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Does Trickle-Down Economics Actually Work? | Robert Reich - YouTube
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To the extent the Republican Party has
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any economic platform at all,
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it's trickle-down economics.
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Now, unfortunately for the G.O.P.,
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it's based on three giant myths.
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It's time to debunk
them, once and for all.
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Tax cuts for corporations and the rich
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create more and better jobs.
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Wrong.
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Corporations used Trump's giant tax cut
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to buy back shares of their own stock
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and boost share prices.
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From 2017 to 2018, stock buybacks
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increased by a staggering 50%.
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Lowe's spent $10 billion
on stock buybacks in 2018,
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and then fired thousands of workers
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with no notice or severance.
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Walmart and AT&T also laid
off thousands of workers,
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and contrary to the claim
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that the tax cut would boost wages
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—"Around a $4,000 pay raise."—
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a recent analysis found that
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in the year after the Trump tax cut,
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wages increased by about the
same as they did before it,
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and then slowed.
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Tax cuts for rich individuals
don't trickle down either;
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the rich simply get richer.
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Two years before Ronald
Reagan's first tax cut,
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the richest 1% of Americans
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owned less than 23% of
the nation's wealth.
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A decade later, after two
rounds of tax cuts for the rich,
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they owned over 28%.
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By 2019, after more tax cuts for the rich
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by George W. Bush and Donald Trump,
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people at the top owned almost
35% of America's wealth.
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Meanwhile, average wealth barely
budged for the middle class
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and went negative for the bottom 10%.
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It gets worse.
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During the pandemic alone,
America's 664 billionaires
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added $1.3 trillion to
their collective wealth,
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and now own over $4 trillion.
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That's almost double the
wealth of the bottom half
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—165 million Americans—
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but nothing has trickled down.
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Even before the pandemic, wages stagnated.
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Tax cuts for corporations and the rich
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spur more economic growth.
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Baloney!
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Not even Ronald Reagan's
surging economic growth rate
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was driven by tax cuts;
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it was driven by low interest rates,
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and humongous government spending.
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George W. Bush promised
his 2001 and 2003 tax cuts
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would pay for themselves
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—remember that?—
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by spurring economic growth.
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Well, that didn't happen.
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A 2017 study led by one of
Bush's former chief economists
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found that the tax cuts had no
significant effect on growth.
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In fact, growth declined,
slowing to just 2.8%
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from over 3% during the Clinton years.
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The economic expansion under Bush
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was one of the weakest
expansions since World War II.
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Donald Trump claimed his tax cut
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would be like rocket
fuel for the economy, and
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would spur annual growth of 3%.
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After its first year, in
fact, growth declined.
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Finally, a recent study analyzing tax data
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spanning 50 years from
18 advanced economies
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found that tax cuts for the
rich only benefited the rich,
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and had no effect on job
creation, or economic growth.
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I, for one, am shocked.
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Deregulation spurs economic growth.
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Well, that's just more rubbish.
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The cost savings from deregulation
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go to corporate executives
and major investors,
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while the costs and risks
land on the rest of us.
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Trump's Environmental Protection Agency
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rolled back regulations on everything
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from clean air and water standards
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to dangerous chemicals in products,
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benefiting chemical and fossil
fuel executives and investors
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while forcing everyone else
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to deal with polluted air and toxins.
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His Labor Department
loosened child labor laws
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and scaled back the number of workers
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eligible for overtime pay.
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Companies raked in savings,
while workers were exploited.
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And with the help of Congress,
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he rolled back banking regulations
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put in place after the
2008 financial crisis
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to the benefit of rich Wall Streeters,
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and the detriment of everyone else.
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Don't forget Ronald
Reagan's deregulatory agenda
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allowed for-profit healthcare
companies to flourish,
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contributing to the
out-of-control healthcare costs
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we are now saddled with today.
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And remember deregulation
of the financial sector
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was a major cause of the 2008 crash,
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as it allowed banks to make risky bets.
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In other words, the
Republican trickle-down claim
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that deregulation helps us all is baloney.
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Regulations that protect you and me
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from being harmed or fleeced or shafted,
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injured or sickened by
corporate profits and services
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are worth the cost.
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So don't fall for trickle-down nonsense.
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Making big corporations
and the rich even richer
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through tax cuts and regulatory rollbacks
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doesn't make the rest
of us any better off.
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It just makes big corporations
and the rich
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even
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richer!
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