Re “Bring on supply-side economics,” Opinion, March 23
To quote Ronald Reagan, “There you go again.” Ideologues like Brad Schiller tout supply-side economics once again as a possible cure for our economic woes.
Economists teach us about “supply and demand,” but it really should be called “demand and supply,” because without demand, supply is irrelevant. Demand is what drives everything, including job creation. If you have a line of customers snaking out the door, you will hire employees to meet that demand, regardless of taxes or regulation.
Our economy is about 70% consumer driven, so when median household income stagnates or drops, so do consumption and hiring. It’s simple logic.
Trickle-up economics creates more demand than trickle-down because lower- and middle-income families will spend additional income, whereas high-income families invest their money. That’s why the stock market has been booming while the overall economy has been weak.
You don’t need a Nobel Prize in economics to figure that out.
Schiller’s call to action is timely enough. It is just wrongheaded.
Yes, more attention to employment, and also wages, is critically needed. But Schiller fails to acknowledge the controversial nature of supply-side economics, most starkly revealed in its desertion by the man who chaperoned its entry into the Reagan revolution. He ignores the already flush supply side, with corporations sitting on mounds of cash they won’t spend to hire or expand.
Mostly, Schiller fails to realize that trickle-down Reaganomics remains the law of the land and needs no latter-day champion. The decimated marginal tax rate and the prevalence of stock-option CEO compensation remain and, along with corporation-friendly foreign trade deals, have hollowed out the middle class, creating monstrous wealth and wretched poverty characteristic of developing nations.
This piece would more appropriately have been published on April 1.
Trickle-down economics? The Laffer Curve? Supply-side economics?
No thanks. America does not need any more of these voodoo economic theories that have contributed so much to our declining economic stability and increasing economic inequality.
As for the shedding of ideological blinders, dare I suggest that Schiller be the first to begin?