BBC NEWS | The Reporters

The end of 'trickle-down'?

Gavin Hewitt
15 Oct 08, 04:22 PM GMT

DETROIT: I woke up this morning, staring at Canada. It's where I used to live and Detroit's high-rise hotels offer you a glimpse of a long, receding horizon.

Sunset in Detroit The hotel itself is half-showroom. There seem to be cars in the lobby and black and white pictures of models with gleaming metallic fins. Looking at them now, these cars are bursting with optimism.

The present seems so different. We've stopped here en route to Hofstra university in Long Island for the third and final debate. We wanted to get a snapshot about the economy.

The television vox-pop is a curious animal. It is often little more than a visual punctuation. It is certainly unscientific but every so often it draws you into a fascinating conversation and that happened last night.

We stopped off at The Bar on Michigan Avenue, Dearborn, not far from the Ford plant.

The lighting was low inside. A place for a quiet reflective drink. We joined three men who had spent a lifetime in the auto industry, working for Ford. In their view, they had seen the best of times. Everyone, they said, feared the possible merger between General Motors and Chrysler. Job losses usually follow mergers.

The men were bitter about the economy. Norman Tomkowski said "most of the people you talk to think it sucks."

Another man looked into his beer and said "it's not good at all. People being laid off, losing their jobs. People can't afford to live anymore."

When they spoke of the election the economy trumped everything, but it's what they said about the conditions at the car plant that caught my attention. In their day, they had health insurance; they were compensated for inflation. There were other benefits. Most of them have been pruned back.

It connected to what I've heard elsewhere, that for millions of Americans the last few years have seen a cut in real income. Wages have not increased and many working Americans feel less off. Benefits have been squeezed.

It nags away at basic beliefs, that hard work can lift you up. It challenges the much quoted belief in a "trickle-down" theory, that if those at the top are pulling in the high salaries and bonuses, the wealth trickles down. In conversation after conversation, I find people doubting this and it feeds into the mood that America is on the wrong track.

We're off to the airport and the debate in New York. Our brief encounter in Detroit underlines the difficulty for John McCain - how to answer this feeling that America is heading in the wrong direction.

Some people are reminding the voters that in 1980 Ronald Reagan was behind in the polls with just a few weeks to run but won by a landslide. He looked into the camera, slightly tilted his head, and asked, "Are you better off than you were four years ago?" The question hit the spot but it's a question John McCain can't ask.

Comments

1. At 6:06pm on 15 Oct 2008, GoonerPetronius wrote:
Let's hope this is the end of the "Trickle Down" policies. It's no secret that these policies were designed to help the wealthy and well-connected few at the expense of everybody else. Tax laws and deregulation have turned everything in favor of a small, wealthy group in hopes that they will spend and invest to grow the economy. However, what they don't tell you that there's no guarantee that the money will be invested here at home. McCain and Republicans are still clinging to the "trickle Down" theory and their new argument is that any change to help the Middle Class is "Socialism". What a crock !

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2. At 6:11pm on 15 Oct 2008, apkeeley wrote:
It is unfortunate but true- it took a total meltdown for many of us Americans to realize Reganomics was more fantasy than reality. This change in how we perceive the world and the economy will probably shape American government and life (and possibly the rest of the world) in ways that cannot even be conceived currently. Though it is a frightening time to be an American, I am also excited by this.

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3. At 10:39pm on 15 Oct 2008, coreycanuck wrote:
I seriously hope that it at least prompts a review of the entire economic philosophy. "Trickle down economics" is simply the last stage of pure capitalism that needs to be examined. Why, in Canada, are people paying in excess of 35% in taxes on my entire gross income when corporations (which only enrich a relative few) only pay 11% in some jurisdictions and less than 20% almost everywhere else on their after-expense money?
The old answer (hopefully now discredited) is that the companies provide jobs that enrich the lives of their employees. Companies exist to make a few people a lot of money. (I say this as the sole owner of a Corporation).

Also, the ideas of limited government intervention and self regulation also need to be critically evaluated in light of the huge amounts of public money that is being used to bail out companies that raked in huge profits in the short term, knowing that they would have to be rescued at the expense of the taxpayers.
Democratic forms of government exist to protect the majority from the excesses of the few. If the actions of businesses can negatively impact the larger population to the extent of the crisis, governments need to have much greater input in how they are run.

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4. At 10:32am on 19 Oct 2008, JMH1969 wrote:
Gooner, Do you believe in trickle up economics? When was the last time a broke man gave someone else a job? You either have trickle down or you have Socialism/Communism.

Apkeely, the meltdown was from Reaganonics? Do some research. Look into the Community Revitalization Act(CRA) introduced by Carter(A Democrat). In its origianl form the CRA was alright. Then along comes Clinton(Another Democrat) who expanded the act to allow many more lower income people to qualify for loans that they had no business getting or could pay for in the long term. Then, you have groups like ACORN who used intimadation to force banks into giving more loans that should never been given. The Republicans, Bush and McCain, have been trying to get tighter regulations and oversight on Fanny Mae and Freddy Mac for YEARS! But, with the Democrats controlling congress they were not able to get anything through. Look into the connection between Barney Frank and his live in boyfriend. Frank was on the banking commity while his boyfriend was a VP(IIRC) of Fanny Mae. Possable conflict of interest maybe? The meltdown can be laid directly at the Democrats and Obamas feet!

coreycanuck, Both the AIG and the Banking bailouts are unconstitutional. The Federal Government does not have the authority under the Constitution to use tax dollars to buy private assets.

What the USA needs is to get back to a pure Constituional form of government. The Federal Government needs to stop over stepping its authorities. Until 1913 when the Federal Reserve and the IRS were established this country was doing just fine. We have been on a move towards Socialism ever since. People talk about the National Debt - It is an illusion! Other than the money that we owe to other countries, that debt could be wiped clean to $0 tomarrow by an act of congress to eliminate the Federal Reserve(A private Bank). Just tell those idiots to "kiss off, you are not getting another penny from us", and for the USA to start printing their own money again!

Last point. Obama has said that he is for the Right of people to own guns as long as laws protecting community "safety" are put into place. His ideas of laws for "safety" is to outlaw all guns. He said, "Even if I wanted to take away guns, I don't have the votes (in congress) to do it." What if in the future he does have the votes? If the second amendment ever gets stripped from We the People, its just a matter of time before all of our Rights are taken away from us. It is a historical FACT that before a government can take Rights away from the citizens that they first have to disarm them! You may not care about the 2nd Amendment, but they will eventually get to a Right that you do care about! Without guns to protect ourselves, our Rights and our Republic form of Government we are all screwed!

God bless the United States of America and have a great day!

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5. At 03:50am on 20 Oct 2008, Jetjock wrote:
Well it’s over….The only way McCain could win the upcoming election is if we were in a parallel universe where we had a situation with a very popular George W. who walked the talk by managing to convey truly conservative values and properly managed or stayed out of the war and left a legacy with coattails that could have swept in McCain (e.g., Reagan’s bow wave pushing in Bush 41). But then again, I like to daydream.

However, reality trumps it all. With an uninformed electorate reacting to B.O.’s swagger and rock star persona combined with a relaxed unfettered demeanor, B.O.’s “style over substance” yet un-vetted approach will make him a winner in November with that electorate blind to his political DNA. It’s nothing more than hating anything Bush.

So be it. Paraphrasing columnist George Will, who nailed it soon after the 2006 election, stated the GOP was going to need to spend some time in the wilderness to pay for its antithetical sins against conservative principles. How long that will be is hard to tell. Depends as much on what Obama does as what conservatives do.

There is no Newt in Congress that can put out the Contract with America and upset the apple cart during the first midterm election in 2010. Although, I really feel he is waiting in the wings to somehow reemerge on the scene possibly by 2012. Newt is now doing what Reagan did in the years prior to his nomination for California governor, laying out a belief framework. In Newt’s case, he is attempting to re-establish a conservative movement with out of the box thinking. If he can overcome his negatives with a truly innovative philosophy, he stands to be, at least, the next GOP philosophical leader with the potential to establish a true reform movement.

Bottom line is that the GOP is paying for its sins getting off its conservative message. The only true silver lining that can come out of this election is, if they're lucky, the Senate will remain shy of a veto-proof majority. Pretty low expectations, huh?

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