I thought Milton Freedman's "Trickle Down Theory" died dead

[FreakinDJ]

when the moment Allen Greenspan when called in front of congress to answer for the Mortgage Crisis and subsequent Economic collapse of the Wall St Financials blamed the whole collapse on practicing Milton's theory of deregulation.

Are Rightwing Ditto-Heads that scared of OWS they are trying to revive Milton's tripe

[MADem]

1. He believed it was raining when someone peed on his leg, apparently.

He should take a lesson or two from Judge Judy!

[Horse with no Name]

2. K&R. They are just one-trick ponies. n/t

[safeinOhio]

3. Trickle Down is a theory

Supply and demand is a law.

[FarCenter]

4. More David Stockman's theory than Milton Friedman's

Friedman may be guilty of many sins, but probably not this one.

http://en.wikipedia.org/wiki/Trickle-down_economics

[FreakinDJ]

9. Chicago is the home of Milton's School of Economics

and you wondered why all of Obama's Economic advisor's were merely a continuation of the former administration

[Major Nikon]

12. Guilt by geographical confluence?

Pretty weak argument.

Do you actually know of any economic advisers to Obama who are are subscribers to the Chicago school of economic thought or are even alumni of the University of Chicago?

[nomb]

13. Lot's of people conflate Stockman, Laffer & Milton, That's a HUGE mistake.

Don't underestimate Milton's influence.

[girl gone mad]

17. Professor Austan Goolsbee was Obama's chief economist..

and he hails straight from the University of Chicago economics dept.

Peter Orszag is another example of an Obama adviser with a strong Chicago School bent, with his extremist and ridiculous deficit hawkishness.

Almost all of the people Obama chose to guide the White House's economic policies are neoliberals.

[Major Nikon]

25. He strongly supported allowing Bush tax cuts for the rich to expire

The WSJ seems to disagree with his classification as a neoliberal.

http://blogs.wsj.com/economics/2010/09/10/who-is-austan-goolsbee/

[girl gone mad]

30. There is nothing in the article to indicate he's not a neolib.

His advice to let the Bush tax cuts expire was bad advice, and it relates directly to his neoliberal views on the deficit.

[Major Nikon]

10. Both had roles to play

Friedman was an economic adviser to Raygun. Much of the crap that Laffer and other dipshits came up with was based on the works of Friedman.

[nomb]

14. Laffer's curve is correct... and easy to understand.

It simply points out that an unknown point exists where government maximizes it's revenue before choking productivity. At the beginning of the curve, *0 taxes* - the State receives nothing. At the other, *100% tax* - the theory finds the state getting nothing because business will be unable to carry the costs and take the risk if every penny goes to the state.

It predicts that between those two points (0% and 100% tax) there exists a point of equilibrium where we might find maximum productivity and maximum tax revenue.

The academic theory known as the Laffer curve makes no claim as to where that point is.

Politically it was simply waved as a magic wand to hide policy behind. It was an abuse of academia (with Laffer's help as he was a publicity hound) but the simple political response was to ostracize the thought because details don't communicate well to the electorate.....

[Major Nikon]

18. It wasn't a new idea and the practical application of the curve is nil

Laffer himself misrepresented the idea to the GOP which is why I consider him a fraud.

[nomb]

20. Laffer made no misrepresentations and he credited the thought to Ibn Khaldun and John M. Keynes.

[nomb]

21. It was Jude Wanniski that coined and publicized the phrase "Laffer Curve"

http://en.wikipedia.org/wiki/Jude_Wanniski#Lower_taxes

[nomb]

23. And BTW: "Laffer" estimates of revenue-maximizing tax rates have a mid-range of around 70%

According to a reference from The New Palgrave Dictionary of Economics

[Major Nikon]

26. That certainly wasn't his estimation

[nomb]

29. I don't recall him ever putting number on it - and the theory itself offers no answer.

The theory simply pointed out the obvious. It has no real bearing when you think about it.

[Major Nikon]

32. Laffer claimed that tax cuts would ALWAYS result in growth

And he offered his famous curve as a proof. So he may or may not have originated the idea regarding the free lunch, but he certainly did nothing to discourage it.

[nomb]

33. The curve makes no such claim. At all. Read Krugman's take on it:

http://krugman.blogs.nytimes.com/2010/08/10/the-laffer-test-somewhat-wonkish/


Krugman wastes no time in claiming that the Laffer curve is anything but neutral on the subject of the perfect point.

[Major Nikon]

35. Laffer himself made the claim

I have already read what Krugman has to say about it. Say whatever you want about 'his' curve (which even he admits is not a new idea). The point is the very best you can say about Laffer is he misrepresented those ideas to the detriment of everyone, and still does to this day.

[nomb]

36. If that's part of Laffer's theory - why does Krugman respect the theory and offer a balance point?

Krugman thinks the Laffer Curve kicks in and chokes tax revenue at near 91%, but peaks at over 70%.

Is the Nobelist wrong in his understanding of the Laffer Curve's purpose and premises?

[Major Nikon]

39. Krugman doesn't say that

If you take the time to read what Krugman writes more carefully, you'll see that the attributes problems with trying to collect a 91% tax rate as avoidance, which has absolutely nothing to do with Laffer's curve. The purpose of Laffer's curve is simply an economic thought model intended to demonstrate that at some point, tax rates effect tax revenue. It's pretty easy to prove in a capitalist or mixed economy. Set your tax rate at 100% and you've removed the incentive to work. Set your tax rate to 0% and you get no revenue. Those are the only two points on the "curve" that can be proved. Even Laffer himself never intended that his "curve" should be used in a practical sense and if you try it's quite easy to find the flaws in that method. As I said, (and as Laffer himself says), this entire idea did not originate with him. If you asked Krugman if he agreed with the underlying principle, I'm sure he would say he does as would most (if not all) economists. If you ask Krugman if he agrees with the way Laffer applies the principle, I'm sure you'd get a very different answer.

[nomb]

40. Krugman: 'rates of 70% are unlikely to put us on the wrong side of the Laffer curve'

Krugman:

"So the way I see it, even quite high marginal tax rates on high earners — even rates in, say, the 70 percent range that prevailed pre-Reagan — are unlikely to put us on the wrong side of the Laffer curve by discouraging effort."

"That doesn’t mean, however, that it’s OK to go back to Eisenhower-era 91 percent top marginal rates. The problem with super-high rates isn’t so much that they reduce incentives to work; it’s that they create huge incentives to avoid or evade.

But we’re nowhere near Laffer country now. In terms of taxes and revenue, up is up, down is down."


The Laffer curve simply states that an unknown point exists where government maximizes it's revenue. At the beginning of the curve, *0 taxes* - the State receives nothing. At the other, *100% tax* - the theory finds the state getting nothing.

It predicts that between those two points (0% and 100% tax) there exists a point of equilibrium where we might find maximum tax revenue.

The academic theory known as the Laffer curve makes no claim as to where that point is. Krugman has no quibble with that - he merely argues that the Laffer Curve may kick in (Revenues to Government decrease under high taxation) due first to avoidance.

If you have a quibble with the Nobel Laureate using the Laffer Curve in a serious commentary while respecting its fundamental tenet (Krugman: "how high do taxes have to be before further increases actually reduce revenue?") Take it up with the Nobelist.

You are clearly trying to argue a political point Where.There.Is.None. It's an accepted economic principle that at some unknown point revenues to government decrease as tax rates increase. Krugman argues that point lies somewhere between 70% and 91%.

Do you argue that Paul Krugman (Nobel Laureate in Economics) is wrong regarding where the Laffer Curve peaks?

[Major Nikon]

41. You appear to be arguing with yourself

First, at no point did I ever claim the concept behind the Laffer curve was invalid.

Claiming that I did and then proceeding to counter that argument is what is known as strawman rhetoric.

Posting something that I already told you I read does not improve your argument.

So lets start over here. Go back and read what I wrote more closely. If you find a statement you would like to contradict, then do so. I have no interest in arguing with what you somehow imagined I said.

Next, you simply assume that because Krugman mentions two points, (70% and 91%) he MUST think the point of equilibrium on the Laffer curve must lie between the two. That makes some very wild assumptions, and the contradiction to your assumption can be found within Krugman's own statement which I have already pointed out.

So to paraphrase your own advice, if you don't like the Laffer curve, take it up with Laffer.

I'm not going to answer your loaded question because it forces one to agree with your false premise that Krugman alluded to a peak on the curve.

[nomb]

45. Krugman was crystal clear in his claim as to where the Laffer Curve peaks.

Krugman:

"So the way I see it, even quite high marginal tax rates on high earners — even rates in, say, the 70 percent range that prevailed pre-Reagan — are unlikely to put us on the wrong side of the Laffer curve by discouraging effort."

"But we’re nowhere near Laffer country now. In terms of taxes and revenue, up is up, down is down."


The Nobel Laureate makes clear his understanding of the academic theory known as the Laffer Curve. And he postulates that the curve peaks above 70%.


I have given no false premise, nor strawman. It is you that utterly fails to address the elephant in the room.

[girl gone mad]

22. The Laffer curve has been debunked empirically..

time and time again.

[nomb]

24. Please explain how? when? or where?

It simply points out that an unknown point exists where government maximizes it's revenue before choking productivity. At the beginning of the curve, *0 taxes* - the State receives nothing. At the other, *100% tax* - the theory finds the state getting nothing because business will be unable to carry the costs and take the risk if every penny goes to the state.

It predicts that between those two points (0% and 100% tax) there exists a point of equilibrium where we might find maximum productivity and maximum tax revenue.

The academic theory known as the Laffer curve makes no claim as to where that point is.

Politically it was simply waved as a magic wand to hide policy behind. It was an abuse of academia (with Laffer's help as he was a publicity hound) but the simple political response was to ostracize the thought because details don't communicate well to the electorate.....

[girl gone mad]

27. Here:

http://www.time.com/time/magazine/article/0,9171,1692027,00.html

If there's one thing that Republican politicians agree on, it's that slashing taxes brings the government more money. "You cut taxes, and the tax revenues increase," President Bush said in a speech last year. Keeping taxes low, Vice President Dick Cheney explained in a recent interview, "does produce more revenue for the Federal Government." Presidential candidate John McCain declared in March that "tax cuts ... as we all know, increase revenues." His rival Rudy Giuliani couldn't agree more. "I know that reducing taxes produces more revenues," he intones in a new TV ad.

If there's one thing that economists agree on, it's that these claims are false. We're not talking just ivory-tower lefties. Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to. Harvard professor Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.

The yawning chasm between Republican rhetoric on taxes and even informed conservative opinion is maddening to those of wonkish bent. Pointing it out has become an opinion-column staple. But none of these screeds seem to have altered the political debate. So rather than write yet another, I decided to find out what Arthur Laffer thought.

Laffer is a bona fide economist with a doctorate from Stanford. He's also largely responsible for the Republican belief that tax cuts pay for themselves. Now 67, Laffer runs economic-consulting and money-management firms in Nashville. About the best I could get out of him on the question of whether the Bush tax cuts have paid for themselves was "I don't know." But that's only part of the story.

Read more: http://www.time.com/time/magazine/article/0,9171,1692027,00.html#ixzz1cyYpr2UA

more:

http://www.questia.com/googleScholar.qst?docId=5008547792
http://krugman.blogs.nytimes.com/2010/08/10/the-laffer-test-somewhat-wonkish/
http://www.cato.org/dailys/6-06-97.html

[nomb]

28. You quoted Laffer on the Bush tax cuts. This has nothing to do with the Laffer Curve academic theory

[nomb]

31. And your Link to Krugman shows him clearly and explicitly supporting Laffer's curve.

From your link to Paul Krugman at the NYT:

"So the way I see it, even quite high marginal tax rates on high earners — even rates in, say, the 70 percent range that prevailed pre-Reagan — are unlikely to put us on the wrong side of the Laffer curve by discouraging effort."

[girl gone mad]

46. Read it again..

until you understand what he is saying.

[nomb]

47. You are kidding, aren't you? Krugman clearly states the Laffer Curve exists:

Krugman:

"So the way I see it, even quite high marginal tax rates on high earners — even rates in, say, the 70 percent range that prevailed pre-Reagan — are unlikely to put us on the wrong side of the Laffer curve by discouraging effort."

"But we’re nowhere near Laffer country now. In terms of taxes and revenue, up is up, down is down."


The Nobel Laureate makes clear his understanding of the academic theory known as the Laffer Curve. And he postulates that the curve peaks above 70%.

This is not the writing of someone who feels the theory is disproven garbage. Quite the contrary. But then, I'm debating someone who has yet to make anything but the mildest of points like the scintillating, "Read it again, until you understand what he is saying."

[Lionel Mandrake]

16. You are correct.

According to wikipedia:

The economist John Kenneth Galbraith noted that "trickle-down economics" had been tried before in the United States in the 1890s under the name "horse and sparrow theory." He wrote, "Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: 'If you feed the horse enough oats, some will pass through to the road for the sparrows.'"

Read more:
http://en.wikipedia.org/wiki/Trickle-down_economics

[girl gone mad]

19. Reagan and Stockman had a falling out because Stockman quickly grew anti-supply-side.

Stockman had nothing to do with the development of supply-side theory.

[Fumesucker]

5. Vampire Squid Trickle Down is undead, it cannot be killed.. n/t

[malaise]

6. That was the moment

but the recent CBO data is all the proof you need to demonstrate that it sure didn't trickle down-the neo-liberal model is dead

[aint_no_life_nowhere]

7. Isn't the current drumbeat for faith-based job creationism the trickle down theory?

It's the almost religious belief in jobs creationism by the wealthy that will trickle down to the rest of society if we only give them more tax cuts, more deregulation.

[Horse with no Name]

8. And when that doesn't work

they will come for more and more...until we are employing 4-year olds as chimney sweeps again...

When my mother died I was very young,
And my father sold me while yet my tongue,
Could scarcely cry weep weep weep weep,
So your chimneys I sweep & in soot I sleep.

Theres little Tom Dacre, who cried when his head
That curled like a lambs back was shav'd, so I said.
Hush Tom never mind it, for when your head's bare,
You know that the soot cannot spoil your white hair

And so he was quiet. & that very night.
As Tom was a sleeping he had such a sight
That thousands of sweepers Dick, Joe, Ned, & Jack
Were all of them lock'd up in coffins of black,

And by came an Angel who had a bright key
And he open'd the coffins & set them all free.
Then down a green plain leaping laughing they run
And wash in a river and shine in the Sun.

Then naked & white, all their bags left behind.
They rise upon clouds, and sport in the wind.
And the Angel told Tom, if he'd be a good boy,
He'd have God for his father & never want joy.

And so Tom awoke and we rose in the dark
And got with our bags & our brushes to work.
Tho' the morning was cold, Tom was happy & warm
So if all do their duty, they need not fear harm.

The Chimney Sweeper
William Blake

[surrealAmerican]

11. It doesn't matter how many times this "theory" is disproven ...

... they will always revive it. They want it to be true so badly, they will be unable to see all the evidence of its failures.

[formercia]

15. I can still feel the piss dripping down the back of my neck.

The Koch whores are still celebrating the American Dream.

[ThomThom]

34. Is that tinkle down economics?

[DefenseLawyer]

37. It works great

for the people it's supposed to work for. If it doesn't work for you... blame yo'self!

[The Wizard]

38. An abundance of supplies

is nothing more than a pile of shit if there's no demand.

[Manifestor_of_Light]

42. Demand is what drives the economy. They refuse to believe that.

"Supply side economics"????

:wtf:

You can have thousands of factories with plenty of goods. If nobody wants to buy them, you're screwed.

[mmonk]

43. Milton's tripe didn't die. That is why there is an OWS movement.

The political parties are continuing on with it in some faction. The Ditto Heads don't have to revive it. They live in an imaginary world in their minds where Freidman's economic theories haven't been implemented but that we are living under extreme liberalism (left) or socialism (a world of opposite reality).

[Dragonbreathp9d]

44. Love your tag line

By the way- working on a new versions of Peanut Butter Jelly Time for today's times- pb&j- police brutality and jail