"Trickle down" fails again

Remember "trickle-down economics"? That was the lie the Revolutionaries told us in the 80's and 90's to justify tax cuts for the rich. The idea was that they would get richer, but that some of their gains would "trickle down" to the rest of us, thus making everyone better off. It didn't work - instead, the rich got richer, and the rest of us got poorer in real terms. And according to a study of recent US census data by McClatchy Newspapers, exactly the same thing has happened in the US as a result of Bush's economic policies. Tax cuts for the rich combined with policies that keep unions weak and inflation low have ensured that virtually all economic growth has been funnelled into the pockets of the already rich - corporate profits now utterly dwarf wages. Meanwhile, everyone else is falling down the income pyramid, getting worse off in real terms ("the median household income of working-age families, adjusted for inflation, has fallen for five straight years"), while poverty levels are rising. And extreme poverty - defined as having an individual or family income less than half the poverty line - is at its highest levels since 1975, and growing 56% faster than poverty overall. In other words, people aren't just becoming poor - but bankrupt. Which is what you'd expect in a country with no social safety net and no public services, where many people are just a short period of unemployment - or an illness, or a divorce - away from destitution.

How can this happen in a democracy where people can vote for alternative policies? Part of the reason is that not enough Americans vote. But as the Independent points out, another reason is that American politicians just don't talk about inequality and poverty:

These figures are rarely discussed in political forums in America in part because the economy has, in large part, ceased to be regarded as a political issue - John Edwards' "two Americas" theme in his presidential campaign being a rare exception - and because the right-wing think-tanks that have sprouted and thrived since the Reagan administration have done a good job of minimising the importance of the trends.

This is a warning to us. The National Party still has not forsworn these policies (and Don Brash was pretty explicit about wanting to see them return). We should not let that happen. And the best way of preventing it is by ensuring that the subject is visible and that politicians don't just stop talking about it. On this front, perhaps John Key is doing us a favour.