What's Wrong with Trickle-Up Economics?

ickle up is how all economies work naturally.
when you pay peopel a bit more than a living wage they have disposible incoem to spend and the poor looking at he rich.. will tend to spend it to live a bit better than save it.
trickle up economics is what happened with bush's tax rebates.everyoen got 300-600 dollars and they all spent it..and the economy did grow for those two months.

he world isnt black or white though. you cant divide up the money evenly as prices will skyrocket. and incentive will drop. So you cant go for total trickle up or total trickle down.

so how can you tell when you got it right? well you look at the bell curve of americans wealth.
roughly you want a nice smooth curve, with just about as many of he super rich as the super poor. and a clear majority of us in the middle class with plenty of money for a median priced home. with disposable cash left over for indiscriminate spending

Genius.

Decent, practical, and helping the people who actually need it.

Love the idea of limiting maximum wage of 40 times above what the lowest paid worker earns. A janitor at $20k a year would mean a limit of $800k a year - not exactly bad money whatsoever - but decreases the ridiculous expanse in money.

Norway has such limits.. it works well for them.
int eh 60s and 70s we were about those rates naturally.
it wasnt untilt he top tax rates started to dropt hat the greed on the top starts to soar.

plus it is a self growing thing.. see if i leave my job they can hirer another guy for the same price.. but if a ceo leaves they tend to have to pay the next one a bit more than the last. or at the very least just as much as the last.. this has the effect of constantly risign the min wage for ceos.

Why shouldn't I be able to earn what my ideas are worth and what anyone might be willing to pay me? Isn't that freedom? Wouldn't I, by your own theory, then spend to my abilitity to because I have disposable income? Wouldn't I then invest in my interests creating then more space for people to participate? If you simply want a system where you'll cap what people can earn and eventually have sameness, what then would be the motivating factor to excel? It isn't all about money, true, but money allows you greater freedom to express yourself in other ways and that is how this country was built. Are you saying it is fundamentally flawed or are you really saying that due to government corruption we need to do something? I agree with the later, but not the former. Get rid of the problems but don't throw the baby out with the bath water.

Why shouldn't I be able to earn what my ideas are worth and what anyone might be willing to pay me?

There's nothing wrong with that at all, but when CEO pay decouples from the law of diminishing returns, as it clearly has, there's an indication of gamesmanship afoot, as we clearly see with this finance debacle.

You are of course precisely wrong for a variety of reasons.
I'll name the most obvious, the middle class makes the whole machine work.
The rich can only buy so much. Precisely what do you do when your income exceeds a certain threshold. It's a term called propensity in economics. You save more which of course is then invested and increases your stake hold. You can afford the best advisers, lobbyists and politicians.
You than achieve hegemony, an oligopoly, a monopoly.
We need the middle class to fuel mass production.
We need the middle class to assure the lower class has an achievable goal.
Study the glossiest magazines, wealth TV, etc. All they issue is a call to greed. There can only be so many ULTIMATE winners but there can be many OK winners.
Waiting for the rich to dispense of their wealth is an endless wait.
They need to be taxed heavily while alive and their fortunes must disappear at the time of their death.
It then allows yourself to get in the Yacht Club. Smaller boats but more of them can be lifted this way. Not through connivances, but by your merit. Studying the various financial crises, we discover that the banks initiate them through unsound practices which are approved by those who JUST CAN'T GET ENOUGH.
The Federal Reserve is a private institution which is controlled by the two banks now making purchase of those banks which were not in the on the inside. Chase and Citibank. They own in excess of 50% of the NY Fed and through interlocking directorships and ownership control the others. Looking at who controls these banks leads you to the same folks who own chunks of every major Immortal Corporation. So who had approved all of this sham economics? The same folk who are consolidating control over you.
Great system, eh? Or is that grate? I feel chafed.

Interesting that I first made this suggestion--bail-out homeowners, not mortgage bankers, if there is any bailout at all--Monday, 9/22/2008. Was Trickle-up suggested before this?

ickle up is how all economies work naturally.
when you pay peopel a bit more than a living wage they have disposible incoem to spend and the poor looking at he rich..

But isn't paying someone a trickle down in itself? Nobody is going to eat without someone somewhere offering somebody a job.

The 'living wage' concept just boggles the mind. You speak of natural economics yet don't acknowledge that when you raise the costs of doing business that raises the cost on the consumer and wipes out the benefit of whatever a living wage is supposed to be.

Why not a minimum wage of $40 an hour?

Heck, we could go to some of these dirt poor African countries like Kenya where the average income is around $1 a month and announce that we've discovered the secret to a prosperous economy: just force business to pay a high minimum wage. Instead of $1 a month, the government can guarantee everyone working $20 a month or $200 a month or $2000 a month. The rest will just work itself out. I guess.

But isn't paying someone a trickle down in itself?

You're confusing micro with macro-economics.

No, I'm challenging the notion that those with little can do wonders if through force they are given a little more, whether it's through government setting artificial wages or prices or simply paying people off. My response is directly to what I quoted Joules as saying.

the particular concept you are discussing is "inflation" :)

Exactly, which is what forced artificial increases (such as imposing a 'living wage' standard) leads to. 

And paying executives exhorbitant amounts totally unrelated and unrelatable to performance in any way leads to ........

I'm sorry did Otto say he was in favor of high executive salaries?

Put another way what did 1.15 have to do with 1.14

No, he didn't, but the argument stands that we're currently causing inflation through people like CEO's and therefore, his argument might be moot.

Great discussion! A crash course in economics. I've learned more here, than in the last two weeks from talking heads on TV. Thank you all. Now, I need some Tylenol. :-)

The thing that can keep CEO wages in line most effectively would be unions. There are some problems with unions though and they can deter business development more by reputation than anything else. However tax policy can be a major equalizer. It can help to ensure that the lower and middle class are not excessively maligned. The thing is right now we have had increasing consolidation of wealth in the upper echelons of American society. It has not reached the point of the 1800's industrial revolution, but it could. We are witnessing the beginning of a shift. The middle class used to be able to survive on a single income and now a double income for many is not cutting it. We are reaching a breaking point at which the lower part of the middle class is being pushed to the lower class. They are losing their hoems and having to adjust to a lesser lifestyle. With further consolidation this trend will continue to the extreme where you have a small upper class and a massive lower class. The choice is simple we vote in a guy who wants to consolidate more wealth in the upper class (McCain) and hope that investment trickles down which it hasn't been doing, or we put someone in office that will try to fight for fair wages and trickle up economy that we desperately need right now to fire back up the broken economy. You cannot have a real modern economy without a middle class. The number of people in our middle class used to be a mark of pride that we used against the Russians, but it seems like now that a lot of the Republicans would be more than happy to blame the lower middle class for biting off more than they can chew. Its like they're saying become lower class and stop complaining. The major argument here against changing the tax system in favor of the middle class is that it will quash upward mobility, but we aren't talking abotu French taxation of like 50% or anything. Obama isn't going to destroy the upper class. He will just make the tax system more equitable and we need that. We need someone in office that looks out for the 95 percenters not the top 5 percenters. McCain IS primarily upper echelon conscious corporate interest motivated. Look who his friends are to see that. Its simple I don't even think McCain supporters could deny that.

In Japan, the top executive at Toyota... arguably the largest automotive manufacturer in the world, makes something like $975,000.00 a year.  His counterpart at General Motors was paid roughly $10.9 million last year.  GM is now contemplating Chapter 11, and Toyota is so cash-rich they are now offering 0% financing to sell more cars in a down economy.  Japan is one of the many countries with a ceiling on compensation.  IIRC, it's 30X what the lowest paid regular employee earns.  That works out to about $32K/year (or $625.00/week) for Toyota's lower rung employees.

We also reward losers here in the USA and we reward them well.  Carly Fiorina is a great example.  After cutting 20,000 jobs within the HP/Compaq organization, her ideas didn't sit well with the board of directors so they fired her, but gave her $21 million in cash plus another $21 million in stock options.  Didn't the head of Lehman Brothers (who just testified) get over $420 million in salary since 2000?  Is anyone really worth $200 million a year, and worse yet... when the company was possibly leveraged 30 to 1 and they went under he was authorizing $20 million in special payments to key executives?  That is insane.

Trickle up is not crazy.  If Marie the teacher had a better salary, she might be inclined to buy a new car, a new TV, or remodel her house.  When Marie spends money like that, companies have to respond by either building inventory (which means jobs/work/production) or hiring people to provide the services.  The company makes money and the more goods/services provided, the greater the likelihood of expansion, R & D, new products, and more growth.  

This is not rocket science. 

the otto show:

The 'living wage' concept just boggles the mind. You speak of natural economics yet don't acknowledge that when you raise the costs of doing business that raises the cost on the consumer and wipes out the benefit of whatever a living wage is supposed to be.

Why not a minimum wage of $40 an hour?

Heck, we could go to some of these dirt poor African countries like Kenya where the average income is around $1 a month and announce that we've discovered the secret to a prosperous economy: just force business to pay a high minimum wage. Instead of $1 a month, the government can guarantee everyone working $20 a month or $200 a month or $2000 a month. The rest will just work itself out. I guess.

Subterfuge is your game, keeping you on point is mine.  Let's turn around your argument a little bit.  Let's move a production job from the U.S. where the average income for that job is say $25 per hour as dictated by the local economy and give that job to someone for say 10 dollars per day in another country where the local economy dictates that income level.  The global loss in income for that productive exercise over an 8 hour day is 190 dollars per day.  Let's multiply that $190 by similar production jobs of say 5 million and the loss per day in global income is 950 Million per day.  The only way that one can temporarily hide that type of global income loss is to expand debt (money in circulation) and thus manipulate real estate prices much like a doctor uses pain medication to mask discomfort hoping that the body will heal itself.  Unfortunately, politicians believing their economics experts (bought and paid for though they are) and wanting to reward their big donors continue allowing jobs to leave the country while more novacaine is administered to try and keep the patient comfortable.

Otto, what you need to do is come clean.  Your agenda is obvious.  Slave Labor Profit.  Pitting U.S. Labor against Chinese Labor straight up is slave labor exploitation and only serves to weaken U.S. labor and push down their wage.  Prove me wrong.  I hope you can.

jcatom, Great article!  Keep up the good work.

Golfer, I actually agree with you in theory, but in practice a forced "living wage" creates problems. Imposing an artificially high living wage will force business to raise prices and, thereby cut demand for thir products, which will ultimately force them to reduce their workforce. So yes, the people working will get paid more, but there will be fewer people working. As it is, millions of manufacturing jobs have been sent overseas because the labor rate in the US is too high to make competitively-priced products. Trust me, I hate wal-mart and I hate the cheap made in China garbage. How I wish I had the option of buying higher-priced quality products that are made in America, but they no longer exist because they aren't competitively priced. Unfortunately, low prices is what the American people want... they look for the lowest price, but never count the cost.

If the point of trickle up is to equalize assets or close income gaps, I believe its effectiveness would be a temporary as any other.  Money problems are rarely actually solved with money.  Usually, at the root of money issues is lack of education about money, lack of motivation, greed/overspending, or some faulty belief about money such as "I'll never get enough money because the system is stacked against the little guy." 

My strong suspicion is this: if a magic wand was waived over American today, equally distributing all money among all people, it would be a very short time before the same people ended up controlling it again.

Any small dent we will ever make in addressing poverty/the "underclass" will have to include education about money.  IMHO

naftel , lets breakdown your argument and see where it takes us.

Golfer, I actually agree with you in theory, but in practice a forced "living wage" creates problems. Imposing an artificially high living wage will force business to raise prices and, thereby cut demand for thir products, which will ultimately force them to reduce their workforce. So yes, the people working will get paid more, but there will be fewer people working. As it is, millions of manufacturing jobs have been sent overseas because the labor rate in the US is too high to make competitively-priced products. Trust me, I hate wal-mart and I hate the cheap made in China garbage. How I wish I had the option of buying higher-priced quality products that are made in America, but they no longer exist because they aren't competitively priced. Unfortunately, low prices is what the American people want... they look for the lowest price, but never count the cost.

Respectfully, your argument ignores tariffs utilized to equalize differences that exist between potential trading partners.  Forcing labor in an advanced economy to compete with labor in a developing economy with near slave labor wages does nothing but reduce labor wages in the advanced economy and consequently reduces the buying power of the middle class.  We've been sending jobs overseas and incomes, except for the upper one percent of income earners, have been decreasing for sometime and we're in trouble and you are arguing to continue doing that some more.  Why?

You mistakenly state the labor rate in the U.S. being high as the reason for millions of manufacturing jobs being sent overseas.  The reason is greed and slave labor wages.  If I manufacture a product that requires 20 labor hours to produce and I pay an average of $20 per hour my labor cost per unit is $400 dollars.  Now I get a Preferential Trade Agreement enacted and I can move my production to China and my labor rate is reduced to $5 dollars per day.  Assuming an 8 hour day per individual laborer, the labor cost per unit is reduced to 12.50 or lowered $387.50 a 97% decrease.

Now lets look at the competitively priced argument.  Have we seen a deflationary trend in product prices due to offshore manufacturing?  NO!  Corporate profits increased, but with wages decreasing in the U.S., the collapse we are witnessing is something that would have happened much earlier except for the fact that debt was exploded to rigg the real estate market to dull the pain.

You're defending a flawed system with flawed logic, why?  You ignore that China as well as many Asian countries manipulate their currencies giving them an unfair advantage as well, why?  You ignore that our Health Care costs are the highest and that manufacturers also shift production offshore to lower or avoid medical costs altogether.  You ignore that Mexico and China have very poor human rights protections which prevent labor from organizing because that type of activity can be detrimental to ones health or life, why?  You ignore that China and Mexico do not have environmental laws that add to the cost of producing, why?

I look forward to your rebuttal. 

There is no rebutal. I don't disagree with your assessment of the global workforce problem. But simply requiring higher wages in the US won't solve any of the problems you stated. Will requiring higher wages in the US force Mexico to increase it's enviromental laws? No. Will it force China to stop human rights violations? No. Will it make American products more competitive on the world market... Hell NO. I don't ignore those things, but how is a "living wage" in the US going to level the playing field? I don't want to continue the same system, but if there is a solution, it is Isolationism not "living wages".

As a former small business owner (sold business in June 2008), it was unbelievably difficult to make a profit as it was, which is why I sold the business. If the government had required me to pay my workers more, it would have put me out of business and my workers would have received nothing.

There is only one area I disagree on:

Have we seen a deflationary trend in product prices due to offshore manufacturing? 

Inflation has been historically low for a very long time and there are many products, the jeans I'm wearing for example, that cost the same or less than they did 20 years ago. So, while there may not be deflationary pressure, there has certainly been a check on inflationary pressure.

If it were up to me, I would close all wal-marts, send the ships full of cargo containers back to China and start rebuilding our manufacturing base. That is the only solution. Forcing higher wages on US businesses, while business in other countries maintain the practices you outlined will only hurt American workers and a smaller wage for workers is better than no wage at all.

I don't think we disagree on the problem, we simply disagree on the solution.

Repeal the tax cuts for the top earners would go along way toward fixing what ails us.  Check out these articles on the subject: http://www.cbpp.org/2-4-08tax.htm and http://www.cbpp.org/1-23-07inc.htm

Naftel, Isolationism is a word that is used to defend unfair trade policies.  Just because a country decides to pay a living wage does not mean that it can't invest in developing countries for their own domestic production and consumption.  Forcing labor in economies with different living standards and economic standards to compete against one another is a game that benefits the wealthy stockholder priveleged class and is designed to preserve economic and political power.  Our problems are a result of imbalance and with the wealthy having more power in a capitalistic economy the balancing must be done to reduce the corrupt and destructive effects of the priveleged classes efforts to enhance and protect their position.  When the scales are tipped as they have been for almost 30 years the result is perhaps an event that makes the Great Depression a walk in the park.  Great article atom.

Think of that fat rude lady as the American Corporate structure. Her obesity represents all the wealth they hold onto. The cellphone is a specialized connection to other obese people and represents connections you don't have.

Now picture yourself at the back of the line, there. You are the citizenry.

There may be a few of these annoying dolts among us - but the real problem is far above us...

abusers of the system ar ethe minority.. you dont see the struggle family where the husband got sick and they just want to keep theri kids freed. it is easy to see the drug out homeless guy beggign you for money.. you wont see the proud families that find themselves in the mission.

plus a few things. a majority of the money that comes out of your paycheck is for defense,t he second biggest chunk is for your SS(which yeah probably wont be aroudn for you but that what it is for)

two clinton enacted welfare reform that only allows peopel to abuse the systems for a few years.

as for the persons weight.. i guess you havent heard of diabetes type 2?
well besides that wieght problems arent always and overeating problem.. the poor tend to get fater do to the cheap no nutrician products they buy. There have been studies on this but you tend to fint he cheapest food in he store has high calories and low nutrician.. which makes the poor peopel cost a whole whole lot more.

I agree however we have to get rid of the abusers.
for my own story.. pickign up my dog fromt eh vet.. i was behidn and irate woman threatign to call the cops on the vet cause the vet wouldnt take her food card. SHe had a cell phone as well.. years ago when they were a bit rarer.. and drove a nice cadalac and i was about to spend 20% of my weekly pay on my dog. It was offensive to watch this crazy lady. Luckily for my mental health i knew she was an extreme minority. Most peopel dont want to be on welfare.

True enough. It isn't fun.

Ire - if the rude lady in Erin's post symbolizes anything, it's not the "American corporate structure" (whatever that is) but rather bad government.

Joules -

a majority of the money that comes out of your paycheck is for defense

Is this calculation based on the idea that every tax you pay doesn't come out of your paycheck?

Otto,

if the rude lady in Erin's post symbolizes anything, it's not the "American corporate structure" (whatever that is) but rather bad government.

I should have been clearer: corporate structure = corporate oligarchy.

The "bad government" in the scenario is not readily discernable but you gave it a good shot.

Bad government in this case is exemplified by the fact that the fat lady (corporate oligarchy) is there at all, being fat and holding up the line.

That makes for an interesting extrapolation but you're applying this weird symbolism to something that it seems Erin was describing as very real and problematic.

The "bad government" in the scenario is not readily discernable but you gave it a good shot.

Not discernible? That's exactly what she's talking about. When she complains about her paycheck going to this kind of person while she struggles through her tough times, it's doesn't sound symbolic to me - I think she's being literal. And it has everything to do with bad government and nothing to do with 'corporate oligarchy'.

In fact, she's not complaining about her situation - she's complaining about her being in a situation while her money goes to people who appear to have more luxuries than she does.

You don't get the analogy so your doing a makey-up on the fly. Nice one.

I get the analogy, I just think it's silly and basically contradicts the actual scenario that Erin posted.

I am so sick and tired of having a grocery line being held up by an obese person on her cell phone trying to figure out how her food stamps card works when I don't qualify. I am supporting five people -- a disabled husband, three children and myself. I travel two hours each way to do this and to see people on assistance sporting excesses I wouldn't dream of having. Half my paycheck goes to this woman and she has a cell phone. I don't. I am not overweight. Why is someone 100 pounds overweight on foodstamps? How come someone who smokes gets foodstamps? At what point does need exist?

You should be proud of your own functional ability not scornful of her lack. She's dysfunctional for one reason or another, you are not. You might as well be saying that you are sick and tired of all the people in the world who are not as intelligent as yourself. These columns are a case in point, even though by virtue of being able to express oneself online, however badly, you are selected out as among the top 60% at least of the population. Yet 2/3 of the posts here are so lacking in insight and information as to merit no response at all. Do you despise all the people with below average intelligence in America, that would include half of the population of the country, except for one thing. Close families with one or two intelligent members tend to look after their dysfunctional relatives. So the below average members of your family, for example are kept off the bread line. What should be done with those who fall out of family care? The government has a right to take care of them, in some measure, to ensure that they don't have to spend even more on their forcible incarceration.

It costs $207 @ day to house a prisoner in Michigan. In a high security prison in Colorado it costs $179.50, and in a regular security prison in Pennsylvania it costs $98 @ day. How much is that a year? $76,000 in Michigan, $66,000 in Colorado & $36,000 in Pennsylvania, and yes Michigan is sending some of its overflow of prisoners to both these states

Let's say that 10 to 15% of a population are dysfunctional because they are not able-bodied enough to do manual labor and not intelligent enough to do white collar work, or to avoid harmful or wasteful behavior. Society has a choice, ignore them and lock them up when they commit crimes in order to eat, at a cost of more than $50,000 p.a., or assist them with $10,000 or so in food stamps. I ask you which is the intelligent choice?

Finally, a cell phone these days can cost as little as a house phone and is more convenient, would you deny her that?. She is out of shape because she is dysfunctional. There are any number of ailments where a person will become overweight without strict supervision because they cannot exert themselves physically. Did you see Jerry Lewis when he was taking cortisone for his bad heart? Sometimes a lack of compassion is a sign of selfishness, pride, or simple inability to understand any human circumstance outside oneself.

That is a major problem - horrendously bad eating habits.

Ire, I think you missed LetRobesonSing's point. The poverty stricken may become more obese because "cheap" food is loaded with crap that makes you fat. Think Burger King Fish Sandwich and fries.

Only the well-off can afford to eat the "good" food that allows you to remain healthy and fit. Think lightly grilled pompano with a mixed field green salad.

I don't know if anyone has done any studies, but I would think that obesity and poverty often go hand in hand. There has never been a level playing field in this country, although we all like to talk about how "opportunities" are abundant - and they are, if you are white, male, have an education, and familial/friends/collegiate connections - but for those who are born into poverty, we don't make decent food, housing, or education affordable or available and then wonder why they haven't "pulled themselves up out of the gutter".

We are one sick puppy of a society.

It's a combination of both things said, and throw in food education.

So many products advertise "reduced fat" (reduced by how much?) and "light" versions that just still are not healthy.

Overproduced crap + expensive fresh produce + minimum amount of time to prepare food + lack of education + social attitudes towards eating = mass obesity.

Only the well-off can afford to eat the "good" food that allows you to remain healthy and fit.

Sorry pjwrites, but this is a rediculous statement. You act as though poor people have no choice what they put into their own bodies. Poor obese people have the same choices as rich people do and not all poor people are obese. What it takes to eat healthy food and remain healthy and fit is time and effort, not money. Walking to the store and buying healthy food to prepare for yourself takes much more time and much morer effort, but costs significantly less than driving somewhere to buy fast food for every meal.

I can eat turkey sandwiches, wheat crackers, celery sticks and water for a full week at lunch for the same price as 2-3 lunches at Burger King. It doesn't tast as good and sometimes I really want that double cheeseburger, but it is cheaper and more healthy. I can afford to eat much more food than I do, but I do not want to gain weight so I always stop eathing before I'm "stuffed". Sometimes I even CHOOSE to go without food even though I am very hungry, because I know that eating every time I'm hungry or have a craving for something will cause me to gain weight. If I can eat healthy for less, while ignoring my hunger at times to control my weight, then it seems to me everyone can do it, particularly those with less money to spend on food.

Bottom line... Eating too much and excercising too little causes obesity, poverty does not.

pj,

"The poverty stricken may become more obese because "cheap" food is loaded with crap that makes you fat. Think Burger King Fish Sandwich and fries"

You make a good point - I was thinking along those lines also but was too lazy to highlite them, thanks for the clarification. As Naftel writes,

"I can eat turkey sandwiches, wheat crackers, celery sticks and water for a full week at lunch for the same price as 2-3 lunches at Burger King."

There was a long period of time where I was making very little money so Sunday was my meal day. I would prepare the weeks' meals on this day - A weeks' worth of Oatmeal for breakfast (cheap and very healthy), vegetables and fruits prepped in sandwich bags in the fridge (in the mornings I would make a quick PBJ), and for dinner is was usually chicken, veggies and potatoes. If my bananas went bad I'd make bread from them. I had it down to a science and what lasted me all week eating healthy would have cost the quivalent of 2-3 burger king meals.

Lack of nutritional education and time feature as prominently in terms of obesity as does good eating habits. A mother working two full-time jobs will not be able to prepare foods efficiently when she's struggling to keep her head above water.

A mother working two full-time jobs will not be able to prepare foods efficiently when she's struggling to keep her head above water.

Show me a single mother working two full-time jobs that is obese. I don't like that some people are in the position where they have to work two full-time jobs, but I guarantee those are not that ones that are obese.

Researcher Links Rising Tide Of Obesity To Food Prices poverty does encourage obsetity and i back my claims up with studies.

"It's a question of money," Drewnowski said. "The reason healthier diets are beyond the reach of many people is that such diets cost more. On a per calorie basis, diets composed of whole grains, fish, and fresh vegetables and fruit are far more expensive than refined grains, added sugars and added fats. It's not a question of being sensible or silly when it comes to food choices, it's about being limited to those foods that you can afford."

more studies agreeing..
and still more

it costs us all more.. cause cheapo/fast convenient food is crap.

Naftel - I'd love to show you around Columbia, SC.

It's a sad fact, but it's true.

Thanks for doing the research, JoulesBeef. It made sense to me, and now we know.

I'm not buying what these studies are selling. They were probably written by organization trying to get funding for nutrition programs. I will concede that it is possible that poverty caused obesity is a uniquely American phenomenon, but, if so, the American poor should look across the Atlantic to the millions of poor people in Africa who are actually starving to death and consider themselves lucky to be so well nourished. Maybe if the poor in Africa get a little poorer, they will start gaining some weight.

How many obese wealthy people do you really see? More educated consumers don't touch a McDonalds. Main stream consumers suck it up, thus your increase in obesity. A sedentary lifestyle promoted by too much time in front of the idiot box doesn't help. You have to lead by example! Teach your kids good habits and you'll save money on Deal a Meal later!

Naftel - it's not that poor people have -no- choices, it's that they have fewer (along with no choices for health care, etc.).

For example; ire's diet A weeks' worth of Oatmeal for breakfast (cheap and very healthy), except that some people can not have Oatmeal (it's a high potassium food) vegetables depends on which ones, some are much cheaper than others; and fruits and again it depends on which ones; are you allergic, have dietary restrictions, etc.) a quick PBJ certainly not for a diabetic nor a kidney patient nor ...) and for dinner is was usually chicken (expensive for single people) and potatoesagain high in potassium, not on everyone's diet). If my bananas went bad again high in potassium, not on everyone's diet.

This it your problem, naftel - it is just so easy to overgeneralize and over-simplify the problem; but it falls apart in the details.

Not to mention everyone with forkinmouth disease.

eriq,

Thanks, based on your informative post, I just scheduled my physical...

I've noticed there are more cookbooks out there for diabetics, have even picked up a couple because of the healthy recipes.

Not to mention everyone with forkinmouth disease.

Or anyonne on a see food died. Nope... it's just cashless wallet syndrome. Another example of personal responsibility taking a back seat to political correctness.

You can make good eating decisions as Naftel indicates, but education is key. And let's face it, the information is out there if you want to find it, but there are too many American people that find excuses why they can't - I'm too busy, too tired, whatever. It is a vicious cycle. The lazier and less inclined they are, the heavier and more out of shape they get.

But frankly, it is the same reason we are in the financial situation we are in, greed and laziness. I want it all and I don't want to do the work, this is the easy way, etc...

Ire, I think you missed LetRobesonSing's point. The poverty stricken may become more obese because "cheap" food is loaded with crap that makes you fat. Think Burger King Fish Sandwich and fries.

Because vegetables aren't cheap, soup isn't cheap, meat isn't cheap. For the cost of a BK Fish and fries you could buy a couple of potatoes and a can of green beans and feed more than just yourself. Heck, you could buy a pound of hamburger and some bread and have burgers for the family.

The fact that people are free to make bad choices doesn't take away from Erin's initial complaint and I think Ire may have been too quick to capitulate on the original sentiment.

Ire - I spent most of my adult life on a diabetic diet only to find that what is good for diabetics kills off the kidneys - high potassium foods, high phosphorus foods, high sodium foods, high protein foods - "healthy" foods are not so healthy for some. There is no magic diet. If you are going to get a physical make sure you get all the results. Nearly halk of people with advanced stages of kidney disease do not know they have it; 1 in 9 has chronic kidney disease

Persistent proteinuria (protein in the urine) means CKD is present.

Glomerular filtration rate (GFR) is the best estimate of kidney function.

Three simple tests can detect CKD: blood pressure, urine albumin and serum creatinine.

High risk groups include those with diabetes, hypertension and family history of kidney disease. from here

see also here

Table 1. Stages of Chronic Kidney Disease
Stage Description GFR* mL/min/1.73m2

1 Slight kidney damage with normal or increased filtration More than 90
2 Mild decrease in kidney function 60-89
3 Moderate decrease in kidney function 30-59
4 Severe decrease in kidney function 15-29
5 Kidney failure requiring dialysis or transplantation Less than 15

*GFR is glomerular filtration rate, a measurement of the kidney's function.

im seriously not trying to be a jerk here but if you have type two diabetes you should exercise

there have been studies that show losing weight CURED as many as 75% of type two diabetes cases

as in they didnt have it anymore

the key to a healthy diet is to eat everything including fat,cholesterol ,sodium, sugars, etc but to eat them in moderation

if you have a diet devoid of fats,sugars, etc your body will go into a starvation mode and when it does receive those items it will store them and you will get fat

diets of deprivation do not work because of this starvation mode the human body knows that it is supposed to get SOME of all types of things

if you have type one, well, im sorry that sucks

eriq,

Thanks for the info - that is good stuff to know.

htawt,

I don't think you're being a jerk - most of us could use a regular exercise routine, me included.

hard - There is nothing that "cures" diabetes. Nothing.

That said, a diagnosis of diabetes is simply a diagnosis that your body has a blood sugar control problem that involves

• your body's insulin not working or working too well
• your pancreas not making enough insulin or too much
• your kidneys cleaning too much or not enough insulin from your blood
• your liver cleaning too much or not enough insulin from your blood
• your stomach cleaning too much or not enough insulin from your blood

In your comment, these individuals may be no longer demonstrating the symptoms (i.e. the blood sugar may appear to stay in the normal range of 90 - 115 when measured) of the disease, that does not mean it is cured and, depending on the complications involved, it may still be causing damage their nerves, kidneys, etc.

These people still need to monitor their blood sugar; and to be sure it really is under control - check 1 hour after meals as well as the fasting (morning before eating anything) blood sugar - see your doctor and never listen to non-medical professionals when it regards your health, there is too much misinformation out there

hi eriq

i used to think that also but in the last year ive read two different studies on two different continents that said people with type two diabetes who lost significant weight, up to 75% were no longer diagnosed with diabetes

so yes that would seem to me to be a cure

if youd like to argue with the doctors in the study feel free to look them up

Good article to just sit back and listen.  My one comment would be on nutrition in school lunch menus. The poor eating habits at home transfer to the schools. The kids won't eat the "good" food, kids just toss it out. So they serve the junk food kids will eat.

The idea of trickle-up economics does not mean that the Government gives money to the poor or middle-class. What it means is that tax policy is written with the recognition that the people are the driving force behind the economy. It forces companies to compete for our business instead of the other way around.

God, I wish I had said that, Mhally. Even more, I wish it didn't have to be said! It should be assumed as obvious. The sad thing is, that in Taiwan, (first of the Asian Tigers), China, Vietnam, Norway, Sweden, the rest of the EU, all the countries that vie with us now for exports to other countries; in all these places it is so ingrained in their national politics, that it is the expected thing, not that the arguments don't have to be made, but they are winning arguments. I suppose it is difficult (but necessary) to trace the inflation in house values back to the inflation of the dollar, and the crash to the loss of jobs, but ask any economist and he will try to spell it out for you.

There is a difference between Government hand-outs, for which there will always be some limited need, and targeted spending for developmental reasons. Without the latter we can and will fall behind in terms of leading economies in the world and living standards. In some respects we already have fallen behind, but no one seems to want to dwell on that unpleasant reality. Per capita crime figures, prison populations, education, longevity, infant mortality, and bankruptcies because of illness are among the measures of comparative quality of life. Relative decline in comparative GDP (compared to the rest of the world) is both cause and effect of this decline, as in a feedback loop. We'd need calculus to prove which feeds which.

Don't stop me if I've said this before because it's important, but the general thrust of the additions made to the bill passed by the Senate is in the right direction. The new government will be like a proprietor who has just spent more than he should to take over a failing business with good brand recognition. He still has to borrow and spend even more to restructure and redirect his acquisition, or he will fail. A good example is Lee Iacoca when he took over Chrysler on the verge of bankruptcy in 1979:-Wikipedia

Realizing that the company would go out of business if it did not receive a significant amount of money to turn the company around, Iacocca approached the United States Congress in 1979 and asked for a loan guarantee. While it is sometimes said that Congress lent Chrysler the money, it, in fact, only guaranteed the loans. Most thought this was an unprecedented move, but Iacocca pointed to the government bail-outs of the airline and railroad industries, arguing that more jobs were at stake in Chrysler's possible demise. In the end, though the decision was controversial, Iacocca received the loan guarantee from the government

My point being that the new government will have no choice but to do the kind of targeted spending that the extra $100 billion on the Senate bill appears to guarantee in some respects. Ibrought up the Iacoca episode to show that this kind of rescue is nothing new, only the magnitude, some of which is due to inflation! (I've already pointed out that since 1980 inflation means that $1 billion dollars in 1980 would be worth $2.5 billion dollars in 2008. More accurately, $780 billion would be worth $310 billion dollars in 1980 ... still a sizable sum, but less shocking.

Personally, I would have gone for an accommodation which revised the old mortgage contracts to a rent to own type of agreement. The defective securities would have to be bought at a discount which reflects the decline in value and the level of risk entailed, (as with a debt collecting agency purchasing a company's bad debts.) The investment company would be able to write off its shortfall as a non-taxable bad debt, which they would have done anyhow. However this bill at least demonstrates the kind of approach which will have to be made to FIRST rescue the housing industry, and THEN rescue the economy. There's no other way.

Yes, and Ford and Gm were so happy that Chrysler had their loans guaranteed and could pay lower interest rates resulting in more competitive pressure on Ford and GM.  Chrysler was not a success story, where are any of the Big Three now?

In the solution is not to bail out the housing industry. We overpaid. When one overpays one loses money on that investment. No matter what anyone does in the short run, if we overpaid than there will be a loss at some point in time. At least that loss should be absorbed by Wall Street as much as Main Street. The point is that we all must "write-off" the losses which we have incurred---and I, for one, am not happy about it. C'est la vie.

the solution is not to bail out the housing industry ...
The point is that we all must "write-off" the losses which we have incurred---and I, for one, am not happy about it. C'est la vie.

Socrates, it sounds like you are making a case for non-intervention. I am contending that there is still work to be done that only a government can do. Evolution does a fine job of synchronizing a system over time, but like the "mills of the gods" it grinds "exceeding slow." We don't have time to let the system evolve and let that survival of the fittest philosophy come into play. That's where government needs to step in. We already have the institutions, some since the turn of the last century. It's just that your conservative approach tend to reduce their effectiveness.

Even the economists are ignoring the point that I made earlier. There are not one but two issues to be considered with the housing crisis. One is the obvious one of the housing bubble which happened because buyers were persuaded to speculate on the probability that their houses were going to appreciate in value so they could accumulate equity in excess of the mortgage price even with little or no down payment.

The second issue that is often ignored begs the question, why did the value of houses suddenly stop appreciating? There's usually a precipitating factor. In this case there was more than one. (a) One was inflation which more than doubled in two decades, and then spiked suddenly with the rise in oil prices, thereby driving up the cost of living and causing some defaults outright. (b) Another was that job pay has not kept pace with inflation. (c) A third was that unemployment began to rise as manufacturing jobs went overseas and export sales began to sag because of competition for our overseas markets, and finally (d) More than a million people declare bankruptcy every year because of medical costs.

I forgot to mention that (e) education costs are sky-high thereby reducing or slowing down college enrollments. There are three other markets larger than ours, China, India, and the European Union which is about twice the population of the US. China and India rather more and less that four times as large respectively. This means we have to educate and train our man-power much more intensively in order to keep up with the productive and especially the innovative powers of these more populous countriesin particular and the rest of the world in general. Otherwise we will always be importing more than we are exporting with a concomitant loss of jobs.

So, the point I'm making when asking why housing values stopped rising, is that the root causes of our recent economic decline are macro-economic problems which will still be there after the real estate market evens out, unless we recognize them and do something about it.

Clarify something for me, please. Is the goal to pull people up and out of the middle and lower classes?

The OttO Show,

Clarify something for me, please. Is the goal to pull people up and out of the middle and lower classes?

No. Although it would be nice to have a system that doesn't push the middle and lower class even lower.
The goal is to put power into the hands of the American Citizen.

What's the relationship between power and lower class?  The idea that a lower class would yield power and remain lower class seems at best to be a bit short sighted.

What's the relationship between power and lower class?  The idea that a lower class would yield power and remain lower class seems at best to be a bit short sighted

 Well, it is possible, in a variety of ways, some benign, some malignant. It's called populism in one form.  A benign example would be that of Obama raising all his money from small contributions. What about MLK, why was he killed, wasn't it because he was amassing too much power? Then you can examine the terms rabble-rouser, or demagogue, although these latter two eventually end up creating their own upper class, if successful in mobilizing the lower classes.

people need to be remidned the good book say "god helps those that help themselves"
according to them he gives us free will so that we can choose to embarrass him.
free will means we wil make the wrong choices sometimes.
"god's plan" is a canard to allow us to abdicate responsibility for our own actions. and if it was true.. it woudl disprove the foundations of christanity.
If god has a plan.. there si one imutible truth.. no one knows what it is.

The good book says an awful lot of things and not all of them agree with each other.

If Christ ever does return to earth, I hope he brings along his blue pencil and clears a few things up.

The "Good Book" does NOT say, "god helps those that help themselves".

supply side might work.(er better). if we didnt let anyone out of the country.
It seems rediculosu to reduce the sacrifice of corps that send so much over seas.

still i say woudl work beter but it cant work due to "keeping up with the jones" syndrum and that humans have a thing called jealousy and greed.. really you can see this in action with a simple experiement.. line up en of your friends.. gvie on 100 one dollar bills and say take what you awant and pass it down... guarenteed most of your fiends will leave with nothing,

That's pretty much why I said to only "start thinking about it", G. I do believe that there is an important place for business owners in a democratic form of capitalism.. .they (the proprietors) just don't want to believe in it.

I'm glad we agree. I'm too stressed today to argue with people.

smart regulations that foster competition is the only way to have a healthy market.

we need to drop weather or nto regualtiosn themselves are good or bad and start discussing which oens are good and bad.. as no regualtiosn is juts as bad as too much.

I'm demanding a gold plated car.

POOF!

Ooh, there it is! Thanks.

Otto!! Demand has a specific meaning to economists and that's how it is used in economic arguments. It has nothing to do with barking orders, that would be naive. Is that what some Republicans fail to understand? I hope not! It actually has more to do with a combination of NEEDS and WANTS, than with anything to do with attempted coercion.

Demand stimulates supply. Hundreds of new products fall by the wayside every year because there was no demand for them. Demand is need and you have to tap into an existing need. The truth is that a wise govenment pays attention to both sides even when it gives lip service to only one side. We see what happens when a dumb administration actually believes its propaganda and neglects one or another side. The balanced equation is so obvious as to be trite: Demand = Supply. When either side gets out of whack the economy suffers.

KyleN

...The idea behind it seems to be take from the most productive and give to the least productive...

Actually, The idea is not about taking from one and giving to the other. The idea is, when deciding who to take less from, choose the middle class not the rich.

The idea is if you tax something less is produced, the less you tax the more is produced. It's that simple.

Exactly, it favors those with capital, it favors the rich who own the means of production. The flaw in the system has always been what T. Gracchus mention in the post immediately above yours.

If we lay off taxing the production of SUVs and GM produces an oversupply of SUVs, they are not only inefficient, they are grossly inefficient: they are producing what the market does not want. Supply side reduces the compelling need of producers to study their markets. Supply Side subverts the whole concept of the market, which is demand driven and one can argue for market creation via marketing campaigns (a supply side function) but they can only go so far.

As Stated in #12, supply siding can not work in a sick economy. Demand side or, "trickle up" not only can work, but it is like marriage: it works in sickness and in health, for richer or poorer...

Who to take less from is supply side, it doesn't apply to rich or poor it's simply changes in tax rates. Expenditure programs that grant money to people for various reasons are different both in incentives created and distortions. The reason supply side gets confused with rich is because the rich pay such a high proportion of total taxes that just about any cut affects them more than the rest of us.

Of course if favors those with capital as capital is the entire purpose. Supply side is not about equalizing wealth it's about generating new wealth. If you use a yard stick that assumes a fixed sized pie then you will both misunderstand the purpose of supply side and you will see it as bad. Those with capital will grow faster than those without, that is true in any non-punitive system. The higher you make the rate of growth the faster the discrepancy rises even if the overall wealth is higher.

So what it boils down to is which is a better idea everybody having more or everybody being more equal. Personally I'm not rich, not even hardly middle class by many definitions but I don't care how many cars, houses, yachts other people have. I care that I can be fairly poor in a nice home with multiple cars, computers, TVs, and still be 'poor'. Meaning I measure my wealth against myself not against others.

I don't see how trickle up works in anything as to date I have seen no theory for trickle up just a campaign soundbite. If by trickle up you mean ideas like the 'stimulus' checks earlier this year what was the full effect? At best it temporarily increased incomes which again at best led to unsupportable growth as the demand generated isn't fixed. If people when given capital used it to increase their productivity you'd have a point however the vast majority of it went to direct consumption which was unsustainable and now the effects wear off while the debt remains. Not a good policy.

KyleN: The reason the stimulus package effect was temporary is because the stimulus itself was. You can't water a garden and then say, "OK, that's done."

Trickle up makes those tax benefits a permanent part of capitalism. When a consumer driven economy puts more money in the hands of consumers through lower taxes and higher wages, jobs are created.

When business is bad, like it is now, a tax benefit to businesses only puts more money in that businessman's pocket. He won't hire anyone new, because ther's no need when business is down. He might purchase some foreign made equipment that will increase his productivity and allow him to actually eliminate jobs. This is the failure of trickle down, and one need only look over the American economic landscape to see it.

The stimulus package wasn't a tax cut, it was a spending program thanks to additions made to get it passed through the Democratic Congress. Were it a tax cut I fully agree it would be much more permanent effect. And ironically to this discussion it fits supply side theory perfectly.

Businesses shouldn't be taxed in the first place because there isn't such a thing as a business essentially and a tax levied on them is simply another way to tax consumers of their products. It would be more efficient, and more 'fair', to do away with that fiction and tax real citizens not organizations of citizens. A business tax in a fantasy market with perfect alternatives (meaning can't pass on the cost) would be the opposite of the bailout - socialized gain, privatized loss. In good times the profit is taken, in bad times the loss is borne solely by the owners. It is one reason for the bailouts, the 'balance' of this idea. These companies paid large taxes when times were good and want it back now that they are bad.

There are many failures at work here today across a broad spectrum over a long time all working together. It isn't one cause, there was simply a straw that broke the camels back so to speak. I don't see why the socialists don't want to get behind a fair tax plan as it could be made to be as redistributive as any other tax plan and allow better collection. They just get caught up in the romance of harming evil businesses instead of actually serving their own ideology.

A major rewriting of the tax code could help alleviate the root causes of the problem. If people want to call it trickle up whatever as long as the long standing distortions, redirections, loopholes, etc are removed and incentives are clearly defined without contradictions. Senator Obama talks like somebody told him part of that and he forgot the other half when he starts proposing more spending programs ala stimulus checks. It's weird. Senator McCain talks like somebody told him some of that as well but he can't see less rules as leading to greater control so you get more hybrid bs that will fail.

Just tell me how a business tax cut in today's economic climate creates jobs, because that is the mantra of supply siders. I don't think business is "evil" at all, nor do I want to "punish" the wealthy. I just don't think its very American for the wealthy to take advantage of the working class and the tax loopholes just because they can.

You are correct, of course, that a business tax is passed along as cost of product, but how does that cost jobs, exactly? If customers are unburdened by taxes, they have the purchasing power to absorb those costs as part of the purchase price. Hell, its done already with gasoline and cigarettes. I don't see any oil or tobacco companies going out of business.

The stimulus package was promoted as a "tax rebate", not as a spending bill. All I'm suggesting is that it worked-do it again and keep it coming.

Taxes change when a particular venture is profitable or not. Removing taxes would change that mix favorably on the growth side, meaning any projects that are currently borderline and thus not done would be favorable and thus could be done.

Supply side hasn't been fully tested because Republicans never cut the size of government to correspond to a cut in taxes which is required for it to work. If you keep spending and run a deficit you offset your benefits by making lending harder in a crowded credit market. I think most Republicans, in power anyway, keep thinking supply side tax cutting is somehow equal to Keynesian theory of deficit spending - they are not!

To answer your second question. A tax raises the cost, the raised cost raises the price, the raised price decreases demand, decreased demand reduces the need for workers to satisfy it. When you get into this area of public finance economics people always talk about price elasticity of demand meaning certain goods like gasoline are purchased at largely the same volume (equal demand) no matter what the price thus a tax doesn't decrease demand and thus will not lead to a loss in jobs. The counter to that is the money comes from somewhere if people spend more on gasoline then a increased tax on gas might not cause gas stations or oil refiners to lose workers but what about movie theaters when people go less because they spend more on gas and have less left over for other things? It's all interconnected.

The stimulus package started out as a tax rebate but was changed into a spending program. It might have been more effective were it left as a rebate instead of expanding it to people who never paid taxes in the first place however I doubt it. The effect was minimal and the idea is a direct descendant of Keynesian economics with all the well documented pitfalls therewith. Your idea of a permanent cut is a whole different story it could have a actual real effect but again it has to be a real tax cut not a spending measure, meaning it can only include people who actually pay income taxes.

KyleN, You packed a whole lotta stuff into four paragraphs, and the first one made no sense at all to me. But the rest I generally agree with. I think we have more common ground than either of us knows due to tha fact that we seem to be talking past each other.

My main theme is that the economy, being that its all sick right now, can't operate under ANY kind of standard model.

The proposals by Senator Obama that he calls trickle up is simply an expenditure program, if combined with higher taxes then it's not a new idea just redistribution under a new name.

Come-on Kyle, you know better than that! Don't obfuscate the argument with a deliberate misrepresentation of a reasonable point of view. Debate the point don't lie. The greatest redistribution of wealth in the history of the nation just took place in the lst 8 years of Republican rule. A con-man can get into your wallet faster than the tax-man ever could.

The SBA was formed in 1953 to give small businesses a chance at entrepreneurial activity. The large businesses with their access to capital were making it impossible for the small businesses to compete or resist being bought out. The computer industry burgeoned in the '70s and '80s because small companies (under $40M p.a.) were able to get the kind of concessions that the new bail out bill is attempting to introduce. I should know I worked for one for seven years. This has nothing to do with redistributing wealth. It has to do with encouraging development at the grass roots level. Contrary to popular belief, more than 60% of all production in the USA is derived from the small businesses. That's where the greates job losses and fall off in GDP has taken place. Fixing this imbalance is is all about what the Senator is referring to. It's another name for demand side economics as expounded by Keynes. Investopedia Says:

A supporter of Keynesian economics believes it is the government's job to smooth out the bumps in business cycles. Intervention would come in the form of government spending and tax breaks in order to stimulate the economy, and government spending cuts and tax hikes in good times, in order to curb inflation.

Sounds very relevant to our present condition to me! Doesn't say anything about wealth redistribution.

Yes, and weren't many of these companies responsible for the bubble and subsequent crash of the tech stocks?  Again, artificial wealth was created and a few benefited with the effects still being felt.  Why do you think that India can compete so well on off-shore tech jobs?  Because we paid for the lines which link the US to India, the company went bankrupt, and the lines were picked up for a song.

Accusing another of lying doesn't somehow make your own statement true.

Senator Obama's plan is a tax credit, read it right from his website. A tax credit is not a tax cut. A tax cut means one pays taxes and they are now paying less taxes. A tax credit means some who pay taxes pay less and some who pay nothing get money - like the EITC. Since closing in on half of American's pay nothing his program is most certainly an expenditure program. To be otherwise he needs to reword his tax credit plan to be above the line.

Senator Obama intends to pay for this plan by eliminating the cap on payroll taxes, those that pay for the major entitlement programs. So we have established he is giving money away not reducing taxes, and he is getting it by increases taxes on those earning more than the current cap so how is this not redistribution? He even uses the marxist code works parroted last night by Senator Biden. A 'fair' economy not a healthy economy is their plan.

The tax-man has one huge advantage over the con-man, he doesn't have to convince you of anything he has the guns and right to take it from you by force. The con-man at least has to get you to agree to something.

Redistribution is Keynesian but Keynesian isn't redistribution. It has to do with government intervention in the market because a handful of politicians and their appointees 'know' better than the rest of us how to run our lives. Unfortunatly for them it's never really worked out that well. It has to do with lack of information, the cornerstone of the market. It's hard to know how to act in somebodies best interest when you aren't them and don't even know them and harder yet when you try and make it blanket rule to apply to everybody. Senator Obama's redistribution plan is Keynesian in nature as it attempts to tell us all the better value for our labor than what we would otherwise choose for ourselves.

The idea is that if you tax something less is produced!

Well that's the dumbest idea I never heard! (Groucho Marx)

How simplistic! It depends on what the tax dollars are spent on.

• If I tax the producers of potatoes in Idaho, and then spend some of the tax dollars building an efficient road system to New York markets, more would be produced not less!
• Then if I teach the children in the schools that even though potatoes are carbohydrates they are actually better for them than refined flour, I'd be doing even more for the potato market.
• Then if I spent a little more on research that selected the best strains of potatoes for each area that would be even more beneficial wouldn't it.

See, nothing's as simple as a slogan, not even e=mcc. Acceleration due to gravity, for example, is 23 feet per second per second, but a feather doesn't fall at that rate, nothing does actually, but it's true. A little learning is a dangerous thing. Axioms are tools best left to the experts!

MIDDLECLASSMOM: I totally sympathize and share your anger. However, it just isn't that simple. The problems on Wall Street and the monster banks and insurance institutions that those problems have created are so gynormous as to create an avalanche throughout the economy. It is trickle down's worst nightmare.

As a result of Monday's failure to pass the bail out proposal in the House, which would have cost taxpayers $700 billion (spread out over time in orchestrated installments), the market took an historic puke of 777 points, costing taxpayers $1.2 trillion in just one day.

Though the president and his minions presented their case very badly as a rescue for Wall Street, the sad truth is that all of us are going to suffer in the form of inflation, stagnation, job insecurity and loss, higher taxes, loss of retirement funds, and a long list of other consequences which the failed rescue will precipitate.

Wall Street had a party that has lasted almost ten years. In Bush's own words, Wall Street got drunk. The middle class was not invited, but we're the only ones left standing. Guess who picks up the tab? Yes, I understand and share your anger but, in the end, such emotional responses are in vain.

Middle Class Mom,
I'm sorry to say that the old cliche about cutting off your nose to teach your face a lesson seems to apply here. What's the point of hacking the shins of the man holding a gun to your head just because he's wrong and deserves to be punished. I'd negotiate first, and only when I'm free from his clutches would I talk about punishing him.

Why is it so hard to understand that these people have the money we need to survive tied up along with their other worthless assets? I'm talking about your next pay check, middle-class mom! If they declare bankruptcy, my bank doesn't get paid what it's owed so it can't honor its promises of credit. A close relative of mine just got turned down, or stalled, for a mortgage which was a sure thing all along, until first thing Monday morning.

Then let them try to figure out how to educate their kids and give them the opportunities they need to get even a start in the world

I don't think you have a clear idea of the kind of people we're dealing with here. Back in the 80's a guy called Bunker Hunt and his brother worth more than $3 billion between them, ($5 billion today), made a massive deal that went sour. Bunker Hunt was complaining to some reporters that he was almost broke as a result. So how much are you worth these days, they asked him. "Only about $600 million," he replied. See what I mean? To them, getting into financial trouble is like the Red Sox losing the series, a setback for a season that's all. A setback for them is a total loss of savings for me. I don't care if they are helped or hurt, by these measures. I'm interested in how much pain I and mine will be saved. I suggest you should ask those kinds of questions. You can't hurt them.

You can't win with a bad attitude.

Maybe being turned down for a mortgage will cause the price to be reduced which will result in a lower mortgage.

What's wrong with finishing high school, going to college, working 40 hours a week, having just the number of kids you can afford to raise, exercising more than walking to the fridge, and eating like a normal human being?

That's a tall order for a significant percentage of any population. The gifted will always do well as long as they're not dysfunctional. Some people just can't manage it. It's not a moral issue, they do what they want and suffer the consequences, they can't help it. Some might make it if they have help. What's wrong with helping them? I'm not saying stop preaching what you're preaching, it could help, but here you are preaching to the choir, I can tell. On the other hand I just don't want their misery to affect my joy in life, that's all. So we all make concessions to their dysfunctionality. Social services are much much cheaper than the heavy hand of the law, that's why we provide them. For the sake of peace.

That's a tall order for a significant percentage of any population.

Then our country is not what it used to be and we will probably never get it back.

Then our country is not what it used to be and we will probably never get it back.

What history books have you been reading Naftel!?? I know, it's not the history books, that's distorted your perception, it's living a sheltered existence in a restricted community, where the talented and the endowed separated themselves from the rest of the world and pretended to their families that their idyllic existence was the norm for the rest of America.

Haven't you heard of Al Capone, and the Bowery, and the ghettoes of all the major cities? Have you never heard of the subsistence existence of the migrant workers and the sweatshops of Soho? Have you never heard of slavery and the Indian massacres? I wish you'd be more specific, what era is it that you are nostalgic for?

As if I didn't know? It's not an era you are nostalgic for, it's a place, a little area in suburbia where a tiny percentage of the population isolated and insulated themselves from the realities of the rest of America and the world.

The truth is, Naftel, recession and all, for the majority of the people who've ever lived in America up to this present moment in time, the best time to be alive in America is right now. Go read some more.

The truth is, Naftel, recession and all, for the majority of the people who've ever lived in America up to this present moment in time, the best time to be alive in America is right now.

I don't disagree with this statement.

Cutting mortgages in half only helps those who had enough money to buy a house in the first place or who still have a mortgage - shortsighted.

For years there have been proposals - negative income tax, etc. - to put more money in the hands of people who will spend it thereby increasing the economy (demand side - herein called "Trickle up"). In response, the wealthy came up with supply side - what they fail to mention is that without an open, free, market; however when you have private ownership of the supply side there is a need to control, and therefore not increase supply. Supply side was a dumb idea from the beginning, an idrea that had no chance of working as it ignored reality.

Hetep and Respect eriq samson, I think we are on the same side, the Demand side.

Cutting mortgages in half only helps those who had enough money to buy a house in the first place or who still have a mortgage - shortsighted.

You are right my Trickle uP is for this immediate pending vote.  700 B to everyone, cut mortgages in half to make the D instruments that are worthless, worth something instantly. The idea is simple half a loaf is better then no loaf. The institutions  may have to  cut salaries and  the stock  holders  would have to take less  in  the short  term,  but  liquidity would  be back in  the system.

Long term your right, the system must be re-engineered from top to bottom So I propose  Aunk Trickle  up short  term and  Eriq'  Re-engineering long term.  What  do you  say, do we have a deal?

As for cutting mortgages in half, please understand that the total value of all the housing in America is about $21 trillion. What with second mortgages and the present turn around rate for houses, probably most of these houses are under at least 50% mortgage. To cut all the mortgages in America in half would require the govenrnment to transfer about $5 trillion to those same investment and mortage backed securities that have plundered the nation with false paper. That figure of  $5 trillion alone means this is just a pipe dream launched by Whoopi on the View some time back.

Minor problem with the math there. Try $500.00 Of which they would take about $150 in taxes, leaving you with $350. Less than your stimulus check.

Yeah - You gotta snopes those Ellen. I use that regularly when something sounds too good to be true.

LOL

That's one sure fire way to make $500,000 instantly worth about a $1.50.

F-3,

You sound like Maher - that was hysterical.

They pool their resources and come up with enough water for each of them to have a glass.

What are their resources and where did they get them? Why did they pool the water together and give it to someone? How it relates to trickle down economics is elusive to me. You don't think that the water would be a valuable commodity and begin being traded or sold amongst those people? That some will drink their glass down in one gulp and have to rely on someone else's, someone who perhaps kept a swallow for themselves and then put the rest on the market, a market that they then attempt to grow and compete over? That's how wealth is built, how jobs are created and how needs are met.

I'm still looking to identify the magic that would realistically allow the least successful in a society to brandish the most power.

OTTO: Ask GW. He's about as unsuccessful a person as I have ever heard of, yet he has become one of the most pwerful people on the planet.

Didn't Lenin, Stalin, Castro, and Chavez implement trickle up economics?

How do you mean, BKnudson?

BK - I understand in your misguided way what you think you are trying to say (boy, is that convoluted) but - in Communism there is no "up" to trickle up to; there is no logic to what you said

If you understand, eriq samson, please explain to me since BK seems to have left. I am honestly confused by BKnudson's reference to these socialist tyrants and the connection he believes there is between them and anything I have said.

From each according to his ability, to each according to his need (or needs) is a slogan popularized by Karl Marx in his 1875 Critique of the Gotha Program.[1] The phrase summarizes the principles that, under a communist system, every person should contribute to society to the best of their ability and consume from society in proportion to their needs, regardless of how much they have contributed.

This may be what BK is refering to as trickle up economics. People, regardless of what they produce are given resources to use "according to their need." The fundamental problem is that under such a system you will find that production is discouraged, since you are only going to get what YOU "need" anyway (and the Government will tell YOU what YOU need) and people that produce less than you are going to get the same anyway.

BINGO Naftel!

I am back from wife mandated job, earning more than my fair share, and making sure that most of my money goes to those who have been deprived the oppurtunity to graduate from High School, spending 25 years in the military, and working 60-80 hours a week.

The basic premise of Trickle up economics, and communism is that the Nanny stste guarantees a certain minimum, and in many cases, maximum, standard of living and pay for the masses, regardless of each individuals input to the whole.

So I would get the same government bennies and caps as my deadbeat brother, evenif I worked 50 hours a week, and he sat around drinking coffee all day. I would also be capped from improving my life, no matter how much hard I work. Ergo, the lazy will sit idly by knowing that thier basic bodily functions are taken care of, and they will not have to perform to get by. The performers will shut down because they will learn that the extra effort doesn't mean anything.

This has ultimately happened in every socialist and communist country that has ever existed. Stagnation, and corruption.

since you are only going to get what YOU "need" anyway ... and people that produce less than you are going to get the same anyway.

So you are calling every corporation I've ever worked for a communist entity.

So you are calling every corporation I've ever worked for a communist entity.

Not at all... small corporations are more like dictatorships and large corporations are more like Kingdoms, wher ethe CEO is King, the board of directors are the "knights of the round table", middle management are vassles and all others are surfs. If you have ever run a corporation, as I have, then you know they can not operate any other way.

If corporations were communist entities, workers could stand on the loading dock smoking cigarrettes all day, still get paid and NEVER get fired... they would get according to their need regardless. Try that at your workplace and see what happens.

I get it now...

If corporations were communist entities, workers could stand on the loading dock smoking cigarrettes all day, still get paid and NEVER get fired...

So since corporations are like "Camelot" the CEOs, Boards (all incestuous throughout industry and gov.), and upper level execs sit on their A##es all day doing nothing and get paid ungodly sums of money for doing so. Much better system...

Naftel - So much prejudiced nonsense, I have no idea where to begin; Oh yes, let's stgart with :The fundamental problem is that under such a system you will find that production is discouraged," which is false; nothing is discouraged. You might say it is "not encouraged monetarily" but then you would find out that this is not true either, you can use excess "profit" to establish an encouragement system, it's just that the base "to each according to their need" would be done first, and this assumes that you are charging more than enough just to cover costs (otherwise you might be paying only the actual cost of production, transportation, stocking, etc.' in other words gasoline might cost you $1 per gallon, Milk $1 a gallon, cars $5,000, etc. instead of the current prices which include exhorbitant costs for expensively overpriced executives (do you realize that on cars like Cadillacs, BMW's etc.; more goes into advertising and executive salaries than the costs of materials or the costs of workers?)

BK - The basic premise of Trickle up economics, and communism is that the Nanny stste guarantees a certain minimum, and in many cases, maximum, standard of living and pay for the masses, regardless of each individuals input to the whole. again with the same mistakes as above, and, No, trickle up is not the same as communism which is not the same as the Nanny state (why does it seem like I am talking to some AM Radio conservative pundit here? Where is Stephen Colbert when I need him!) I have yet to see any society have a maximum standard of living (although it makes sense that someone somewhere might) or a society completely without incentives for performance.

That said, the proposal I have seen for a maximum limit here in the US of 40 times base worker pay is a little high - if the free market actually existed and worked, studies done in 1989 discovered that in Japan and Industrialized Europe the executives were making on average 17 times their base workers pay, but at that time American executives were making 2,014 times base worker pay.

That said, Trickle up could work in an incentivized way (i.e. some getting more and some less based on criteria that are important to society like performance); just because you want it to be some other way doesn't make it so.

So I would get the same government bennies and caps as my deadbeat brother, evenif I worked 50 hours a week, and he sat around drinking coffee all day. I would also be capped from improving my life, no matter how much hard I work.

This has ultimately happened in every socialist and communist country that has ever existed. Stagnation, and corruption.

In Actuality there has never been, on this planet, a socialist or communist country; there are those who had that as a goal but recognized they were only on their way. Also, even in those countries run by the dictators you mentioned, none has had a non-incentivized system; none has had "cap's"; I have no idea of where you get your history but this has not happened (the closest might be the Kibbutzim of Israel, particularly those around 2,000 years ago, hint hint)

And that is also a big part of the problem; since when is monetary reward the only reward / incentive? If corporations were communist entities, workers could stand on the loading dock smoking cigarettes all day, still get paid and NEVER get firedNo, they would get fired and be back on a minimum (call it unemployment) until they found a job and could get work-incentive pay again; let alone the positive feeling of contributing to society, etc.

Instead of this religion of what "capitalism" or "communism" is, (according to conservative talk radio pundits), it is better to educate yourselves and get a real understanding.

BKnudson-I don't think you are reading me accurately at all. I don't like the idea of "giving" anyone a salary. I think everybody ought to work for a living if they can. But, realistically, there's always going to be some who are too lazy, too uneducated, too undisciplined, too unlucky, or just too stupid to get a job. I don't want them hanging around on the streets panhandling. I'm talking about freeing up the consumer base of our economy. Taxes are killing purchasing power. 2/3 of the economy is consumer based. This is why Bush told people to shop as a response to 9/11. He may have been clumsy in his delivery of this message, but he was right.

I do not advocate socialism. Hell, if I had the misfortune of being born in a Marxist country, I'd be the first one they'd shoot. But somebody has got to pay the taxes to keep the roads repaired, the army fed, and sustain "the common good" as defined and argued about elsewhere.

My point is that those taxes should not be dumped on the most dynamic engine of the economy: the consumer. That's not socialism, that's just common sense.

The fundamental problem is that under such a system you will find that production is discouraged," which is false; nothing is discouraged. You might say it is "not encouraged monetarily" but then you would find out that this is not true either, you can use excess "profit" to establish an encouragement system,

In theory this is true, but history doesn't bear this out. In practice, in places like the Soviet Union the "excess" went straight to the pockets of the elite through corruption, ironically, not unlike what is happening on wall street. But the issue we are discussing here is production. Is there a socialist country that produces anywhere near what the United States produces? Look at the Russian aerospace industry. Most of their modern fighter planes, as well as comercial airliners, are copies of airframes developed in the United States. Why? Beause there is no incentive to come up with their own design so they just copy the country that has THE BEST DESIGNS IN THE WORLD.

Examples: Mig-29, First Flight 1983 bears a striking resembelence to the F-15, First Flight July 27, 1972. It took them 10 years to copy this design.

Tupulov 204, first flight January 1989, bears a striking resembelence to the Boeing 757, First flight Feburary 1982... only 7 years to copy this design.

Tupulov TU-160, first flight December 1981 ---- Rockwell/Boeing B1-Bomber, first flight December 1974. Again, 7 years

The Russians even tried unsuccessfully to copy the Space Shuttle

I could go on... there are plenty of other examples from other industries as well. Yes the Soviets did come up with some of their own designs in the 50 and 60s. But ALL major developments in airframe design and manufacturing and avionics have happened in the US or other parts of the Capitalist Western World and were coppied by others, especially socialist states like Russia and China. So far they haven't introduced their knock off the F-27/35(first flight 1997). They are usually 7-10 years behind the curve, but this one will be harder because they are way behind on producing the advanced materials used in these airframes. I am confident they are working on it as we speak. Look for a maiden flight around 2012. Please point me to one example of where an American company knocked off a Soviet or Chinese design? When you don't have incentive to come up with your own designs, it is easier to just copy off your neighbor. The above is well documented fact, not "So much prejudiced nonsense."

Ire:

So since corporations are like "Camelot" the CEOs, Boards (all incestuous throughout industry and gov.), and upper level execs sit on their A##es all day doing nothing and get paid ungodly sums of money for doing so. Much better system...

Three things:

1) You're really riled up about this... why not march into your bosses/CEOs office this morning and let him know that you feel this way. I think he will agree with your asessment of the effort he has put into his accomplishments.

2) You will never get to the point where you can sit on your A$$ all day doing nothing and get paid ungodly sums of money with that attitude. In fact, you will get NOWHERE unless you work for the Government where expectations are much lower.

3) There are plenty of non-capitailst countries you can move to in order to avoid this system that disgusts you so. Maybe making copies of American blueprints for the Russian aerospace industry is up your alley.

Whatever you decide, don't expect me to turn my company over to the%

Actually, Naftel, you sound much more riled up than I do.

Just stating facts... are you going to do any of the three things I suggested or just sit and complain about the corrupt system and horrible people that are taking advantage of you and ruining your life?

First:  You've got fact and opinion confused.

Second:  As far as offering up options, you don't have the horsepower. 

I am impressed with the convoluted logic that turned "trickle-up economics" into communism.  As I have stated before.  The basic idea of trickle-up economics is to set tax policy to allow the people to be the driving force in the economy.  Over the past 25+ years we have seen the tax code written with the notion that if it's good for business it's good for everyone.  The reality is that has not been the case.  If you want to make the argument that trickle-up economics is akin to communism then I think it's fair to equate trickle-down economics with fascism......

So since corporations are like "Camelot" the CEOs, Boards (all incestuous throughout industry and gov.), and upper level execs sit on their A##es all day doing nothing and get paid ungodly sums of money for doing so. Much better system...

If you think that high level executives sit around and do nothing all day than that might be one basis for this bizarre class envy that's dripping on this board.

First: You've got fact and opinion confused.

Second: As far as offering up options, you don't have the horsepower.

Again, you are all talk and no action. No response that has any meaning at all. Not one sentence about my last post. No critique on my misguided analysis of the world aerospace industry. Nothing... Not one meaningful comment... only this useless drivel. Put some thought into it... man up... Which part of my post about the aerospace industry was opinion disguised as fact? Name one socialist country that leads the way in any industry. Take the challenge. Prove me wrong. Show me the great accomplishments of Socialism. You sit there and throw ineffective insults at anyone who disagrees with you, while completely ignoring every substantive conversation that doesn't agree with the world you want to see. And you call THAT horsepower... well I guess if you drive a Prius you a lacking in point of reference for that annology. Anoyne who reads this thread will see right through your meaningless facade... you've got nothing!

mhally

I am impressed with the convoluted logic that turned "trickle-up economics" into communism.

I may have gotten a little off topic and caused some confusion, sorry. I agree with trickle up economics... It's called tax cuts and I say bring them on. The ultimate tricke up would in fact be no income taxes at all for the lowest classes and lower-middle classes, say thos emaking less than $35,000/year. I do not disagree with that. I agree with a progressive scale to make up the taxes owed by lower-income people. So, I am not equating "triclke-up" with communism or socialsim, unless we start giving people back more than they have put in. Then it would be redistribution of wealth, which I view as a communist or socialist concept.

But the government can't just hand out money to solve problems. In our situation we MUST reduce spedning in the public sector or we will move toward socialism and we will never get out of debt. I do not like this bailout, because it IS socialist in nature, but it seems we have no other choice. Hopefully it will be more like an investment in "paper" that will prove to be viable when the broader economy stabilizes and we will get the money back. When all is said and done, we do need change going forward, I don't believe that increasing government spending and more government participation/intrusion in private enterprise is the change we need. That was the point I was trying to make.

See, here's my problem with your analysis,  you don't mind a bail-out for Wall Street and in fact say there is no other choice when using the same amount of money you can bail out from the bottom up.  The results are the same in that inflation will rise, etc.etc., people just don't seem to see it unless you realize that a bailout is a bailout,  Wall Street or Main Street, but if you are going to participate in this nonsense than bail out from the bottom up.

Socrates your name-sake is famous for saying, "Let us first define our terms." I think you need to define more strictly what you mean by the term, "bail-out." Are you implying that the tax-payer will lose the $780 billion, or that the government shouldn't use or risk losing a sizeable portion of it, or do you simply mean give Wall Street a chance to get back on their feet because it serves them right, regardless of who else it hurts in the process?

you don't mind a bail-out for Wall Street and in fact say there is no other choice when using the same amount of money you can bail out from the bottom up. 

If this was directed at me... I DO mind the bailout.  My first choice would be to do nothing and let the pcompanies that wrote bad mortgages suffer the consequences  and go out of business. I am not an accountant, but it seems to me that  Bush tried a trickle-up approach with the tax rebates, which provided a temporary stimulus, but did nothing to address the problem of unpaid debt clogging the credit market. Unfortunately, that debt can only be cleared at the Wall Street level.

Now, it seems to me that even after this bill is signed and in full effect we will still be facing a prolonged downturn in the economy and here's why. The president and representatives who supprot this bill point out that as things are now, it is very difficult to get a loan for a new car or a home, etc. While this bill might make credit more available, it will not necessarily create a demand for that credit. That is to say that this crisis has helped people realize they need to stop living on borrowed money and therefore, instead of taking on new debt, they will be working for many years to pay off the debt they already have. If we gave the money directly to the taxpayers I have heard it would be between $2,500 to $4,000 per taxpayer, which is much less than the average debt of those taxpayers. Thus, any "trickle-up" stimulus would only be used to pay old debt anyway and would do nothing to help the economy. I really wouldn't help consumers either, because it would only pay off a small fraction of their debt.

McCain accurately described this bill as a tournaquate, which (hopefully) saved the life of our financial system, but the bleeding limbs will have to be amputated. We tried pumping money into the old bleeding system and it didn't work. Now we are out of surgery but still in critical condition.

Didn't Lenin, Stalin, Castro, and Chavez implement trickle up economics?

No, what they instituted was a command economy, not a demand economy. That model has now been largely abandoned all over the world, even China. That's why they are threatening to become such fierce competitors. In a command economy you not only tell the supplier what to supply, you also tell the consumer what his needs are. That doesn't work, because it removes the incentive to innovate or motivate as well as simplifying the complex needs of individuals across the total spectrum of millions of people. No government could do that. As the workers in Russia liked to say, "We pretend to work, and they pretend to pay."

Freedom of choice is an essential ingredient in a needs based economy and that was sorely lacking in all the societies you mentioned. The consumer is given money for his labor in a capitalist needs based economy and he determines what he needs to satisfy his drives modified to the limits of his power to earn. If he wants more he works harder or smarter.  That is the basis for the success of our capitalist system. 

Those wages in turn, unlike in a communist society, allow him to prepare himself for either advancement or transfer to a higher or different level of productivity.

There's nothing wrong with government demanding (in turn) some payment in the form of taxes for the few services it can provide more efficiently than private enterprise. There's also nothing wrong with the government providing necessary regulation to prevent the superior situation of the few from blocking the aspirations and achievements of the many.

That's not communism that's enlightened and enhanced capitalism where government enhances the efficiency and the broadens by its intervention the freedom of choice of the individuals.  That's the essence of the social contract a free people enters in with its government.

OttO: Who are these millions and how do I become one of them? My paycheck gets nailed with about a 30% tax reduction every week (it is not just federal tax), and no, I do NOT get it all back on April 15th. And the crack you made about a gold-plated car made absolutely no sense whatsoever and contributed nothing to this discussion. Please come back to reality and use your considerable wit in a constructive manner.

sightseer,

You want to be one of the millions that pay no federal taxes. Quit your job, stuff your face, and vote Dem in November!

Oh, I see. I was confused when you said "millions of workers", OttO. I did not realize you were referring to those who do not have a job, either by choice or circumstance.

Perhaps we should be like a third world country, and have beggars at the city gates and child pickpockets working the marketplace alongside the child prostitutes. Would that serve "them" right?

Sightseer,

I hear what you're saying.

I'm thinking Otto and BK are in the ether just like Wall Streeters. I wouldn't be defending the criminal policies or the criminal actions that got us into this mess, much less the hackneyed economic propaganda that Paulson keeps spewing out.

What we hear from both parties of congress, Wall Street, Treasury, Commerce, etc about a "rescue plan", or "bail out" or "buy in" is nothing but a smoke screen and cover up by those same oligarchs of the biggest bank heist and insurance scam in the history of mankind. The punchline of their private little joke is that they really don't care whether a plan to save the economy is agreed upon and implemented or not because they all saw it coming long beforehand and, in fact, set it up to transpire exactly as it did. All they were waiting for was the payoff. They're going to be OK regardless.

OttO: Who are these millions and how do I become one of them?

You become one of roughly the bottom 35% of income earners.

My crack about the gold plated car makes as much sense as the idea that demand holds the power.  You can have a demand for something but if no one is supplying it than you're kind of SOL.  Supply gives life to demand and even determines the price.  You can have a bunch of poor, unproductive people creating a demand but if it's not being met or only being half met, it shoots the power of demand right in the head.

Supply gives life to demand and even determines the price

Unfortunately you are only partly right. As an addictive "early adopter" my home is littered with the carcases of devices sold to me by the suppliers which just don't work. Demand, can also be seen in that vague term known as consumer confidence. Without consumer confidence goods just don't get sold, and the consumer loses his confidence when the tax-cuts don't seem to trickle down to him. A healthy demand side of the equation makes sure that the right goods are produced, which help the consumer be more productive thus boosting the economy. On the other hand a healthy profit margin helps the supplier expand and create more jobs. The important thing to understand is that these are TWO OPPOSITE SIDES OF THE SAME EQUATION! Why is that so hard to admit? I understand of course. The politicians are just pandering to greed and playing off one side against the other. I wish the electorate would wise up.

Demand for a product makes it a sure sell, as anyone in the music and film industry will tell you. Billions are spent every year by producers to discover what the demand for a particular product is precisely. When the consumer is hurting inventories pile up, no matter how well the supplier is taken care of. Right now there is no DEMAND for housing. Need I say more?

The biggest employer in the country even now is not the big corporations but the small entrepreneur and small business operations. Before the senate tacked on its $100 billion provision to the bill no one seemed to realize that small businesses are as much a part of the demand side of the equation as individual households. Small businesses also supply jobs throughout the nation and are not restricted to industrial locations. These are the jobs that are being lost in the credit crunch, and these are the ones needing special consideration in a new tax regime, NOT THE BIG BUSINESSES!

Since WHEN is it justifiable to borrow money to keep you in business? Isn't a business suppose to sustain itself through it's profits?

You genuinely don't seem to understand, so for those like you who don't:-
If you were a small contractor asked to clear a site to begin a multi-million dollar operation, ten times as big as your last job, do you think you would be able to use the 30% profits from you last $250,000 dollar home building operation to buy the two bulldozers and two Mac trucks you're going to need before you even begin to lay the foundation for your building? Do you think the client is going to lend you the $750,000 dollars you'll need to buy that equipment? You'd have to get credit either from the manufacturer of from the bank, otherwise you'd have to let that opportunity for expansion pass and your reputation as a builder would go with it. Businesses get paid after delivery, for the most part, that's why they need credit to meet operating expenses. Sometimes homeowners do too, because pay checks come at regular intervals but expenses don't really care when they arrive. This economy runs on credit, as do all the advanced economies of the world.

There's a guy in India who recently got a Nobel prize for his work crediting tiny amounts of money to indigent people all over India to get them out of poverty. Money to buy a cow here, to start a dairy, a sewing machine there to start a dress making operation, money to dig a well or install an Archimedian pump to get water to dry fields. That's credit and that's what Obama meant by trickle-up economics.

Ironically, that is precisely what his mother was doing in the Philippines up to the time she fell ill. She was organizing the distribution of micro-loans to villagers in the Philippines as part of an American Outreach program of some sort, to help them get out of poverty. It's not surprising that Obama understands the efficacy of this aspect of Keynesian economics.

As I have said before, previous governments have understood the need for this kind of development ever since before the First World War. The Small Business Administration started in 1953 still exists with a budget of $400 million up to 2006. The Department of Commerce has a budget of $9.4 billion of which about $300 million is spent on job development. So America is not denying that the need exists, its just that it has been underfunded under Conservative government who pay more attention to the big businesses.

No, inflation and housing bubble are not a result of cheaper goods from overseas which have a deflationary effect on the economy.