Here’s Thomas Sowell at his best. A slice (but do read the whole column):
Years ago, this column challenged anybody to quote any economist outside of an insane asylum who had ever advocated this “trickle-down” theory. Some readers said that somebody said that somebody else had advocated a “trickle-down” policy. They could never name that somebody else and quote them, though.
Mr. de Blasio is by no means the first politician to denounce this nonexistent theory. Back in 2008, presidential candidate Barack Obama attacked what he called “an economic philosophy” that “says we should give more and more to those with the most and hope that prosperity trickles down to everyone else.”
Let’s do something completely unexpected: Let’s stop and think. Why would anyone advocate that we “give” something to A in hopes that it would trickle down to B? Why in the world would any sane person not give it to B and cut out the middleman? All this is moot, however, because there was no trickle-down theory about giving something to anybody in the first place. [Hat tip Cafe Hayek]
But Thomas Sowell is wrong. “Trickle down” does exist.
It emanates from government.
It emanates from government in the form of favours, and of subsidies and of welfare social. Perhaps the best place to see it in action was Labour's 2008 Welfare for Working Families package: the govt takes some large part of your money, waste a large portion of it (fiscal drag, you see), and then dole out some small proportion of it back to a selected class of voters (for which those voters are supposed to be pathetically grateful). That's trickle-down for you, as administered by the residents of an insane asylum. (And, since the electoral effect of each tranche of trickle is short-lived, that’s the same sort of “trickle down” proposed for this election by the current Labour leader in the form of his baby bonus election bribe.)
Trickle down also emanates from government, and in ever-larger gobs in recent years, from the likes of central bankers. Here’s newly-appointed Federal Reserve Chairthingy Janet Yellen, making it explicit in her defence of The Fed’s programme of Quantitative Easing:
You know, a lot of people say, this is just helping rich people. But it’s not true. Our policy is aimed at holding down long-term interest rates, which supports the recovery by encouraging spending. And part of it comes through higher house and stock prices, which causes people with homes and stocks to spend more, which causes jobs to be created throughout the economy and income to go up throughout the economy.
You want to find the failing apostles of trickle down? You’ll find them in big government.