The Fox had a proposition for the Chickens. “I couldn’t help but notice,” said the Fox to the chicken Chitty Council, “that you have to walk an unfair distance from your coop to the chicken yard, simply in order to avoid my den. I propose that we move your coop closer to my den so that you won’t have to walk so far to avoid it.”
“Not so fast,” came the voice of a skeptical chicken. “This is a ‘Free Range’ community. No one beak clucks for all of us, but I have my doubts. The benefit is undeniable but WHO is going to pay for this?”
The Fox was prepared and without hesitation he replied, “Why I am, of course! I will pay for all the materials and provide the labor. I saw some chickens who were idle and this will put them to work, and your old coop will be all the materials we need. If there are any cost overruns, we’ll work out an equitable repayment plan from you. Perhaps, supply me from your surplus of eggs.”
The chickens chirped amongst themselves but were quick to respond. “This is a once in a lifetime opportunity. Thank you, Fox, for your generosity!”
Within a month the chickens were eaten and the Fox moved to another farm to start a new business.
And that, boys and girls, is how post-Laffer/Supply-side Republican economics work.
Was it that easy to sell such a concept to bright, hardworking, God-fearing, patriotic, Americans?
‘fraid so.
Supply-side economics are nothing new. The macroeconomic theory is as old as taxes themselves but the term wasn’t used until 1976 when a former economic advisor to Richard Nixon coined it to forward the idea that influencing the supply of labor and goods by using tax cuts and deregulation is the key to economic growth.
Under President Reagan in the 1980’s this became known as “trickle-down” economics and argued that increased investment and spending by the wealthy will result in job creation, higher wages, and thereby, trickle down to benefit the working and middle class.
Great theory. It even has logic on its side. What it doesn’t have on its side, however, is reality. In reality, the wealth was kept at the top to reinvest, not in production, but in valuations to create more wealth. Wages did not rise because the system quickly became shareholder centric rather than protecting employees. Wages, in fact, became an obstacle to better margins and companies reorganized to keep wages, benefits, and pensions level. When supply demands contracted, jobs were cut, rather than dividends.
Maybe the nature of greed was not considered. Or maybe…it was greed itself that designed, packaged and sold the idea to working America. The power of money has never been questioned even by those who would benefit from hiding their self-serving interests from the people whose hard work and paychecks fuel the power brokers. It is not difficult to imagine the smokey backroom where the idea was hatched and sold to the American public much like the Fox to the chickens.
“Our benefit is your benefit.”
After 40 years, as the holdings of the upper class have tripled while working wages have been flat (against rising costs of living), the message continues to resonate: “If we, the job creators, pay less in taxes, we will build our industries, you will have more jobs with better pay and by deregulating the confinements that keep us from making even more, our wealth will benefit you even more. And if you become a billionaire, too, someday, you will thank us.”
It made enough sense to good, honest, people that it warranted doubling down by George W Bush and again by Donald Trump. And now again by Donald Trump. And the demons that have kept most Americans from seeing any of their benefits actualized? Why, of course, it’s trans youth, reproduction rights, gun control, immigrants, diversity and inclusion and books promoting acceptance and equality, recognizing racist histories and remaining systemic issues; any and all progressive-born concepts that trend away from a fairytale fabrication of a mythical time when America was “Great.”
Another easy sell because, there it is, right in front of us: The longer trail from the coop to the yard.
And to shorten the trail again we now have Trump-style “Tariffs.” Tariffs that will make us rich in revenue, lower our personal income tax, create jobs, increase wages….etc. Same sales pitch from that smokey back room and there will be the same result. Only this time average Americans will fall behind fast and without the programs and services that were created to bridge hardship to opportunity, more people will suffer.
A devious logic is, once again, on the side of this economic coup. The United States has been taken advantage of by some trade agreements. Trump is not wrong.
(catch your breath, I haven’t lost my mind)
There are reciprocal agreements where we pay higher tariffs to countries that pay lower tariffs on our imports, resulting in trade deficits that could be considered unfair. The issue, however, is to what extent does America lose in unbalanced trade? And to that end Trump’s trade war is an exaggerated answer to an exaggerated problem.
Trump has singled out high tariff rates that countries charge on certain U.S. exports including Europe’s tax on cars, but the U.S. also has high tariff rates that it charges on certain imports, such as a 25% fee on light trucks. Trump has lumped in allies like Canada, which have some limits to U.S. exports, with nations like China, which have extensive trade barriers.
The tariffs rolled out now are drastically raising trade barriers, potentially to a level beyond what other countries impose on the United States. According to The Spokesman-Review using data collected by The New York Times, “the trade measures that Mr. Trump has introduced so far have more than tripled the estimated dollar value of tariffs that importers must pay to bring products into the United States compared with last year. And that’s before his new reciprocal tariffs and 25 percent auto levies go into effect this week.”
In 2023, The World Trade Organization showed the United States had a trade-weighted average tariff rate of 2.2 percent compared with 2.7 percent for the European Union, 1.9 percent in Japan, 3.4 percent for Canada, 3 percent for China and 1.7 percent for Switzerland. While some poorer countries do charge higher rates (India’s trade-weighted average tariff rate is 12 percent, Mexico’s is 3.9 percent and Vietnam’s is 5.1 percent), U.S. tariff rates (what we are charged) are lower than tariff rates in other countries.
So, what is this really about?
It is Trickle-Down Part II. Sell (use all hyperbole necessary) how America is losing money (even though we are stinkingly rich) and how policies designed (rigged) to improve the financial outlook of wealthy investors, will solve the problems and enhance the fortunes of working Americans.
Trump admits that there will be some “pain” to consumers due to the probable rise in costs (tariffs are passed onto consumers) but promises that it will be “shortlived.” But is that true? Most economists (and the history of civilization) disagree. Most economists agree that inflationary pricing will result soon, and many are predicting this could trigger a global recession from which there is no quick and near painless recovery. Financial markets around the world are already reeling and the US stock market may see the worst of it. And who doesn’t suffer? Those who don’t know what their help is paying for eggs and avocadoes in the first place.
So, finally, what is this really about?
This is the long sought after plan from that smokey backroom which laid the groundwork to privatize EVERYTHING; to make everything from welfare, medicine, education, retirement, and trade, the sole domain of the private sector. Take government and the collective needs of people out of the equation and pass the savings onto the ruling class. It is “Oligarchy 101” and it is being shamelessly unveiled to a public that was, albeit unwittingly, complicit in their own demise. Like the chickens.
“Thank you for your generosity. How much are you selling our eggs for???”
