(Feel free to move to GD if this is the more appropriate forum.)
When refuting especially, I (personally) would prefer seeing first any “factual” reasons this meme doesn’t work (e.g. a fundamental misunderstanding of what “trickle-down economics” is) before getting into the more opinion-based stuff (such as what economic model in general works and what doesn’t).
If I wanted to refute that I’d point out the futility of making a judgement about something as complex as the US economy based on one data point. Even in the best conditions, there are a few struggling. In the worst conditions, some will prosper.
On the other hand, one mustn’t discount the value of tailoring the argument to fit the audience.
As an aside, I’ve seen this meme being handed around online with approval and glee. I’m not sure how strong it is, but it speaks to my beliefs on a visceral level. Thus this thread; I wanted to ground myself better, as it were.
What do they mean by “the stock market”? The Dow is not at an all time high-- it’s lower than it was in 2007. Same with the S&P 500.
Well, isn’t the point of trickle down economics something to the effect that ALL BOATS RISE when you flush? So, your response is that trickle down economics doesn’t hold water?
When people say things like “destroying the economy” they don’t have any definition of “destroying” or “economy” in mind. It’s shorthand for saying, life isn’t as good as I want it to be and blaming the “other” makes me feel better about it.
Since it’s not a fact or even really an opinion, but a generalized grousing, it can’t be refuted. No one fact or one anecdote or one “get over yourself” is going to make a dent.
It’s true that the Dow has more than doubled since it hit its low in 2009. That’s interesting, because it’s a reflection that this economy, both the recession and the recovery, are working differently than previous recessions. The stock market usually reflects other factors in the economy but almost nobody feels as if it’s doing so now. That may be a mistake. My guess is that it’s a reflection that the worst is over and that the economy is on a good upward course, even if that will proceed much slower than most will care for. Not much consolation to those who are hurting, of course.
It’s objectively true that the economy isn’t destroyed and that Obama isn’t destroying it. If you want to win a game of snappy comebacks then playing the stock market card isn’t bad. It has the advantage of being truer and more meaningful in the long run. But remember that it’s not a “truth” or a “fact” and doesn’t “refute” grousing any more than telling someone who’s depressed to cheer up does.
They probably mean that the Dow has risen since Obama has been in office and continues to be way above where it was in January 2009, at least that’s how I look at it
No. Because some people will jump out of the boat.
I’m heavily invested in the stock market and watch its movements daily. (I’m not a day trader, just a guy with a good bit of assets in the market so I read the financial news every day.)
The stock market in general is not at all time highs, so that is factually incorrect.
Corporate “earnings and profits” are also not, in general, at all time highs. For anyone who doesn’t follow the market, basically every quarter everyone watches major corporations as they release their earnings statements. In general when batches of earnings statements meet analyst and corporate predictions, that generally causes a stock boost for that stock and the market as a whole. When batches of earnings statements do not meet those expectations, the market can falter.
In the past two quarters earnings have been very, very mixed. Many major companies have missed earnings targets while others have come in above analyst expectations.
That’s a mixed signal, and certainly isn’t a sign of “record corporate profits and earnings.” (And really without a qualifier that phrase is meaningless, you need to define exactly what you mean and what subset of corporations you’re talking about.)
A lot of people are hiding out in fixed income right now because the market just isn’t giving good indications and every day we get mixed news. The moment we get good news out of Europe, another Fortune 500 company reports bad news. The moment we get a Fortune 500 company beating earnings estimates, we get greater than expected jobless claims. The moment we get an indication that the housing market improved last month, we get more troublesome news from Europe.
It’s a weird time, the Dow has bounced around a lot from 12500 to 13400 or so and there aren’t any strong economic indicators about what is going to happen. That could just mean we’re looking at long term anemic GDP growth of 1.5% or so.
If that is the case, the market will remain uncertain, because in low growth periods the portion of “losers” is a lot higher. When the economy is growing at 4% every quarter the “losers” are a very small portion, almost all stocks are growing and the indexes are all rising and basically almost all economic indicators (hiring, home sales etc) are going up.
That’s not really what the market looks like right now.
The numbers disagree with you. This article shows profit margins at an all time high.
Trickle down also seems to state that if you make sure the richest would make more money, they will spend it or invest it in ways that trickle down to us peons. Here is a good article and chart showing the rise in income disparity, which before the crash was the worst since the Depression, and which is increasing again.
While the market may not be at an all time high, it is not like it has to be to help the masses if trickle down were correct. Doubling since the worst of the recession should be good enough to have more of an impact on employment than it has had.
Trickle down predicts that an increase in profits, market valuation, and the incomes of the rich should lead to more jobs and a significant increase in the income of everyone else (on average, of course.) It has not, so the meme has been falsified and the meme in the OP basically correct.
If the market were twice as high when Bush left office as it was when he entered the right would be trumpeting the success of his free market policies. Now, not so much.
Was just watching a Krugman video from earlier this year and he dismantles the point. Well, he’s in accord with the latter: stocks are not a good predictor of prosperity, especially not for the lower classes (so stocks and profits can be high, but the lower classes can not dispense of those). The bond market is a better predictor of long term economic health, at least according to Krugman.
As a side note, he seems quite right wing for my tastes. I mentioned the G. A. Cohen book in the comments, but also he mentions that Japan has a “smart populace”. Smacks of trilateral commission thinking. It’d be better to simply state the population is educated, with reference to world rankings (which’d put it on a par with Norway or Cuba, IIRC).
Why not just point out out that Mr Obama was the only presidential candidate who was sincere about trying to improve economic conditions, and therefore the economy will be as good as it could be for the next four years?
“Trickle down” was never so much a theory as an excuse. When a situation favors the rich and the powerful, there is usually a very good reason why it is in the best interests of the Republic that the situation remain unchanged. Oftimes, discovering this reason requires ingenuity and creativity.
But, for appearance sake if no other, it also requires some academic back up, some tame economists who will provide the rationales that show the desired object in the best possible light. And the accepted criteria demands research and mathematical models, to give it a solid objective basis. Regrettably, research into the precise nature and quality of pixie dust requires more imagination than observation.