The Trickle Up Theory of Economics

The Trickle Up Theory of Economics

 

For about thirty-five years we had a fairly stable economy from the 1950’s through the 1980’s.  We had a large, healthy and robust middle class.  Senator Elizebeth Warren(D-Massachusetts) http://en.wikipedia.org/wiki/Elizabeth_Warren says that certain laws were put into place to insure that our economy stayed stable and balanced.  Then during the Reagan years some teeth and regulations were pulled out of these laws and we immediately had the S&L Scandal.  Then some more were pulled out by President Clinton in 1999 (the Banking Modernization Act of 1999 and the end of the Glass-Steagal Act) http://www.investopedia.com/terms/g/glba.asp  and we immediately had the Dot.com bust in 2000 and set us up for the housing bubble and its eventual demise of the economy in 2008.

This is by design.  It was created by some very far thinking and clever people on Wall Street.  Here is how it works.  First you feed the population this lie.  “Investing is the stock market is a great way for a middle class person to invest and grow their money.  Investing is a smart way to save for your retirement.”  Then the Wall Streeter’s create a system of booms and busts on roughly a ten year cycle. 

Imagine that a million people invest $1000 in the market.  Their money grows a little bit at a time for 10 years and all looks good.  Suddenly, the market crashes in a matter of weeks and their investments are only worth $500 now.  What happened to their money?  Did it just disappear into thin air?  Well to the investor it disappeared.  But to the people on Wall Street and to the investment firms the money trickled up the ladder to the people at the top.  A million people just lost $500 that is half a billion dollars that went into somebody’s pocket, one of the 1%’ers.

Some people will be able to weather this set back, but many people will not and they will get out of the market and their money is lost forever.  So now let’s say there are only ¾ of a million people are able to invest.  But the lie is told again and more people invest.  Those people stay in the market and will regrow their investments until the next market crash.  Then more people will get out of the market and their money is lost and has trickled up the ladder to the top once again. 

As more people can no longer afford to invest the few people that have profited will invest more and more until they get bumped out of the market in the next crash until the only ones left are the very, very wealthy while the rest of the nation lives paycheck to paycheck. 

With this plan of trickle up economics the rich steal from the middle class over a 50 or so year period of time till they have all the money and all the control.  We are twenty-five years in and so far I think their plan is working out pretty well.  What do you think?

If I were elected President I would make Elizebeth Warren Secretary of Economics and bring back all the banking laws, safeguards, and regulations that existed before 1980.