Well, have we figured out that "trickle down economics" doesn't work - at least when the government is in charge of the trickling?
Also known as "supply side," a simple explanation is that if you let people keep more of what they earn, the economy as a whole will grow.
This was spelled out pretty specifically in an Associated Press report in Monday's Miner. The gist of it was that the economy is slowing down because the wealthy are hanging onto their money rather than spending it. The belt tightening is attributed to the stock market slump in late spring, sinking home values and the promise of higher taxes as of Jan. 1.
As an aside, I find it interesting that Congress isn't interested in repealing all of the Bush tax cuts "for the rich," only those that specifically apply to those who are actually wealthy. Liberal politicians have gotten a lot of mileage out of that "tax cuts for the rich" phrase for years, and now the folks who bought it hook, line and sinker might be figuring out they were benefiting as well.
But back to the AP story and the lack of spending by the wealthy, described as "the main engine of the economy." If you think the economy is sluggish now, wait until "the rich" - including any number of small business owners - have more of their money confiscated.
Of course, with all the help we've been getting from Congress and the president lately, what with 3.5 jobs (I left "million" out on purpose) saved or created by the trillion-dollar stimulus, all of us can just shrug off the higher bank fees headed our way due to the "financial reform" package just passed - but not read - by the Democrats.
According to another AP story, "reform" will cost Bank of America up to $10 billion. Who do you suppose will make up the difference, or do you think BofA can just shrug off that kind of hit?
In other words, money is finite.
That's why I cringe when a letter to the Miner calls for a corporate tax of 40 percent because it would be a fair share. Corporations don't pay taxes, customers of corporations do. And if customers don't buy, or don't buy as much because what they get is more expensive, that equals more empty desks where employees used to sit.
My own perspective is that I don't think it's just the rich who are hanging onto their money. A lot of people have figured out that this is a good time to pay off bills, not get new ones. A lot of people know the financial reform package passed and signed with great fanfare by the president is incomplete, that regulators will decide what is actually in the bill.
A lot of people know if the Democrats maintain control of one or both houses of Congress, you might as well kiss another 16-18 percent of your income goodbye because a value-added tax is on the way.
Last year, when all of this started unfolding, this column on two occasions ended with the point that all of these steps to make government bigger and more intrusive were about taking control of your life.
The process gained steam with Obamacare, and that's a kind of control we'll all eventually be able to see. The reach is far beyond that, though, because keeping more of what you earn really is a matter of freedom.
Having less money, money that is instead funneled to the government to be doled out to favored constituents, makes you less free.
The AP got it half-right when it pegged the problem with the economy as the wealthy not spending. The other half of it is that they are not investing due to uncertainty over when the next shoe will fall (Cap and Trade, anyone?) and that the rest of us have less to spend, and it figures to be a lot less until we get plenty of new faces in Washington.