The economic fairy story of trickle-down economics

Trickle-down economics is a stupid economic fairy story because wealth doesn't trickle down from the rich to the poor and ordinary, it's siphoned upwards from the poor and ordinary to the rich.

For almost five decades we've been fed this absurd economic fairy story that allowing the wealthy to take a greater share of the national wealth will benefit us all in the long-run through "trickle -down" economics.

The theory is that if the feast on the top table is lavish enough, sufficient crumbs will fall to the floor to feed the rest of us.

This is simply not the way the economy works. The wealth doesn't trickle down from the rich to the poor and ordinary, it's siphoned upwards from the poor and ordinary to the rich.

The radically right-wing experiment in directing public wealth directly to the rich (through policies like privatisation, outsourcing, subsidisation, tax giveaways ...) has seen the wealth of the tiny mega-rich minority multiply many times over, while living standards for the rest of us have collapsed.

In the 1970s it was possible for a family with a single main earner (usually the dad) to afford a house and plenty of nice things. And even if home ownership was slightly out of reach, there was plenty of affordable social housing.

These days most people under the age of 45 find themselves locked out of home ownership altogether unless they're lucky enough to benefit from generational wealth (inheritances, trust funds, bank of mum and dad ...), and home ownership is often still impossible even when both parents are working full-time jobs, even when the average family size has fallen dramatically since the 70s.

Since the 70s access to social housing has been completely ruined by the destructive "Right to Buy" scheme that flogged off millions of council houses at way below their real values, with no new social housing built to replace what had been flogged off.

Add austerity ruination into the mix, and we've suffered an unprecedented lost decade and a half of wage stagnation, while the rate of wealth accumulation by the tiny mega-rich minority has gone into overdrive.

Anyone with a grain of sense can see that trickle-down economics is an economic fairy story that results in excessive wealth accumulation at the top, and falling living standards across the rest of society.

That's what makes it so infuriating to see a Labour Party chancellor promising that her new programme of financial sector deregulations will deliver "trickle down benefits" to ordinary families.

Rachel Reeves offers no evidence or economic impact assessment to back up her unlikely assertion that she's found a novel new way of making favours to the rich work to benefit ordinary people in the way they absolutely haven't since 1979. We're just expected to believe that this time the economic magic beans are real, trust her.

Given that it's fairly well established that wealth actually flows upwards, from the poor and ordinary to the rich, wouldn't it actually make more sense for the government to put more money in at the bottom, to improve the living standards of the poor and ordinary, knowing that the wealth will eventually work its way up to the top anyway?

A truly smart government would look into ways of making sure that the money circulates around the economy as much as possible before it gets siphoned off by the mega-rich to be stashed away in tax-havens; squandered on ostentatious luxury good; or used to inflate property prices and speculative asset bubbles.

I don't think I'm bursting anybody's illusions by pointing out that Keir Starmer and Rachel Reeves are not running a "truly smart government".

In fact they seem to be suffering some kind of maniacal fixation on economically punishing the poorest and most vulnerable in society, whilst doing nothing whatever to stem the extraordinary flows of public cash directly from the treasury and the Bank of England into the bank accounts of the mega-rich.

They tried to mug low-income pensioners until public opinion and the Labour rebels forced them to backtrack; they tried to give savage economic punishment beatings to disabled people until public opinion and the Labour rebels forced them to backtrack; and now they're saying that they're going to continue economically sanctioning children for the "crime" of having more than one sibling because they were frustrated in their efforts to harm pensioners and disabled people.

'You wouldn't let us mug pensioners and beat up disabled people, so now we're going to teach you a lesson by starving kids.'

It's not just unbelievably malicious, it's a display of naked economic illiteracy too.

It's as if these people are so economically stupid that they don't realise that money spent on social security for the poor and vulnerable isn't just burned in a pit, and that it actually circulates around the economy every time its spent, generating tax revenues every time, until what's left of it eventually ends up squirreled away by some mega-rich tax-dodger.

Cutting welfare to the poor doesn't "save" money at all, it simply removes that money from economic circulation; making families and communities poorer in the process.

And deliberately forcing children to grow up in poverty in order to spite the people who prevented them from giving economic punishment beatings to pensioners and disabled people is economically idiotic in another way too.

The children of today are the workers of tomorrow, so the more the government stymies their development; denies them opportunities; and starves them of adequate nutrition, the lower their economic potential is going to be in the future.

What makes this economic illiteracy on top of economic illiteracy all the more frustrating is Starmer and Reeves' insistence on siphoning off even more wealth to the already insanely rich, while they keep trying to inflict punishment beatings on the poor.

One of the policies that Reeves insists will benefit ordinary households through the "trickle-down" effect is a new slush fund of public money to bail out banks that make reckless lending gambles.

It's an incentive for the banks to engage in the ludicrous lending practices and derivative gambling that caused the 2008 financial sector meltdown, knowing that this time they absolutely can't lose, because Reeves will use public cash to bail them out when their bad bets fail!

Free no-strings money for financial gamblers at the top, and merciless boots of economic repression stamping down on the necks of the poorest and most vulnerable in society.

But don't worry!

Rachel Reeves says there's no need to concern your tiny little mind over stagnating wages; failing public services; unaffordable housing; soaring inequality; and her government's sadistic fixation on harming the poor and vulnerable ... the handouts she's giving to the mega-rich will trickle down to benefit the rest of us, in exactly the way handouts for the rich demonstrably haven't for the last four and a half decades!