Trickle-Up Economics


As we await the winter rains here in Northern California, I’ve been paying attention to the early morning chorus of sprinkler systems in our neighborhood. Like a carefully choreographed game of “whack-a-mole”, sprinkler heads peak above ground, disperse water and then return to their subterranean lair. Unfortunately, this type of system sends water up toward the ether where much of it evaporates rather sending water directly into the soil to soak the roots of flora with life-giving liquid.

This inefficient top-down watering system is an apt metaphor for “Trickle-Down Economics”, which has been the prevailing economic theory for the past thirty years. [Warning: This is not an economic treatise and thus should not be used in lieu of your normal sleep medication.]  The essence of Trickle-Down Economics is the belief that when the richest Americans have the lowest possible effect tax rates, much lower than that of the rest of the population, they, in turn, will create jobs that raise the economic status of everyone else.

It sounds reasonable. Unfortunately, it hasn’t work as advertised.  Here are a few sobering statistics:

  • If wages had kept up with increased productivity since the 1970’s, then someone making $40,000 today would be making over $62,000. 
  • Only Russia, Ukraine and Lebanon have worse income inequality than the U.S., and the likelihood of upward economic mobility in this country is about the same as in Pakistan (slightly worse than Singapore and slightly better than China).
  • The wealthiest 400 Americans have as much wealth as 80 million families combined (62% of the population).
  • Since 1980 American GDP has about doubled. While wages are stagnant (or even declining) when adjusted for inflation, the stock market has increased its value by over ten times with 93% of that wealth residing in the hands of the richest 20% of Americans.
  • For more information and supporting data, check out or Robert Reich’s new documentary “Inequality for All“.

Essentially what we have in this country is “Trickle-Up Economics”. The rich get richer, and everyone else treads water or sinks. Over the past few decades, the wealthy few have become exorbitantly wealthy, while the rest of the country has seen wages stagnate or decline (when adjusted for inflation). The result is that millions of ordinary folks have less available income to buy stuff, and that demand for goods and services is what drives the economy and creates jobs. No matter how much he loves to be warm and cuddly, there are only so many Snuggies that Bill Gates is going to buy.

What’s bizarre is that the rich would likely fare better in a more equitable economic system by having a smaller share of an ever-growing pie as opposed to a larger share of a stagnant or shrinking pie. As the middle class thrived, they would purchase goods and services from companies owned by the rich, thus not only increasing profits for the wealthy but also providing more capital to hire more workers for decent jobs rather than the McJobs typically created in this wimpy recovery. I’m not advocating communism but rather a somewhat higher tax rate on the rich so that the budget is not balanced on the backs of the squeezed/shrinking middle class and the poor so that they (we), in turn, can heat up the economy.

What’s perhaps most startling about Trickle-Down Economics is its unholy alliance with organized Christianity. Despite the clear solidarity of Jesus with the poor (Luke 4:16-19, Luke 6:20-21, Matthew 25:34-36, Luke 14:12-14, Luke 12:16-21, Matthew 19:24, etc.), not to mention passages in the Hebrew scriptures lambasting the wealthy establishment for its treatment of the poor (Psalm 109:16, Proverbs 14:31, Proverbs 28:3 and innumerable examples among the prophets such as Ezekiel 22:26-29), in many Christian circles, God has morphed into a monocle-with-top-hat capitalist who advocates for a totally unregulated free market, no matter how that impacts the most vulnerable.

Former President Jimmy Carter recently weighed in on this unseemly mangling of sacred scripture to support a trickle-up economic system, when he said, “If you don’t want your tax dollars to help the poor – then stop saying that you want a country based on Christian values, because you don’t.” Amen, Mr. President. Amen.

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2 Responses to Trickle-Up Economics

  1. Rhona ballarta says:

    Where is the hardwork mentality this country was based? I do believe if all of us study, work hard and be ready for any opportunities in our lives we will be successful and financially stable. I came to this country with $100 in my pocket- have to pay my apartment deposit and rent which left me about $12-15 for food ( this was 30 years ago). I ate bread and mayonnaise with eggs and tomatoes til I get paid in two weeks. I worked 16 hours and saved money. I brought left over food instead of spending $10 for lunch at he hospital. The problem with our society is we want comfort now without working our share….

    • scott says:

      Hi Rhona, thank you so much for taking the time to read and respond to my blog. What dedication and achievement on your part, working so amazingly hard to become successful. Truly remarkable! Wishing you all the best, and I miss getting to see you.

      Yes, agreed, many in our country, both rich and poor, have a sense of entitlement. No doubt. But among the poor, this is a very small percentage. In 2010, 91% of all those receiving government assistance were elderly, severely disabled or members of a working household. For that remaining 9%, most of it goes to social security survivor benefits, medical care and unemployment insurance (which, of course, requires a work history). So, yes, lazy people do abuse the system, but, statistically speaking, they are the exception. What should evoke equal or greater outrage are the tax-benefits received by the wealthiest (bought by their political contributions) that force the rest of us to pay higher tax rates so that they can have historically low tax rates (especially low taxes on investments, which are taxed lower than wages earned through work) and keep more money in their pockets. So, those with a sense of entitlement, no matter what their economic standing, do need to be called to account. In all of this, we need fairness, balance, justice, humility, compassion, and a commitment to responsibility for self and the common good.

      Thanks again for sharing your thoughts. I love the dialog.

      Wishing you all the best. Peace and blessings, Scott

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