Sunday, December 15, 2013

Economist: Reagan Labor Secretary Admitted "Trickle Down" Failed

Speaking to PBS NewsHour, Northeastern University economist Barry Bluestone explains why "trickle-down" economics failed and led to wide income inequality and unemployment: "When we redistribute income from working families and low-income families to rich people, we're basically reducing our consumption. The wealthiest people spend maybe 30% of their income. Poor people spend 100%, working people spend 98%. So as we move money away from working families to very wealthy families, we take more and more consumption out of the economy, means slower and slower growth, means higher and higher and extended unemployment.” Bluestone then recounts that Reagan Secretary of Labor William Brock criticized his views in 1987 and admitted three years later that Bluestone was right. Watch:

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