Trickle-Up Economics - American Rural
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Trickle-Up Economics

23 May Trickle-Up Economics

May 11, 2016

Economic policies that skew toward the wealthy and big business are often counterproductive


So what do you suppose trickle-up economics might look like? I’m not sure yet, but am pretty confident we’re headed there so we might all want to start giving it some thought.

According to Investopedia, “President Reagan’s economic policies … were based on trickle-down theory. The idea is that with a lower tax burden and increased investment, business can produce (or supply) more, increasing employment and worker pay.”

Presumptive Democratic presidential nominee Hillary Clinton, feeling the Bern, has backed fast and furiously away from any policy that smacks of Reagonomics. Similarly, Republican primary voters who delivered Donald Trump the nomination are mostly blue-collar Americans who haven’t seen a significant pay increase since the ‘70s. I doubt they’re going to elect Mr. Trump if he doubles down on a 1980’s economic philosophy that left them overburdened and underprotected while their high-wage earning, corporate shareholding peers (many of them living in overly gentrified cities) made bank.

So, what next? defines trickle-up as “… the theory that monetary benefits directed toward small business and the poor will gradually pass up to big business and the rich.” I suspect we’ll hear more about variations on trickle-up economics in the months to come.

Bring it on. Economic policies that skew toward the wealthy and big business are often counterproductive for rural and small-town Americans because we just don’t have a lot of super-wealthy folks or super-big businesses. Indeed, if you’re lucky enough to live in a small community that’s done well over the past decades, it might just be evidence of a tenacious ability to thrive despite challenging government policies.

President Reagan famously said, “The nine most terrifying words in the English language are: I’m from the government, and I’m here to help.” What if even more terrifying are the words, “I’m from the government and I refuse to help.”

We’re 16 years into the 21st century and way smarter than we were back in the 1900s. Our daily lives now include digital learning, instantaneous mobile communications, and autonomous tractors. We Skype with folks around the world and find what’s locally unavailable on Amazon. We do this every day in rural and small towns and it’s remarkable.

We’ve made precious few policy changes though to reflect these new realities. The 2016 election, therefore, would be a good time to begin figuring out what 21st century government ought to look like. You know, like government that’s smart, functional, and enacts policies that pay off for ordinary folks and not just a privileged few.

Success and wealth creation built with integrity will always be worthy of our high regard. But we can no longer ignore policies and practices that have left many behind. Trickle down might have worked at one time, but its deficiencies have become pretty obvious. So, I’m looking forward to hearing a lot more about trickle up. Done right, it could work out well for all of us.

Diane Smith is the founder and CEO of American Rural

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