Trickle Downers

The Prospect's ongoing exposé of the folly, dysfunctions, and sheer idiocy of feed-the-rich economic policies.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

Trickle Downers

How the Democrats Can Hijack the Tax Reform Debate

Just in case they want an economic policy, here’s one they can win on.

AP Photo/J. Scott Applewhite
AP Photo/J. Scott Applewhite Senate Finance Committee member Senator Sherrod Brown questions Treasury Secretary-designate Steven Mnuchin, on Capitol Hill. W hat with the president’s war on immigrants, his travel ban, his Putinphilia, his threats to Obamacare, and his cabinet picks, congressional Democrats have spent most of the last month busily saying “No,” with the occasional “Maybe” thrown in by some red-state senators. What congressional Democrats haven’t done is propose some serious alternatives to the economic policies that Trump and congressional Republicans are poised to inflict on the (partly wary, partly unsuspecting) nation. And that’s a mistake. Not right now, perhaps. To some degree, the Democrats’ strategy has to be guided by the same criteria as an ER physician: the most urgent cases first. As well, as my colleague Paul Waldman argued on Monday , the 2018 elections, like all midterms, will largely be about mobilizing one’s base, and nothing stirs the Democratic base...

Kevin Brady: Trickle Downer of the Week

The House Ways and Means chair wants American consumers to pay for massive corporate tax cuts. 

AP/Susan Walsh House Ways and Means Committee Chairman Rep. Kevin Brady, R-Texas., speaks during an interview with The Associated Press on Capitol Hill. S peaker of the House Paul Ryan has an ambitious plan to dramatically remake the American tax system—and in doing so, give out massive tax breaks to powerful corporations and the wealthy. Ryan’s plan is unadulterated trickle-down economics, sending 99.6 percent of the tax cut savings to the top 1 percent of American taxpayers. At the same time, it slashes the corporate tax rate from 35 percent to 20 percent. To pay for those mammoth corporate tax cuts, Ryan and the GOP’s top tax writer, House Ways and Means Chairman Kevin Brady, are hawking a “border adjustment” tax (BAT) that would levy what is essentially a tariff on imports and a rebate on exports. One analysis finds that the proposal would raise about $1.2 trillion in revenue over 10 years, though that’s likely still not enough to cover the cost of the business tax cuts. What is...

Jeb Hensarling: Trickle Downer of the Week

Wall Street’s favorite congressman wants to gut consumer protections. 

Bill Clark/CQ Roll Call/AP Chairman Jeb Hensarling runs the House Financial Services Committee meeting to organize for the 115th Congress on Feb. 2, 2017. T he Consumer Financial Protection Bureau’s aggressive regulatory and enforcement mission, crafted as a part of the Dodd-Frank financial reforms, has long drawn the ire of congressional Republicans who are eager undermine its power and independence—and with a deregulatory fanatic as president, they may now have their best shot. Leading that charge is House Financial Services Committee Chairman Jeb Hensarling, whose Wall Street deregulation bill—the Financial CHOICE Act—forms the GOP’s blueprint for winding back Dodd-Frank. In a memo obtained by The New York Times last week, Hensarling outlined his plan to eviscerate the CFPB’s power. In a follow-up interview this week, the Texas congressman called the CFPB a “rogue, unconstitutional” agency. “I want to protect consumers from the Orwellian-named Consumer Finance Protection Bureau—...

Gary Cohn: Trickle Downer of the Week

In which Goldman Sachs deregulates itself—and tells you it’s for your own good. 

AP/FEREX Gary Cohn, Trump's head of the National Economic Council, in the lobby of Trump Tower. L ast Friday, Donald Trump signed two dramatic—albeit largely symbolic—executive orders that outlined his plans to pick apart Dodd-Frank financial regulations and review Obama’s conflict-of-interest rule that require retirement advisors to act in their clients’ best interest. The move is unsurprising (Trump campaigned against Dodd-Frank) but the president’s rationale for rolling it back borders on the comically absurd. In a room full of billionaire business leaders, Trump said, “We expect to be cutting a lot out of Dodd-Frank, because frankly I have so many people, friends of mine, that have nice businesses and they can’t borrow money. They just can’t get any money because the banks just won’t let them borrow because of the rules and regulations in Dodd-Frank.” The man behind this deregulatory scheme is Gary Cohn, the former chief operating officer at Goldman Sachs and the current White...

Republican Governors: Trickle Downers of the Week

GOP leaders in the states are using regressive tax policy to address massive revenue shortfalls. 

(Photo: AP/Orlin Wagner) Gov. Sam Brownback waves to guests before delivering his state of the state address to a joint session of the Kansas legislature in Topeka, Kansas in early January. O ver the last couple weeks, state governors around the country have unveiled their budget proposals amid political tumult. Not only are state governments unclear how Trump and the GOP Congress may impact their funding, but nearly 40 states are facing some level of short-term, or more structural long-term, revenue shortfall in the upcoming fiscal year. While the factors behind these deficits vary, many are driven by aggressive, and regressive, tax cuts of yesteryear, which a number of GOP-controlled states endeavored to offset by cuts to schools and other social essentials. Confronted by deficits that their own cuts created, many Republican governors are now calling for further cuts to state education spending and other critical services. Even more boldly, they continue to call for further...

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