I don't quite know enough about economics to understand this thoroughly, but I do know enough about history to point out the obvious - trickle-down economics or supply-side economics, which has genuinely been tried three times in the recent American past, is an abject failure. Here is a link to a HuffPo piece that contains a document by a UC-Berkeley professor that lays out the current, and past, ratios of the distribution of wealth in the US. The above graph I grabbed from HPo's site. Now, historically, to look at the graph, one would note two things: tax policy can be effective at ameliorating the more grotesque maldistribution of wealth. (And note - this is the top .o1%!!) So the passage of the first income tax bill by Woodrow Wilson (using the newly-passed 16th Amendment), along with war-time taxation, significantly reduced the share of wealth held by that top .01% of the population. Similarly, the programs of the Great Society and War on Poverty also had the effect of diminishing income inequality, which was the point of the program (well, one of them), for LBJ. The second thing worth noting is the periods at which income inequality spikes, and the historical events that follow: notice that GIANT spike in 1928 and 2003? Obviously, the historical events that follow those are two dramatic economic collapses - the Great Depression and the Great Recession. Now, I have to admit, I've not yet read J.K. Galbraith's The Great Crash, though it's on "the list." But I have read enough of the Depression to feel pretty confident in classifying three causes of the Great Depression: overproduction/underconsumption, the collapse of the international economy, and a huge maldistribution of wealth. Consult the 1929 Brookings Institution report for a good description of the concentration of wealth in the hands of a few. Notice any connection? I don't want to paint a mono-causal picture, but historically, it seems that a dramatic maldisribution of wealth can have calamitious economic impacts. Does this sway in any way the thoughts of the super-rich? No, of course not. They don't care. But the next time a Republican administration tries to sell you "supply-side" economic dung as rosebuds and lilacs, be skeptical. It don't work.
