Saturday, August 22, 2009

A Challenge for "The Bible Answer Man" on Money, Greed and God

Hank Hanegraaff, the "Bible Answer Man" recently aired an interview of Jay Richards over two days of the B.A.M. radio program, concerning Richards' new book, Money, Greed and God: Why Capitalism is the Solution and Not the Problem.  The bumpers for the interview and the trailers for the book made it almost irresistible to listen in on.  The book was purported to "annihilate all the "leftist" and "socialist" myths and propaganda on economics being taught as fact today" and a "must read for Americans and Christians seeking the truth in these trying times".

The book was advertised as Part one of the interview is here. Part two is found here.

**I found the program not to live up to the billing, to simply do a cursory gloss over the "myths" it was supposedly destroying and leave many unanswered questions.  I think its worth mentioning here that I am not a leftist, liberal or socialist. The only labels I will wear are Christian, human, American, Cherokee and Oklahoman. I will not participate in the false dichotomy and endless contention of "conservative" vs. "liberal' or "capitalist" vs. "socialist" debate as it is customarily formulated.  I will not allow someone else to signify me as any of those other things simply because I am questioning the veracity of the thesis on capitalism as put forth by Richards and Hanegraaff in this radio program and in the book.

I too am a fan of the “Bible Answer Man”. I have four of his books and listen to his radio program most days. I was also listening on the two days that he ran the two programs about the "Christian Merits" of capitalism. It is very seldom that I question or challenge the positions that the “Bible Answer Man” takes. I did have a few issues with this topic as it was spelled out by Mr. Hanegraaff and Mr. Richards. I was looking for a blog or a forum by CRI or either one of these gentlemen to address some of the questions I was left with and found practically nothing so I decided to throw the discussion out onto the internet via my own blog.

To be fair I have not read the book yet. Some of what I am wanting to address may be in the book. However, based upon the way this material was presented in the radio program I would not likely spend my money on the book. The book was advertised as one that “annihilates the liberal myths on economics often taught as facts”. Now, I would say that to annihilate a position and expose it as myth it would take more than just a cursory gloss over of that position being annihilated and slapping the label “liberal” on it and calling it done. To me at least, and I suspect to other critical thinkers it would take a line item review of the “mythical economic theories taught as fact” and then a thorough and comprehensive rebuttal to those. Granted, the radio show was a limited time format, but I still think they could have taken on those “liberal” positions much better, especially if they are being portrayed as merely “myth” and “propaganda”. Instead what we had was a couple of hours of full on praise of capitalism and cheerleading of capitalist assertions on economics and opinions. Richards said in the program that “liberal” and “socialist” types always have the “best rhetoric”, but based on this program alone and the way these topics were handled one could conclude that the “capitalists” have a very good propaganda model working as well. Then if you factor in the patriotic and religious overtones and jingoistic cant of the corporate, advertising dollars driven media, I think I would really have to question and/or challenge the idea that the “leftists” have the best rhetoric.

I will not go into a treatise on the media or a history lesson on the wars and bloodshed propagated by the capitalist urge and the “great commission” to spread the gospel of capitalism and “make the world safe for democracy” in places like East Timor, the Philippines, El Salvador, Guatemala, Nicaragua and so on and so on. But I will simply point out that Hanegraaff and Richards and those like them generally prefer to either downplay or flat out ignore these sorts of things while they are praising capitalism and/or dismissing those “silly liberal” myths. Granted, they do like to list the litany of crimes against humanity by people like Hitler and Stalin. But there seems to be a void where qualifications about capitalism concerning things like the conquest of North America, the theft of land and the holocaust of American Indians ought to be. For instance, when discussing the need to quell the resistance of “American Indians” so as to obtain the goal of “civilizing” them and assimilating them into the framework of the republic, general William T. Sherman put forth an idea that speaks volumes about the worldly culture of capitalist ideals. He said that the “Indians”, “know no greed, and, until they understand greed, they will never understand the private ownership of property.” This demonstrates, not only the superficial understanding of other cultures that we often see from the captains of capitalism, but also that the capitalist system is propagated and motivated in large part by the institutionalized, individualized greed. American Indian and Christian, theologian George E. Tinker spells out quite a case on this in his books “Spirit and Resistance” and “Missionary Conquest”.
Another point I would like to make is on how Richards and Hanegraaff spoke about how capitalism “creates” wealth, progress and prosperity. First, this depends upon how one defines wealth, progress and prosperity. Since these men are professing Christians some qualifications on these terms ought to be easy to come up with. That seemed to be missing in any kind of comprehensive, spiritual treatment in the program and review of the book.
Also, I would challenge the very pretense that capitalism truly “creates” anything. It sometimes seems like these avowed capitalists think that all the resources and raw materials that are harvested and/or consumed to make the products that fuel the capitalist engine simply appear from nowhere. It seems that they think that the earth is an inexhaustible resource, a bottomless garbage can and that the forces, human costs, blowback and turbulence created by mass consumption and material greed are minimal, easily controlled and easily rationalized since they create jobs and medical and military advances. Again, a redefinition of progress and prosperity seems to be needed here. About as far as they, or many other capitalist apologists go on this is the platitude about how God has created the Earth to be used and consumed by men. I will resist the urge to go into a much more comprehensive treatment the theological incompleteness of this sort of rationalization for the moment.
I would however like to challenge the idea that one can have a “Christian capitalism”. I will allow that you can have a Christian values driven person or people operating within the framework of capitalism (or other economic systems like socialism for that matter). But, the idea that you can have a “Christian capitalism”, a Christian nation or a Christian business is about as valid as the idea that you can have a Christian machine or a Christian milkshake. It just doesn’t work that way. Such ideas simply do not take into ful account the fatally flawed, fallen nature of mankind and are oddly as Utopian as anything I have ever heard coming from the “left”. It is allowed that humans can be the representatives of the Kingdom of God while they are in the world. But, do not forget, if one is going to use the Bible to prop up the cause of capitalism or any other ism that Jesus said that his Kingdom is not of this world. We are also told not to love the world or anything in it in the scriptures. I do have a qualified understanding of what that really means- but, I am wondering if they have not realized what this fully means themselves. Richards did go into a bit about the “Secret” of capitalism and a treatment on the “rule of law” on this point. But, again it did not take into account practically any of the questions I am raising here. In fact his points about the “secret” and unleashing of the “creative potential” of humans as reflections of God started to sound like new age humanism. Maybe that is unfair not having read the book. But, as I have stated already, based on what I have heard, I am not planning to spend my money on the book and feed Richards’ capitalist urge.  Maybe I'll find it in the library or someone will send me a copy if they are convinced of it's truth and wish to change my mind.
Lastly, here are the type of concepts that Richards and Hanegraaff really need to address if they are going to presume to annihilate these supposedly leftist myths and economic theories:

Excerpted from: IN THE ABSENCE OF THE SACRED- By Jerry Mander
The following list is an attempt to articulate the obligatory rules by which corporations operate. Some of the rules overlap, but taken together they help reveal why corporations behave as they do and how they have come to dominate their environment and the human beings within it.
  • The Profit Imperative: Profit is the ultimate measure of all corporate decisions. It takes precedence over community well-being, worker health, public health, peace, environmental preservation or national security. Corporations will even find ways to trade with national "enemies"—Libya, Iran, the former Soviet Union, Cuba—when public policy abhors it. The profit imperative and the growth imperative are the most fundamental corporate drives; together they represent the corporation's instinct to "live."
  • The Growth Imperative: Corporations live or die by whether they can sustain growth. On this depends relationships to investors, to the stock market, to banks and to public perception. The growth imperative also fuels the corporate desire to find and develop scarce resources in obscure parts of the world.
    This effect is now clearly visible, as the world's few remaining pristine places are sacrificed to corporate production. The peoples who inhabit these resource-rich regions are similarly pressured to give up their traditional ways and climb on the wheel of production-consumption. Corporate planners consciously attempt to bring "less developed societies into the modem world" to create infrastructures for development, as well as new workers and new consumers. Corporations claim that they do this for altruistic reasons to raise the living standard—but corporations have no altruism.
    Theoretically, privately held corporations—those owned by individuals or families—do not have the imperative to expand. In practice, however, their behavior is the same. Such privately held giants as Bechtel Corporation have shown no propensity to moderate growth.
  • Competition and Aggression: Corporations place every person in management in fierce competition with each other. Anyone interested in a corporate career must hone his or her ability to seize the moment. This applies to gaining an edge over another company or over a colleague within the company. As an employee, you are expected to be part of the "team," but you also must be ready to climb over your own colleagues.
    Corporate ideology holds that competition improves worker incentive and corporate performances and therefore benefits society. Our society has accepted this premise utterly. Unfortunately, however, it also surfaces in personal relationships. Living by standards of competition and aggression on the job, human beings have few avenues to express softer, more personal feelings. (In politics, non-aggressive behavior is interpreted as weakness.)
  • Amorality: Not being human, corporations do not have morals or altruistic goals. So decisions that maybe antithetical to community goals or environmental health are made without misgivings. In fact, corporate executives praise "non-emotionality" as a basis for "objective" decision-making.
    Corporations, however, seek to hide their amorality and attempt to act as if they were altruistic. Lately, there has been a concerted effort by American industry to appear concerned with environmental cleanup, community arts or drug programs. Corporate efforts that seem altruistic are really Public relations ploys or directly self-serving projects.
    There has recently been a spurt of corporate advertising about how corporations work to clean the environment. A company that installs offshore oil rigs will run ads about how fish are thriving under the rigs. Logging companies known for their clearcutting practices will run millions of dollars' worth of ads about their "tree farms."
    It is a fair rule of thumb that corporations tend to advertise the very qualities they do not have in order to allay negative public perceptions. When corporations say "we care," it is almost always in response to the widespread perception that they do not have feelings or morals.
    If the benefits do not accrue, the altruistic pose is dropped. When Exxon realized that its cleanup of Alaskan shores was not easing the public rage about the oil spill, it simply dropped all pretense of altruism and ceased working.
  • Hierarchy: Corporate laws require that corporations be structured into classes of superiors and subordinated within a centralized pyramidal structure: chairman, directors, chief executive officer, vice presidents, division managers and so on. The efficiency of this hierarchical form (which also characterizes the military, the government and most institutions in our society) is rarely questioned.
    The effect on society from adopting the hierarchical form is to make it seem natural that we have all been placed within a national pecking order. Some jobs are better than others, some lifestyles are better than others, some neighborhoods, some races, some kinds of knowledge. Men over women. Westerners over non-Westerners. Humans over nature.
    That effective, non-hierarchical modes of organization exist on the planet, and have been successful for millennia, is barely known by most Americans.
  • Quantification, Linearity, Segmentation: Corporations require that subjective information be translated into objective form, i.e. numbers. The subjective or spiritual aspects of forests, for example, cannot be translated, and so do not enter corporate equations. Forests are evaluated only as "board feet."
    When corporations are asked to clean up their smokestack emissions, they lobby to relax the new standards in order to contain costs. The result is that a predictable number of people are expected to become sick and die.
    The operative corporate standard is not "as safe as humanly possible," but rather, "as safe as possible commensurate with maintaining acceptable profit."
  • Dehumanization: In the great majority of corporations, employees are viewed as ciphers, as non-managerial cogs in the wheel, replaceable by others or by machines.
    As for management employees, not subject to quite the same indignities, they nonetheless must practice a style of decision making that "does not let feelings get in the way." This applies as much to firing employees as it does to dealing with the consequences of corporate behavior in the environment or the community.
  • Exploitation: All corporate profit is obtained by a simple formula: Profit equals the difference between the amount paid to an employee and the economic value of the employee's output, and/or the difference between the amount paid for raw materials used in production (including costs of processing), and the ultimate sales price of processed raw materials. Karl Marx was right: a worker is not compensated for full value of his or her labor—neither is the raw material supplier. The owners of capital skim off part of the value as profit. Profit is based on underpayment.
    Capitalists argue that this is a fair deal, since both workers and the people who mine or farm the resources (usually in Third World environments) get paid. But this arrangement is inherently imbalanced. The owner of the capital—the corporation or the bank always obtains additional benefit. While the worker makes a wage, the owner of capital gets the benefit of the worker's labor, plus the surplus profit the worker produces, which is then reinvested to produce yet more surplus.
  • Ephemerality: Corporations exist beyond time and space: they are legal creations that only exist on paper. They do not die a natural death; they outlive their own creators. They have no commitment to locale, employees or neighbors. Having no morality, no commitment to place and no physical nature (a factory, while being a physical entity, is not the corporation). A corporation can relocate all of its operations at the first sign of inconvenience—demanding employees, high taxes and restrictive environmental laws. The traditional ideal of community engagement is antithetical to corporation behavior.
  • Opposition to Nature: Though individuals who work for corporations may personally love nature, corporations themselves, and corporate societies, are intrinsically committed to intervening in, altering and transforming nature. For corporations engaged in commodity manufacturing, profit comes from transmogrifying raw materials into saleable forms. Metals from the ground are converted into cars.
    Trees are converted into boards, houses, furniture and paper products. Oil is converted into energy. In all such energy, a piece of nature is taken from where it belongs and processed into a new form. All manufacturing depends upon intervention and reorganization of nature. After natural resources are used up in one part of the globe, the corporation moves on to another part.
    This transformation of nature occurs in all societies where manufacturing takes place. But in capitalist, corporate societies, the process is accelerated because capitalist societies and corporations must grow by extracting resources from nature and reprocessing them at an ever-quickening pace. Meanwhile, the consumption end of the cycle is also accelerated by corporations that have an interest in convincing people that commodities bring material satisfaction. Inner satisfaction, self-sufficiency, contentment in nature or a lack of a desire to acquire wealth are subversive to corporate goals.
    Banks finance the conversion of nature insurance companies help reduce the financial risks involved. On a finite planet, the process cannot continue indefinitely.
  • Homogenization: American rhetoric claims that commodity society delivers greater choice and diversity than other societies. "Choice" in this context means product choice in the marketplace: many brands to choose from and diverse features on otherwise identical products. Actually, corporations have a stake in all of us living our lives in a similar manner, achieving our pleasures from things that we buy in a world where each family lives isolated in a single family home and has the same machines as every other family on the block. The "singles" phenomenon has proved even more productive than the nuclear family, since each person duplicates the consumption patterns of every other person.
    Lifestyles and economic systems that emphasize sharing commodities and work, that do not encourage commodity accumulation or that celebrate non-material values, are not good for business. People living collectively, sharing such "hard" goods as washing machines, cars and appliances (or worse, getting along without them) are outrageous to corporate commodity society.
    Native societies—which celebrate an utterly non-material relationship to life, the planet and the spirit—are regarded as backward, inferior and unenlightened. We are told that they envy the choices we have. To the degree these societies continue to exist, they represent a threat to the homogenization of worldwide markets and culture. Corporate society works hard to retrain such people in attitudes and values appropriate to corporate goals.
    In undeveloped parts of the world, satellite communication introduces Western television and advertising, while improvements in the technical infrastructure speed up the pace of development. Most of this activity is funded by the World Bank and the International Monetary Fund, as well as agencies such as the US Agency for International Development, the Inter-American Bank and the Asian-American Bank, all of which serve multinational corporate enterprise.
    The ultimate goal of corporate multinationals was expressed in a revealing quote by the president of Nabisco Corporation: "One world of homogeneous consumption. . . [I am] looking forward to the day when Arabs and Americans, Latinos and Scandinavians, will be munching Ritz crackers as enthusiastically as they already drink Coke or brush their teeth with Colgate." Page 31
In the book, Trilateralism, editor Holly Sklar wrote: "Corporations not only advertise products, they promote lifestyles rooted in consumption, patterned largely after the United States.... [They] look forward to a post-national age in which [Western] social, economic and political values are transformed into universal values... a world economy in which all national economies beat to the rhythm of transnational corporate capitalism.... The Western way is the good way; national culture is inferior."
Form Is Content Corporations are inherently bold, aggressive and competitive. Though they exist in a society that claims to operate by moral principles, they are structurally amoral. It is inevitable that they will dehumanize people who work for them and the overall society as well. They are disloyal to workers, including their own managers. Corporations can be disloyal to the communities they have been part of for many years. Corporations do not care about nations; they live beyond boundaries. They are intrinsically committed to destroying nature. And they have an inexorable, unabatable, voracious need to grow and to expand. In dominating other cultures, in digging up the Earth, corporations blindly follow the codes that have been built into them as if they were genes.
We must abandon the idea that corporations can reform themselves. To ask corporate executives to behave in a morally defensible manner is absurd. Corporations, and the people within them, are following a system of logic that leads inexorably toward dominant behaviors. To ask corporations to behave otherwise is like asking an army to adopt pacifism.- Jerry Mander
Corporation: n. An ingenious device for obtaining individual profit without individual responsibility.
—Ambrose Bierce, 1842-1914.

Wednesday, August 19, 2009

Kings of Leon- Crawl

This song is a skull crusher!!!!!!!!!!!

Is President Barack Obama a Socialist?

I have been considering my thoughts about the current American political scene quite a bit lately. One reason I have been contemplating all this is that I have been sent, frequently of late, sent a lot of negative e-mail and video clips about President Obama's supposedly Socialist agenda. Many of the YouTube style videos out on this have the comments either cut off or moderated pending approval. This is kind of funny when the videos are often accusatory about president Obama and/or representatives of his administration being asked and supposedly tough questions and then supposedly dodging answering them sufficiently.

I observe that most of the strongest critics are not even listening to the answers- but rather are simply enjoying seeing the "tough" questions that they are obsessed about having asked be posed. When the answers come- many of these these critics simply ignore the answers they were given and insist that their questions were either ignored or that the answers were fallacious. People often see what they want to see and hear what they want to hear. This is an innate feature of humanity it seems. Those that are observant will see many prime examples of this in the political discourse of nearly every single day right now.

Here is what I have seen transpire over recent years.

First, when former President George W. Bush wanted to implement his tax cuts for the wealthier American citizens and businesses, McCain opposed it and voted NO (neaux).
McCain said it would hurt the middle class and the less fortunate. Go check the voting records.

During Obama's campaign for the presidency he explained that he was seeking to essentially roll those same tax cuts that John McCain opposed back and instead give them to the middle class and less fortunate (ironically, like Joe the plumber). Suddenly Obama was labeled a socialist and commie according to the McCain- Palin campaign and right wing America. This, I thought to myself, was an insult to the intelligence of EVERYONE.

Secondly, there was this from the Constitution:


Passed by Congress July 2, 1909. Ratified February 3, 1913.

The Congress shall have power to lay and collect taxes on incomes, from whatever sources derived, without apportionment among the several States, and without regard to any census or enumeration. The income tax is collected yearly on a percentage basis. The higher the earnings, the higher the percentage collected from them. This changes article 1 section 2.

So then, we have had a progressive income tax in America for many years. That's the way its been done for a couple of lifetimes. Considering that, this charge of socialism and the evils of wealth redistribution and revolutionary radicalism levied against now President Obama regarding his taxation plans doesn't rhave in teeth after all. Anybody that yet believes that President Obama is a total socialist/communist obviously has not really read the Communist Manifesto and does not really know what the definitions of socialism are. The best one can come up with is a few quotes by Karl Marx that seem to parallel some quotes by President Obama. I can produce quotes from any American leader in the last 200 plus years that parallel ideas by many other notorious dictators from Saddam to Stalin to Hitler. So what? Such comparisons are usually just political gamesmanship or shortcuts to actual analysis.

I have discovered in my own studies and research that President Obama is not a socialist if you ask a socialist; Greg Pason, National Secretary of the Socialist Party USA and David Schaich, Socialist Party Campaign Clearinghouse Coordinator both say he's ...definitely not. Schaich says: “The idea that Barack Obama is socialist, or quasi-socialist, or semi-socialist, or socialist-light, or anything of the sort, is far-right nonsense. Barack Obama, like John McCain, is very much a ‘politician as usual,’fully committed to the continuation of the capitalist system and the expansion of its empire.” A socialist agenda (even a reformist one) would not prop up capitalism and capitalist economies or companies when they fail, but rather sieze upon the opportunity to radically transform the economy. None of President Obama's proposals or programs offer any perceptible threat to capitalism. These quotes and many others were easily found in cursory research of the actual question of whether president Obama is a socialist- rather than a blind acceptance of the precept that he is or a search for evidence to prove a pre determined premise.

I will also say that it is kind of hollow to be complaining about socialism and/or communism or using words like "liberal", "socialist" or "communist" as perjoratives when our homes and store shelves are jampacked with goods made in COMMUNIST China and nearly every dollar we spend at places like Wal-Mart fattens up China with its terrible human rights record and its RED, NUCLEAR CAPABLE ARMY. Unless you do not buy, sell, trade, consume or own anything from China you simply cannot gripe about socialism and/or communism without being a hypocrite.

Now, communism or capitalism are both worldly systems flawed by fallible humanity and self interests and vested interests of the wealthy and/or powerful. Neither system is really, intrinsically more or less evil than the other. I have seen no convincing evidence that God is a capitalist. In fact, as As C.S. Lewis pointed out in "Mere Christianity", a great deal of what is condemned nowadays as leftist or subversive is found in the teachings of Christ as in the Sermon on the Mount and also in the New Testament as written by Paul- like sharing, concern for fellow man, love of enemies, the peaceable as opposed to militaristic nature, the humility and meekness as opposed to crassness, the aversion to worry and fear, etc. The "religious right" which is participant in much of this cant and fear mongering and worry about the evils of socialism would do well to remember some of that. Now get this straight, I am neither capitalist or communist- both systems are worldly and ultimately doomed to failure by human factors- not to mention the natural cycles of history and/or God's intervention and plan for human history, if one believes in that sort of thing (I do).

With all of this hullabaloo about wealth redistribution, many "conservatives" seem to have forgotten what Sarah Palin did in Alaska:

Palin’s criticisms of President Obama’s “spread the wealth” remarks are ironic to put it nicely and plain old campaign Bull in the street vernacular. She recently characterized Alaska’s tax code in a very similar way. Just last month, in an interview with Philip Gourevitch of the New Yorker, Palin explained the windfall profits tax that she imposed on the oil industry in Alaska as a mechanism for ensuring that Alaskans “share in the wealth” generated by oil companies:

And Alaska—we’re set up, unlike other states in the union, where it’s collectively Alaskans own the resources. So we share in the wealth when the development of these resources occurs. … It’s to maximize benefits for Alaskans, not an individual company, not some multinational somewhere, but for Alaskans.

In fact, Alaska’s Clear and Equitable Share (ACES) program, which manages the redistribution of oil wealth in Alaska, brings in so much money that the state needs no income or sales tax. In addition, this year ACES will provide every Alaskan with a check for an estimated $3,200.

Perhaps there is some meaningful distinction between spreading the wealth and sharing it?

Perhaps the McCain- Palin supporters or "conservatives" see some important distinction between what Obama is talking about and what Palin has done to redistribute wealth in Alaska that I am missing it and I need a far greater intellect to tell the difference? I submit, though, that it is at least possible, if not very likely, that just as McCain and Palin were trying to win a campaign, many "conservatives" and/or "conservative" politicians are now simply trying to cost the current President some political capital so as to increase their chances at regaining seats of power and they are in fact self contradictory and just don't know it or don't care. I submit that ascertaining that really only only requires the analytic skills of say... a sincere fifth grader with a speck of curiosity, objectivity or self critical analysis.

It seems to me that the American system has long been a sort of hybrid of capitalism and so called socialist ideas, what with things like Social Security, Medicare, corporate subsidies and bailouts, welfare, and all sorts of other programs designed to make our system work more smoothly and not implode upon itself due to imbalances in it. "Liberals" certainly seem to idealize and overestimate the amount of actual good and prosperity can be achieved by way of good intentions and throwing money at problems. Conversely, "liberals" tend to underestimate how much the flaws of human nature can be suppressed using these same means. In the end, both "conservatives" and "liberals" both seem to have Utopian ideas about the perfectibility of human nature and how good things could be if they could just convert or eliminate each other or the "others" they fancy as "them". I myself am an idealist- but not as much of one as those who proudly wear the labels of "conservative" or "liberal.... I do try to stay grounded in a reality based world view.

Monday, August 17, 2009

Busting The Reaganomics Myth

What we have nowadays, rather than a “government”, is actually more of a dualistic system of adversarial fat cats whose primary activities, it would seem, are the acquisition of power, the maintaining of it, exchanging insults and being nasty to one another…

This article, about a former Reagan admin. insider, will challenge all the conventional wisdom about "conservative" vs. "liberal" politics:

"Trickle Down" economics was a "Trojan Horse"

David Stockman
David Stockman

In the 1980’s Ronald Reagan ushered in a new era in American economics as he cut the top tax bracket from 70% down to 50% and then down again to 28%. In order to get support for doing this from the people, and also from politicians, a very crafty set of lies were produced. As David Stockman, then Reagan’s budget director, put it: giving small tax cuts across the board to all brackets was simply a “Trojan Horse” that was used to get approval for the huge top tax bracket cuts. “Trickle-Down” was a term used by Republicans that meant giving tax cuts to the rich. Stockman explains that:

"It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."

"Yes, Stockman conceded, when one stripped away the new rhetoric emphasizing across-the-board cuts, the supply-side theory was really new clothes for the unpopular doctrine of the old Republican orthodoxy."

"…the Reagan coalition prevailed again in the House and Congress passed the tax-cut legislation with a final frenzy of trading and bargaining. Again, Stockman was not exhilarated by the victory. On the contrary, it seemed to leave a bad taste in his mouth, as though the democratic process had finally succeeded in shocking him by its intensity and its greed. Once again, Stockman participated in the trading -- special tax concessions for oil -- lease holders and real-estate tax shelters, and generous loopholes that virtually eliminated the corporate income tax. Stockman sat in the room and saw it happen."

"'Do you realize the greed that came to the forefront?' Stockman asked with wonder. 'The hogs were really feeding. The greed level, the level of opportunism, just got out of control.'"

The Education of David Stockman 1981:

http://www. theatlantic. com/politics/budget/stockman.htm

Reagan's policies did more than simply cut income taxes. A large number of tax loopholes were written into the tax code that catered to special corporate interests. In fact many of the current scandals involving companies such as Enron are rooted in laws that were passed during the Reagan administration that gave these companies more legal legroom to work with and less oversight.

In addition, the small “income-tax cuts” that were given to the middle and lower income tax brackets were countered with new taxes that were directed at middle and low income individuals, as former House Speaker Jim Wright said:

Reagan's tax increases fell mainly on consumers, low- and middle-income people. Sales and excise levies. Reagan didn't call these taxes. They were, in his euphemistic lexicon, "user fees" and "revenue-enhancers."

The most important issue though is that even if you take the Reagan “Trickle-Down” policy at face value it’s still horribly flawed as a policy that will provide economic growth that benefits all Americans.

There is no realistic way for "Trickle-Down" economics to work to increase the income of the working classes of America. In fact I am certain that the developers of the theory of "Trickle-Down" economics were fully aware of this and that "Trickle-Down" has in fact worked as intended. This means that the intent behind implementing "Trickle-Down" was to benefit the wealthiest Americans at the expense of working class Americans. "Trickle-Down" hasn't failed, as many modern economists have suggested, it has succeeded in its goals, which is the increase of economic inequality and the shift of a greater portion of America's wealth into the hands of the wealthiest Americans.

I'll show you exactly why "Trickle-Down" can never really trickle down, and I'll expose the logic that was used to trick Americans into supporting the idea that freeing up money for the wealthy could somehow benefit the poor and middle class.

I'm going to use a very simplistic example to demonstrate the principles of "Trickle-Down" economics. No, this is not a 100% accurate model of our economic system, and it assumes that "all other aspects of the economy are equal," but the major principles are represented. I will give "Trickle-Down" the benefit of the doubt and assume that it actually does create jobs in my example.

We have a room with 5 people in it. The total value of all the money in the room is $10. 00. The money is apportioned as in the table below.

Total Value $10. 00


$4. 00



$3. 00



$2. 00



$1. 00



$0. 00


Sam enters the room and says that he has $10. 00 that he wants to give to Jim. This makes everyone else unhappy of course and everyone says that they will beat Jim up if he takes the money. Sam then proposes a solution. He says that if everyone allows him to give Jim $6. 00 he will give $1. 00 to everyone else in the room. This sounds pretty good to everyone so they agree to let Jim receive the money. So, after Jim gets the money and everyone gets a dollar this is what the monetary breakdown of the room looks like:

Total Value $20. 00


$10. 00



$4. 00



$3. 00



$2. 00



$1. 00


As you can see, due to inflation most of the other people in the room either lost value or saw no real gain. As you can also see the size of the "economy" did in fact grow as the theory of "Trickle-Down" proposes, but the growth only benefited one person, Jim, and arguably Bill. Even though the economy grew overall most of the people in the room saw a loss of value. This is because the value of money is relative. It's relative to many factors, but one is how much money is in the system. If you have 1 dollar out of 10 then its worth more than 1 dollar out of 1,000. How wealthy you are in terms of dollars is not measured by the number of dollars you have, it is measured by the share of dollars that you have out of the total number of dollars in the system.

Now, your opinion of Sam and Jim can be one of only two options.

1) Jim and Sam were naive and actually thought that they were going to be helping everyone with their actions; the fact that the actions had a negative effect on everyone else was an accident.

2) Jim and Sam knew that taking the $10. 00, keeping $6. 00 of it, and giving $1. 00 to everyone else wasn't going to help anyone but Jim, and they tricked everyone for the purpose of self gain using the $1. 00 "gift" to the under-classes as a "Trojan Horse" to support the action.

As in the example above there are three basic possibilities for economic growth (and many variations in between): Either the growth of the economy can be spread equally among everyone, the growth of the economy can be shifted towards the bottom of the population in which case the poor see a rise in relative value, becoming "less poor," or the growth can be shifted toward the top in which case the rich see a rise in relative value, becoming "more rich. "

The general economic policy of "Trickle-Down" that was put in place by Reagan has gone fundamentally unchanged since it was adopted by the country in the 1980s. The claim of Reagan was that "all boats would rise" by giving huge tax cuts for the wealthy. This did not happen. The majority of boats stayed the same or sank, while only between 5% and 1% of the boats actually rose.

The effects of "Trickle-Down" policy are evident. As would be expected from the policy, the largest beneficiaries of the "Trickle-Down" system have been the wealthy.

Individual earnings inequality as reported by the U. S. Census Bureau was falling or stable from the 1960s through the 1970s, however, beginning in the 1980s, along with the economic reforms of "Trickle-Down" policy, income inequality began to rise and has continued to rise dramatically ever since, as shown in the figure below.

(Data for the graphs below comes from the US Census Bureau)

http://www. census. gov/hhes/income/histinc/histinctb.html

Although there was a huge increase in real income for average Americans between World War II and the 1970s the income of the average American male has gone essentially unchanged since 1970 as the figure below indicates. Income for females though has continued to rise. What is significant about this graph is that between 1980 and present (2003) the incomes of the top 2% of American wage earners has gone up dramatically despite the stagnation of the income of average Americans.

This graph shows both average hourly earnings and the minimum wage together in 2001 dollars. As you can see both the minimum wage and average hourly earnings reached their peak in the 1960s and 1970s. This graph does not go back any farther than 1960, but for all practical purposes the peak shown here in 1973 is the historical peak for hourly earnings in America. See the source data in the link below for details on hourly earnings.

http://w3. access. gpo. gov/usbudget/fy2000/sheets/b047. xls

As we can see below, the percentage of people in poverty who are also working full time has gone up steadily since the 1970s, and it also underscores an important point, as all of these graphs do, which is that the fundamental economic policy of the Reagan administration has gone essentially unchanged, even by President Clinton.

http://www. census. gov/hhes/poverty/histpov/hstpov18.html

Today we are still operating under a Supply Side economic model. In fact, even though the average income tax rate paid in America today is roughly the same as it was in 1979, the average income tax rate for the top 1% is less than it was in 1979. The graph below shows the actual percentage of income paid to all (Income, Social Security, Corporate, Capital gains, and Excise) Federal taxes per the various groups. During the Regan era, you can see that total Federal taxes on the lowest income groups actually went up. Clinton continued to maintain the Supply Side model that was established under Reagan. By 2000 the Top 1% still maintained significantly lower taxes compared to the pre-Reagan era, but taxes on "upper middle class" earners had increased and taxes on the middle class have stayed about the same as they were just prior to Reagan's entry into office, which is higher than they ever were prior to the 1970s.

http://www. cbo. gov/showdoc. cfm?index=4514&sequence=3&from=0

As the figures below indicate, the degree of increase in income for the wealthiest Americans has far outpaced the majority of the population, a trend that also started with the Reagan Presidency. A large factor in this increase for the top 2% has been capital gains.

http://www. cbo. gov/showdoc. cfm?index=3089&sequence=11

The two graphs above show similar data, but there are some important differences. Obviously the first graph shows a wider range of data in terms of the years that it covers, but the first graph also shows the data for total household incomes, which have increased among the bottom quintiles in large part because of the increase in two or three worker households, but the bottom graph shows the data adjusted for household size. In addition the bottom graph obviously also shows data for the top 1%, whereas the top graph does not, and, perhaps most significantly, the bottom graph shows after tax income, so it is showing what was taken home after all federal taxes were paid.

This next graph shows an even longer range view. This shows after tax income in 2000 dollars going back to 1913 for the top 1% and the average for the remaining bottom 99%.

http://www. aflcio. org/corporateamerica/paywatch/

After World War II significant efforts were made to ensure prosperity for all Americans. These efforts dramatically reduced poverty rates and helped to build the strong middle-class that America has become famous for. However, as the graph below shows, significant changes began with the Reagan presidency.

Between 1965 and 2001 the number of multi-worker households has increased dramatically. In fact the slight increase in income that is shown for the 1st through 4th quintiles in the graph titled Average Household Income by Quintile (a quintile represents 1/5th of the population) is primarily attributed to an increase in the number of households with two or more workers supporting the household. Individual male income for the 1st through 4th quintiles has actually gone down or stayed the same since the 1980s when adjusted for inflation.

In 1965 27% of the full time workforce was female, by 2001 that number had risen to 41%. What has allowed the average American household to continue to maintain a good standard of living is an increase in multi-worker households and a decrease in the number of children that families have, as well as a large increase in the trade deficit, with increasing numbers of American goods being made in third world countries.

The issue is that the economic policies of the Reagan administration were designed to primarily benefit wealthy Americans. At the time a lot of smoke and mirrors were used to convince average Americans that these policies would help them as well. A similar set of lies has been used by those, like Steve Forbes, who promote a flat tax system.

What the "Trickle-Down"/Supply Side policies of the Reagan administration were designed to do was to increase the amount of money available to wealthy Americans for investing and developing businesses. This was intended to create an increase in production of products and services and hence and increase in new jobs. The reason that the policy is called Supply Side, is because the supply of goods increases before there is a demand for goods. So, in that case, the supply of goods is intended to then spark demand, resulting in economic growth.

This use of Supply Side policy led to a huge increase in consumerism and the use of credit. An environment of consumerism was created in American society through the media via advertisements, movies, and television shows, etc. that promoted consumerism. Consumers though, did not have the money to fulfill the desires created by society so debt was used to participate in the economy. Restrictions on credit were loosened under the Reagan administration making it easier for individuals to gain credit lines because the use of credit was essential to growing the economy because real wages were not going up for the average American, yet it was essential that the average American increase spending in order to fuel the economy. This situation fueled female entry into the workforce as more households require two workers to maintain their standard of living.

The result of this is that American household debt has been constantly hitting new highs since the 1980s as can be seen in the graph below provided by Michael Hodges.

http://mwhodges. home. att. net/nat-debt/debt-nat-a.htm

The truth is that "Trickle-Down" was never intended to help middle income and poor Americans; it was intended to help the wealthy and Corporate America.

The economic policies of the Reagan era increased the trade deficit and provided easier ways for companies to "hide" money.

1980 the top 1% of tax filers received 8. 45% of American AGI (Adjusted Gross Income) and in 2000 that figure had risen to 20. 81% of the national AGI. Today the over 50% of the national income goes to the wealthiest 20% of Americans. This is the first time since 1935 that such a large portion of the national income has gone to such a small portion of the population. In 1967 the wealthiest 20% only accounted for 43% of the nation's income. The trend began in 1982. Between 1967 and 1982 middle-income households were gaining a larger share of the economy. What this means is that between 1982 and 2001 the bottom 80% of Americans have lost share in the nation's economy. This was the inevitable result of Reaganomics. It was an intended result. Political control and economic control go hand in hand. If the control of the economy is not in the hands of the majority of Americans then neither is political control.

For more on taxation and income in America see:

In Depth Analysis of American Income and Taxation