Trickle-down economics was first embraced by Ronald Reagan in 1980. It refers to economic policies that disproportionately favor the upper tier of the economic spectrum, comprised of wealthy individuals and large corporations. The policies are based on the idea that spending by this group will “trickle down” to those less fortunate in the form of stronger economic growth.
While some politicians still espouse this theory, it has been an abject failure. Economic inequality has surged since 1980. Wealthy households have seen historic rises in their income, while middle-class families have been left behind.
The evidence could not be clearer, yet the belief persists today, primarily as a rationale for politicians to reduce the levels of taxation on wealthy people, even if it continues to exacerbate economic inequality and strain the social fabric of our country.
Here’s the crazy part:
Satirist and humorist Will Rogers invented the term “trickle-down” economics as a joke, stating clearly that this type of economy would make the rich richer and the poor poorer.
In a 1932 column criticizing Herbert Hoover’s policies and approach to The Great Depression, Rogers wrote:
“This election was lost four and six years ago, not this year. They [Republicans] didn’t start thinking of the old common fellow till just as they started out on the election tour. The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot. But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands. They saved the big banks, but the little ones went up the flue.”
A satirist wrote a joke about an ineffective, stupid policy, and 48 years later, a Presidential hopeful latched into the name, despite its origin, and made it the cornerstone of his election campaign and Presidency.
The result?
Exactly what Will Rogers predicted.
The little ones went up the flue.
