Trickle Down

There has been a lot of discussion around the distribution of wealth and of government taxes recently in the U.S. Some have even argued that the raising of taxes on the wealthy is unfair and is moving our country towards socialism. Rather than “sharing the wealth” as some suggest, they prefer a more pure capitalism, in which the wealth of the rich trickles down to the rest of society.

As a Christian who takes serious both the prophets of the Old Testament as well as Jesus Christ of the New Testament, I cannot support an economic policy that desires to trickle down wealth. The very language and rhetoric of this economic theory exposes its intentions… to merely trickle down. The word trickle is not only passive (giving the image of one trying to hold on to and contain as much as possible, yet a little trickling down anyway) but the word definitely does not assume pursuit of justice, equality, nor any compassion for the poor, marginalized, and most vulnerable in our society.  When will this trickle down begin to kick in… generation after generation awaits the crumbs from the masters table!

On the contrary, wealth has actually not been trickling down much at all, rather the rich have been getting richer and hoarding wealth, while the gap between rich and poor increases (and the middle class shrinks). In the U.S., “the top 10% of Americans hold 71% of all wealth, while the top 1% alone holds up to 33% of all the nation’s wealth.” What happens when the rich hoard the wealth at the top, and refuse to increase the wages of their workers as their profit grows?

In 1960 CEO’s made an average of 41 times more than their workers and in 2004 that number had grown to CEO’s making an average of 431 times more than their workers. In 1980, the average CEO pay was $1.4 million (in 2004 dollars) and the average worker pay/hour was $15.68 (in 2004 dollars). In 2004, the average CEO salary rose to $11.8 million while worker pay/hour remained steady at $15.67. Not even a trickle…

In response to letting wealth trickle down, the Bible says “let justice roll down like waters and righteousness like a mighty stream.”  I know this is a touchy subject… but chime in and share your thoughts on this… freestyle with me.

(My statistics are widely availabe, I got mine from Census stats as well from United for a Fair Economy)

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12 comments

  1. Marco · April 17, 2009

    Peace Drew,

    There’s an important distinction that needs to be made between wealth and income. Income is the salary you generate from working. Those numbers you posted about CEO and workers are very much about disparate wage conditions (ie – the income gap). Wealth is about asset accumulation. IRA accounts, savings bonds, home and vehicle equity, among others are examples of wealth. Basically, wealth is assets and income minus debt.

    Anyway, if we factor in race into wealth disparities, the numbers are more glaring. Indeed, African Americans hold only 2 percent of the nation’s wealth. This figure is down from 3 percent from about 25 years ago. The disparities in the racial wealth gap persist even when accounting for class status:

    From Oliver and Shapiro’s “Black Wealth/White Wealth”:

    “…taking the average Black household and endowing it with the same income, age, occupational, educational, and other attributes as the average [W]hite household still leaves a $25,794 racial gap [in net financial assets, and a $43,143 difference in net worth]” (p. 207). Indeed, poverty-level Whites control nearly as many “mean net financial assets as the highest- earning Blacks, $26,683 to $28,310” (p. 206).

    Given the history of class and race inequalities in this country, the notion that money will accrue to those at the bottom from folks at the top is laughable.

  2. freestyle · April 17, 2009

    Marco,
    Thanks for chiming in… My use of wealth statistics followed up by income statistics were intentional, given the topic “trickle down” I just wanted people to see both the the hoarding of wealth by the rich as well as the steady income pay for workers, which clearly helps people see that the trickle down theory is not actually happening.
    However, I think your right it is important to make that distinction. You can have two people with the same income, and have drastically different assets. In fact, Paris Hilton could not work for a year, and that year I could have a higher income, yet obviously her wealth would put my the value of my property and my chump change in the bank to shame. And race does illustrate huge inequalities. You referenced Black Wealth/White Wealth, I would through in “The Color of Wealth” as a great resource too, it spends an in-depth chapter on each various ethnic and racial group in the U.S and how wealth has or has not been accessible historically for them.
    You call it “laughable” that people would believe in “trickle down”, but half our country seems to believe in just that and clearly many believe in it, to their own financial detriment. How do we get meaningful dialogue going for those in that camp? No solidarity… no change!

  3. DR · April 18, 2009

    Dru
    I don’t like to see people destitute or poor.
    I don’t like to see people suffer.
    but, In America – even the poor usually have tv and cell phones so – I don’t know if I understand what you are talking about when you start at the end and try to work backwards.
    By that I mean – in a free society, after a person has earned their wage – you ask how we can get it back.
    What is your solution by the way?
    I hear plenty of people talking about what they don’t have and the unfairness of it all – but I don’t hear too many solutions offered – other than redistribution after the fact.
    The reason you can see what people make and where the wealth is, is because of freedom. This freedom allows for people to negotiate for their wages – except in unions (where everyone is pigeon-holed into a standard wage scale) So, what about that freedom don’t you like since nobody is forcing people to earn big wages. What are you driving towards? You speak of trickle down – but that doesn’t say what you actually want and how we should get there.
    Love ya
    D

    • freestyle · April 20, 2009

      My post assumes no particular slant in solution but as you see it primarily focuses on the problem. There is an assumption that wealth is freely shared from the wealthy to those who work for them. In reality, the wealthy want to make as much profit as possible, which means paying the least wages as possible. This post points out that reality.

      If we can come together and acknowledge the problem, it can be the first steps towards finding meaningful solutions that everyone can get behind, which I think is the end goal that we all want.

      However as long as we put the blame on the poor and use that to justify their state of poverty, we will get no where. I think the cell phone statement, is an unfortunate stereotype, because there are plenty of people who cut out all those “luxuries” and still struggle to make it day to day. And for the few that want to watch a little TV, and escape their world with some entertainment, I can actually understand that.

      You are right, freedom is what allows us to see what people make and where wealth has been accumulated. And it is also what allows for people to negotiate for wages or join a union if they would like. However, freedom is also what allows people to enslave others (when there is no law stopping them) freedom also allows greed to run wild without any regard for other people’s human dignity. Complete and absolute freedom without regulation and accountability is a danger to the masses. Inevitably people will gain centralized economic power and will practice whatever means possible to keep it. In effect, others will suffer the consequences for their greed. And if centralized economic power isn’t the top 10% of America having 71% of all the wealth then I am not sure what is… Hopefully as Christians we can continue to dialogue and seek how we can most be servants to “the least of these” in our society.

  4. DR · April 21, 2009

    Dru,
    Yes, your post does not pose solutions. So, who doesn’t know there is greed, corruption, hording, unfairness . . . ?
    How about a show of hands here… Who out there reading these posts didn’t know? Any body….?
    But that isn’t what you’re saying is it? You sound like you’re saying that a few people shouldn’t be allowed to have the lion’s share of the wealth.
    OK, so, way back in Old Testament times I seem to recall reading about a thing called “The year of Jubilee”. God himself instituted it. Why? Think he knew that the people he created were gifted differently and that some would always be able to accumulate more than others over time? Yeah, so do I. So, He commanded that everybody start back at square one every 50 years. Level the playing field and everybody gets back their inheritance (the land God assigned them) no matter what they did to loose it.
    What ever became of that?
    I do not read that it was followed even once.
    Then Jesus came along and he says “Love your neighbor as yourself”
    Even the best Christians I know sometimes do and sometimes don’t.
    The original founders of the country you and I call home said that the form of government they were setting up depended upon the people of this country being and acting in a God fearing manner (being Christian) otherwise it wouldn’t work. Meaning that honesty and integrity and virtue were necessary because the restraints necessary to balance the freedom they built into it would not all come by human laws.
    So here we are – and I’m left wondering if you wish to institute those laws the founders purposely left out and also to get people to do what they wouldn’t even do for God Himself and what kind of government that would give us . . . “Comrade Dru” – it has a certain ring to it, don’t you think?
    How about this – let’s get a little bold here and risk being like MLK or Malcolm X or Lincoln or Jesus himself… Let’s propose some solutions and see if we can’t take some arrows too?
    How about the church at large getting behind the school voucher system of education and push to give ALL the people of this nation the freedom to get the best education they can?
    And…
    Let’s tie all of the government assistance programs that are currently available to the poor with one caveat – that they must be in an educational program that will maximize their potential, in order to get that aid.
    How about those two simple things to start?
    How important is education in regard to poverty?
    Is anything more important besides knowing God himself?
    D

  5. Freestyle · April 22, 2009

    You know most of the African Americans I respect most were at one point or another called communist or socialist, so being labeled comrade puts me in good company. Nonetheless, I am not suggesting socialism nor pure capitalism as a solution. I really believe that every society must balance personal responsibility and accountability with social responsibility and accountability. Our resistance to be faithful personally in this area as well collectively with the relationships with our neighbors, community, country, and all around the world just points to our greed and apathy towards others. Any truly Christian teaching will always favor the other before oneself. As well as seek to comfort the afflicted and afflict the comfortable. That is the Jesus way. Whether we talk about politics, money, evangelism, hospitality, etc.
    But as for limiting the aid given to the poor to just education, I can not agree with that. I do think education is one of the main issues that need to be addressed. I think quality education will help empower people to provide for themselves, but education is definitely not the only issue.
    Even Jesus understood that giving materially to the poor was helpful. He told the rich young ruler “to sell everything you have and give to the poor, and you will have treasure in heaven.” And unlike this ruler who was to greedy to give and did not, Zacchaeus actually does, telling Jesus “I give half of my possessions to the poor”. And then of course Jesus held a massive welfare program feeding the 5000 when they were hungry. And it seems that Jesus’ expectations is that we ought to meet whatever needs there are… “For I was hungry and you gave me nothing to drink, I was a stranger and you did not invite me in, I needed clothes and you did not clothe me, I was sick and in prison and you did not look after me.” I think that we ought to meet whatever the core felt needs are. Clearly, Jesus sees that we are not called to merely connect with them with God, but holistically take care of any needs they have.
    However, I think the real issue is not that argument above… it is how we are to address these problems. I advocate both personal and social responsibility. I think that our American individualism has fractured our collective identity and responsibility. This is not the case in the bible… along with Jubilee which you mentioned (although I suggest a re-read, it is a powerful chapter) in the new testament we have some interesting examples of collective responsibility. Acts 2 and 4 both reference, the community sharing “everything they had” and “from time to time those who owned land or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone who had need.”
    Even more striking is Acts 6, when the greek widows were being overlooked in the food distribution that the the Jewish widows were receiving. The leaders picked seven Greek leaders to watch over the whole process. That’s beyond affirmative action. Not only do we see a system developed to take care of the most vulnerable in the community, but when their was inequity, they took drastic measures to correct them, with the installment of not one, but all seven deacon positions to the greeks to oversee the process.

    We could argue all day about what exact policies to implement. But I think that our faithfulness requires that there ought to be both personal and systemic support of the vulnerable, and specifically the have’s have the greatest responsibility to support the have not’s.

    By the way, Martin Luther King’s ideas were for “a radical redistribution of wealth” because he saw that ultimately, that was the core problem in America. In fact the very last thing he was working on before he was killed was a “Poor People’s Campaign” which would address poverty across the board in America. But let me guess, you think he was a crazy socialist right?

  6. DR · April 22, 2009

    No, not crazy – but doomed to failure.
    Why..
    #1 – The people of God are the people of God and can therefore be held to the standard you describe.
    All the rest – are out of the equation unless you can pass Government legislation that confiscates and redistributes wealth according to your will.
    This of course would mean a different form of government than the one we have. Not easily done short of a violent overthrow.

    #2 – Even if you could take all the money in the country and / or the world and redistribute it evenly – it would all soon be right back in the way it is now – so you would need (again) a form of government that simply caps, takes and then redistributes (after, of course, embelishing those in power beyond anything the civilian wealthy know now)
    Just ask chairman Mao and Putin

    #3 – Explain Job to us. A man blessed by God. In real dollars today – he would be up there with Bill Gates. Where does it say he had to give it all out to the poor or that God required it of him?

  7. Chance · April 29, 2009

    Interesting thoughts. A couple of my own.
    While the rich have been getting richer, the poor poorer, it is typically not the same rich and same poor. In other words, there is upward mobility from the poor class to the rich class.

    Also, the difference between rich and poor shouldn’t matter, but if the basic needs of the poor are being met – not that I’m saying they are, but that should be the focus rather than differences between the two classes. In other words, it should matter that I have a roof over my head and have food to eat, not that I (hypothetically) live in a 2 bedroom house and eat ground chuck while my neighbor lives in a mansion and eats filet mignon.

    But you do make a point in that workers’ wages remain stagnant while CEOs skyrocket. I’m not quite sold on the statistics, as a few executives who make ridiculous amounts of money can tip the scales. But I believe by making it harder on them, it makes it harder on other people too, like owners of small businesses. Being a CEO is a stressful job, therefore I would hope they would make quite a bit more. In this time, anyone’s job can be up in the air, but they put their necks on the line quite often.

  8. Chance · April 29, 2009

    One more thing, I think it is important to balance between two different things. We want to make sure that the poor are taken care of to some extent, like not having people die in the gutter. At the same time, we want to avoid breaking the Tenth command, thou shalt not envy, in other words, wanting other people’s stuff. Whenever I hear terms like “redistribute”, I can’t help think of that commandment.

  9. Andrew · April 29, 2009

    I think there are several things missing from your equations…

    As to the distribution of wealth between races, the greatest factors not mentioned are the family and abortion.

    In my understanding families where a father and mother are both in the home tend to bring in more money. Children out of wedlock is a large contributing factor to poverty. Fathers are meant to be bread winners. Single mothers have two options if they don’t have family to take care of their children: live on government support, or somehow get a job that pays enough for daycare. What if black men manned up and got married and were great husbands and fathers… what kind of difference would that make? How many of the poor would that eliminate?

    Your other unseen factor is abortion. Something close to half of the black children conceived have tragically lost their lives to abortion in the last 35 years. That tells us that there is a moral gap between the races. What if those children had been born at the same rate as white babies?

    As far as Acts 2 goes, keep in mind that the passage is speaking to the church taking care of its members. We have two problems here: the church is predominately not integrated racially or socio-economically, and second materialism is eating our churches alive. We have “white churches” and “black churches” still, even if we don’t call them that. On the one hand, white people need to welcome black people into their churches, but on the other hand, black people need to stop isolating themselves. The same goes with the rich and the poor. The problem seems to be, most of the richest churches don’t know any poor people to give to!

    Each of us needs to stop worrying about what someone else is giving and give what we have. The rich young ruler was called to give all he had, but the widow gave more when she gave her last mite. Every one of us has something to give! If we are always worried about what others are giving to the poor, then we have a serious heart issue of our own.

    As a side note… I visited to a church in Memphis that was awesome! They have one black pastor and one white pastor. The praise band is predominately black (which reflects the population), and the congregation is an even mix. We pulled into the parking lot and saw black people with Obama stickers get out and shake hands with white people with McCain stickers. Where is that in our churches? What keeps us apart?

  10. Trinidad. Adventist.Gay?! · June 18, 2009

    I agree with the last poster.
    Such statistics are meant to suggest an answer that is different to the real one.

    70% of African-American children are born out of wedlock–something that we know is a sure predictor of lifelong poverty!
    We need to rescue the black family–which was destroyed by the Great Society and other wealth re-distribution schemes and I am stunned that after all we know you could come back and clamor for the same solution that ha failed blacks for so many years (30 – 40).

    We have had high taxes and more welfare before and it destroyed the black family (an intact family being the single greatest predictor of the wellbeing of a child emotionally and financially).

    I would suggest you stopped reading Michael Eric Dyson for a second and take a few months to consider a perspective you might not have heard before.
    Stop listening to pejorative caricatures about “trickle-down” economics and go read up much of the good work by people like Thomas Sowell and Milton Friedman and even John McWhorter; just for a few months examine it for yourself exclusively. It cannot hurt to know more.

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