Trickle Down Economics Doesn't Exist

--Steven Horwitz, Charles A. Dana Professor of Economics at St. Lawrence University and Visiting Scholar at the Hohn H. Schnatter Institute for Entrepreneurship and Free Enterprise at Ball State University, joins David to discuss why trickle down economics doesn't work

--On the Bonus Show: The 2017 TDPS calendar is on sale for members, Donald Trump offered Chris Christie the VP spot before taking it back, a service dog dispute is going to the Supreme Court and much more...

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Broadcast on October 31, 2016 --Donate via Bitcoin: 15evMNUN1g4qdRxywbHFCKNfdCTjxtztfj

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[QazwerDave]

To print new money is not the same thing as giving a bigger part of the existing amount of money to the poorer people !

[chrisblatner]

I am more libertarian than anything but I watch your show David because I had echo chambers and you're very respectful to people you disagree with and educate me on the other side. Much respect!

End occupational licensing? I've always wanted to be a pilot and a doctor without having to go to school.

[ariefraiser]

Nice debate guys. I can see where the libertarian is coming from in wanting a pure free market health system but when it comes to health and staying alive money and savings are not the drivers for most. Most people would pay or give up almost anything to get healthy or stay alive...and to keep a love one like a son or daughter alive a lot of people would sacrifice their lives if that's what it takes. You can't tie that kind of desperation to a profit motivated industry.

We also recognize that on a certain level. that is why there ant gauging laws during national disasters in parts of this country

[notoverlyacerbic]

I love it when there is someone who's politics I might not completely agree with but who's personality I like...this was a pleasent guest..

[beastemeauxde]

End occupational Licensing? Would you really want food prepared by unlicensed personnel? After dying from Listeria poisoning, my family will *not* be comforted by the fact that the "invisible hand" of the market will bankrupt that restaurant.

[GenerationX]

Trickle down is not a valid theory. It's a Will Rogers joke. That's no joke.

[arcticnerd]

Except all the tax cuts aren't equivalent. Supply side tax plans always give huge cuts to the upper brackets and small cuts for the lower brackets. The cuts for the rest of us are just a bone that we are being thrown.

[titolovely]

a major flaw in his argument comes from the "famines" that he cites, almost all of which werent caused by lack of food or lack of markets. take the famine in the ukraine under Stalinist russia. wheat exports actually increased as 11 million people were starving. it wasnt due to a lack of knowing where to allocate resources, but rather a distibution problem wherein the russian imperialists were using the ukraine as an export area to bring resources back to the homeland, similar to the way the US has used south and central america in the past. it's essentially like saying that if only we had removed the nazi's food distribution program for the concentration camps and allowed markets to work, then we could have saved 12 million jews. it's totally ludacrous, and wasnt really an economic issue, but a political one, as is the case with almost every famine in the modern era.


when goldman sachs, one of the largest commodities trader in the world, buys up 30% of a countries harvest, and holds it until the price rises, is that market efficiency? how is it that socialist countries that have famines due to the inefficiencies of socialist bureaucracies get lambasted, yet the famines incurred by the third world due artificial increases in scarcity driven by market forces arent even mentioned? it is yet again, an example of blind libertarians, who naively believe that the western success is due to capitalist markets, not imperialism.

there's always so much hypocrisy when talking to libertarians. on the one hand, they say that it's much more complicated than simply allocating enough food for people to eat, but on the other hand, they make vague references to situations that were far more complicated than they seem, as evidence that socialism doesnt work. it's a double standard. critique of capitalist markets is always "too broad and doesnt take into account the details of the situation", but critique of alternative solutions is always vague, extremely misleading examples of failure, propped up to elicit an emotional response so as to mislead the listener/reader into believing that socialism cant or doesnt work. that isnt to say socialism can work, but make a real argument against it, not this horseshit.

[abdullahiahmed]

One rich guy told me, if the government gives me a tax break and i have a million dollars extra this year, im depositing it into my savings account and im defenatly not hiring anybody or giving anybody a raise

[darkeimp]

Every time I hear someone say social democratic ideas "can't work" I never seem to hear a solid reason. For one thing there's never a solid rebuttal of why it works so well in all the Netherlands and Canada, or an explanation for why when it was working pretty well in the UK with two of its major institutions, healthcare and train transit, both institutions took a huge nosedive in efficiency, quality of service, and sustainable pricing once they started allowing aspects of it to be privatized. They always seem to reply with "well it's all nice and well to think everything would ""just magically work out"" but it's more complicated than people think" and then someone says "magic has nothing to do with it, we would redistribute wealth with these kinds of tax laws, we would ensure workers get paid enough to be consumers by passing these regulations, we'd prevent abuse of the system with these laws, " etc etc explaining what sounds to me like totally reasonable and well-thought out logistical plans of how to actually execute the goal and they just repeat "well it'd be nice to think it's that easy but it's not". That sort of dismissal without a point by point explanation of WHY those logistics wouldn't work or what SPECIFIC problems could arise, really looks like they want to avoid helping people think of any potential solutions to those problems by avoiding talking about them in depth, and that sort of "you wouldn't understand so it's not worth telling you why it would be a problem" could only be more condescending if they patted your head while saying it.

Every time I hear it, I can't help feeling like here's a big "but" that they really want to avoid talking about. They never want to get to the part where they have to say redistributing wealth means taking it from the people who have wealth and that means there will be resistance, and they don't want to talk about those scenarios, because that steps outside of just economics into the contentious territory of real world interactions among real people. I can understand the fearfulness of talking about that stuff, it scares me to think about it and talk about it too. But I wish they would just admit that's why they actually think it "won't work" and say they don't want to talk about people fighting each other over money, rather than try to pretend there's just some "magical" forcefield keeping social democracy from functioning in the US when it works so well in other countries.

[xXbudredXx]

This is why corporations are so greedy, because the CEO's are taught by complete idiots like this guy. He makes claims, and when you ask why those claims are true and yours are false, he never actually gives an answer, he just brushes it off and assumes he is right. He never answered how a free market healthcare system is the best, he just states that it is. People like this are only interested in making money, nothing else.

[kelleywhitehurst]

David Packman has an expert on his show and then proceeds to be the expert.

[somebody]

The notion of scarcity in the health care field and in food supply is absolutely absurd. Completely not based in reality.

[AbnormalWrench]

Trickle down economics is also called the horse-and-sparrow theory: "If you feed the horse enough oats, some will pass through to the road for the sparrows."

[enhydralutra]

It's getting tiring listening to libertarians say "there's no such thing as trickle down economics" as though that's an argument. It's clear in the context of a conversation what a person means by trickle down economics -- the idea that tax cuts that favor the rich will somehow jump start the economy in a way that will bring in more revenue than is lost by the tax cuts. It also usually means cutting social programs that provide a huge benefit for a large portion of the population, making the poor and working class noticeably worse off despite their meager tax cuts. It's not enough to cry "there's no such thing" when the ideas that are being defended are so incredibly flawed.

[oldmanjenkins]

Libertarians being libertariany. We have ways of determining where $ should go in healthcare. It's called research that he been done determining why we die earlier than we need to. Cut the defense budget and get rid of this free market competition bullshit regarding healthcare.

[rylieweaver]

I thoroughly enjoyed how Pakman stays calm and concise and this didn't turn into a debate of constant interruption. I rate 11/10 just for that.

[SuperXrunner]

I wish everyone could stop buying...so when they make their crap it stays on the shelves and rot... then they can see how important consumerism is to them...it seems his views are lopsided

[martinkollarovic]

A completely free market has already been tried, it's called the "gilded age", and it worked out about as well as the bolshevik revolution. So no, thank you