Quote of the Day on Trickle-Down Economics

John Christensen

Published:

25 March 2015

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Inequality and human rights ↘

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Trickle-down: the theory explained

Economist John Kenneth Galbraith described trickle-down theory as “the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.” Which pretty much summarises what has happened in practice over the past forty years as the theory has been rigorously applied by giving tax cuts to rich people and powerful corporations. Well guess what, the rich have become very much richer, the corporations have become very much more powerful, and the sparrows are getting a whole lot thinner as fewer oats make it through the system.

Now President Barrack Obama has rubbished the trickle-down belief-system. Speaking at an event in Cleveland, at which he attacked Republican proposals for yet more tax cuts for millionaires, he said:

“Reality has rendered its judgement, trickle-down economics does not work and middle-class economics does.”

Better late than never. The horse needs to go on a diet, and the sparrows need nourishment.

The author

John Christensen

Trained as a forensic auditor and economist, John has worked in many countries around the world, including a period of working in offshore financial services with Touche Ross & Co. For 11 years he was economic adviser to the government of the British Channel Island of Jersey. In 2003 he became what the Guardian has described as “the unlikely figurehead of a worldwide campaign against tax avoidance.” His research on offshore finance has been widely published in books and academic journals, and John has taken part in many films, television documentaries and radio programmes. John can be contacted on +44 (0) 7979 868302.

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