Associated Press Swerves into Reaganomic Truth

Collateral Eduction: AP swerves into truth

By C. Edmund Wright

Ronald Reagan, who is dead, is still several decades ahead of the Associated Press when it comes to understanding basic economics. But let's give credit where credit is due. Today, the AP did pull within about 30 years of the late, great President's economic understanding .

For today, the AP did discover one of the foundational tenets of Reaganomics; so-called "trickle down" economics. Trickle down, which is of course absolutely sound as a theory and is closely related to "supply side" economics, is provable by history (not to mention common sense).... yet named in such as way as to invite demagoguery. And we all know that liberals will demagogue an issue with or without invitation.

So today, in an attempt to slam conservatives and the rich, the AP swerved into the truth of economics in an article entitled "When the Rich get Stingy, it Trickles Down to the Rest of us." http://www2.tbo.com/content/2008/aug/04/rich-begin-feel-economic-pain/

Well halleluaih. They even put "trickle down" in the title. Of course, they had this epiphany (no relation to Obama's suggested epiphany") by mistake. The truth here was collateral education. But it happened nontheless. The AP slammed the rich by accusing them of getting stingy, demonstrated Reaganomics and lamented what Al Gore might call reducing one's "carbon footprint" all in one article. I wonder if they have any idea what they have just done.

Anyway, consider a few excerpts of their tortured revelations:

"The rich are sharing your financial pain - and contributing to it.

It may have taken longer and it may not be as acute, but there are early hints that the economic slump is crimping the lifestyles of the wealthy."

---I wonder if they ever ran articles about how the rich were sharing the financial boon of the middle class and "contributing to it" during better economic times? We all know the answer to that.

"They (the rich) are investing more conservatively, spending less on luxury goods and are being more thrifty with their credit cards."

---which of course means they aren't spending money in places that create jobs and tips and incomes to the middle class. Memo to the Obama economic team....they also pull back this kind of spending when they face tax increases, by the way.

"Many are asking their personal shoppers and private-jet travel providers to seek the best deals rather than over-the-top extravagances."

---well, at least we are seeing the creation of some jobs...."personal shoppers." This could also be good for the evil corporation known as Wal Mart.

"That news may produce a shrug from many people who have lost their jobs or homes in this economy. The problem is that when the wealthy get stingy, it trickles down to the rest of us."

---which is proof of the terrible state of economic education in our society. No one who las lost their job or home should shrug when the rich...the very people they will need for their next job or next home loan....are hit. It's common sense...when the wealthy have less disposable income, they spend less in ways that will "trickle down" to the rest of us.

Ok, so the Associated Press still has a lot to learn about Reaganomics....but this is progress nontheless.  Afterall, they come dangerously close to connecting the dots with a couple of paragraphs in the middle of the story:

"The 10 percent of households with the highest incomes account for nearly a quarter of all spending, according to data compiled by research firm Moody's Economy.com from a 2006 federal survey.

That does suggest those folks are important for the spending outlook, and the overall economic outlook," said Scott Hoyt, Moody's director of consumer economics."

If you understand those two paragraphs....you will realize that the AP just called it plain stupid to ever raise taxes on the rich. I doubt they realize that.