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

Waiting -- and Waiting-- For Corporate Tax Cuts to Deliver Those Wage Hikes

Though if you’re a CEO or shareholder, the new tax cuts are the gift that keeps on giving.

(Photo by Albin Lohr-Jones/Sipa USA via AP Images)
(Photo by Albin Lohr-Jones/Sipa USA via AP Images) A demonstrator holds a sign at a rally in opposition to the Republican tax bill held in New York City on December 2, 2017. trickle-downers.jpg W orking- and middle-class Americans standing by for those corporate-tax-cut-fueled wage increases to appear now understand how Vladimir and Estragon felt in Waiting for Godot . It’s been nearly four months since the Tax Cuts and Jobs Act became law, and the good times continue to roll for shareholders and company executives. Corporate profitability is well on its way to hitting decade-long highs, and CEO pay, coming off of a record year in 2017, will be the cause of much champagne-popping. But if the new tax bill, which showered corporate America with an estimated $68 billion in savings, has been a party for Wall Street, folks on Main Street—the supposed primary beneficiaries of the tax-cutting bonanza, as Republicans told it—have yet to receive their invitations. A new online database...

Striking a Match

The walkout wildfire is spreading from West Virginia to Kentucky to Oklahoma to Arizona, as teachers demand investment in education—not more tax breaks for the rich.

(Nate Billings/The Oklahoman via AP)
(Nate Billings/The Oklahoman via AP) Teachers and supporters of increased education funding pack the first and second floors of the state capitol during the second day of a walkout by Oklahoma teachers on April 3, 2018, in Oklahoma City. trickle-downers.jpg W hat started in West Virginia has spread . This week, partly inspired by the teacher walkouts across every county in West Virginia, teachers in both Kentucky and Oklahoma have left the classroom to protest (the issues vary state to state) low pay, abysmally low school funding, and inadequate benefits—but fundamentally, the attacks on public education. As was much the case in West Virginia, the blame for these states’ defunding of public services like education can be placed on a history of tax cuts for corporations and the wealthy. West Virginia saw a wave of tax cuts passed in 2006, which only grew over the next decade. Soon, the cuts were reducing West Virginia’s revenue each year by $425 million . Corey Robin, author of The...

What the Teacher Strikes Mean

(AP Photo/Adam Beam)
(AP Photo/Adam Beam) Su Sheridan holds a sign protesting proposed cuts to retirement benefits for public school teachers on March 8, 2018 in Frankfort, Kentucky. trickle-downers_35.jpg A round seven years ago, I had a standard wisecrack to explain the standing of workers in the world’s two dominant economies: “China has strikes but no unions; America has unions but no strikes.” Seven years later, it’s clear we’re becoming more like China every day. The remarkable upsurge of teachers in Republic-run, largely non-union states that has swept through West Virginia and is now sweeping through Oklahoma and Kentucky, and is poised to descend on Arizona, has returned the mass strike to the United States after decades of relegation to the history books. In each of these states, the teachers unions have something between limited and no legal rights to bargain collectively, and, correspondingly, represent just a hard core of members whose commitment to their union is more a matter of belief than...

Under Trump, a New Golden Age for Payday Lending

A deregulatory push led by top-level Republicans could turn back the clock to the heyday of predatory lending.

(AP Photo/Ross D. Franklin)
(AP Photo/Ross D. Franklin) A payday loan business in Phoenix P ayday lenders—those usurious operations that profit from providing high-interest loans to working-class and poor Americans—have seen their prospects improve dramatically under the Trump administration and the Republican Congress. A joint resolution introduced last week by South Carolina Republican Senator Lindsey Graham would eliminate strict regulations on short-term, small-dollar lenders imposed by the federal Consumer Financial Protection Bureau (CFPB) and prevent the agency from issuing a similar rule in the future. The resolution marks the latest attempt to defang the CFPB, which became the bête noire of the payday loan industry in the years following the financial crash. The rule, which among other things would obligate lenders to confirm that people can actually afford to repay their loans, was set to go into effect in January but was put on hold by the interim head of the CFPB, Trump appointee Mick Mulvaney. While...

Is It Race or Class? To the Trump Administration, It Doesn’t Matter

A new study on upward mobility points to racial disparities across generations—but efforts that could work to reduce these disparities are not a priority of the GOP administration.

AP Photo/Matt Rourke Jennifer Donald, whose family receives money from the Supplemental Nutrition Assistance Program, eats dinner with her sons David and Donovan, and daughter Jayla, in Philadelphia. trickle-downers_35.jpg T he income inequality between black and white Americans affects not only the ability of poor black men to earn more money than their parents, but also the chances of black men who were raised in the wealthiest households to remain wealthy. And the income disparities between black and white adults exist even if they grew up in families with similar incomes, education, and family structure—even if they lived in the same neighborhood. That’s the conclusion of an expansive new study by Raj Chetty and Nathaniel Hendren, two economists with the Equality of Opportunity Project, and Maggie R. Jones and Sonya R. Porter of the Census Bureau. Their results point to specific poverty interventions—namely, reducing systemic racism and discrimination—that policymakers may want to...

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