This is a Reagan-era idea that conservatives still cling to, even if they don\u2019t use the term anymore. The idea is that if corporations and the very wealthy have more money, they\u2019ll invest more of it and \u201ccreate jobs.\u201d It\u2019s flat wrong. <\/p>\n\n\n\n
Let\u2019s take as a hypothetical an owner of several multiple McDonald\u2019s restaurants. We\u2019ll call him \u201cRonald.\u201d Actually, I\u2019ve known some of these folks (by and large a lovely group of people – most of them started on cash registers or the grills) and they\u2019re not outrageously rich, but they make a more relatable example than Howard Hughes. Let\u2019s also hypothesize a very low-income part of town, so poor that these folks can hardly ever spend more than $5 on a meal, and that maybe once a week. If the Mickey-D\u2019s magnate finds himself with an extra million bucks, do you think he\u2019s going to build a shiny new restaurant in the neighborhood where he can\u2019t sell any hamburgers? However, if those poor folks somehow get better incomes, Ronald will borrow the money to build a store to sell hamburgers. <\/p>\n\n\n\n
One of the ways those people might get more money is if other working-class people have the money to buy cars or furniture so somebody needs to increase manufacturing capacity and builds a factory in the area. <\/p>\n\n\n\n
So. Businesses don\u2019t invest in production because they HAVE money, they invest because they can MAKE money. The rich will sit on their money unless they see a good opportunity to turn a profit. When there\u2019s an economic downturn they\u2019re the first to move their money from struggling businesses to safe investments, like bonds – or foreign investments, if say the Indian or Swedish economy is booming while America slumps. <\/p>\n\n\n\n
The people who spend money at McDonalds and Walmart and Target and Ruby Tuesdays and movie theatres and Best Buy aren\u2019t the very rich, they are working people with families. <\/p>\n\n\n\n
Henry Ford, for all his faults, understood this. He made the decision to pay his factory hands enough so they could afford to buy a Model T. This not only made him very rich, but it had a wide impact on working class wages and quality of life. <\/p>\n\n\n\n
If we\u2019re going to support the real supply side, we need to support the working classes, from factory workers to checkout clerks to salespeople, IT people, skilled tradespeople – really, just about anybody who budgets around a biweekly paycheck instead of checking their investments. <\/p>\n\n\n\n
I have a weakness for metaphor that I will try not to over-indulge, but I\u2019m rather proud of my metaphor for this situation: Every farmer knows that if you want fruit, you don\u2019t water and feed the blossoms, you take care of the roots.<\/p>\n\n\n\n
(You can water my roots at my CafePress store!<\/a>)<\/p>\n\n\n\n Feedback: blather@progpatriots.com<\/a>. I\u2019d like to say appreciate your feedback but I can only promise to check it when I can.<\/p>\n","protected":false},"excerpt":{"rendered":" This is a Reagan-era idea that conservatives still cling to, even if they don\u2019t use the term anymore. The idea is that if corporations and the very wealthy have more money, they\u2019ll invest more of it and \u201ccreate jobs.\u201d It\u2019s flat wrong. Let\u2019s take as a hypothetical an owner of several multiple McDonald\u2019s restaurants. We\u2019ll… Continue reading \u201cSupply side\u201d economics<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[8],"class_list":["post-74","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-business-economy-and-government","entry"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/progpatriots.com\/index.php?rest_route=\/wp\/v2\/posts\/74","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/progpatriots.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/progpatriots.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/progpatriots.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/progpatriots.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=74"}],"version-history":[{"count":1,"href":"https:\/\/progpatriots.com\/index.php?rest_route=\/wp\/v2\/posts\/74\/revisions"}],"predecessor-version":[{"id":75,"href":"https:\/\/progpatriots.com\/index.php?rest_route=\/wp\/v2\/posts\/74\/revisions\/75"}],"wp:attachment":[{"href":"https:\/\/progpatriots.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=74"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/progpatriots.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=74"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/progpatriots.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=74"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}