Goldman Sachs and the current White...

Republican Governors: Trickle Downers of the Week

GOP leaders in the states are using regressive tax policy to address massive revenue shortfalls. 

(Photo: AP/Orlin Wagner) Gov. Sam Brownback waves to guests before delivering his state of the state address to a joint session of the Kansas legislature in Topeka, Kansas in early January. O ver the last couple weeks, state governors around the country have unveiled their budget proposals amid political tumult. Not only are state governments unclear how Trump and the GOP Congress may impact their funding, but nearly 40 states are facing some level of short-term, or more structural long-term, revenue shortfall in the upcoming fiscal year. While the factors behind these deficits vary, many are driven by aggressive, and regressive, tax cuts of yesteryear, which a number of GOP-controlled states endeavored to offset by cuts to schools and other social essentials. Confronted by deficits that their own cuts created, many Republican governors are now calling for further cuts to state education spending and other critical services. Even more boldly, they continue to call for further...

Three Reasons Trickle-Down Tax Cuts Don’t Work

(Photo: Shutterstock)
(Photo: Shutterstock) History shows that bad economic ideas almost never die, especially when they serve the wealthy and powerful. There’s no better example of this truth than trickle-down tax cuts. As we write this, the Trump administration is teeing up a tax plan that slashes taxes for the wealthy and the corporate sector, does little for everyone else (repealing the Affordable Care Act actually raises taxes on some with low and moderate incomes), and stiffs the U.S. Treasury to the tune of $6.2 trillion, according to the Tax Policy Center’s estimates. Evidence does not hurt this zombie. We and others have shown the lack of correlation between tax changes and the indices of growth—GDP, jobs, incomes—touted by the trickle downers. Among those claiming that Trump’s plan will spur economic growth are the same folks who told us that a trickle-down tax cut experiment in Kansas in 2013 would bring an “immediate and lasting boost” to the state’s economy. Four years later, that immediate...

Donald Trump: Trickle Downer of the Week

The deregulator-in-chief’s crusade to slash 75 percent of the federal government’s rules is based on the myth that regulations kill jobs. 

(Photo: AP/FEREX) President Donald Trump signs one of five executive orders related to the oil pipeline industry in the oval office. I n a meeting Monday with the country’s leading business moguls, President Trump not only reiterated his promise to slash the corporate tax rate down between 15 to 20 percent; he pledged to cut federal regulations by 75 percent or “maybe more.” “Now we’re gonna have regulations—and they’re gonna be just as strong, and just as good, and just as protective of the people as the regulation we have right now,” Trump pronounced . “The problem with the regulation that we have right now is you can’t do anything. I have people telling me they have more people working on regulations than they have doing product, and it’s out of control. It’s gotten out of control.” His declaration should come as no surprise—he’s said time and time again that deregulation will be a major priority of his administration. Trump has already grinded his federal agencies to a halt with a...

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