There is a reason why the failed Trickle Down metaphor of Supply Side Reaganomics is more like Voo Doo than Physics. Because when it comes to wealth accumulation, money isn't like water at all. Money is like HELIUM!
Water seeks its own level, the lowest level possible. But wealth naturally gravitates upward like helium. Left to its own devices, most of the wealth in any society will accumulate at the top, from which point the concentration will drop precipitously as one looks downward toward the bottom, where it will exhibit a vanishingly diffuse presence. They say it takes money to make money and it's true. So if you ain't got much money, you'll never make much money, unless you're the rarity that defies the physics and performs the feat that's called "Beating the Odds".
Helium released into a room will float up to the ceiling and stop there. On its own helium has no impetus to move back downward, other than the very weak force of diffusion along concentration gradients. Similarly, wealth concentrated in the top strata has no reason to move downward from the ceiling and since there is vanishingly little wealth below, there's no force to generate any dynamism in the system. And there's certainly no impulse for wealth at the top to invest itself in the interest of gaining more wealth from below, there's simply not enough of it there to make it worthwhile and generate the energy to do so.
Wealth is like Helium, it Stagnates at the Ceilium! (I've just renewed my poetic license). By September 2008, after three decades of Reaganomics, this was the state our Plutonomy had finally come to, with the vast majority of wealth concentrated at the top, the circulation collapsed, resulting in the Great Republicon Recession.
If however, instead of settling for stagnation, a force is introduced to push that helium downward, like a ceiling fan, it gets distributed more evenly throughout the room and inevitably returns to the top through dynamic flow and its property of buoyancy. Similarly, money circulated downward ($9.00 Minimum Wage, Revitalizing our Infrastructure, etc.) will flow back upward as it is used for purchasing. And unlike helium wealth can grow, so now there is momentum to invest that money to attract some of the wealth from below, which is now in more plentiful supply. And so the strength and volume of the circulation grows. And that circulation my friends, is called an "ECONOMY"!
3 comments:
There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.
Who said these words and when was written?
I cheated and Googled it. Honestly, I still tell people that is the primary difference between the two parties when people ask me. There is so much crap out there everyone can disagree on but the bottom line is how money is used and regulated.
I had to cheat too. Hint, it's the man about which the Wizard of OZ was written as an allegory.
http://topdocumentaryfilms.com/the-secret-of-oz/
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