Trickle-Down Economics is Officially a Hoax!

Trickle-down economics is officially a hoax. You might also know it as Voo-Doo Economics. The idea that you can just give massive tax breaks to the wealthy and because they create all value and job opportunities, it “trickle” down to the rest of the economy. Sounds like a law of nature or something, doesn’t it? This concept was first mentioned by Reagan as he completely dismantled the tax code that led to the most prosperous time in American history. It wasn’t only Reagan who was all in on helping the ultra-wealthy, the Democrats helped him pass it. We saw this same logic tested in the Bush Administration with tax cuts for the wealthy and with the lowering of the capital gains tax. One can picture these Republican ‘Noah’s’ parting the seas of hard work and adversity for these trustafarians. Get daddy’s money tax-free, throw it in the market, and watch it grow! If only there were literally zero taxes these rich people could own the majority of the wealth indefinitely in the exact manner of royalty in the old world. Oh wait, many of them, like Bezos, don’t pay any taxes already! Turns out a 50-year study of tax cuts for the wealthy revealed a shocking discovery, they never trickle-down. 

Ok, let’s not act like this was the most obvious thing ever, we still have politicians pushing it on the American public today with the Trump tax cuts. There is some logic to the argument that the wealthy are employers or owners. So in theory you could take a leap without looking closely that if you gave those employers more money, they will hire more workers and spend more money. This is why it is just a theory and not a factual idea, rich people do not spend the extra money like a normal person. For a working-class person struggling to make ends meet, they can think of countless ways to spend the money immediately. To the non-wealthy group of Americans, the trickle-down logic kind of makes sense because we know we would spend the money, boosting the economy, so it makes sense a rich person could do that at a more impactful rate. However the ultra-wealthy live life utterly alien to ours. They aren’t worried about making ends meet, they are just trying to save and grow their fortune. Plus if your house is paid for, you have every material thing you could want with no debt, getting $1,000,000 more won’t spur a spending spree. It’s pennies in the pile. Let’s take the $1,200 stimulus check, picture someone who makes $500,000/year as a software engineer(not even a billionaire), and then someone making $40,000/year as a server who lost their job during COVID, who do you think spent their money quicker? This is where theory butts into reality or something called the velocity of money, you check it out in-depth here. It doesn’t take a scientist to understand that the more impoverished you are the faster you would spend a stimulus check, this is the classic hierarchy of needs. 

So at its core we know the wealthy will not blow the money they are given on local businesses, what about business owners? Won’t they have more money to employ people? This again seems logical, we all seem to know a small/local business owner that we hear talking about how tough the system is on them. However, the people lobbying for these tax cuts aren’t small business owners that you know. These are large corporations, like Comcast, Amazon, Goldman Sachs, the list could go on all night. So if these large companies provide so many benefits to American society how many people did they hire after the Trump tax cuts? Well AT&T laid off a record number of employees after the tax cut to secure enough cash to purchase Time Warner, making a move away from technician services to streaming. Yet this is not AT&T’s fault, these companies do not have brains of their own sickened by greed. AT&T is forced by shareholder expectations and competition to always make more money the next quarter than you did the last. If you are the CEO and your sole purpose is to be more profitable every quarter, naturally you are going to hire the absolute minimum amount of employees to get the job done. Then imagine that Comcast comes up with some new logistical product that allows them to do installs with half the human technicians as AT&T allowing them to drop their prices. AT&T will have to cut the same amount of workers or go out of business. Pair this with automation and we have drag race to the bottom, who can be the first company with no employees, all profit. We are already seeing this today with the business model of the future, Gig-workers. They aren’t employees, you just get to absorb the majority of their production value with zero risks, a capitalist wet dream. 

So if you are some kind of billionaire that actually wants the system to flourish and see your businesses explode, what would work better than tax cuts and keep the workers satisfied? Direct all of these government programs currently going to the ultra-wealthy(Elon Musk), to your customers. See this is their big mistake, workers are the primary consumers. The healthiest economies see a wide array of people with spending power. Perhaps we should propose trick-up economics? 

This is why programs like Medicare for All would be an immediate boon to the economy. Millions of Americans would spend an additional $300-$1600/month in the economy instead of it sitting stagnant in the accounts of billionaires. Perhaps it is time to rethink our priorities.

Why Warren Buffett Defends Medicare for All.

Since the corporate Dems coalesced around Biden to make a completely united front against Bernie Sanders, the words Medicare for All have scarcely been uttered. The name Bernie Sanders has scarcely been uttered. Medicare for All was the literal line between Bernie Sanders and everyone else in the primary. If you remember, we got to see Kamala Harris try her hand going back and forth across that line, I guess when you’re that cynically opportunistic the grass really is always greener. Joe Biden was the only other candidate beside Bernie that even owned their position, everyone else squirmed out of their skin over the question. Elizabeth Warren didn’t mind going total Houdini when asked- “Will you back Medicare for all? Yes. Will you people pay any more in taxes? No. Will you eliminate private insurance? No.” Spoiler alert, those answers added up, do not total Medicare for All. Why was Bernie Sanders attacked for being the only one who told the truth about his plan? Do we want an America where we elevate ambiguous liars, or do we want a country where we face the facts and tell the truth regardless of how it sounds in a media clip? Medicare for All defined the primaries, now we must ensure the idea stays in the zeitgeist until it becomes a reality and Americans enjoy the healthcare that the rest of the world already has.  

The whole system is cockamamie,” the company’s vice chair, Charlie Munger. Warren Buffett added that private insurance is “the tapeworm of American economic competitiveness”

Instead of going into the life saving impact of M4A that we hear from the left, let’s go straight for the heart of why right-wing (and Biden’s) arguments about M4A are completely bunk, especially from a business perspective. The first base level fact you need in your M4A defense arsenal is that 32 countries already provide universal healthcare. Below the countries in green provide universal healthcare, those in blue provide some form of free health care and the red countries provide no healthcare. 

You probably noticed every “advanced” nation on earth has universal healthcare. We stand alone with impoverished nations and dictatorships. To state that nationalized healthcare is not economically possible, is to insult the American people and their potential, TAR believes we are the greatest nation on earth and if anyone else can do it, we can do it better. 

Let’s dive into the Warren Buffett quote above, bet you haven’t heard that one on the nightly news? Why is Buffett pro single-payer? First let’s break down why insurance is a complete racket and how it does not follow market laws. 

Lets start with an example- you are getting ready to buy a car, you have your eye set on a Toyota Camry, base model. You go to car lots and start looking at different models, different year makes, at different car lots. You narrow down to an exact make and model you want and start comparing prices online, you check Kelly Blue Book to know the price and find the best deal. At the end of the day you knew what you were going to pay, had many options and found the best deal. 

This is how markets work, competition dictates price and helps supply to meet demand. If someone tried to scam you and sell a Camry for $100,000 you would never buy it because you can look on your iPhone and know the market value of the car, then buy it elsewhere. However, market mechanisms are nowhere to be found with insurance. If you need to have a surgery, you can’t compare hospital prices and your insurance provider will not give you the rates before the operation. You can’t google how much any part of healthcare will cost, and to beat all, it could be something life threatening. You don’t have a choice, are you going to die or save your life without knowing the cost. Imagine going to the grocery store and swiping your card before they ring your items up, then assigning you a random total cost!? We would never accept it! So, how is this possible – laws and regulations. This isn’t natural capitalism or markets, this is an industry that has written the rules to line their pockets. 

Private insurance is only good for one business in America – Private Insurers. Everyone else is picking up the tab for them. This takes us back to Warren Buffett’s original criticism, it is the tapeworm of American business. Why? Because not only do we pay more per person than any major country, American businesses have to pay for the majority of people’s health insurance. Yes these businesses will possibly pay more in taxes with M4A, but it is nothing compared to the massive cost of buying insurance for your workers. Not to mention the complete unpredictability of insurance cost. Many are speculating that all insurance premiums will increase by 40% in 2021 due to COVID. American businesses are having to spend a fortune just navigating the insurance industry. 

This is also where you see small businesses hit a ceiling, at a certain amount of employees you have to provide health care. Why are we putting this burden on small business owners? On top of hurting our large businesses it is crippling to your individual American entrepreneur. Picture this – in many European countries an ambitious entrepreneur would go to college for free, leave with no debt, and have health insurance. Upon graduation they go full-bore on their project and require only small amount of capital to survive on while building their dream. Now picture an American student – They graduate college with $50K+ in student loan debt, thousands in credit card debt to pay for living expenses, and at age 26 they are thrown off their parents insurance to purchase their own. Oh, and who is insurance the most expensive for and least protective? Young individuals, buying insurance on the market as an individual. Looking to start your own business here in America? Better be able to make $300-600/month student loan payment and purchase private insurance for $100-$600/month. So tell me, who will quit first and take the first job offered to them? The American Entrepreneur or the European?

Next time you hear “Medicare for All” is bad for business, simply ask “Bad for which business?”. Who knew we would side with Warren Buffett?

Class War

We in no way condone violence. TAR is strongly supportive of non-violence. 

“I wanna war between the rich and the poor. I wanna fight, and know what I’m fighting for.“

What are we fighting for? Promotion of anti-racism? To completely snub out small town fools and cancel celebrities? An economy where “nothing changes” like Joe Biden has told his donors? 

Here’s an unpopular opinion- We will get nowhere believing the Democrats are with the people. These are extraordinarily wealthy people, with extremely powerful donors. You did not grow up with people like this. That conservative “rich” business owner from your hometown is not even 1/10th the status of this class. Your doctor making $250,000/year is not in this group. Most people have never actually met a top 1%er, yet they are writing the rules and laws that influence your life. 

So who are these people and how did we end up on their team? And aren’t the Republicans the wealthy corrupt party? It is hard to say exactly when this change occurred to the democrats, but a good guess is in the Jimmy Carter administration. This is the beginning of corporate Democrats and the first step of walking away from white working class voters. Many of the lobbyists we see in the Ragan administration were in the Carter administration as well. 

We then see Richard Nixon(with the aid of Pat Buchanan) start speaking the language of the working class. Nixon upended and destroyed the Democrats dominance they had since FDR and the New Deal by literally adopting it’s talking points. Nixon bridged the gap between the 1% and the workers, they now felt like they were one in the same, a trend that is extremely evident with Trump. The left has been playing a dual game of imitation and catch up ever since, relying on celebrity “special flower” candidates to win.(Clinton, Obama, Mayor Pete)

Once the Democrats started losing this working class ground, they actively turned around and ran from their working class constituents. Sprinting into the arms of the white college educated elites that occupy the suburbs. Truly showing their colors, they never cared about advancing workers rights, they were simply using poor whites and poor minority groups to win elections. After all workers are not in their class, they don’t live a life anywhere close to an actual American. They could already speak the super woke language of affluent suburban whites, and their donors hated labor more than anything on earth anyways. This was more than an easy transition, it was a new job with a big raise. Serving the technocrat college educated class is great, they have all the money and work for our donors!

In the same way that the Trump tax cut didn’t help any of his actual voters, the Democrats engage on culture war topics that will never actually help their voters. Yet if they can just come out and say Black Lives Matter and support the protest, they will never have to actually fight for the economic rights of the protesters. And they don’t want to, the elitist Dem voters who work at technology companies are their bread and butter, and these people are on the winning side of massive inequality. 

Random fact: Nixon did more than almost any President to protect the environment.

So you’re a member of the working poor, or a union worker, why would you be with the Democrats? They haven’t raised your wages? They let your union collapse? They signed disastrous trade deals that closed your factory? Sadly fewer and fewer people are finding a good answer to that question. The Democrats have abandoned economic populism, they will do everything in their power to never have an economic agenda again. This was evident in the fact that the Democrats are more united in their hatred of Bernie Sanders than of Donald Trump. 

So what choice do we really have? The class war started long ago, you just had no idea your side was losing so badly. The upper class has already taken over both political parties and divided all of the workers on fad cultural issues. Perhaps the battle worth focusing on is the class war within our respective parties, realizing that you have much more in common with a Trump voter than you do Nancy Pelosi and Chuck Schumer. Never forget, every working American is on your actual team, from MAGA hat wearers to fast food workers. Never forget the success of the ultra wealthy can only come at the expense of workers.