There Is No Trickle Down
If you fire your 500 factory staff and move production to China, this will increase the profitability of your company. Those extra profits do not go to the 500 workers who lost their jobs - nor the businesses where those 500 workers used to spend their income. It goes to a) the CEO and a handful of board member who squeeze themselves as much of it as they feel they can get away with and b) the shareholders of the company.
The trickle down comes in two ways - firstly through those rich people spending their enormous bonuses - either on goods or in new investments - and secondly through pension funds, which are held by less rich folk and effectively makes them shareholders.
First, it is true that a small amount may trickle back down through investment in other companies - but do they open a new factory in town to re-employ all of those people laid off? No (could we find more than TWO examples of this having ever happened?) The only trickle down might come through increased job security for the cleaners at the local Aston garage.
As for Pensions, anyone retiring recently will tell you that they would have been better off stuffing their money in a low interest savings account, than having their savings over as guaranteed long term gambling chips to hedge fund managers and financial ‘experts’. Those financial experts having failed to provide decent - and in some cases negative returns - whilst at the same time also managing to charge eye-watering multi-million pound management fees. Once again, the extra wealth gets creamed off where-ever possible.
This is an efficient market - one that maximises return in the short term for those who control the money. Deregulation makes that market more efficient - and thus a vote for de-regulation and a freer-market is also a vote for higher inequality, greater job insecurity and more frequent financial crises.
Warren Buffet gave an interesting insight in showing that giving relief to the top earners doesn’t make them spend/invest that money back in equal terms. They don’t buy hundreds of cars, Macs or anything else. Equally the investments they make are seldom public domain, which is where taxation money would go
- brokencapitalism posted this