The Civil War Never Ended Pt. II: The reality of Trickle Down Economics

The Holy Grail of the right wing is the assertion that supply side economics (trickle down economics) works best for the economy while liberal, demand side economics is a failure.

As we all know, trickle down economics is a crock of shit, a myth created by cheap labor conservatives to keep the poor (read blacks and minorities) in poverty and allow the rich to "conserve" their wealth and hold on the reins of power.  Trickle down economics is the credo of Corporate Feudalism.

And now we have the data to prove it.



As the center for American Progress reports, economic mobility in America is worse than any high-income nation besides England.  In other words, we are trending back towards the strict English class structure of the aristocracy that our forefathers rebelled against 230 years ago.

The key findings relating to intergenerational mobility include the following:

Children from low-income families have only a 1 percent chance of reaching the top 5 percent of the income distribution, versus children of the rich who have about a 22 percent chance.

Children born to the middle quintile of parental family income ($42,000 to $54,300) had about the same chance of ending up in a lower quintile than their parents (39.5 percent) as they did of moving to a higher quintile (36.5 percent). Their chances of attaining the top five percentiles of the income distribution were just 1.8 percent.

Education, race, health and state of residence are four key channels by which economic status is transmitted from parent to child.

African American children who are born in the bottom quartile are nearly twice as likely to remain there as adults than are white children whose parents had identical incomes, and are four times less likely to attain the top quartile.

The difference in mobility for blacks and whites persists even after controlling for a host of parental background factors, children's education and health, as well as whether the household was female-headed or receiving public assistance.

After controlling for a host of parental background variables, upward mobility varied by region of origin, and is highest (in percentage terms) for those who grew up in the South Atlantic and East South Central regions, and lowest for those raised in the West South Central and Mountain regions.

By international standards, the United States has an unusually low level of intergenerational mobility: our parents' income is highly predictive of our incomes as adults. Intergenerational mobility in the United States is lower than in France, Germany, Sweden, Canada, Finland, Norway and Denmark. Among high-income countries for which comparable estimates are available, only the United Kingdom had a lower rate of mobility than the United States.

It's easy to see two things from this study so far, Corporate America is very feudalistic, with the rich retaining all the wealth and power and the rest of us not moving on to be more successful than our parents.

In fact, most of us are finding things are worse:

Key findings relating to short-run, year-to-year income movements include the following:

The overall volatility of household income increased significantly between 1990-91 and 1997-98 and again in 2003-04.

Since 1990-91, there has been an increase in the share of households who experienced significant downward short-term mobility. The share that saw their incomes decline by $20,000 or more (in real terms) rose from 13.0 percent in 1990-91 to 14.8 percent in 1997-98 to 16.6 percent in 2003-04.

The middle class is experiencing more insecurity of income, while the top decile is experiencing less. From 1997-98 to 2003-04, the increase in downward short-term mobility was driven by the experiences of middle-class households (those earning between $34,510 and $89,300 in 2004 dollars). Households in the top quintile saw no increase in downward short-term mobility, and households in the top decile ($122,880 and up) saw a reduction in the frequency of large negative income shocks.

Emphasis mine.

So who does trickle down economics benefit?  Only the richest and most powerful Americans.  It actually hurts the huge majority of Americans.  The Rags to Riches dream is just that, a dream.  We now live in a feudal society where wealth and power are inherited, just like the old kings and queens of yore, and the rest of us are merely peons.  Slaves to the cheap labor conservatives.

Households whose adult members all worked more than 40 hours per week for two years in a row were more upwardly mobile in 1990-91 and 1997-98 than households who worked fewer hours. Yet this was not true in 2003-04, suggesting that people who work long hours on a consistent basis no longer appear to be able to generate much upward mobility for their families.

THAT'S what trickle down economics has gotten us.

The Slavery of a permanent peasant class ruled by The Aristocracy of Wealth.  Blacks stuck in their place at the bottom of the economic heap.  The rich firmly entrenched.  Just like the southern slave holders once envisioned.

The Civil War Never Ended.