President Obama spoke today in Osawatomie, Kansas, channeling Teddy Roosevelt, who presented his “New Nationalism” speech there 101 years ago advocating a progressive agenda. Obama attacked the linchpin of conservative economics, the misguided “trickle down” theory stating that deregulation and tax cuts for the wealthy will ultimately benefit everyone. The president said that this theory “never worked”; we know for sure that it hasn't worked over the past 10 years. The idea that we can’t cut taxes on the wealthy because they’re “job creators” has been thoroughly discredited. The Bush tax cuts continue–so where are the jobs? Indeed, the legacy of the Bush tax cuts is no job creation and stunted growth. Listen:
President Obama: Now, just as there was in Teddy Roosevelt’s time, there is a certain crowd in Washington who for the last few decades have said let's respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If we just cut more regulations and cut more taxes – especially for the wealthy – our economy will grow stronger. Sure, they say, there will be winners and losers. But if the winners do really well, jobs and prosperity will eventually trickle down to everybody else. And, they argue, even if prosperity doesn’t trickle down, well, that’s the price of liberty.
That's a simple theory and we have to admit it's one that speaks to our rugged individualism and our healthy skepticism of too much government. That's in America's DNA. And that theory fits well on a bumper sticker. But here’s the problem: It doesn’t work. It has never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible post-war booms of the 50s and 60s. And it didn’t work when we tried it during the last decade.
For a fuller look at Obama’s speech, I recommend Robert Reich’s "The Most Important Economic Speech of His Presidency."