[jsmeaton]

Isn't trickle down economics supposed to redistribute portions of that wealth? If you agree that trickle down isn't working because the elite are capturing it for themselves, then you could conclude that them being rich is a contributing factor to these people being poor. No?

[randomdata]

As I understand it, the 'trickle' comes in the form of, for example, cheaper food. Which, as a percentage of income, is something that we can see has actually happened. The remainder can be used to capture a portion of the wealth.

The problem comes in actually using that money to capture wealth instead of increasing your expenses elsewhere. The latter of which is very easy to do.

[jsmeaton]

I guess I'd prefer to see this in wages and similar. Rather than increasing wages with respect to inflation, they've stagnated, and profits for companies, shareholders, and owners are much higher.

> The problem comes in actually using that money to capture wealth instead of increasing your expenses elsewhere. The latter of which is very easy to do.

Absolutely. I think this is where the idea of trickle down economics fails. It assumes that mo' money mo' expenses. I guess there's only so much you can buy with 80 Billion before that assumption breaks down.

[randomdata]

> Rather than increasing wages with respect to inflation, they've stagnated

The data doesn't support this[1]. Wages are stagnant, but only with respect to inflation. Wages are increasing at rate of inflation, more or less.

> Absolutely. I think this is where the idea of trickle down economics fails.

For argument's sake, let's say that the 'trickle' has lead to food being $100/month cheaper. Do you put $100/month you have gained into the stock market, with average returns of 7%, or do you go and sign up for a smartphone plan?

If, assuming you are young, you choose the former, you will have an average wealth of ~$250,000 by the time you retire, which will then provide ~$18K per year recurring income to retire on. If you choose the latter, you will have ~$0 of wealth when you retire and no income.

The choice seems fairly obvious, but something tells me that most (myself included) would choose the smartphone phone plan instead. In reality, you are taking the wealth you have gained (~$250K) and are spending it on a service that you wanted to have instead (a smartphone).

So, I agree, that doesn't work. People have shown that they are willing to spend the gains they have made. But if we found a different way to funnel $250K onto the balance sheet, would that actually stop them from spending it? Or would they still find some way to turn that $250K of wealth into a smartphone (or whatever consumable someone wants to enjoy) and be no further ahead?

[1] http://www.tradingeconomics.com/united-states/wages

[majewsky]

> Wages are stagnant, but only with respect to inflation.

True, but at the same time, productivity (value produced per working hour) in the US has more than doubled in 30 years. [1] I consider this unfair: Workers should benefit from increased productivity as much as shareholders do.

[1] https://twitter.com/MaxCRoser/status/819316887213449219

[randomdata]

> Workers should benefit from increased productivity as much as shareholders do.

I mean, they do. The price of goods comes down. This is quite visible. Food, for example, went from 25% of income in the 1940s to less than 10% today as wealth concentrated among fewer and fewer farmers. If that wealth remained distributed, leaving every American still trying to run a small patch of land like they did in the 1940s, it would be highly inefficient and the price of food wouldn't have been able to decline.

But, okay, imagine (to stay with the previous comment's example) that the price of food remained the same and your income went up by $100/month instead. Your profit is still the same. Are you really any further ahead? Is having $100 clearly in your hand more apt to have you put it into the stock market, or similar, to captures wealth? Or are you still going to go out and spend that on a smartphone plan, or similar consumable, leaving no wealth to show for it?

[cmdrfred]

You keep bringing up food. What of housing or healthcare? The costs there have risen dramatically at rates many times higher than inflation. Inflation adjusted the poverty line keeps rising while wages stay flat. I don't see how this is a sustainable system.