Letter: Those trickle-down economics
I have been watching the progress of Congress's bailout voting with interest and not a little bemusement. For at least two decades, and even during the last federal election cycle, I have heard Democrats criticizing the "trickle-down theory" of economics that is credited to former President Ronald Reagan. The tax cuts given to the "wealthy" based on the "trickle-down theory" were even blamed in part for the current economic crisis. The criticism/blame may or may not be correct; I am not sure.
However, now a Democratic-controlled Congress and a Democratic President Obama are in the process of passing an $800 billion-plus bailout that goes to... large banks, insurance companies, and corporations, i.e. the wealthy. The theory behind this seems to be that the money given to the large corporations (read: wealthy) will "stimulate" the economy by (are you ready for this?) "trickling down" to the average citizen.
What I don't understand is:
1. If giving money to the wealthy in the form of tax cuts to stimulate the economy by "trickling down" to the less wealthy was a "failed policy", why is giving money to the wealthy in the form of massive bailouts to stimulate the economy now a "necessary policy"?
2. If Republicans favored trickle-down economics in the form of tax cuts when a Republican was in the White House, why do they seem to be opposed to trickle-down economics in the form of massive bailouts when a Democrat is in the White House? And why do the Democrats who opposed the trickle-down tax cuts when a Republican was president now favor trickle-down bailouts when a Democrat is in the White House? Is this the kind of change that President Barack Obama has been talking about for the past two or more years?
3. Is the massive federal bailout actually a wise policy? Or is it simply another instance of senators and representatives, confronted with a problem (crisis), doing what politicians have been doing for as long as I can remember: throwing taxpayers' money at it in hopes that it will go away?
Joseph W. Carpenter