10 thoughts on “How economics works

  1. The ultimate simplification of this shows the error. This shows the economy as a zero-sum-game. In other words there are only $500 to get and only the wealthy get them. So how did the wine get in the bottle in the first place?
    In reality there is not a fixed amount of money out there, it is constantly growing. How does it grow? Through labor, mining, improvement, farming etc. Those at the so called top will never succeed unless they can sell their improved product to someone. How will they sell their product to anyone if they don’t hire, spend, etc. We are all in this together. As far as I have seen the only ones who don’t let it trickle down are those who are unethically receiving compensation. This includes the poor as well as the rich.
    Once again, way over simplification, and all out just class warfare.

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    • Please explain how the wage gap between the highest earners and the average earners has increased so significantly over the past 20-30 years. I’m sure you will blame democrats, but I’d love to see some actual FACTUAL support for any statement you make.

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    • The simplification actually explains it quite precisely. All your gibberish does not even address the lie about trickle down economics and how it has been sold, whereas the illustration does.

      Trickle down was a scam then and is a scam now:
      http://www.decisionsonevidence.com/2014/12/another-major-advisor-to-president-reagan-admits-trickle-down-economics-doesnt-work/

      Reagan, who was a useful idiot, was the messenger of libertarian morons who pushed this proven failure of economic theory. The irony is, if it wasn’t for Reagan’s use of Keynesian economics any positive growth in the economy under him would never have happened.

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  2. A picture says a thousand words. Trickle down economics has been pure propaganda for at least the last 30 or so years (can you say Reaganomics boys and girls?) and the ones that haven’t been paying attention are finally starting to figure it out. Thanks Mike from Spain.

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  3. I’m really worried. The gap between the 1% and the rest of us has not been this wide since just before the 1929 crash.

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    • Not to be an alarmist, but all signs are pointing to another crash, perhaps just as bad as 1929. With another Reagan policy being utilized by corporations we are getting false comfort from the stock market. Since Reagan allowed stock compensation for regular salaries for corporate executives, many companies have been either using their billions in reserves, or borrowing at 0 percent interest rates from the Fed, to buy back stocks, decreasing availability thus raising the values. Where they then sell it at a profit and only pay a lower capital gains tax. This, along with student loans, which are being treated just like mortgages from the 2008 debacle, are indicators we are about to go down the abyss again.

      So with stock market manipulation and more derivatives being gambled with, I suggest you find a safe place for your money soon.

      Oh, and just to clarify about the buybacks: by borrowing money at low or zero rates, they are destined to to fall into debt when rates rise. And they will rise.

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