We plutocrats need to get this trickle-down economics thing behind us: this idea that the better we do, the better everyone else will do. It's not true. How could it be? I earn 1,000 times the median wage, but I do not buy 1,000 times as much stuff, do I?
Interpretation
Trickle-down economics is a flawed theory which suggests that benefits for the wealthy will ultimately help everyone else, but this isn't true in practice.
In this quote, Nick Hanauer critiques the concept of trickle-down economics, arguing that it fails to ensure that wealth generated at the top benefits those at the bottom. He highlights his own disproportionate earnings compared to the median wage and suggests that such an income does not lead to equivalent increases in consumption or economic benefit for the wider population, emphasizing the need to rethink how economic policies are structured to truly benefit all levels of society.
In practice
This quote is perfect for an economic policy debate.
The most powerful forces in economics are not numbers or facts. They are prejudices and preferences. No amount of evidence will ever change the degree to which many of the rich and powerful prefer themselves to be richer and more powerful and others poorer and weaker.
Raising the minimum wage allows business people to stop thinking about workers simply as costs to be cut and allows you to start thinking about workers as customers to be cultivated.
When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer.
The most insidious thing about trickle-down economics is not the claim that if the rich get richer, everyone is better off. It is the claim made by those who oppose any increase in the minimum wage that if the poor get richer, that will be bad for the economy. This is nonsense.
You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It's not if, it's when.
The thing I've learned most about poverty is how expensive it is to be poor. It's super easy to pay rent every month if you earn enough to pay rent and have a decent job. It's super hard to pay rent if you need a coupon from the state and then need to go find an apartment that will accept that coupon and only that coupon.
Money is not an invention of the state. It is not the product of a legislative act.
We need to revise our economic thinking to give full value to our natural resources. This revised economics will stabilize both the theory and the practice of free-market capitalism. It will provide business and public policy with a powerful new tool for economic development, profitability, and the promotion of the public good.
In time of peace there can, at all events, be no justification for the creation of a permanent debt by the Federal Government. Its limited range of constitutional duties may certainly under such circumstances be performed without such a resort.
The world needs banking but it does not need banks.
The failure of Lehman Brothers demonstrated that liquidity provision by the Federal Reserve would not be sufficient to stop the crisis; substantial fiscal resources were necessary.
Capitalism and market forces are very powerful in producing wealth and innovation. But we need to ensure that these forces act in the common interest.
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