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Andres Aullet

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Trickle down vs. trickle up

The more businesses are left alone to do what they do best (sell a product or service), free from regulations, external influences and excessive taxation, the better they will be.

Loans and extra profits can be then used for more business creation and business growth, which in return drive more economic prosperity for investors, and that also "trickles down" to workers (as jobs and better salaries) and consumers (as lower prices) and everybody benefits in the end.

Or so the story goes.

Although the theory says that when investors gets richer, they use this extra wealth to promote more businesses, and in the process creating more jobs and driving prices down through specialization; there are many examples where the extra wealth is either just accumulated, or it is invested in ways that do not create jobs nor drive prices down.


Would things work in reverse?

What if individuals rather than businesses were the recipients of loans (micro), left alone to do what they do best (which i contend is creativity), as free from regulations, external influences and excessive taxation as possible.

They would then require raw materials and more people to put their ideas into action, they would need products and services offered by bigger businesses. In the end, everybody would benefit and the economic prosperity would trickle up

Obviously, this is an idealization.

But, could we benefit from a balance of both approaches?

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  • Nov 10 2012: P-l-e-a-s-e  ....let the good professor explain "TRICKLE-DOWN-ECONOMICS" to you

    ...since I know that it is a complex, difficult and often misunderstood term.

    After all, it's things like this that keep Economics Professors like me in business, no? 

    I AM sorry that I left my graphs at home, but here goes, anyway:

    Well, basically ,there are two parts to this beautiful , time-tested theory. 

    The FIRST part is the "TRICK"le part. 

    You MUST realize, you must understand, and you must emphasize that this is ALL a trick. 

    The rich are the "tricksters, and you my poor friends, are the "trick-ees".

    Do I make myself clear? Good, then we'll go on to the second part.

    The SECOND part, dear students of the world, is the crucial "Trickle-DOWN" part. 

    That, my friend, simply means that the super-rich URINATE all over the rest of us

    ...and then laugh all the way to their off-shore banks and tax-shelters.

    I hope that I have been helpful. Until next time -ask me anything-!

    - Professor America
    P.S. Bottom lone: the only acceptable looters are the super-rich.
    Anybody else is subject to arrest.

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