Trickle Downers

The Prospect's ongoing exposé of the folly, dysfunctions, and sheer idiocy of feed-the-rich economic policies.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

Trickle Downers

Under Trump, a New Golden Age for Payday Lending

A deregulatory push led by top-level Republicans could turn back the clock to the heyday of predatory lending.

(AP Photo/Ross D. Franklin)
(AP Photo/Ross D. Franklin) A payday loan business in Phoenix P ayday lenders—those usurious operations that profit from providing high-interest loans to working-class and poor Americans—have seen their prospects improve dramatically under the Trump administration and the Republican Congress. A joint resolution introduced last week by South Carolina Republican Senator Lindsey Graham would eliminate strict regulations on short-term, small-dollar lenders imposed by the federal Consumer Financial Protection Bureau (CFPB) and prevent the agency from issuing a similar rule in the future. The resolution marks the latest attempt to defang the CFPB, which became the bête noire of the payday loan industry in the years following the financial crash. The rule, which among other things would obligate lenders to confirm that people can actually afford to repay their loans, was set to go into effect in January but was put on hold by the interim head of the CFPB, Trump appointee Mick Mulvaney. While...

Is It Race or Class? To the Trump Administration, It Doesn’t Matter

A new study on upward mobility points to racial disparities across generations—but efforts that could work to reduce these disparities are not a priority of the GOP administration.

AP Photo/Matt Rourke Jennifer Donald, whose family receives money from the Supplemental Nutrition Assistance Program, eats dinner with her sons David and Donovan, and daughter Jayla, in Philadelphia. trickle-downers_35.jpg T he income inequality between black and white Americans affects not only the ability of poor black men to earn more money than their parents, but also the chances of black men who were raised in the wealthiest households to remain wealthy. And the income disparities between black and white adults exist even if they grew up in families with similar incomes, education, and family structure—even if they lived in the same neighborhood. That’s the conclusion of an expansive new study by Raj Chetty and Nathaniel Hendren, two economists with the Equality of Opportunity Project, and Maggie R. Jones and Sonya R. Porter of the Census Bureau. Their results point to specific poverty interventions—namely, reducing systemic racism and discrimination—that policymakers may want to...

Welfare Work Requirements Won’t Help Puerto Rico’s Shattered Labor Market

The Puerto Rican governor’s plan to implement work requirements for welfare recipients is a cruel political ploy, not a policy solution.

JUAN LUIS MARTINEZ/GDA via AP Image Puerto Rico Governor Ricardo Rosselló speaks in San Juan trickle-downers_35.jpg I n his annual State of the Commonwealth speech this month, Puerto Rico Governor Ricardo Rosselló announced a highly anticipated and in many ways conventionally conservative package of policy proposals to address the island’s ongoing economic and energy crises: privatizing the island’s battered energy grid, cutting corporate and individual taxes, and reforming the education system through charter schools and educational vouchers. Tucked away near the end of the governor’s speech and overshadowed by such front-page proposals was a call to enact work requirements for welfare recipients on the island. “It’s important that we protect and strengthen programs for the most vulnerable,” said Rosselló. ”Likewise, we must incentivize those that can work to find dignified work and insert themselves in the economy.” Puerto Rico’s unemployment rate was almost 11 percent in January...

West Virginia Teachers Win—Will the Legislature Try to Undercut Their Victory?

West Virginia’s teachers won a 5 percent pay raise for all state employees. But it was the legislature’s corporate tax cuts that underfunded the teachers in the first place—and it may slash public services to pay for the raise.

(Craig Hudson/Charleston Gazette-Mail via AP)
(Craig Hudson/Charleston Gazette-Mail via AP) West Virginia teachers, from right, Kara Brown, Katherine Dudley, Nina Tunstalle, and Lois Casto react to news that Governor Jim Justice and Senate Republicans had reached a deal to end the strike on March 6, 2018, in Charleston, West Virginia. T he West Virginia teachers’ strike, which had become the longest in the state’s history at nine days, ended Tuesday with a deal to increase the pay of teachers as well as all state employees by 5 percent. (Previously, union leaders had struck a deal for a 5 percent pay raise of teachers with only a 3 percent raise for state employees. With the Republican state Senate initially balking at the deal, rank-and-file teachers were rightfully skeptical that the legislature would agree to the raise, and continued striking.) The increasing costs of the teachers’ health insurance was another driver of the strike; Republican Governor Jim Justice has promised to set up a task force to look at the state’s...

Trump’s Tax Cuts Incentivized Corporate Offshoring. These Dems Want to Reverse That.

Democrats have waffled on how, or if, they will repeal the new tax laws. This is a step in the right direction.

(Photo: AP/Alex Brandon) Sen. Sheldon Whitehouse, D-R.I., speaks during a Senate Judiciary Committee hearing in September 2017. trickle-downers.jpg E ver since President Trump and the GOP enacted their gargantuan tax cut, Democrats have done a pretty good job of highlighting how the plan disproportionately benefits the wealthiest few, how it sets the table for future cuts to the federal safety net, and how corporations’ newfound savings have generated more than $200 billion in stock buybacks and minimal increases in worker pay. But they haven’t done a good job of articulating an affirmative tax policy agenda of their own—let alone whether they even intend to push for a “repeal and replace” of the cuts, should they regain any semblance of political power. Earlier this month, Washington Post reporter David Weigel asked New York Representative Joe Crowley, who is part of the Democratic House Leadership team, whether the party would run in 2018 on repealing the tax cuts. He hedged,...

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