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

No, We Don’t Need Higher Interest Rates

AP Photo/Andrew Harnik
AP Photo/Andrew Harnik Federal Reserve Chair Janet Yellen testifies before the Senate Banking Committee. An earlier version of this article appeared at The Huffington Post . Subscribe here . T he press is fairly slavering for the Federal Reserve to raise interest rates. You can hardly read an item in the business pages without some commentator declaring that, at last, the unemployment rate is low enough and the growth rate high enough that the Fed can tighten money… and choke off further progress. Hosannas! But the commentators have to strain to tell us how good things are. Yes, wages are up this year and unemployment is down, but as EPI’s comprehensive report makes clear, these gains have only begun to reverse several decades of rising inequality. Why does the financial community want higher interest rates? So that banks and other creditors can make more money, of course. And to head off inflation that for the moment is mostly imaginary. And to keep down worker pressure for higher...

The Republicans’ $370 Billion Cut to Medicaid

AP Photo/J. Scott Applewhite
AP Photo/J. Scott Applewhite House Speaker Paul Ryan meets with reporters on Capitol Hill. A ccording to Republicans in the House of Representatives, block grants “give states the freedom to tailor their individual programs to address the diverse needs of communities.” According to the historical record, block grants are thinly disguised budget cuts . In their newly released plan to “repeal and replace” the Affordable Care Act, Republicans are proposing to convert Medicaid—the program that provides health coverage to almost 100 million low-income Americans each year—from a program that expands with need and thus provides a reliable safety net, to a type of block-grant program called a per capita cap . This funding mechanism provides states a fixed amount of federal Medicaid dollars per recipient with loose restrictions on how the money can be used. But the level of funding provided to the states declines dramatically. According to a new estimate , the House Republican health plan...

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—...

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