The MYTH of Trickle Down Economics

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trickle-down theory and tax cuts for the rich an excellent monogram written by dr. Thomas solo which will be the basis for this video and which covers a topic that I don't think ever gets talked about it all in the mainstream or at least not in the way that it should be talked about but those two phrases are some of the biggest buzz words that I hear and not only the American left but the right as well and even on the international stage and particularly in the context of fallacious misrepresentations of American conservative economic principles so I thought I'd explain what's actually going on here let's start with this fact right here the term trickle-down theory or trickle-down economics is a completely made-up word by left-wing news outlets journalists and politicians in order to mischaracterize conservative economic principles it's absolutely a straw man and you hear this all the time from the left classic sort of trickle-down economics free trade deals never trickled down I do not believe in trickle-down economics trickle-down policies trickle-down trickle-down advocates the trickle-down it never trickled down same old trickle-down economic theories trickle-down economics as trickle-down economic plan trickle down trickle down and then trickle down trickle-down economics just trickle-down tax cut fairy dust has never trickled down prosperity for everybody else that's the theory trickle-down economics trickle-down economics trickle-down economic trickle-down economics trickle-down economics on steroids trickle-down economics prickled down economic trickle-down economics trickle-down economics trickle-down economics trickle down to the rest of us and hope that it trickles down on us eventually trickle down clowns trickle-down economics trickle-down economics Sambi lie of trickle-down economics or trickle-down economics trickle-down economics trickle-down economic trickle-down eat get up and here it is trickle down I call it trumped-up trickle-down [Music] even the Pope himself uses it he writes some people continue to defend trickle-down theories which assume that economic growth encouraged by a free market will inevitably succeed in bringing about greater justice and inclusiveness in the world the entirety of academia and the media have been pushing this narrative of trickle-down economics for decades now and not once has anyone ever been able to point to anyone who has seriously proposed the hard economic theory of trickle-down not one because it doesn't exist it's completely a straw man named the school of economics that even remotely proposes such a theory it doesn't exist because it's not an economic theory in all of economic history no economist has ever proposed such a theory of trickle-down economics it's the literal embodiment of repeat something over and over again and it becomes true seriously named the economist who came to a university one day and said okay guys here's my new economic theory that I proposed to you today I call it trickle-down theory it doesn't exist so let's try to dig into some history to find out where this phrase trickle-down even comes from now finding the answer to that isn't the difficult part as I'll get into in a second the difficult part is understanding how and why such a lie was able to sink itself so deep into academia in the public at large but let's dig in the closest the phrase trickle-down comes to as its current date depiction is in a statement made by Franklin D Roosevelt speechwriter Samuel Rosenman in which he refers to the philosophy that had prevailed in Washington since 1921 that the object of government was to provide prosperity for those who lived and worked at the top of the economic pyramid in the belief that prosperity would trickle down to the bottom of the heap and benefit all and even that speech is loosely connected to a speech called cross of gold by William Jennings Bryan in 1896 in which he says there are those who believe that if you just legislate to make the well-to-do prosperous that their prosperity will leak on through to those below that's it he didn't propose an economic philosophy saint's prosperity is gonna trickle down to poor people and even what Samuel Rosenman was referring to have to do a tax cut reductions proposed by secretary of the Treasury Andrew Mellon and even the arguments made by Andrew Mellon himself spoke nothing about anything trickling down it's pure propaganda and from here we get the widespread adoption of the phrase trickle-down economics and the propagation of this non-existent theory from textbooks like winner-take-all politics which refers to the trickle-down scenario that advocates of helping the have it all with tax cuts and other goodies constantly trot out and the National experienced a history of the United States this book in particular written by two Pulitzer Prize winners has a segment that says it was better he argued Andrew Mellon to place the burden of taxes on lower-income groups that a share of the tax-free profits of the rich would ultimately trickle down to middle and lower-income groups in the form of salaries and wages so not only do we get another use of trickle-down we also get a complete mischaracterization of Andrew Mellon's policies and the false inference of him supposedly creating the trickle-down theory while in direct contrast to this quote here's what Angemon himself said which was that it was the duty of tax policy to lessen so far as possible the burden of Taxation on those least able to bear it the guy even proposed sharper cuts and tax rates at lower income levels but no historians still try to paint some malevolent image of the guy like in the textbook these united states words Pulitzer prize-winning author Aaron Unger says Mellon one further victories for his drive to shift more of the tax burden from high-income earners to the middle and wage earning classes this is despite the fact that Andrew Mellon himself called the repugnant for there to be a class of people in the country that couldn't be reached for tax purposes largely because it was a pretty common fact back in the day that rich people would put their money in non-taxable securities and Joe Mellon himself said that it is incredible that a system of Taxation which permits a man with an income of 1 million dollars a year to pay not one cent to the support of his government should remain unaltered and with regards to the lower income classes he called it almost grotesque that higher taxes should be imposed on everyone else in the country in order to make up for deficiencies in government revenue and there's more books like the American nation and the American Pageant which continued to misrepresent Mellon's policy proposals and I as what they say our policies designed specifically to spare the rich and from these textbooks which are supposed to be trusted sources and therefore wouldn't need extensive research to prove their legitimacy we get journalists in the New York Times and The Washington Post who continue the use of trickle-down terminology such as Tom wicker referring to Reagan's tax cuts as the old Republican trickle-down faith pains Johnson's helped the rich first and let the rest trickle-down philosophies and David S Broder calls it feeding the greed of the rich this use of trickle-down is seen everywhere and this is where we get the constant use of the non-existent theory of trickle-down economics a phrase that is in large part a narrative driven smear by leftists in the mainstream media and Democratic politicians in order to obfuscate and distort real economic theories and I even see self-proclaimed Republicans using this term to to describe what they think their party is all about though the occurrence of that isn't nearly as common as when the left uses it which is always the trickle-down economics has actually worked for that theory eventually became trickle-down economics right so I want to ask I want to ask you and it's the deliberate and continued use of this straw man that makes having a conversation about economics nearly impossible on the national stage and it's not bad enough that the terminology is a completely non-existent straw man but the more time you spent hearing that phrase the more time is spent thinking about that phrase and then conversations get framed around that phrase so much so that the phrase is deemed to have some intrinsic truth attached to it to the point where someone who might not know what the real conservative economic platform is thinks it's probably got something to do with money trickling down which the media always tells them never works trickle-down economics has never worked and it will never work classic sort of trickle-down economics which actually hasn't worked the trickle-down experiment that began in the Reagan years failed and not even here Republicans using this phrase from time to time because they just assume it's a synonym for actual conservative economic principles which have never once even claimed to trickle-down anything and the issue of taxation wasn't always as politically polarized as it is today and Jim Mullen wasn't even the first person to have proposed the tax rate reduction policies that he did and members of both parties were once pretty level-headed and willing to talk and debate this topic with having things being reduced to what I call the politics of oh my god everyone is going to die this is the end of the world hysteria hysteria Hitler Hitler Hitler this is Armageddon this is not trying to be overly dramatic thousands of people will die you know what you will die people will die and other people will die are more likely to die die died died died died people died I'll tell you how blood money No hundreds of thousands of people will die it feels like we're trying to avoid the apocalypse and half of the country is voting for the asteroid these cuts are blood money people will die compared that moment to something that might have happened at a rally and Nazi Germany people have compared Trump to Adolf Hitler we should look at Adolf Hitler in 1929 where Donald Trump takes it I have absolutely no idea he's going to take our economy from here to here I had one of Hitler's speeches translated into English and I think this tells us a lot about where Donald Trump is getting his ideas please stop it with voting for trout the guy is Hitler the number of prominent people comparing you to Adolf Hitler the Mexican president said you're using the same kind of language that ushered in Hitler New York's Daily News ran this front-page earlier this week Trump is Hitler you're being unfavorably compared to Donald Trump don't get me wrong Conan I agree with a lot he says a lot he's striking fear just like Hitler did in Germany he talks about immigrants that is what Hitler did Trump then says this is inconceivable so something must be going on publicness Obama is a Muslim and that's about there is there a doomsday plan for a time like this am i right to ask about a doomsday plan do you see this as a doomsday scenario but it doesn't matter that no one has ever proposed the theory of trickle-down economics because the propaganda has successfully done its job I asked a friend a while back if you knew what trickle-down economics was and all he could come up with was well I don't really know what it is but I know it's bad he doesn't know what it is but he knows it's bad now there's a success story for progressives and the media right there I asked another friend if he knew what it was and he just responded trickled down my nuts later he clarified that he knew nothing about the supposed economic theory and again let's make this perfectly clear no economist has ever proposed a theory of trickle-down economics this term is only something that has been proposed by the left and is continually propagated among leftist circles as a strawman attack towards real conservative economic policies there is no school of economics for trickle-down theory no economist anywhere has ever thought up the theory of trickle-down and it is nowhere to be found anywhere in the history of economics but I still here in my classes I hear it with my family I hear it in the news and I hear it with disingenuous politicians who only want to make you more ignorant on these issues oh and I can hear this one already hey juice boy David Stockman Ronald Reagan's director of the Office of Management and Budget said this I mean Kemp Roth Reagan's 1981 tax cut was always a Trojan horse to bring down the top rate it's kind of hard to sell trickle-down so the supply-side formula was the only way to get a tax policy that was really trickled down supply side is trickle-down theory gotcha juice boy gotcha well shit guys David Stockman said it that's it take all your economic research and history back home David Stockman said it someone who is not even an economist therefore it's a real economic theory despite the fact that people before he was even born we're talking about it but forget about it forget everything fuck it David Stockman said it David Stockman made it real everybody he created the theory forget everything and even David Stockman the man who invented trickle-down economics says yeah it was a stupid idea and that's from the guy who invented it that's right guys David Stockman is apparently some kind of time traveler Will Rogers was making humorous news columns about it 14 years before he was even born the merriam-webster dictionary even cites the first use of the word and it's a record from 1954 David Stockman was just eight years old when he created this theory Wow what a guy the trickle-down experiment that began in the Reagan years failed the experiment that started in the Reagan years what about all these other guys talking about it Pocahontas hey wait a second they were even talking about it before you were even born hey are you all talking out your assholes it's not an economic theory and it's especially not a real economic theory when you take into account the comparisons made between what the Left likes to say the purpose of trickle-down economics is and what supply-side economics actually is because what we are actually talking about here is supply-side economics supply-side economics is what conservative economic policy and principles are based on so now let's spend the rest of this video to talk about what supply-side economics actually is and how it works and has worked in the economy while also dispelling some more myths surrounding the derisive phrases trickle-down theory and tax cuts for the rich let's start with what supply-side economics is supply-side economics is only concerned with the generation of additional wealth and economic growth and to do that it prioritizes an increased rate of supply in the economy which will increase demand for that supply which will increase tax revenues from the new taxable jobs and wealth generated from the means of producing that supply and the best way to get an increased rate of supply in the economy is to cut high marginal tax rates that are stifling money that would otherwise go straight back into the economy and to roll back regulations that impede businesses from being able to more efficiently create higher levels of supply that's it nobody's trickling shit down money isn't being transferred from rich people to poor people like so many people like to say trickle-down economics does if the sole purpose of supply-side economics was to just trickle down money from a rich person to the hands of a poor person then why even have the middleman of the rich person at all and just give it straight to the poor person but that's what they'd like to say trickle down economics is and how supposedly prosperity is supposed to trickle down all over my face and benefit the poor and that's what they want you to think of conservative economic principles and they try to confuse it with supply-side economics claiming tax cuts on the rich will trickle down to working families in the form of stronger economic growth damn it grandpa I just went over this and aside from that no one is saying to completely abolish all taxes on rich people but to cut back on its high marginal rates to a level or government revenue and economic growth reach its highest level of efficiency that's what the Laffer curve is all about and that's also why it's an important distinction to make between cutting tax rates and cutting taxes because the phrase tax cuts is also used synonymously with cutting tax rates and cutting tax revenues one that's not the case at all as I'll get into in a second and remember the sole purpose behind supply-side economics is the creation of more wealth and increased economic growth through greater supply no one's trickling shit down if you just read this tribute money from a rich person to a poor person so that they can go shopping and buy a burger at McDonalds that's not going to spur large-scale economic growth it's not going to seriously incentivize making products any better than they currently are if you redistribute money to a poor person to theoretically help them in their poverty at current economic levels that's money that a business doesn't have to be able to create new and better products and services to facilitate the creation of jobs and in many cases they won't even be willing to risk the capital to even try such a venture but if you have large sums of money and invest it into new services products and businesses that is what is going to spur economic growth and generate supply which one do you think is going to spur economic growth giving Bill Gates a million bucks so he can go make some cool new computer hardware or giving a million bucks to the guy down the street so he can go and buy stuff if you give it to Bill Gates he will then go and invest it into research and development and have to hire a bunch of people to create the new product he just invented if you give it to the guy down the street he's going to buy stuff one scenario creates economic growth the other one not so much if you let businesses and affluent people keep more of their money to invest in businesses they will produce new and better products generating a supply of that product which will then lead to a marketplace demand for those products which will then lead to a demand for a cheaper better and more efficient version of that product creating more competition to innovate that product to meet new market demands and create more supply which will overall improve the quality of life your entire life changes when someone invents a new product and then you now want to buy that product and one of the typical responses you hear to this point is well if businesses keep more of their money why would they want to create more products and innovate the corporate heads at the top can just keep more of the money for themselves and everyone suffers from their greed and another response is that supply doesn't generate demand demand generates supply okay well look at Apple one of the world's largest companies 11 years ago Steve Jobs created the iPhone there was no such thing as an iPhone before that no one had any idea what one would even look like before Apple spent the time and money to research and create that new technology that would then be used to create this new product and this new product that had never existed before suddenly plentiful and supply has generated a demand that has been seen across the world so now why would they want to keep innovating shouldn't they have just stopped they're the owners of Apple could just sit back and keep raking in that money like the greedy people they are well to the deep resentment of people who don't believe in supply-side economics no because once you create a product and once there is now a demand for that product there is also demand for an even better product we want an iPhone that is twice as fast and twice as powerful and you know what comes with that demand competition because now Apple can't just sit back and let the money keep coming in because some other company or a multitude of other companies are going to come in with an even better smartphone and attract apples customers away from them thus there is an incentive to innovate and create new products businesses have to keep up with changing demand that has been generated by creating the supply of the smartphone that's what businesses compete for that's what the entirety of history has shown us that's where the money is the first thing you learn in business 101 is that the sole purpose of a business is to generate profit for the owners good luck generating profit when all your customers are going over to that other guy with the better smartphone and this idea of supply generating its own demand is two of nearly every product available you weren't sitting around demanding a personal computer in the 1960s that would do all the stuff that computers do now no one knew what the hell a personal computer would even look like someone had to create the thing first and invest large sums of money into even formulating the ideas for it and then you saw in a commercial one day and said hey that looks pretty freakin cool I'm gonna buy one of those even software would then the computer had to be supplied first people weren't demanding a way to surf the Internet with Internet Explorer like what no no one even knew what the hell an Internet was someone had to create that software first before there was any demand for a better version of it and now we have Internet Explorer updates every few years no one's sitting around and going oh my god I demand gummi bears No someone had to make them first and then a bunch of people said hey those were pretty good and then bought some and now we have your standard gummi bears or your gourmet gummy bears and all these other brands of gummi bears kosher gummy bears vitamin gummy bears hair loss prevention gummy bears what the hell but you get the point someone had to make the product first in order for that to be further demand for it so now back to Apple Apple created the iPhone you wanted that iPhone and you went out and bought that iPhone and now Apple was in the game to constantly be making better iPhones they can't be sitting back raking in all the profit if they're not also reinvesting that money into research and development to create a better iPhone it's like most people think that businesses just sit around and say yeah the customer fuck'em but businesses hold customer surveys they hold meetings with people and ask them how they feel about the company and their products and their services and what they think could be better businesses pull their customers they need to know what people are thinking so they can meet that market demand for the products they have and cater their services to them and just because you might think or may have been told by some media outlet that oh this company does this one thing that's not so good and businesses they're just pure evil doesn't mean that their entire existence is some kind of cancer or nefarious force placed upon humanity I mean for God's sakes they just gave you a job they're paying you money that you can now use to go and buy stuff with how the hell is that evil I was watching a video a few weeks ago on Apple and why they probably won't buy Netflix which I didn't even know that was a conversation that was even happening but I scrolled down to the comments section and found one of the most uninformed and ignorant comments on the Internet but it's very relevant because this is the sentiment that many people have surrounding big businesses and what they think about their mere existence especially people my age I hate Apple not because its products are absorbedly pricey in developing countries and in the US but because it has so much money to change the world in a better way but it doesn't there's no CEO or shareholder and Apple just willing to do goodwill in health poverty medical research food research space research renewable energy or think out of the box like Tesla Apple is for profit and against humanity I swear to god this person literally just wrote this statement out of thin air like this is just what they felt like Apple does so to them they probably do do these things well I don't really hear about all the great things Apple does for Humanity on a daily basis so that must mean that they're against humanity and probably do absolutely no charity work to save the world at all yeah I'm gonna tell the world about my discoveries great idea I'm telling you all it takes to find some information about this is to just type in these keywords into Google Apple charity how would you look at that the Apple corporation has spent millions upon millions of dollars in donations to charities there's no CEO or shareholder and Apple just willing to do good will did you miss the story where Tim Cook CEO of Apple donated 100 million dollars to charity 50 million dollars of which went to Stanford city's hospitals which was divided up with 25 million dollars of that go into a new main building and the other 25 billion going to a new Children's Hospital and the other fifty million dollars go into a charity foundation called product red which fights diseases like AIDS malaria and tuberculosis medical research man one of your criterias did you miss all that great idea 11 how in the hell did you form this opinion of yours what the hell were you thinking seriously someone had to have told you that Apple is evil someone had to have told you that there's no way in hell that any normal person would have come to this conclusion about Apple without someone telling them something about how evil they are and for some perspective these donations came back in 2012 this comment was made this year 2018 but hey let's go down the list of some more of these anti humanity Apple executives Philip Schiller senior vice president of worldwide marketing at Apple donated ten million dollars to the Brunswick Bowden college in the hopes of advancing research on climate change I'm sure a person like you would think that's just fantastic right and I'm sure that can be included in your space research criteria did you miss that news article Angela Erin's senior vice president of retail sold 50,000 shares in Apple and donated seven hundred and seventy five thousand dollars of it to her charity foundation that helps relieve poverty Advanced Education and promote and protect good health health and poverty man two of your criterias Eddy Cue senior vice president of Internet software and services who raised over two hundred and fifty thousand dollars for the National Association of Basketball Coaches Jonathan Ive chief design officer who raised twenty six million dollars to fight AIDS tuberculosis and malaria Dan ratio senior vice president of hardware engineering who sold nearly 11 million dollars worth of his shares and Apple to charity Bruce Sewell senior vice president and general counsel who works with the equal justice works initiative that provides two-year fellowships to young lawyers assigned to projects or cases in underserved communities art Levinson Apple's chairman of the board who helps to fund the breakthrough prize and life sciences that rewards researchers who develop cures for intractable diseases and produce research into anti-aging and hey let's go back to some more of Tim Cook's donations seven hundred thousand dollars to the Robert F Kennedy human rights group remember the whole Charlottesville deal he donated two million dollars to the Southern Poverty Law Center and another million to the anti-defamation league which I'm not all that much a fan of the anti-defamation league because they're largely political hacks for the left and they also decided to deem a freakin cartoon frog a hate symbol get real get real but still the man is donating his money which is the point I'm trying to make here such as giving ten million dollars to hurricane Harvey relief and before that two point five million dollars in hurricane sandy relief in total the man has donated damn near a hundred and thirty million dollars to organizations that tackle AIDS HIV tuberculosis and malaria and how about as a 100 million dollars provided to schools in the form of iPads Matt books and other Apple products and none of this even includes all of his undisclosed donations to various organizations so again this person literally just made this shit up and despite what you may think about Tim Cook politically the guy donates his money to charitable causes but now I can think whatever I want about these companies without doing any basic research and let everyone know just what I think making them even more ignorant by doing so so basically a poloz cancer great why all of this donating from Apple executives even ignores the fact that Apple matches its own employees donations to charities so if you're an employee of Apple and want to donate say a thousand bucks to your favorite charity Apple will match your donation making it a total of two thousand dollars going towards your favorite charity or if you decide you want to volunteer at a charity somewhere and you're an employee of Apple they will donate $25 an hour to that charity for the duration of time that you volunteer though I think now they upped it to $50 an hour this program has yielded more than 50 million dollars in donations and that numbers from 2014 the most recent number I could find puts it at a total of 78 million dollars but all this donated from Apple aside how in the hell did you know what an individual shareholder of Apple donates to charity in his spare time some random Joe and Montana could own a share an Apple who the hell are you to say that he never donates to Goodwill causes finally this last sentence is really one of the biggest pieces of annoyance for me Apple is for profit and against humanity the entire world has benefited from Apple's products the iPhone literally revolutionized the entire way the world is connected to each other the poorest person in America is highly likely to own an iPhone do you understand what this tiny rectangle is capable of doing the amount of knowledge you have access to just by owning it the standard of living of everyone has been improved by Apple's products I can FaceTime my relatives on the complete opposite side of the country on the complete opposite side of the world with this thing and do you know what had to have happened before you got that product in your hands Apple had to hire a bunch of people so a bunch of people got jobs a bunch of people are getting paid against humanity Apple's products have been nothing but for humanity and hell maybe you don't even own an iPhone but Android or Samsung the same thing applies there too smartphones have absolutely raised the standard of living for everyone and have been nothing but for humanity and bullshit virtru signaling faux morality statements like this infects so many more people than just this one comment here but hey for all I know the 11 and his username could mean that he might actually be 11 years old but either way it's stupid shit like this that just gets spread around all over the internet and all of her politics and economics misinforming everyone unjust basic issues like this and making people think that companies are just evil and greedy and terrible you don't think people could therefore be misinformed about basic economic theories this falls into the most common fallacies of all time and in particular with Apple Apple is evil Apple is evil Apple as evil people you must look into these things before you go talking about them find evidence research at least 22 people out there share the same view of Apple and who knows how many more people this comment made some kind of impression on the first reply to this comment is basically an affirmation of this statement by saying welcome to life and even that has 30 likes I guess this also goes more to the point of what should be considered internet rule number one which is that do not trust random commenters on the Internet so back to the point that businesses actually have a vested interest in what the consumer wants I go and get my hair cut at a place called Sports clips and every time I'm at the cashier to pay for my haircut I get sent an email receipt asking me how their service was and what they could possibly do better to keep my business thereby helping to maintain the existence of the company but recently another barber shop opened up in town the barbers and they're taking a very similar approach to sports Clips high quality haircut services but are offering a lower priced haircut and a complimentary neck and shoulder massage to go along with it holy shit neck and shoulder massage now I'm really interested in going to that other barber shop wait what free popcorn and soda all right what I'm triggers placed on right now just a second now that's what I call a haircut and you know what I got my neck and shoulder massage all for two bucks cheaper sorry Sports clips you just lost my business so I didn't get any free popcorn or soda I think that just might be for the kids or if you're waiting for a long time but that's fine I'm not really much of a soda drinker anyways and I just made some popcorn once I got home but I'm gonna go to the barbers for my haircuts from now on so if you can't tell from this companies have a vested interest in serving you so they can get your money they only want your money and will do whatever necessary to keep on getting it because businesses unlike the government can't force money out of you they have to earn it all of this is due to the motivation of profit money and if the business doesn't have any money to spend or reinvest with they don't have the means to innovate and create a better service for you so you'll just get the same product and service you got yesterday you won't get that sweet ass and that can show the massage to go along with your dope as popcorn and soda all of this brings about the second phrase in this video being tax cuts for the rich surely most of you have at least heard of this phrase by now with the recent bill passed by Congress on tax reform it's all the media more raging about tax cuts the rich tax breaks for the rich tax cuts especially for the wealthy you know caps go to the rich tax sugarplum for the rich for all those juicy juicy juicy juicy tax cuts juice juice juice tax cuts for the rich tax cut for the rich right now cut taxes for the rich cutting taxes for the rich slash taxes for the wealthy the biggest tax cuts they've ever had tax cuts well look I tell you where all the rich folk tax cuts for the top 2% make tax cuts from millionaires and billionaires lowered taxes on the rich resist tax cuts on the rich not only does this line completely ignore the fact that both the middle and lower income brackets are also getting tax cuts with this bill but is this constant wave of attacks on rich people getting cuts on their taxes that for some reason because they're rich they don't deserve to keep the money that they've earned they don't deserve to keep the fruits of their labor as much as that guy does and from this phrase is created another false notion that because rich people are being less the tax burden will go on to other taxpayers which we already went over this with regards to Andrew Mellon but even with this specific tax reform bill this is not the case at all everyone got tax cuts moreover you might also hear this phrase that the tax bill gives the rich more money no one is giving anyone anything what kind of logic is that anything that the government doesn't take from you it's giving to you know all individuals are able to keep more of their own money keeping those greedy government fingers out of your ass wallets and none of this is to say that I think people of middle or lower income classes should be taxed at a higher rate than people of higher income classes in fact I think the fairest system of Taxation would either be a flat tax or just a straight-up national sales tax with no income tax whatsoever and also no one ever says we only want to cut taxes for rich people most supply siders and conservatives want to cut taxes for everyone and because everyone also includes rich people any tax cut proposal is instantly branded tax cuts for the rich rhetoric rhetoric always more rhetoric that's how this always works if you give tax cuts to lower-income groups but you'll also include rich people tax cuts for the rich but the phrase tax cuts for the rich is typically followed with something to the degree of it helping to promulgate trickle-down economics and all that prosperity that will supposedly trickle down to the impoverished cut taxes for the rich and it trickles down same old trickle-down economic theories more tax breaks for the rich tax cuts to the rich it'll trickle down to the rest of us trickle down had a second part to it and that is cut taxes for those at the top claiming tax cuts on the rich will trickle down to working families damn it old man how many times do we have to teach you this lesson old man trickle-down economics is a cruel joke the trickle-down idea that most people have is that if rich people get tax cuts then somehow by them being able to keep more of their money means it trickles down to you and you get more money okay first you see the straw man problem with this right they make up the phrase trickle-down economics and attack it as if that's what's actually being promoted by conservatives again it's complete crap I just went over with supply-side economics is we're gonna bang out some content for you guys supply-side economics also called trickle-down economics no it's not also called trickle-down economics dammit I just went over this we weren't even taught about the economic theory of supply-side in high school we were only taught it as trickle-down theory or if a teacher does talk about supply-side economics they will always say something along the lines of so today we're gonna talk about supply-side economics also known as trickle-down economics but I'm just gonna call it trickle-down economics from here on out no don't confuse it with what you want it to be teacher or they might describe it like this okay class today we're going to talk about supply-side economics or you know trickle-down economics right uh-huh this is how I have always been taught about this theory the teacher always gives some kind of wink and nod about trickle-down economics and how it sucks balls they plant this lie in you early you know I'm not even sure that I've ever had a history teacher who wasn't left-leaning in some way but regardless you you are not teaching supply-side economics you are teaching it's pejorative which is full of lies and misnomers and look he even does the trickle down suckle noise now can taste that chocolate sauce dripping down the ice cream cone they always want it to be called trickle-down economics even if they know that it's actually supply-side economics because then they can make funny pictures about politicians pissing on the ordinary person and it gives them a good excuse to draw some urine trickling down and hey politically it makes for a good visual the guy you voted for is taking a leak all over your face trickle-down economic trickle-down economics is when we let the rich piss on you and we tell you it's raining you want to test that trickle-down theory drink about 20 beers then pee your pants okay then put a cup put a cup down here yes stand and see how long it takes for that PT can fill up that cup but also the phrase trickle-down itself just automatically brings with it a derisive implication no one wants a trickle what the hell is that even supposed to imply the phrase itself isn't even inherently a positive thing Hugh Jimmy let me just give you a trickle of my ice cream does that even sound good or does it sound more like blatant propaganda either way it helps their own political allegiance and because of this most liberals and Democrats I talked to think they know about supply-side economics but they only know it as trickle-down economics and the falsehoods that surround that phrase hey do you know about supply-side economics oh you mean the economic theory that gives tax cuts to rich people so it chuckles money down to the poor no the one that says you need to create a greater supply of stuff what the fuck is that so if you think you know about supply-side economics as being rich people keep more of their money there by poor people will eventually get some of that money and then the trickle happens and we all get some of that prosperity or that rich people keep more of their money and poor people keep less of their money then you have no idea what the actual economic principle on this issue is and I've probably bought into the trickle-down myth spread by so many of the people in academia the media and politics and if you're still going to be using that phrase after watching this video you are only helping to continue the strong a an attack on trickle-down economics and are making the national debate on economic policy even dumber than it already is but mostly I find this situation just to be a lack of information with the only information that does find its way to the average individual being some angry and pretentious talk-show host who says they think that by giving the rich more money that it'll somehow trickle down to the ordinary person from more prosperity when in reality it's more like the rich taking a piss all over your face oh and don't worry we all know it's just so the rich can reinstate the gentry class ridiculous right classic reagan-era trickle-down economics wealth can't help but trickle down think of it as a golden stream John [Music] is protecting wealthy interest get us back to constitutional principles oh no it's not about that John it's about getting back to when America had bought two classes land owning gentry and rabble and we all know how the land owning gentry have to stick together don't we up now John Oliver everybody we'll be right back and if you listen to that then of course you'll think yeah sure that sounds about right because you're not being given any of the information from the other side or even where the actual theory of supply-side economics has even taken place and been a success but the trickle down propaganda is all you hear and because someone is still probably going to say this in the comments this is not an issue of semantics where the two phrases mean the same thing these two things do not mean the same thing there are real misrepresentations of ideas between these two terms as I've already been going over and will continue to go over and Thomas souls own words the point here is not simply that the weight of evidence is on one side of the argument rather than the other but more fundamentally that there is no serious engagement with the arguments actually advanced but instead an evasion of those arguments an evasion of those arguments by depicting them as things they're not and these two arguments are never clarified because no one in the mainstream media will even attempt to clarify the issue at hand and I mean all mainstream media and especially not politicians why even attempt to clarify something like this when the general confusion and heated debate surrounding the subject attracts viewers and creates sound bites I can't stand watching the news anymore it's all so stupid and dumbed down and all these suppose it's sound bites created or never really sound are they but back to the idea of cutting taxes on rich people as Thomas soil points out in his monogram not only do tax rate cuts generate more economic growth incentives it through this economic growth that will generate increased government tax revenue this is another thing that most people will say tax cuts don't create more tax revenue well ok that may be true if you're talking about cutting tax revenues when you say tax cuts because these words cannot be used anonymously but that idea is not considering what can be achieved in the time of the tax cuts and the work that the money can do in the economy and this is supported with empirical evidence let's get into some of it looking back in historical tax cuts in America we see that in 1921 when the tax rate on people making over a hundred thousand dollars a year was 73% the government collected a little over 700 million in income taxes thirty percent of that amount being paid by the people making a hundred thousand dollars after tax rates had been cut all the way down to twenty four percent on people making a hundred thousand dollars a year the federal government collected over a billion dollars in income taxes and of that number sixty five percent of it was collected from people making over a hundred thousand dollars due to the tax rate cuts those individuals of higher income were able to invest their money back into the American economy helping to spur the growth of new businesses industries and products which in effect created more wealth that could be taxed by the federal government so now contrary to the popular rhetoric of the rich pay less and the tax burden goes to the poor the rich ended up paying a higher total portion of all the taxes the rich were paying more of their money at lower tax rates how about that and this doesn't just create more revenue it creates real economic growth that's why we call the 1920s the roaring 20s in 1916 the number of people reporting taxable income of $300,000 or more declined from over a thousand people to fewer than 300 by 1921 as tax rates continued to increase the total amount of taxable income declined by four-fifths from this income group also in 1916 there were only 206 people who reported an annual taxable income of $1,000,000 or more that numbers shrunk to just 21 people by 1921 as tax rates continued to increase but during the tax rate cuts of the early 1920s the number of people reporting taxable incomes of a million dollars or more rose again to 207 by 1925 if you're not going to be taxed out the ass and are actually allowed to keep the money you earn that then creates a change in economic behavior to go out and try and make some more money because it's not all going to be taxed away when you keep raising taxes rich people will find a way to keep their money from being taxed instead of putting it back into the American economy and creating inefficiency in the allocation of their money low tax rates make it safe to bring your money back into the economy so it can go into the marketplace and make more money and all this additional wealth being generated creates new jobs which is why the unemployment rate went from 4.2 percent in 1925 to 1.8% in 1928 Woodrow Wilson even considered that lowering tax rates would probably be more effective in encouraging business activity and productivity in his 1919 message to Congress where he said the Congress might well consider whether the higher rates of income and profits taxes can in peace times be effectively productive of revenue and whether they may not on the contrary be destructive of business activity and productive of waste and inefficiency there is a point at which in peace times higher rates of income and profits taxes discourage energy remove the incentive to new enterprise encourage extravagant expenditures and produce industrial stagnation with consequent unemployment and other attendant evils and Woodrow Wilson's own secretary of the Treasury came out and said that the high tax rates of the Woodrow Administration have passed the point of maximum productivity and are rapidly driving the wealthier taxpayers to transfer their investments into the thousands of millions of tax-free securities which compete so disastrously with the industrial and railroad securities upon the ready purchase of which the development of industry and the expansion of foreign trade intimately depend secretary David Franklin Houston showed that the amount of people in 1916 who were earning $300,000 or more was nearly cut in half by 1918 and in his words because of investments by the richer taxpayers and tax exempt properties why are they investing in tax exempt properties because the tax rates are so freakin high there is no incentive to invest your money into the economy when it's all going to be taxed away so you may as well put it somewhere where it won't all be taxed away but as we've already seen when tax rates are low and you're actually allowed to keep the money you make there is greater incentive to put your money back into the economy so you can try and make some more money even John F Kennedy followed this model of cutting tax rates John F Kennedy urged cuts and taxes and he got it right when he said that the purpose for tax cuts was to total output and economic growth these specific words were italicized in Kennedy's 1963 addressed to Congress he never said prosperity was gonna trickle down in fact he specifically said that it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise revenues in the long run is to cut the rates now because obviously investors will take efforts to avoid tax liabilities and they will move their money over to certain types of less productive activity more profitable than other more valuable undertakings and that this inhibits our growth and efficiency therefore he said the purpose of cutting taxes is to achieve the more prosperous expanding economy nowhere here was John F Kennedy proposing that when rich people get more money that prosperity from the top will trickle down to the bottom and in the common theme with the tax cuts the purpose is not to simply change the flow of existing money but to change behaviors in the economy due to the incentives of tax rate cuts and of course Ronald Reagan cut tax rates and economic regulations and we saw the overwhelming economic bounce back by the mid to late 1980s that continued on throughout the majority of the 1990s and another common point made by people with regards to Reagan is that the deficit was the highest in the history of the entire country during Reagan's administration where's all that extra tax revenue you talked about now juice boy looks like big juice is full of shit everybody know there were increased tax revenues throughout the Reagan administration the only year where they took in less revenue than the previous was in 1983 and that statistic is coming straight from historical tables provided by Obama's White House archives the problem with the Reagan administration in particular comes from the fact that you had a congress that decided they wanted to spend all the tax revenues they received and then some that's where you get your deficits from and it's also an undeniable fact that the increased military spending helped to bring down the Soviet Union by absolutely bankrupting them so you get a trade-off between higher deficits and taking down the evil empire take your pick but either way we went from receiving tax revenues of 517 billion in the beginning of his administration to 909 billion by 1988 because like in the 1920s they were now making more that could be taxed and I'll remind you that we were able to get out of Reagan's recession which was at the time the second worst economic recession ever since the Great Depression much faster and stronger compared to Carter's recessions Bush senior's recessions and the most recent Great Recession and that was despite the 1981 recession having the highest unemployment rate since the Great Depression a rate which was higher than even the peak unemployment rate of the most recent Great Recession and other than Reagan even george w had some success in increasing tax revenues when he cut taxes early on in his tenure though that's been completely buried and forgotten with everything else that was wrong with his administration the new york times of all people even ran an article in 2006 that admitted to their own surprise that there was greater government revenue after bush's tax cuts and corporate tax receipts nearly tripled since 2003 surprise surprise but Bush loves war and he doesn't care about black people and he's the devil himself the devil is right at home the devil the devil himself is right in the house States the gentleman to whom I refer us at the devil yeah everyone forgot about the increased tax revenues oh and fool me once fool me twice three times four or five six Heil Hitler Hitler I can't remember that kind of comparison being used against any other presidential candidate after assigning students the task of comparing Hitler and former President Bush I don't think we've had a president who's been so bent on destroying the United States as George W Bush I put him in league with the supervillains of our world great evil you'd say president but great evil these things you have done mr. Bush they would constitute the beginning of the end of America what's up America it's me G to the WB president number four three land of the brave and sort of kind of free Hitler clearly the same sort of way that Hitler worked he exterminated a lot of people that he didn't like didn't trust whatever and Bush is doing the same damn thing stop calling him President Bush there was a coup d'etat in 2000 a fundamentalist Christian right have basically successfully created a had a coup in our country recently the site came under fire for posting campaign ads comparing President Bush to Adolf Hitler and did it ever occur to you once sir somewhere in amidst your eight separate rusyn intentional terroristic invocations yesterday I can't remember that kind of comparison being used against any other presidential candidate hey wait a second I thought maybe was Hitler you're gonna put y'all back in Chains Mitt Romney is kind of tacitly praising Hitler yeah that's another narrative to look out for every Republican instantly becomes Hitler that's how they play their game but anyways this is why when you look up conservative economic policy you don't look up trickle-down economics because then you'll just find a bevy of it's failures because of course you'll find the failures of a strong in any economic statistic that the left doesn't like can be attributed to trickle-down economics but when you look up supply-side economics you will see success when people are allowed to keep more of their money due to lower tax rates and lower regulations they will be more likely to invest their money into new businesses products and services because there is greater opportunity to see a higher rate of return on their investments in an economy where they aren't being taxed like crazy why would you even invest in a new business in the stock market if the majority of your gains are just gonna be taxed away and you're left with nothing but when taxes are lowered there is an incentive to put your money into areas of the economy where it will be allowed to create the supply that will I have the demand that will create the jobs needed to secure that demand which will result in profit additional wealth and economic growth when taxes are lowered there are greater opportunities to take money out of tax shelters non-taxable securities tax-exempt state a municipal bonds and into the domestic market and economy where that money could actually do some more efficient work create some cool new products and make even more money it will ultimately generate greater economic output counter to what the majority of the left wants which is to redistribute the money of the wealthy person to people of lower incomes at current levels of economic output there is hardly a motivation to create better products at that point there is hardly a motive to make profits if you know that at the end of the day a lot of it is going to be taxed away and that will largely stagnate economic output it is more current investments made that will generate more economic activity and more jobs and make future prospects of profit and growth more favorable now as if it wasn't hard enough to get the government out of your wallets you can go and invest in a business actually running a business itself comes with its own troubles and that's why as important as it is to cut the rates on everyone else in general it's just as important to cut rates on businesses and other corporations most people don't seem to realize that for most businesses it can take years for even decades before they actually do make their first profit and not only that over half of all new businesses fail after just five years that number goes up to a 70 percent failure rate after just 10 years I'm not really sure that all the people who want these high tax rates and business regulations even know how difficult it is to run a successful business that even makes profit to begin with so let's talk a bit about the economics of running a business and all the hurdles they already have to go through on top of paying high tax rates and having to deal with the multitude of other government regulations let's go back to making profit Amazon was founded in 1994 and only in the year 2001 did it actually make its first profit it took seven years for Amazon to make a profit and as a side note it would not have stayed alive had it not been for its numerous investors with large sums of money to even keep the operation alive but anyways this is where profit rates become more important than profit on sales take a supermarket for instance they sell bread and you know what they have to do after they sell all that bread and make all that money well they got to put all that money back into buying more bread it's a constant cycle of reinvesting before actual profits are realized and that's not even considering the fact that before any owner of the company is able to make any profit the workers themselves have to be paid you got cashiers janitors stalkers truck drivers delivery companies managers supervisors administrators the forklift driver hell even the electric company all of these people have to be paid first before any greedy rich evil business owner who even gets to see a penny of profit on his company yeah that's another thing that doesn't make sense about the whole trickle-down rhetoric if there's any trickling going on it's in precisely the reverse direction someone has to be hired and paid first before any owner can realize any profit you know the more you think about all the trickle-down rhetoric the more you realize that none of it really makes any sense I guess that's why they have to make pee jokes all the time but anyways from 1960 to 2005 the average rate of return on assets ranged from a high of twelve point four percent to a low of 4.1% and that's before taxes after taxes the rate of profit ranged from a high of seven point eight percent to a low of two point two percent but now let's make it even harder for business to make money and tax whatever they do earn and put up regulations saying they can't sell that particular brand of brand because our team of bureaucratic specialists don't want you to sell that bread or something or will tax the company if they do try to sell something we don't want them to sell so then the company either sells no bread or has to sell a higher priced bread that we'd prefer for them to sell which now means that every single human being living in the vicinity of that supermarket has to pay more of their hard-earned money on that bag of bread leaving them with less money to spend on other important stuff you see how big the effects of all this can be and this doesn't just pertain to supermarkets and bread I talked about how much tariffs suck two episodes ago and a similar scenario applies there too no no no we don't want you to buy that cheaper steel over there so we're gonna tax you extra for buying their steel because we want you to buy this deal over here we know better than what you want listen to us and again all of the administrative aspects of the business has to be taken care of first before there can be any return on any of made in the business itself and that doesn't mean the profit made on sales I'm talking about the profit made on investments into the business to begin with those costs that were incurred which built the store in the first place all the construction companies the engineers the water suppliers the electricity suppliers all of that was required first to lay down the foundation for the entire building to even exist all of those costs its the profit made on the total capital invested into the company that counts the most because all that money helped to literally create the business itself that's why a lot of the arguments you hear on well if I'm employed in the business I should also own part of the business is absolute nonsense and stems from a complete lack of economic knowledge and actual greed if you're just employed by a company you were not responsible for loaning out your own money to hire that construction company the architects the water suppliers the electrical company that all had to come together first before there was anyone even around to hire you you do not pay for the delivery companies that stock the shelves where you work you did not pay to have all the electrical appliances installed in the store and you did not pay anything into the initial investments made into the business itself you did not risk your own capital to finance the place you work at you don't own it you just provide your productive capacity to keep it functioning and that's after the people before you came along and actually dispensed with their own money to create the thing that is now paying you to work there you would not be there now being paid money if someone else didn't come along first with the large sums of money to build the place you are not inherently owed anything unless you are investor into the very foundation of the business and actually owned it now if you are the owner of the business you can decide this for yourself you really like your workers and you'd like for them to have a share in the company that's great do whatever you want but the second you're now forced to give up ownership or start to have people demand ownership of your company and are out in the streets protesting such a thing that's where the problem starts a lot of the protests you see in particular where people demand some sort of ownership of the company miss the point that they would not be protesting in the first place if someone did not invest in the creation of the building that they are not protesting in front of and moreover it's usually only when a business is really successful do people start to show how greedy they truly are when they start protesting the place they work at to demand higher wages Oh yeah that's some more rhetoric to watch out for a company becomes evil once it becomes successful I think of Walmart in particular these people would not be protesting if Walmart wasn't a multi-million dollar company the entire basis for their employment lies in the fact that Walmart originally had investors who risk their own capital to finance the creation of it they parted with their own money in the prospect of maybe or maybe not getting a return on it you are not suddenly owed any part of the company now that it's actually become extremely successful that's for the actual owners to decide what they want to do if you think your job as a cashier is worth $30 an hour then surely there is another employer out there who thinks your cash shearing skills are worth $30 an hour or maybe someday Walmart executives decide for themselves that they're going to give all their employees 50 shares in the company that's great but that's also their own decision to make because they own the company and hey it looks like with this recent tax bill passing they're going to raise wages and give employee bonuses look at that but the politicians told me that this was never gonna happen maybe that's because they're trying to win votes one of the best things to have happened with this tax bill is the lowering of corporate tax rates from thirty five percent to twenty one percent and for the same exact reasons I've already been going over if a business has more money to spend it will use it to invest in new and better products and services or you can listen to the rhetoric of Democratic politicians and they're bitching and moaning like Chuck Schumer here the stock market's booming job creation isn't and I love the example of AT&T over the last 10 years AT&T has paid an average tax rate of 8% a year they have 80,000 fewer employees today than they had then tax breaks don't lead to job creation they lead to big CEO salaries and money for the very very wealthy ironically enough the very same moment he was talking about the greedy evils of AT&T AT&T announced that they were going to give more than 200,000 of its employees a thousand dollars in bonuses with many of its employees also expected to receive a 10% raise not only that AT&T announced that they're going to invest an additional 1 billion dollars into the US economy when you're not being taxed out the ass there is an incentive to not only put more money back into your business but into the economy and this isn't even true of just the US this is a global fact back in 2003 Ireland cut its corporate tax rates from 40 percent all the way down to 12.5 percent and since then they've nearly doubled their GDP these low tax rates have been enormously successful in attracting business activity from around the world in Ireland in much the same fashion as the Scandinavian countries as I previously mentioned in my Scandinavian video in fact Ireland has around 700 US companies operating there this type of business activity has always been the incentive provided by low corporate tax rates always it doesn't matter what rhetoric some politicians start spewing off about or how outraged the media gets rhetoric always more rhetoric an economic policy analyst at the Heritage Foundation also noted that the flood of foreign investments into Ireland from the US and around the world shows how an attractive business environment benefits the whole economy now as good as the corporate tax rates have been for Ireland they also did a pretty good job at pissing off their EU overlords and have been accused of stealing revenue and jobs from other European nations yeah this is why the EU sucks no no you don't get the benefit no you're stealing from us you're stealing from us the only thing happening here is that Ireland is successfully competing in the global economy and seeing huge amounts of business activity and increased job creation because of it can we please get rid of the EU they want a ban memes now anyways getting back to the difference between profits made on sales and profits made on investments or profit on sales count the most as a matter of how fast you can sell your products and make back the money you put into it also known as the profit turnover rate staying with our grocery store example bread gets moldy and stale within a week so you'd want to sell it as quick as possible to make that profit immediately so you sell it at a low price that doesn't make the customer think twice about it to get it off your shelves and make some money whereas say in the piano market which is a much smaller market because who the hell is going out of their way to buy pianos every single day the piano business can sell their pianos for a far higher price not only because of all the work that went into building it but because the piano also spends more time sitting in front of the store window waiting for someone to buy it so they can charge a higher and still make a decent profit off of it so here you have two different industries where their profit turnover rates are either fast or slow but both are looking to turn that profit on sales over as fast as they can so they can start to realize their profit made on the actual investments into the company itself because someone also had to pay lots of money to build and supply the piano shop in the first place this entire process of constant reinvestment on not only products but perhaps even more efficient ways in making and selling those products means that a business can take years to make a single dollar in profit and the only thing keeping it alive during the time it takes to make profits are all of the initial investments made by the people who actually had all the large sums of money to invest with and this isn't just for the big corporations this applies to the small business owner too who has to put even more on the line because they probably have less money to work with incurring even greater risk now this explanation not only shows the basics of how a business functions but it also shows the importance of supply-side economic policies and how they help to facilitate the investments made into businesses in the first place more on that later but let's take another example that can slow down the process of making profits which is competition now I'm not implying that competition is bad obviously I'm just pointing out all the hurdles a company has to go through to even realize profits and this example can pertain to you if you're a tech junky AMD and Intel both nearly went into bankruptcy because they were so ensconced and competing with each other both companies figured that it would be a better business outcome for them to risk bankruptcy by spending so much money into research and development technology to outdo one another in making you better processing chips for your computers AMD lost more than a billion dollars in 2002 and that stock price lost nearly four-fifths of its value but four years later the price of Intel stock also fell by about 20 percent in just three months which resulted in one thousand managers being laid off and profits falling by nearly 57 percent meanwhile AMD's profits increased by 53% long story short even the big corporations will go into feverish competitive sprees with each other and risk bankruptcy just to get that product to you so they can make some that sweet sweet cash and get some profit on their investments the competition between these two companies got so crazy that the Dean of the Yale School of Management described the computer chip industry as an industry and constant turmoil all this to make money because people's investments are on the line but now let's just tax the shit out of them make them pay some more because we'd like to call him greedy yeah did you know that the companies that made Fortune magazine's list of the 500 largest companies in America averaged a return on revenues of a penny on the dollar in 2002 compared to 6 cents in 2000 which was the peak profit year oh yeah these big companies real greedy yeah that's some real Satan like behavior there they're really squeezing every last penny out of the consumer just like my favorite politicians said they do mm-hmm yeah and hey none of this talk of making profits even accounts for the type of neighborhood the store might be built in if your store is in a high crime neighborhood there's a greater likelihood that your goods and services will cost more money because not only is the business gonna have to pay more for extra security but they also have to take into account shoplifters robbers and vandals which might make it completely unsustainable to maintain a business in the lower-end high-crime neighborhood if a store sells a juice bottle for 75 cents and only makes a penny of profit from each juice bottle sold than just one person stealing a bottle of juice out of every 75 juice bottles could make that product become completely unprofitable to sell which generally means that prices wound up being higher in these kinds of neighborhoods to compensate for all the extra costs it only takes a small number of shoplifters to make your whole business operation on economical it doesn't matter how many honest and good citizens are in the neighborhood but most politicians will overlook these conditions and the fact that it's essentially a luxury to even have a store selling you food in this crappy neighborhood to claim that higher prices are being charged because of greed and if you don't know anything about the circumstances that the business operates in you'll probably just go along with whatever the politician has to say but the same type of price markup could even occur in a low-income neighborhood that doesn't have a crazy high crime rate but for completely different reasons and this is because the business is trying to make its money back on its investments through people that don't really have a lot of money to begin with so what usually results is that many people living in these low-income neighborhoods will either take a bus or a taxicab or hell maybe even an uber now and leave their own town to go and shop at a higher end store in the town next door that has a lot more people of higher incomes living nearby why because prices are likely to be cheaper there why are prices cheaper there because those businesses make their money back faster the profit turnover rate is faster because the people living in the high-income neighborhood actually have money to spend there which means it can be profitable for a business to price its products at that lower price counter that with the high prices of groceries in a low-income neighborhood because the profit turnover rate is slower there because people who don't have a lot of money to dispense with our shopping there the business doesn't make as much money unless it charges higher prices all of this is important not only in the sense of supply-side economics helping to provide business owners with more profits from tax cuts but also in the fact that these businesses exist in the first place because someone with the disposable income helped to create them even in the crappy neighborhood like this and are helping to create more supply in the economy and I give these examples on the basics of economics and business decisions to show you just how many variables a business has to deal with and why you really don't want to be taxing the living crap out of a business regulating them to death or forcing them to do all sorts of other stuff that could drive up their costs and make their very existence on economical this is what the surrounding ideas of supply-side economics aims to do to allow more businesses to not only be created but to thrive grow compete and ultimately to generate more output more supply into the economy and I also cite these examples to try to give you a sense of just how much of the rhetoric by anti-business political advocates is such hyperbole a lot of it is literally just playing politics and pandering to the beliefs held by voters because it is the easiest thing for a politician to come out and say yeah you guys are right businesses are evil and greedy let's start taxing them some more and pass some new regulations now of course they probably don't say like that the rhetoric usually has to have some fluff to it like common sense practical regulation for consumer protection the business needs to pay their fair share it's for the sake of equity or something like that and then on the side that can talk about corporate greed and how things are just so unfair hey didn't I just go over how much profit the top 500 companies in America even made in 2002 but aside from the political rhetoric there are so many costs involved in actually running a business that the last thing you want to do is make it harder for them to operate especially for the sake of creating more supply what are some other costs well don't forget about advertising because people have to know that your business even exists right that's more money the business has to pay for and hey none of this even takes into account for certain labor conditions that might exist within the economy if a manufacturing company has a slow period of orders then it may have to layoff workers to save on money and those workers who get laid off will likely go find other jobs because they need money too but when the company starts receiving a higher number of orders again it'll need to hire more workers since they just laid off a bunch of people and they can't handle the incoming demand and those same workers who were previously laid off are probably not going to return because screw you you laid me off and I'm not coming back because I'll probably be laid off again which means that the business will have to hire new workers which could entail more training costs and lower productivity from each new worker until they're able to reach peak efficiency levels for the company by gaining more experience however it might be difficult for that company to even be able to recruit workers in the first place if it's known for its high job insecurity unless they also offer other forms of compensation which entail more costs hey I just checked your Yelp page and a lot of the reviews on your Yelp page says I'm very likely to lose my job working for you guys what's up with that okay fine we'll pay you a little more per hour happy this is all just a taste of some of the variables to take into consideration when actually running a business which again to the point of this video is why you do not want to be taxing businesses out the ass or regulating them to death so they can actually function and provide people with products services and jobs while at the same time being able to compete innovate and generate greater supply it's hard enough as it is to make money restricting how much can be made or by what means they have to be made are all extra costs on the businesses themselves and ultimately the society at large because someone has to pay for these costs and that someone is you or as we've been going over you can take the route of popular political rhetoric and just say shame on you greedy businesses for charging higher prices and exploiting the poor working classes look out for these specific keywords that people who don't know anything about economics like to use exploitation price gouging predatory prices and the big one greed yeah forget about any other circumstances that might affect the pricing of goods and services it's just greed and hey we've been talking mostly about the taxation side of supply-side economics now let's take on some government regulations that hamper economic growth everyone's always clamoring about how we need more doctors and health care services in America right well here comes the issue of government mandated licensing because to become a doctor you have to get a state-administered license without that you can't be a doctor it doesn't matter if you went to medical school for eight years and passed a bunch of tests if you're not licensed by the state you can't practice so now some of you might be saying well hold on a second juice boy I'm gonna have to disagree with you there why don't you want your doctor to be licensed if he's not then I mean what if he kills you how do you trust him don't you want your doctors to be licensed I'm starting to think you're full of shit juice boy well you know we all need a driver's license in order to drive and you know if we didn't all have driver's licenses then there wouldn't be car crashes all the time and people doing things while driving that they're not supposed to do when oh wait what oh yeah it doesn't work like that yeah that's the thing with licenses they don't really stop malpractice and that's especially true with doctors and nurses hey wait a second he's got a license he can't do that wait what why are there so many medical malpractice cases all over the country why the hell is this doctor dancing around while performing surgeries on a patient yeah it turns out that just because someone is licensed at something doesn't mean that they're automatically going to be better or more competent at their job if someone is going to break the law or do something they're not supposed to do a piece of paper saying they're not supposed to do those things doesn't stop them from doing those things you can be a bad doctor and still be a licensed nvv you can be a really bad doctor all right no from the inside there are some scary bad doctors that have a Colorado medical license and they're also some very good doctors and if anything the state licensure is not a really reliable protector against the bad doctor and this doesn't even have to be on a large scale like malpractice during the surgery even the really small things can't be solved with a license and I got a testimonial from my sister on this who's working as a nurse right now so when I got my job at the hospital we had weeks north of orientation and the staff told us that it's important to not have any nail polish no fake nails no gel nails nothing like that because the bacteria they like to live on the edge of the nails and it's hard to remove if you have all that nail polish kind of stuff on but after all that once I got to the floor and once I started working practically everyone has long acrylic nails nail polish gel nails they have everything that they told us not to do their doing and these are all licensed nurses yeah so it's not easy yeah and in particular with medical licenses most of the people who are on these licensing boards are themselves highly experienced practitioners with years of experience behind them so again you might think well then these people are obviously the most qualified to be dispensing licenses and setting the rules and regulations right sure but that's missing the point that for the most part the people on these licensing boards are themselves biased against expanding the number of legal practitioners why well because limiting the supply of doctors helps to keep their licensing fees high it's all about money people if you restrict the supply of doctors and nurses in the country then the fees to become one and maintain licenses will be high and all that means is more money that the person trying to become a nurse or a doctor has to spend which in itself might be a discouragement to become one when you have to factor in all these costs and in the grand scheme of things it reduces competition in the industry and limits supply so instead of protecting the consumer what licenses actually do is protect the practitioner they are protecting them from the competitive forces of the market this is all especially true when you look at taxicab medallions also known as your license to legally become a taxi driver New York City has been restricting the number of licensed taxi cab drivers ever since the 1930s when it started to give out these taxi medallions at the time the city had about 30,000 cab drivers but once these licenses came around the city limited the total number of taxi licenses all the way down to around 12,000 the result of artificially limiting the number of taxi licenses has led to the taxi medallion from being sold at $10 a piece in 1937 to $80,000 in the 1980s to $1,000,000 in 2011 the highest peak that was one point million dollars in 2014 when you limit the supply of something the fees to become that something always gets higher and reduces competition in the field to try and lower those fees now I should know however what's been called the uber effect incredibly the innovations of companies like uber and lyft have dramatically reduced the price of the taxicab medallion why pay a million dollars to be a taxi driver when you can just do it on your phone for a few bucks now what's more astonishing about all this has been the government backlash towards companies like uber and lyft which is by and large due to the fact that these government officials are heavily invested in taxi medallions and the entry of uber and lyft into the transportation industry has dramatically reduced the value of the investments made by these people imagine you're 1.3 million dollar investment into a taxi medallion now being worth six hundred thousand bees people are pissed but admittedly the people most hit are the current taxi cab operators who are losing hundreds of thousands of dollars on their business investments and this is what licenses do they protect the incumbents in an industry from the competitive forces of the market so in the case of all these taxi cab operators and government officials they're not being burned of all their investment money and here's where we get more talk of competition killing regulations there's a lot of people out there who like to use the we need to license these people rhetoric in order to protect the incumbents in the taxi industry I read this one article by Ben Chu at the independent who said imagine if pretty much anyone was allowed to drive a car to the airport and pick up disoriented tourists charging them whatever they could get away with imagine if we permitted anyone with the vehicle to cruise around city centers on a Saturday night offering to drive the inebriated home for cash this is the view of someone who has no faith in the market and completely misses the point of competition and is also ignorant of the entire system that uber and lyft are created around with both of these apps you are able to review drivers drivers have ratings you can see what people say about them and decide for yourself which one you want to pick yes so this guy's car smells like urine and it keeps mumbling Satanic Verses to himself passenger beware this guy is making a sound like you're always gonna guess some kind of creepy lunatic who's gonna charge you 200 bucks and give you the most terrifying ride of your life also for those of you worried about the quality of your service like this author is the platforms of uber or where you get your quality assurance from they are the ones who are letting these drivers use their platform if they end up letting some creepy pervert drive their customers around for them he's gonna get kicked off their platform because why would you burn lift let some dude harassing and molesting their customers work for them and personally I'd be more concerned for myself if I was actually the driver for one of these companies it seems like what makes the news the most is some uber or lyft driver being harassed or assaulted more than any driver screwing over their customer crisp of urca's faces badly bruised and he is barely able to see out of his left eye this lyft driver was viciously attacked Thursday while picking up a passenger I got out of my car and I told them please get out I opened the door for the guy he just got out and just punched in my hat he spent the next morning in the hospital police are investigating the group became violent the guy on the passenger side started pouring water on me and then some of the passengers from behind me started pouring water on me and they didn't stop there two men hitting me on this side and then there were two of the females came from this side and they kind of just rotated and took turns kicking and punching me these photos taken right after the incident the lyft driver becomes captive in her own car it's Gary I would say I contemplated about every single day whether I want to go out or not he told me how a passenger once posed this question what would you do if somebody tries to rob you at that present time the president said he had a knife Israel tried to act like nothing had happened oh we get almost to his house and that's when he says well you know I think I'm gonna rob you and matter of fact I even have a gun he saw an opportunity and I jumped out of the car I ran for the hills more or less he's aware of recent problems like Monday night's shooting of a cabbie the recent carjacking in crash of an uber drivers car and these two men accused of forcing a lyft driver to drive around as they committed crimes [Music] and this type of Quality Assurance is the same thing with doctors and nurses you know how you get your quality assurance there you know how you trust your doctor you get that assurance from the hospital itself you get it from the front placed in front of the people who are providing you medical care why would a hospital hire a guy who has absolutely no medical knowledge or anything to show for himself and then just starts killing all of his patients that hospital is going to get sued out of its ass they're not going to hire some random guy on the street put a scrub on him and call him a doctor so he can start chopping you up or else they're going to go out of business and pay some of the heaviest legal fees ever so if you're going to put up all the resources and investments necessary to have a functioning Hospital you're probably not going to start digging around and hiring a bunch of crazy people to be your doctors all right I found the problem yeah really what is it yeah you got these two these two spikes stuck in your body oh really yeah what were you gonna do well I'm gonna go and I'm gonna go ahead and pull these spikes out of you all right [Music] that'll be $500 also most hospitals have their own committee boards that vet people and make sure they're getting a qualified doctor or nurse hired onto their staff they do this so that the entire reputation of the hospital isn't that stake and so that there can be an assurance of quality or hey say it's just some normal guy running a little physician shop out of his house somewhere well if it turns out that his treatments and medicines just start killing everyone he's going to go out of business get his ass sued and receive some of the worst Yelp reviews in history so if a person is going to spend all the money and resources required to start practicing medicine they're probably going to be somewhat competent or else their entire life will be ruined and if they're running their own business they'll probably want to get some sort of hospital certification themselves so they can verify to their own customers that they're legit and have something to show for themselves if ben Carson loses his license tomorrow I'll still allow him to cut open my brain and fix the problems with me because this guy has decades of experience behind him in some of the most incredible success stories behind his abilities as a neurosurgeon and even if that doctor running his own business turned out to be pretty good at his job and the treatments he offered but accidentally killed one of his patients that story will be all over the news and will probably be heard about all over your local town which is a further incentive to any doctor running their own business or a major hospital to get their act together and hire people who are competent at their job the market will take care of someone who doesn't know how to do their job word will get around town that dr. Bob is killing people and he will go to jail and pay legal fees to all the people he screwed over this is also why you want to have strong courts of law and the justice system that holds businesses fully liable for screwing people over my arms are sore all right come here open up your mouth they need to have full accountability for screwing you over but regardless of all this this is usually how most licensing gets pushed it's to protect us the consumer these people typically government officials or media hacks always like to make you feel as though you're stupid that you don't really know how to do anything or figure things out for yourself but you do know you know how to vet a service and you have the resources to do your research you know how to read a yelp review and if you're still not convinced after all I said let's try this one again spot the logical fallacy number one evil eye sees empty I'm sure he's okay right and number two he's a licensed driver I'm sure he's okay right most people though number two is clearly wrong but I think they need to apply the same logic and realize the number one is equally wrong licensed driver for everybody and that guy's licensed hey he's got a license he shouldn't be doing that licensed driver everybody licensed driver and if you want to see just how stupid the licensing industry can get check this out if you want to be an auctioneer you need a license yeah you want to talk fast and sell stuff you better start taking training sessions and pay a licensing fee you want to wash someone's hair with sham whoo and Tennessee you better take 300 hours of schooling and pay us a nice little fee you want to be a fortune teller in Massachusetts start paying up cosmetologist manicurists pay up you want to braid someone's hair better take a couple hundred hours and training courses and pay us a fee yep a license to braid hair that's a nice barrier to entry way to limit supply guys buh buh buh is to protect us the consumer it's is to protect your hair your hair oh and here's a popular one you need a permit to sell lemonade sorry kids not today so now there's just the taste of some of the government regulations that hamper competition and growth and you can also add on to that minimum wage laws but that'll get its own video sometime down the line but let's get back to those greedy evil rich people because another thing I hear a lot is well if the rich people just keep all their money then it's not gonna go back into the economy we're not gonna benefit like you think we will juice boy it's like most people think that rich people just keep all their money locked up in some vault in their basement or inside their mattress cushions and just take it out every once in a while just to snuggle with it and take a little sniff and I quickly put it back in and hope no one notices most people put their money in banks and you know what banks do with that money they loan it out to you they lend it to people who want to start a new business they invest in your business they're taking that risk they can't take that risk or will be less willing to if they don't have the capital that is largely put in by people who actually have the money saved up so aside from just the crazy rich people doing the investing this is also something that the banks and financial sector do and if you're a homeless drug addict whose only source of income is peddling some of that crack cocaine out in the streets and you have no credit score then that bank will obviously not loan money to you because the bank also wants to be sure that they'll be getting money back on their investments so they can pay out interest to the people who put their money in with them this is what banks and financial institutions all around the world do this is their primary function in 2009 financial institutions all around the world owned a total of sixty trillion dollars in investments of which Americans owned forty-five percent of that you don't get that kind of money unless you have millions of people putting their money in with banks for them to invest with so even if a rich person is not directly investing in someone's business or the stock market their large sums of money sitting around in a bank or other financial institution is going to be loaned out to you and is going to be invested back into the marketplace to further spur economic activity because the bank also wants to make money and this goes on to a greater point of not just banks but also the stock market because we all know that the only people working on Wall Street are just some filthy greedy millionaires right if you're working towards your pension right now it's highly likely that your pension fund is building its value not only from your continued earnings but from the stock market itself because the money that you put into it is being invested directly into stocks and bonds in the marketplace to help grow its value over time most people are invested in stocks and bonds in the marketplace be you through pensions or banks or other financial institutions and either directly or indirectly this means that there are far more people who actually own a share of a corporation than what politicians just like to say are the greedy rich Wall Street billionaires by the late 20th century half of the American population owned stocks either directly or indirectly and if a bank or other financial institution wasn't able to pull all that money together from millions of individuals all over the country they would not be involved in facilitating the large-scale economic activities that they do so the money of a rich person or even the rest of the country isn't just laying around somewhere inactive if a bank loans money out to you so you can start your business that's someone else's money that they have saved which is being loaned to you so you can start that business you'd think this information would be common knowledge but most people just don't understand the implications of economic and financial activities nor do most people really taken the time to think about these things who the hell thinks about this kind of stuff in their free time no one you have better things to do with your time than think about the financial and economic under workings of our country except for this loser who draws like a five-year-old the notion of saving and investing is the whole point of supply-side economics this economic philosophy has less to do with spending on products as much as it has to do with saving and investing to create the stuff that you can then spend money on it's all about creating new stuff people and you can't create new stuff and generate supply without a lot of money you can redistribute a million dollars to some homeless guy and it's not to mean anything significant to the economy if he just decides to spend it on alcohol a new tent and some cartons of food and then he's broke again what counts the most is for him to invest that money and save it and build on his investment because those activities create economic growth those activities are what get people new jobs and I am NOT saying screw homeless people because I know someone is angrily typing that in the comments I am talking about where money can be most efficiently used we already went over whose use of a million dollars would be a better investment but if you still don't understand who do you think can put a million dollars to more efficient use an entrepreneur or a homeless guy Steve Jobs or old man Jenkins whose use of that money do you think is going to have an overall positive effect on the economy and society at large and I'm also not saying that it's not important to worry about poverty of course it is but this conversation has always been about whether or not you're helping people in their poverty or helping people get out of poverty and throughout history the best way to get someone out of poverty is by offering them huge amounts of opportunity within the economy to be able to move up and become successful this opportunity is created by economic growth the generation of wealth and greater supply the guy who can actually create things with money is going to have a better net positive effect on the economy because if he uses that money to start a new business he will then have to hire people to help run his business and will be providing a new service or product to people or he can invest it in another company that'll do those things with his money or he can put it in the bank so the bank can then loan out that money to someone who actually is trying to start a business and meanwhile he'll be making a lot of interest payments on that million dollars you need vast amounts of wealth to create jobs and generate supply especially in such a highly developed nation like America this is what most people don't consider when they say something like but if the money is being saved and not spent directly in the economy on stuff like clothes food and cars then the money isn't being recirculated into the economy but as I just laid out it is being recirculated into the economy even if it's sitting in a bank and not only that it's growing it's building on itself and adding to the overall wealth of the country it is literally generating wealth when it is busy doing work in the economy to create new things or when it is sitting in your bank count and being loaned out to someone else who actually does work with it and as I keep mentioning before you even start to sell that new product you created or start running a business that sells a product or service you have to hire someone to sell it to people which means someone somewhere is going to get a job when someone says that the money that is saved isn't being recirculated into the economy I'm not sure they know how wealth is generated I really don't if you're just redistributing money at current levels of economic activity you are not generating wealth you are just putting money in one place to get the same exact amount of money back out in another place but what you want is for there to be more total wealth and moreover if your idea is to tax the wealthy people to make this recirculation happen you're not only shrinking the wealthy person's overall wealth you will in effect be shrinking the overall wealth of the entire country and making the poor even poorer than they already are because you are making the rich less rich you are not allowing the generation of wealth when you are punishing people for having it is saying is that he will rather the poor were poorer provided the rich were less rich that way you will never create the wealth no gravity and water policy yes he would rather have the poor poorer the rich that is the liberal politics yeah you will set back the standard of living for everyone because the products and services that would make their lives better due to the investments and innovations of the greedy 1% are not going to be created when someone talks like this in the sense that there is only a fixed amount of money in the entire economy or a zero-sum concept of the economy they are more concerned with how the pie of wealth can be divvied up into each individual group rather than figuring out how to make that pie even bigger making that pie bigger is how most of the poverty in the world has been eliminated by increasing the overall wealth of your country you want to increase the wealth not cut it up into who gets what and this and that and nitpick other people's success into whatever fits your personal preferences who told you that you get to decide how other people's money is spent this is what I can't stand about the income inequality debate in this country with such a terribly high inequality rate we are able to buy whatever the hell we want we have never lived better in this country than right here right now with the vast amounts of products and services we have access to the income inequality debate is one of the biggest non issues around right now and has been a totally manufactured outrage I don't give a damn what people think the income distribution should be compared to what it actually is who the hell gave you the right to decide who gets paid what and how much they deserve to keep income inequality means absolutely nothing when we have access to products and services that so few countries even know of their existence oh and bringing this all back around income inequality is also touted as a reason why trickle-down economics has failed because it increased inequality apparently was it supposed to prevent it too now this is what I meant when I said earlier that they'll attribute any economic statistic they don't like to their trickle-down boogeyman own another common one you'll see is that apparently trickle-down economics has caused the stagnation in the median household income if you're at school at all right now and take a class on politics or economics someone will at some point show you this chart which much like income inequality is absolutely a non-issue if someone shows you the household family income and uses it as an example of how we're declining in the world economically that's how you know we're not being serious family incomes have stagnated yeah because the size of families change over time they differ from various income levels and from one group to another we used to have six to ten children back in the day all out making money for the farm we rarely even have two kids anymore if we're really being serious you would look at the GDP per capita because per-capita always means one person and one person has throughout time been making more and more money the number of people per household has been declining for over a century as individual people continue to make more money the median household income statistic means nothing manufactured outrage the household thing is really a tip off idea I think whenever I see somebody quitting household income he's trying to make things look bad all right there's a rule of life yes for example over a period of about 30 years the household income rose by only six percent over those same years per capita income rose by 51 percent because the number of people per household was declining all the while I see I see and when you're comparing income brackets the number of working people in the top 20 percent is some multiple of the number of working people in the bottom 20 percent so this notion that society is a layer cake divided into quintiles is just it's even quintel's is just wrong you can do it by category but that's not doing it by people right and there's another popular saying out there which is that the rich stay rich because they're keeping the poor poor well in this country with five hundred and forty billionaires and 11 million millionaires then by god we should be seeing some of the most impoverished people in the entire world here but we don't in fact we have a higher number of billionaires here that in Africa and the Middle East combined yet our standard of living here is clearly far better than the people living in those nations who have comparatively fewer billionaires and other evil rich people the poor here live outstandingly better than the poor in Africa in the Middle East and we have more evil greedy rich people the upper middle class in Mexico is what the poor class in America would be comparable to which also makes you think about what exactly poverty is supposed to mean whenever some government official here decides to use that phrase are we talking about abject poverty like over here or people who are by American standards poor but by the basic standards of human advancement and development are the most well-off the class of order considered poor have ever been in the history of the entire world I mean that what what we define as poverty today there was a looser Latin American scholar a scholar of Latin America he's not an American himself was saying that what we define is poverty here is the upper-middle class in Mexico most americans families in poverty as defined by the statisticians in washington and that's the thing i try to bring out regardless of what we think of when we think of poverty what it really means is whatever those statisticians say it means and going back to tax cuts you know why cutting taxes is one of the most effective measures to take during recession because instead of taxing people more and taking more of their money away from them that they need to spend for the sake of their own survival cutting taxes in effect leaves them and the business they work for with even more money than they would have had and will likely lead to more consumer spending and saving on the things needed the most limiting the impact of a recession and the spending and saving can even occur long before people receive their next paycheck why well because most people own credit cards which allows them to spend money and participate in economic activities now because they're drawing upon their future earnings from their paycheck which hasn't even come in yet but will contain in it more money because taxes have been cut we can't predict the future but if tax cuts are announced today then you can predict the amount of money you'll have in the future and spend or save accordingly you draw on future earnings to pay for current purchases or make current savings and investments for greater future well-being which in effect makes the impact of economic recessions much less than they would be because there is more money circulating and keeping the economy afloat where it is most efficiently needed while also slowly generating wealth back into the economy rather than having the government tax it and then spend it where its use is most inefficient because what the hell does the government know about where the market most direly needs to spend its and you can see the effects of this when comparing the decade of the Great Depression stagnation compared to a little over a year's worth of a recession during the Reagan years when taxes were cut or he'll take this past Great Recession we've been in this thing for nearly ten years and it doesn't surprise any economist one bit that the economy has been growing at a faster rate now after taxes and numerous other regulations have been cut compared to the former administrations near economic stagnation lest anyone forget that the way the Obama administration planned on getting us out of the recession was to spend more taxpayer money on failing businesses and infrastructure and to increase government regulations on businesses instead of leaving that money for the American people to either spend on their own or save and invest with on their own you always know what to do with your own money better than government bureaucrats and politicians you know what is best for yourself and all of this is why financial institutions are extremely important for any society to have a society without well-functioning financial institutions have fewer opportunities to generate greater wealth over time poor countries may remain poor despite having an abundance of natural resources when they have not yet developed the complex financial institutions required to mobilise the scattered savings of innumerable individuals so as to be able to make the large investments required to turn natural resources into usable output supply many of the great American industries began with people who had hardly any money but were able to acquire it by borrowing from the people who had money hewlett-packard started out in some dudes garage that was rented out with borrowed money Henry Ford Thomas Edison and Joe Carnegie all started out with hardly anything and were able to borrow the money and receive investments from banks and people who had large amounts of money available to them and were able to generate some of the largest quantities of wealth this country has ever seen you need people with large amounts of money you need investments and savings by people with large amounts of money that is how you create economic growth and that is what the supply-side model argues and again no one's trickling shit down but financial institutions can take centuries to develop which was why before London became one of the largest financial centres in the entire world they often had to bar money from foreigners like the lombards who actually had money and who now have a street named after them in London's financial district and all you fuckers who hate the Jews Jews Jews Druze Jew Jews oh well guess what for most of history the Jews were also the only ones who had large sums of money because they actually knew how to create it and were extremely talented entrepreneurs which is why there's also a street in London named old Jewry but for some people reality doesn't matter and all that matters is hmm those Jews kill the people with money this kind of hostility towards entrepreneurs bankers and people with money is a very common historical occurrence especially in third-world countries today Chinese minorities in Southeast Asia the Lebanese in West Africa the cool acts in the Soviet Union the chettiyar's in India Burma and Fiji have all been historically viewed as money sucking parasites by people who have no understanding of the complexities of financial institutions and they are often harassed and expelled from the countries they work in and typically the countries that they are expelled from are left with a decline in their standard of living and economic activity in Malaysia the Prime Minister Mahathir Mohamad tried to blame the Jews and white people who he claimed still have the desire to rule the world but each time he denounced some foreign scapegoat his currency and stock market fell another five percent he grew quieter but wealth one thing then there's no there's no particular reason to have expected that the indigenous people who acquired the same skills that the people who came there had and worse yet the leaders of these groups are very quick to blame the fact that they're lagging on the other groups who are more advanced one of the phrases that you often hear that this group took over this whole industry and in many cases there was no such engines principal they came here and built it they did not take it over right let me put the importance of banks and financial institutions in another way anyone here play video games how about civilization 5 you know why building a bank leads to more money for your civilization or a stock exchange because they actually facilitate the generation of additional wealth in real life this is why the supply-side model of economics is so important and it's also why you don't want insane regulations on everything and want to make sure people have access to as much money in their own pockets as humanly possible and because I know some moron in the comments is gonna say it no I am NOT saying everyone should pay zero percent taxes and we should have some fucking Articles of Confederation system of Anarchy don't think I haven't seen stupid shit like that before in these comment sections all these damn assumptions being made from things I never say is really annoying so anyways trickle-down theory if you hear anyone saying that their obfuscating actual economic theory and propagating a falsehood of what supply-side economics really is and one of the best ways to promote supply-side economics is to cut taxes on the people who actually have disposable capital that they can use to invest in businesses with so that they can create new and better products and services and businesses thereby improving the quality of all of our lives and ultimately grow the economy and if you weren't listening when I went over this earlier no I am NOT saying that people of lower or middle income classes should be taxed more no one who supports supply-side economics ever advocates that crap that's only what other politicians like to say because they have votes to win but because they want lower taxes for everyone and everyone also includes rich people these things are instantly branded tax cuts for the rich Oliver Thomas saw makes a great statement in his book basic economics where he says that an understanding of basic economics could have prevented many human tragedies as well as many economic and efficiencies this is absolutely undeniable and one of the most important reflections that I think people need to have right now is a sense of perspective the poorest person in America right now is living at an unbelievably higher standard of living than a rich person 100 years ago because the poor person in America has very likely got himself a microwave a refrigerator running electricity running water and oven a TV a car some have two cars central air conditioning good god access to a grocery store where he can buy food for some of the cheapest prices available in the entire history of the planet and in most cases they also have an iPhone I mean really people have some perspective back in the day used to be a luxury item to be able to own coffee beans or sugar or tobacco it used to be a luxury item to be able to own a radio or a color television you were hot shit if you had color TV now everyone's got a TV now everyone's got a computer my god we have water everywhere in bottles ready for us to drink we don't have to go and personally pump it out of a wall anymore or go send Jimmy a mile down to the lake anymore it's right there the human race was born into poverty poverty is the norm the question is how the hell have we gotten away from it and have continued to distance ourselves from it and on the global scale anyone classified as poor in America would be considered in the middle income class we are head and shoulders above so much of the rest of the world with the quality of life we enjoy here the great majority of people who are in poverty in the United States by that definition they have microwave ovens they have they have central air conditioning I mean I was in my 40s before I had a window air conditioner you know but the idea of centrally air-conditioned most own and automotive one motor vehicle or more and fourteen percent owned two or more motor vehicles it is simply not poverty not by any historical understand no whatsoever you know the and in the old days particular thinking about the lower Eastside when the Jews live there you know that the oxen the people were squeezed together in these tiny places today the average American in poverty has more space per person than the average European not the average for European the average European period and so all those things by which we've spoken of poverty in the past those things have long since gone all of that historical advancement in this country all of that economic growth all of that technology all of that improvement on the quality of life and the standard of living is the result of people who had the resources to be able to invest in their very creation and generate greater supplies of them this is a bullshit lie this is a success story Thomas soul starts his monograph by citing this quote by Joseph Schumpeter we fight for and against not men and the things as they are but for and against the caricatures we make of them yeah that's a pretty good way of putting it it is an incredible thing it's there is a non-existent theory that is constantly being attacked some years ago in my newspaper column I challenged anybody to cite any economist outside of an insane asylum who had ever made that argument nobody ever came up with a single person so when Barack Obama says in this past July quote we were told that prosperity who told him nobody told him nobody no economist has ever held no politician has ever said it I don't know of anybody who's ever said in fact when I put this out a night we went out a nationally syndicated column various people wrote me and said well so-and-so said that so-and-so said it but find me the person who said it I don't want to hear how you a said that be said find me be and show me where he said it and that was years ago not one example has been offered but if you're interested in hearing more about Thomas Souls writings on economics I'd highly recommend his books basic economics and economic facts and fallacies basic economics in particular I put my category of every single human being needs to read this book seriously other than that this has been political juice and thanks for watching [Music] [Music]

Info

Channel: Political Juice

Views: 361,736

Rating: 4.4936419 out of 5

Keywords: Trickle, Down, The MYTH of Trickle Down Economics, Trickle Down Theory, Trickle Down, Trickle Down Economics, Economics, Supply, Side, Supply Side, Supply Side Economics, Lie, Liberal, Conservative, Truth, About, Political, Juice, Political Juice, Income, Inequality, Income Inequality, Basic economics, Failure, tax, tax cuts, tax cuts for the rich, rich, business, greed, corporations, evil, success, what is trickle down economics, what is supply side economics, equality, media, republican, big business

Id: VlWCnA7TbNU

Channel Id: undefined

Length: 108min 26sec (6506 seconds)

Published: Sat Jul 07 2018

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👍︎︎ 1 👤︎︎ u/AutoModerator 📅︎︎ Sep 17 2018 🗫︎ replies

Wow - I completely understand the intention here, but the execution is awful. Arguing over whether it’s “supply-side” or “trickle-down” is just the same as arguing whether it should be called “pro-life” or “anti-choice.”

Why the hell does so much of this video focus on semantics? No shit “trickle-down” is a spin term.

If the intention of this video was to be an informative primer on the Chicago school, I’d love that. However, 10 minutes of hunting for the ghosts of “trickle-down theory” destroyed my interest.

👍︎︎ 10 👤︎︎ u/probablythefuture 📅︎︎ Sep 17 2018 🗫︎ replies

If you are dumb enough to not understand that “trickle-down” is Keynesian spin for supply-side economic theory, you’re absolutely not going to watch a 2 hour video.

👍︎︎ 5 👤︎︎ u/probablythefuture 📅︎︎ Sep 17 2018 🗫︎ replies

Unwatchable

👍︎︎ 10 👤︎︎ u/pimpco888 📅︎︎ Sep 17 2018 🗫︎ replies

[removed]

👍︎︎ 5 👤︎︎ u/[deleted] 📅︎︎ Sep 17 2018 🗫︎ replies