Archive for February, 2010

18
Feb
10

The Trickle-Down Theory

Though it the term originated in the 1930s, the “Trickle-Down Theory” has come into increasing use over the past year (largely due to the global financial meltdown). Essentially, the theory holds that by cutting taxes on the wealthy and/or allocating wealth to the upper classes, the money they save will be spent on luxury items that will provide work and profits to the middle class, who in turn will buy products that provide work and profits to the working class.

Obviously, this theory is complete and utter tripe.

Firstly, the theory is based on the assumption that the items the wealthy buy will somehow benefit the middle-class. In reality however, when an oil tycoon buys a diamond necklace for his wife, he isn’t benefiting anyone. If he walks into a store to buy the necklace, is he somehow benefitting the clerk behind the counter? Of course not- her wages are the same whether or not he buys anything. The profits of the sale go to the diamond magnates who own the store. In short, the wealthy get wealthier- the middle class simply facilitates the process.

Now you might say, “Hey, doesn’t the oil tycoon’s purchase help the middle-class? Without customers, the store couldn’t operate and the clerk would be out of a job! And if the clerk is out of a job, she isn’t going to be able to spend money and produce profit for the working class!”. Now that’s partly true- but only partly. The clerk’s job does depend on the store being successful, however, let’s look at the big picture. If the store is already running, then it has enough business to provide the job. Whether the tycoon has a few extra thousand dollars isn’t going to make the slightest difference. Again, you might argue “But an increase in the demand for diamonds means that more diamonds must be mined, producing work and profits for the proletariat!”. Again, this is only partly true. Now if there was a massive increase in the demand for diamonds (and let’s face it, it’s not like diamonds wear out and need to be bought by the dozen), there would indeed be more work for the proletariat. There’d be more work, not more profit. The owners of the mines can simply increase the workload- they have no reason to increase wages. Unionizing? The majority of the world’s diamonds are mined in third world countries where (1) unionizers can be beaten, tortured, or killed and where (2) the general populace is so poor they’ll take whatever wages they can get. In short, an increase in wealth for the wealthy does not equate an increase in wealth for the entire social system.

Ok, maybe that isn’t entirely true. There are certain (rare) situations in which the trickle-down theory seems to work (which brings us to the second issue). Imagine a wealthy man decides to build a sports stadium- the advocates of the trickle-down theory will argue that this will provide jobs and profits for the local community. Now this will in fact provide jobs- as food vendors and janitors. Whatever extra money they have will be spent on things too insignificant to boost the community out of poverty. I wouldn’t call that “benefiting” the working class anymore than I would call a dew-drop in the Sahara a “water-supply”.

Now I’ve stated that the origin of the term “trickle-down theory” originated in the 30s- but the actual practice has been going on since the beginning of time. It’s what they used to do with hunting dogs. Sic them on rabbits and, after the dogs catches the prey, they wait patiently under the table while the master eats the meat. When the master’s done, he throws the scraps to them. Now it might work for dogs, but if you treat a human like an animal, then it is only a matter of time before he becomes one- and an animal and has no issue with ripping your throat out.

Advertisements
17
Feb
10

How to Kill Democracy

On January 21, the US Supreme Court narrowly voted to block a ban on corporate spending limits in political campaigns. Ironic that one of the greatest blows to the ideal of democracy should come about as the result of a vote.

Essentially, the argument for allowing unlimited corporate contributions to political campaigns is that since contributing to campaigns (financially) is a form of free speech, setting limits on how much corporations can donate (and to which candidates) is a violation of the rights of the individual. Now this argument makes the bold assumption that corporations are as much a person as you or me, and therefore are entitled to the same rights. Considering that corporations can benefit from all the rights of an individual but can’t fulfill any of the responsibilities (such as serving jury duty, serving in the military, being subject to the same laws and penalties as the rest of us, etc.), exactly how one reaches the conclusion that corporations are equal to human beings is beyond me.

But that can all be saved for another post. The purpose of this post is to attempt to predict the ramifications of free corporate campaign contributions.

Now it’s undeniable that corporate support has been a major factor in politics and political elections prior to ending of corporate spending limits. An oil corporation could influence a local election by offering campaign support to a candidate in exchange for the understanding that the candidate (should he or she win) will act in favor of the corporation (tax breaks for large businesses, laxer environmental standards, etc.). Now this may all seem to be a bit excessive- after all, corporations offering funds and advertising can’t buy an election.
Why not? Two brands of the same product may have unique traits to them that make one better than the other, yet one gets sold on a national level and the other remains nothing but a local oddity. It’s all comes down to advertisement- if one product is constantly flashed in front of the general public, it will outsell the rival brands. The same system can be applied to politicians. If two politicians are campaigning for the same office, who’s going to win- the candidate who’s advertised on a car’s bumper sticker or the candidate whose TV ads appear every seven minutes and whose face is plastered over every billboard in the state? Now just because the same strategies that are used in marketing can be used in politics doesn’t mean they should be used. In the end, what we have is the warping of public servants into products to be sold for the highest profits possible. The very purpose of the old corporate spending limits was to prevent one candidate from having an unfair advantage over his rivals solely on basis that his politics are favorable to corporations. With the limits gone, what’s there to prevent a candidate, a campaign, or even a whole branch of government from being effectively purchased by a corporation? If corporations now have the power to make or break electoral campaigns, why should politicians even try to serve the people when public opinion is eclipsed by the opinions of tycoons and magnates? What’s to stop the government from becoming a corrupted, withered facade for corporate agendas?

Still, it hasn’t happened yet. We still have the power to resist and demand that our representatives lobby for the reinstatement of corporate spending limits. While it’s still our choice, we can ensure that government of the people, by the people, for the people, shall not perish from the earth.

14
Feb
10

An Interesting Article

This BBC article compares other catastrophic earthquakes to the Haiti earthquake, in an attempt to find why the Haitian death toll was so high. Just by looking at the graphs you can see how class and poverty are directly linked to a people’s ability to cope with, and recover from, disaster.

http://news.bbc.co.uk/2/hi/americas/8510900.stm

02
Feb
10

Blog Updated

Check out updates to the “Links” section of It’s Not Easy Being Red!