“Supply side economics.” “Trickle down economics.” “Voodoo economics.” Call it what you may, but the theory is that if you put more money into the hands of the wealthiest Americans, they will be empowered to create jobs to the benefit of the rest of us.
Since Ronald Reagan started marketing this theory, America has doubled down on it. Literally. As we saw this week, over the last three decades we have more than doubled the income share of the top 1% of Americans, recently rebranded “Job Creators.”
So, how’s supply siding going for us? Despite the fact that we have armed the Job Creators with massive infusions of new resources – exactly what the supply siders said we must do – the Job Creators obviously aren’t creating jobs.
Given that embarrassing reality, the new explanation served up by the Job Creators and their political allies is that regulations are just too darn burdensome to allow the Job Creators to work their job creation magic.
For instance, Wisconsin Congressman Paul Ryan (R-WI) had me choking on my Cheerios this morning during this NPR interview:
NPR reporter Ari Shapiro: …we asked Ryan why that wealth isn’t translating into new jobs.
Ryan: I have toured over 200 business in my congressional district asking this very question, and I get the same answer these days. Uncertainty on taxes, uncertainty on regulations… Over 4,200 regulations are coming out of the federal government this year. Over 3,500 came out of the federal government last year. So to me businesses need to have some degree of certainty if they’re going to plan or take a risk.
If the Packer’s underachieve this weekend, or there is inclement weather in Janesville, expect Representative Ryan to blame it on the regulations in our midst.
Just as with the claims about the wonders of supply side economics, the mainstream news media has not sufficiently questioned the “regulations kill business” claims. They usually report the “jobs kills business” claim as if they are noting that “the sun rose over the horizon this morning.” Self-evident.
But if reporters looked at the industries that have been the subject of the most regulations in recent times, health care and energy, they would see that they have among the highest earnings per share in the S&P 500.
If reporters asked Bruce Bartlett – conservative economic guru to Ronald Reagan, George H.W. Bush, Jack Kemp and Ron Paul – he would tell them that there is “no hard evidence” to support the claim that regulations are the principal factor holding back the economy.
If reporters asked economists about the regulatory environment, they would learn that 80% of economists surveyed by the National Association for Business Economics rated the regulatory environment for business and the overall economy as “good.”
To be fair, the Wall Street Journal did survey economists about the principal factor holding back the economy, and learned that 65% said “lack of demand,” not government policy. But the Journal then proceeded to continue skapegoating regulations in their subsequent reporting and editorializing.
Finally, if reporters checked Bureau of Labor statistics, they would see that employers say that less than 00.03% of mass layoffs in the most recent quarter were due to government regulations or intervention. The number one reason, according to employers, was “lack of demand.”
Lack of demand. Not lack of resources in the hands of the wealthy few. Not too much regulation. Lack of demand from the people whose income is stagnating compared to the Job Creators.
The evidence completely discredits the de rigueur skapegoating of regulation. This evidence argues for a long overdue end to the failed trickle down experiment, and a move to demand side stimulation, policies that put more money into the pockets of consumers who buy stuff and less money into the pockets of wealthy people who can afford to horde cash.
It also argues for better reporting of economic evidence.