A plaque remaining from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem.

Above, a 1934 plaque from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem. Discarded as trash in 2006.

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Entry from February 17, 2012
Trickle-Down Economics

"Trickle-down economics” (or the “trickle-down theory") is economics to attract a prosperous top (large corporations and wealthy people), with the hopes that prosperity “trickles down” all the way to the bottom. The term “trickle down theory” has been cited in print since 1933 and “trickle down economics” since 1954.

The use of “trickle down” has been cited in print since at least October 1930, when Kenneth D. McKellar, senior United States senator from Tennessee, attacked the “trickle down” policies of Republicans for creating a depression. In 1931, “trickle down” was used by Wisconsin senator Robert M. La Follette, Jr. (in January) and humorist Will Rogers (in July). 


Wikipedia: Trickle-down economics
“Trickle-down economics” and “the trickle-down theory” are terms used in United States politics to refer to the idea that tax breaks or other economic benefits provided by government to businesses and the wealthy will benefit poorer members of society by improving the economy as a whole. The term has been attributed to humorist Will Rogers, who said during the Great Depression that “money was all appropriated for the top in hopes that it would trickle down to the needy.” The term is considered pejorative by some proponents of tax cuts.

Proponents of these policies claim that if the top income earners are taxed less that they will invest more into the business infrastructure and equity markets, it will in turn lead to more goods at lower prices, and create more jobs for middle and lower class individuals. Proponents argue that economic growth flows down from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. However, others have argued that “trickle-down” policies generally do not work, and that the trickle-down effect may be very slim, if indeed it even exists at all.

Today, “trickle-down economics” is most closely identified with the economic policies known as Reaganomics or supply-side economics. Originally, there was a great deal of support for tax reform; there was a dual problem that loopholes and tax shelters create a bureaucracy (private sector and public sector) and that relevant taxes are thus evaded. During Ronald Reagan’s presidency, the Democratic Party-controlled House, at the urging of President Reagan, cut the marginal tax rate on the highest-income tax bracket from 70% to 28%.

Free Merriam-Webster Dictionary
trickle–down adj
Definition of TRICKLE-DOWN
1: relating to or working on the principle of trickle-down theory “trickle–down economics”
2: relating to or being an effect caused gradually by remote or indirect influences
First Known Use of TRICKLE-DOWN
1944

Free Merriam-Webster Dictionary
trickle–down theory noun
Definition of TRICKLE-DOWN THEORY
: a theory that financial benefits given to big business will in turn pass down to smaller businesses and consumers
First Known Use of TRICKLE-DOWN THEORY
1954

(Oxford English Dictionary)
trickle-down adj. of or based on the theory that economic benefits to particular groups will inevitably be passed on to those less well off; also transf. as n., a filtering down (of money or ideas). orig. and chiefly U.S.
[1931 W. Rogers in Tulsa Daily World 12 July iv. 7/3 What about the old Boys here on the home grounds? Well maybe this thing will eventually reach him in some beneficial way. Lord knows what way it may trickle down to him some day.]
1944 Antioch Rev. Summer 192 In agriculture, as in business, they are devotees of the trickle-down philosophy.
1949 H. S. Truman in Sun (Baltimore) 6 Jan. 6/1 We have rejected the discredited theory that the fortunes of the nation should be in the hands of a privileged few. We have abandoned the ‘trickle-down’ concept of national prosperity.
1954 Sun (Baltimore) 13 Feb. ( b ed.) 2/1 The Administration has already offered us a trickle-down tax program. Now, we are presented with a trickle-down housing program.
1977 Time 16 May 38/2 It’s classic trickle-down economics.

25 October 1930, The Advocate (Baton Rouge, LA), “Depression Is Blamed on G.O.P.,” pg. 13, col. 1:
Continuing his attack on malpractices of the Republican party, Mr. McKellar (Kenneth D. McKellar, senior United States senator from Tennessee—ed.) declared that it “believes in legislating so as to make the rich richer, with a view of letting their surplus riches trickle down and thus benefit the poorer classes.” The Democratic party, he says, “would make the common man prosperous, establish his buying power and thus render all classes prosperous.”

15 January 1931, Rhinelander (WI) Daily News, pg. 1, col. 7:
Phil-osophy
Highlights of LaFollette’s Message.

CHANCE FOR ALL.
“We hold here that the wealth of society is greater and industrial development best insured when the widest opportunity for all is positively promoted by public action than when the development of great fortunes is favored in the hope that that prosperity may trickle down from them to the mass of people.”

Google News Archive
12 July 1931, St. Petersburg (FL) Times, “It Isn’t the Heat; It’s the Reparations” by Will Rogers, sec. 2, pg. 3, col. 3:
Now what about the old Boys here on the home grounds? Well maybe this thing will eventually reach him in some beneficial way. Lord knows what way but it may trickle down to him some day.

Google News Archive
10 October 1932, Meriden (CT) Daily Journal, pg. 6, col. 2:
Mills (Secretary of the Teasury Ogden Mills—ed.), more than any other man, is identified with the depression policy which has produced the Reconstruction Finance corporation and which is based on the theory that the only real prosperity is the sort which has to “trickle down to the masses.”

Google News Archive
26 November 1932, St. Petersburg (FL) Times, “And here’s how it all happened” by Will Rogers, sec. 1, pg. 4, col. 5:
This election was lost four and five and six years ago, not this year. They didn’t start thinking of the old common fellow till just as they started out on the election tour. The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickled down. Put it up hill and let it go and it will reach the dryest little spot. But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands. They saved the big banks, but the little ones went up the flue.

14 February 1933, Ironwood (MI) Daily Globe, pg. 4, col. 1:
The second is that inflation to mean anything must extend purchasing power to the ultimate customer. The “trickle down” theory simply has not worked.

Google News Archive
17 October 1936, Windsor (Ontario) Daily Star, “F.D.R. Slams Wall Street,” pg. 1, col. 2:
After enumerating figures to show “an increase in business for every group” in Ohio, he (President Roosevelt—ed.) declared this was a refutation of what he called the “trickle down” theory of previous administration.

LENDING MONEY AT TOP
This theory, he explained, was based on the lending of money to the “few financial interests at the top of the economic pyramid” in the hop it would seep down into the pay envelopes of workers, into the ledgers of independent businessmen, and into the farmers’ pocketbooks.

“The trouble with that theory was that there was always too little left to trickle more than half way down,” he continued.

Google News Archive
30 November 1937, The Evening Independent (St. Petersburg, FL), “The National Whirligig” by Ray Tucker, pg. 2, col. 4:
They sneered at the ex-president’s “trickle down” theory, which contended that purchasing power could be sustained only if vast corporations could buy and furnish employment.

Google News Archive
30 August 1954, Daytona Beach (FL) Morning Journal, “CIO Hits Congress’ Record,” pg. 2, cols. 1-2:
“Embraced the dangerous school of ‘trickle down’ economics which believes that the welfare of the highest income groups and corporations must received top priority.”

Posted by Barry Popik
New York CityBanking/Finance/Insurance • (0) Comments • Friday, February 17, 2012 • Permalink