Trickle My Fancy
I have never understood the much-vaunted trickle-down economic theory and how it was supposed to work.
And since the theory never has worked I suppose that lets those of us untutored in the fringier branches of economic arcana off the hook.
But then, lo and behold, in the last couple of weeks it all became clear. And how did it become clear? It was as I read about the third quarter profits of Big Oil, specifically Exxon Mobil and Royal Dutch Shell PLC.
Between them, these two titans amassed over $19 billion in profit in the quarter–Exxon came in just shy of $10 billion and Shell just over $9 billion.
So, finally trickle down became clear–as the rest of us were getting squeezed mercilessly at the gas pump, profits were trickling down into the coffers of the oil companies.
You put enough trickles together and you get a gush. You put enough gushes together and you get an oil company like Exxon that is on track to make some $34 billion in profit for the year.
Now, of course, these obscene profits have nothing to do with high gas prices. Indeed, if you listen to the explanations you start to feel nothing but intense sympathy for Big Oil because it, too, is getting squeezed like the rest of us. The only difference is it’s getting squeezed and profiting by it.
So, will Big Oil take those profits and build more refineries to open up the pipeline, so to speak? That is, use the money to trickle down benefits to the rest of us. Not likely is the answer–you see, refineries are very expensive.
This, my friends, explains why the meretricious theory of trickle down never worked and never will. The plain fact of the matter is that those who amass all that wealth and then supposedly put it to work in society never do. (Bill Gates a big exception.) It also explains why those trillions of dollars of tax cuts so beloved by our current President have not had the effect of promoting growth that was their raison d’?tre. Trickle down using an alias.