Trickle On
by modern living editor Jason Capodimonte
July 27, 2005
Trickle-down economics doesn't work. But it lives on. The same could be said of many of its adherents, I suppose.
Ideas don't have to be functional to survive, of course, as you know if you've ever been to church. These days politics is dominated, perhaps even monopolized, by ideas which are either non-functional or dysfunctional. The idea I'm going to pick on this week, though, is trickle-down economics.
I chose this idea to pick on because Canada will, in the event Paul Martin can't find a reason not to keep a promise, have a federal election in the next twelve months. And if Stephen Harper should ever get up the gumption to act like a winner, the Conservatives could win that election. And if the Conservatives win the election, we're getting trickle-down economics.
Advocacy of trickling down was a large part of the Conservatives' recent histrionics about the federal budget. Every day Mr. Harper would assail the budget, hoping to galvanize the Canadian people into rising as one and shouting, very loudly, and with very precise enunciation, "Defeat the government, Stephen! Defeat them now!", thus sparing him the responsibility of making the decision to defeat the budget. In the end, of course, he spared himself the responsibility.
One of the issues Mr. Harper repeatedly dangled before the Canadian public was the Liberals' agreement with the New Democratic party to postpone tax cuts for business. He condemned this agreement. Now, making life easy for business, small or large, is not a high priority for most Canadians, whose relationships with business, at every level, have becoming increasingly adversarial over recent years. But to the neo-conservative mind, a standard model of which is installed in Mr. Harper, tax cuts for business imply manna for all. Lower taxes for business mean more profits which mean more hiring which means higher individual earnings which means higher income tax revenues which mean everybody is happy.
That's the idea, anyway. What usually happens is that the corporations' additional money gets spent on productive things like:
And somehow the era of trickle-down economics has featured cataclysmic bankruptcies and startling declines in the business sectors it was supposed to be helping – remember when the Big Three carmakers were American?
- branding – KFC changing its name back to Kentucky Fried Chicken, for example, fourteen years after changing its name to KFC to get the words fried chicken out of its name – or
- creating more and more lines of products so that they can try to drive their competitors, who are doing the same thing, off increasingly crowded store shelves – remember when any brand of pop came in at most two varieties, regular or diet, and any brand of over-the-counter painkiller was sold as a pill rather than simultaneously as a pill, a caplet, a capsule, a time-release capsule, and a gelcap? – or
- getting the auditors to look the other way while the additional income is distributed among the executives' friends and family.
So if utility isn't what trickle-down economics is about, what is it about? It is about the growing scarcity of status symbols.
In the old days it was easy for businessmen (sic) to advertise their privileged status. You spent a few grand on a Rolex, a few grand on some good suits, and you were a demonstrably superior sort of person.
The Rolex was justified as the most accurate watch on the market. These days, though, thanks to technology, you can buy a watch as accurate as a Rolex for a few dollars. If you don't have the time to go to the really cheap stores you might have to spend ten or twenty. Spending a few grand on a Rolex is now a symbol of one's money exceeding one's brains.
As for good suits, business's success in marketing streetgangwear to the masses has drained the business suit of any symbolic value. No one knows what a good suit looks like any more, mainly because they wouldn't be caught dead in one. Increasingly they're being caught dead in the type of clothes favoured by drug dealers.
In the early 90s the corporate classes seized on the cellphone as a relatively inexpensive replacement for obsolete status symbols. The cost was too high for the proles and the phones were highly visible, because they were huge. Whenever, in the early 90s, you heard someone talking really loud without anyone answering, all you had to do was turn around to find someone bellowing self-consciously into a wireless phone about the size of an electric hand mixer.
These days, though, everyone has a cellphone, and the phones are so small you can carry one in your pocket.
Status symbols haven't disappeared, of course, but the cheaper ones have. Entry-level status symbols these days are items like a Cadillac Escalade or a private island. The raising of the bar in the lowest reaches of the status market has raised the even higher bars at the upper reaches. Now the self-respecting corporate mogul has to have his or her own reality show. Sure, you get paid to be in the show, but the pay is only a tiny fraction of the massive PR operation you have to mount to get a reality show in the first place.
With status costs rising, the corporate elite needs more money. It is no accident that trickle-down economics first came to prominence with Ronald Reagan's accession to the presidency of the United States. Mr. Reagan came to power after a decade in which not only was technology eliminating the status value of many former symbols but non-trickle-down economics was also increasing the purchasing power of the non-elite. Richer proles, cheaper status symbols – something had to be done. And Ronald Reagan did it.
And Stephen Harper's going to do it if he gets the chance, and you'll be able to go to bed at night knowing that your government has acted to shore up the always frail self-esteem of the very, very rich.
Then all you'll have to do is wait for the trickling.
Trickle On © John FitzGerald, 2005
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