Messaging Economics: How to Win, How to Lose


Felicia Wong, Joseph Stiglitz, Rana Foroohar and Stan Greenberg

While at the Democratic National Convention (DNC), I attended an event hosted by the Roosevelt Institute. The institute explains its mission on its website:

Inspired by the legacy of Franklin and Eleanor, the Roosevelt Institute reimagines America as it should be: a place where hard work is rewarded, everyone participates, and everyone enjoys a fair share of our collective prosperity. We believe that when the rules work against this vision, it’s our responsibility to recreate them.

The event hosted by the Roosevelt Institute at the DNC was a panel discussion between Joseph Stigliz and Stan Greenberg, moderated by Rana Foroohar. The primary part of the discussion centered on looking at two economic messages put forth by Hillary Clinton and how these ideas polled relative to election outcomes. The two messages were not all that different; they just took two different approaches. Interestingly, one will win the election, and the other will lose. And, if one is implemented, it could potentially change the course of American economics. [Read more…]

The Story of Broke: Still Plenty of Money to Build a Better Future

New 8-minute video from award-winning Internet filmmaker Anne Leonard – creator of The Story of Stuff and The Story of Citizens United v. FEC

The United States isn’t broke; we’re the richest country on the planet and a country in which the richest among us are doing exceptionally well. But the truth is, our economy is broken, producing more pollution, greenhouse gasses and garbage than any other country. In these and so many other ways, it just isn’t working. But rather than invest in something better, we continue to keep this ‘dinosaur economy’ on life support with hundreds of billions of dollars of our tax money. The Story of Broke calls for a shift in government spending toward investments in clean, green solutions-renewable energy, safer chemicals and materials, zero waste and more-that can deliver jobs and a healthier environment.

It’s time to rebuild the American Dream; but this time, let’s build it better.

Annotated script follows the jump.

Click here for Frequently Asked Questions.  

Does Trickle Down Economics Work?

In 1981, Ronald Reagan took office and began instituting trickle-down economics.  The Democratic controlled House cut the marginal tax rate on the highest income tax bracket from 70% to 28% and made similar cuts in capital gains, corporate income tax, and various excise taxes. These policies were continued for the most part by the ensuing administrations.

According to the theory of supply-side economics, the rich would start spending more, and this would increase employment and wages for the poor, so everyone would be better off.

Opponents countered that the rich would simply invest the windfall, or spend it on goods produced overseas, yielding a net loss for the U.S. economy.

It has now been 30 years, so how has it turned out?

Actually, quite badly.

According to this chart from the Center on Budget and Policy Priorities, during the post-war period 1945-1980, the both the rich and the poor benefitted from the expansion of the U.S. economy. However, since Reaganomics went into effect the average income of the richest top 1% has almost tripled while the income of most of us (in the bottom 90%) has actually declined.

The “Bush tax cuts” enacted in 2001 and 2003 lowered the marginal tax rate for the high tax bracket from 39.6% to 35.0%. These tax breaks are set to expire at the end of this year.

Most Republican favor extending these tax breaks. Most Democrats favor making the tax breaks permanent only for the first $250,000 of annual income. What do you think?