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

GOP Eager to Repeal Rule that Allows Consumers to Sue Conniving Banks

Republicans pretend it’s about dismantling the “administrative state.” But it’s all about market power. 

(Gage Skidmore) U.S. Congressman Jeb Hensarling speaking at the 2015 Reagan Dinner for the Dallas County Republican Party in Dallas, Texas. trickle-downers_35.jpg A s Lisa Servon writes in her thorough survey for the Prospect ’s summer issue of the Consumer Financial Protection Bureau’s prospects under the Trump administration, “It took Congress 66 years to undo Glass-Steagall in 1999. It may take less than a decade to undo the reforms brought about by Dodd-Frank, including the CFPB.” It may take the Republican-controlled Congress even less time to undo a landmark rule issued Monday by the consumer watchdog agency that will widely forbid mandatory arbitration clauses in consumer contracts. Banks, credit-card companies, and other financial-services firms will no longer be able to force individual consumers into corporate-friendly mandatory arbitration hearings to settle disputes. For instance, Wells Fargo used arbitration clauses as a way to block a potentially gigantic class-action...

As Trump Gears Up for Big Tax Cuts, Seattle Opts to Tax Wealthy

The progressive city is once again paving the way, and strongly rebuking trickle-down economics. 

(Photo: AP/Elaine Thompson) Demonstrators stand together as they wait for a Republican response to a new city income tax on the wealthy that was approved earlier by the Seattle City Council Monday, July 10, 2017, in Seattle. trickle-downers.jpg T he Seattle city council voted unanimously Monday to institute an income tax on the city’s highest earners, providing a stark rebuttal to the current trickle-down debate between President Trump and congressional Republicans over how much they should cut taxes for the rich. The measure will levy a 2.25 percent tax on individuals who make more than $250,000 and joint filers who make more than $500,000. The tax is expected to generate an estimated $140 million in new revenue for Seattle, which leaders say they hope to use to lower the burden of more regressive taxes like the city’s property tax, to plug any holes from potentially diminished federal funding spurred by Trump, and to bolster the city’s public services. “Seattle is challenging the...

Does the Fed Think Black Lives Matter?

Putting the brakes on the economy would disproportionately damage black America.

AP Photo/Ted S. Warren
AP Photo/Ted S. Warren Black Lives Matter protesters march in Seattle. trickle-downers_35.jpg F or many Americans, the country’s 241st birthday last week was an unqualified cause for celebration. For many other Americans, however, this Fourth of July was a reminder that United States policy has yet to live up to the Declaration of Independence’s aspirational language. When the words “life, liberty, and the pursuit of happiness” were written, in fact, many groups of people were excluded—including enslaved black Americans. It required our bloodiest war to banish slavery. And while we elected our first black president in 2008, and while today’s Congress, though still overwhelmingly white, is more diverse than it’s ever been, racism persists in all our institutions. A multitude of structural barriers block pathways to economic opportunity across generations of black families, imperil many black Americans’ physical safety, and diminish investment in black communities and businesses...

Kansas Redux: Illinois Legislature Overrides Governor’s Austerity Politics

It’s becoming increasingly clear that conservative governors trying to push trickle-down tax cuts for the rich and austerity for everyone else will, eventually, face a political backlash.

Once again, a bipartisan coalition of fed-up legislators has overridden their intransigent governor’s veto to keep their state from driving off the cliff. On Thursday, Illinois Republicans joined with the Democratic majority in the legislature to override Governor Bruce Rauner’s veto of a $36 billion budget that raises much-needed revenue with income and corporate tax rate increases and brings an end to the longest running budget crisis in the country.

Rauner, a Republican and multimillionaire, has tried to impose his agenda of spending cuts and attacks on labor unions but has long faced staunch resistance in Springfield, which took the form of a more than two-year political standoff over the budget. The financially troubled state has not had an operating budget since Rauner took office in 2015, leading to $15 billion in missed payments and a series of credit downgrades that brought Illinois’s bond rating to the verge of “junk” status.

While Rauner had for years managed to keep Republican legislators under his thumb, ultimately the state’s worsening fiscal disaster and the governor’s obstinacy provoked 11 Republicans to join with Democrats to override his veto.

The end of the Illinois impasse comes just weeks after a similar scenario in which the Kansas’s Republican-controlled legislature, with the help of Democrats, overrode Governor Sam Brownback’s disastrous tax experiment. As I reported for the Prospect’s summer issue, in a matter of five years, Brownback’s radical tax cuts succeeded in throwing the state into fiscal chaos by blowing a massive whole in the state budget and completely failed to generate Brownback’s promised “shot of adrenaline” to the Kansas economy.

And while sanity ultimately prevailed in Kansas and Illinois, it will take both states several years to dig out from underneath the fiscal rubble left by both governors.

Trickle-down tragedies have a long tail. 

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.

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