- - Sunday, January 12, 2014


The “trickle-down” theory may be a lie for Thomas Sowell, but it certainly is not for Barack Obama (“De Blasio’s spiel devoid of any contaminating speck of truth,” Web, Jan. 6). The past five years have presented the biggest practice of trickle-down economics I have witnessed in my lifetime. The upper 50 percent of the population had its equity assets fully restored, and their bonds inflated to all-time highs. Perhaps you lost your house or your job, but the same was not true of the elite. They had to endure a little pain in 2008, but it all came back to them in spades.

The Federal Reserve, with the support of President Obama, manufactured money and zero-interest rates, propelling the stock market to all-time highs. Was this supported by a vibrant, job-creating economy? Of course not. The labor-participation rate is at a 30-year low. GDP growth rates are about one-half that of the average post-WWII economic recovery. In fact, if the labor-participation rate was what it was in 2007, the reported unemployment rate would exceed 11 percent.

Outgoing Federal Reserve Chairman Ben S. Bernanke, former Treasury Secretary Timothy F. Geithner and Mr. Obama all thought this was just fine. Of course, there were various payoffs and kickbacks involving energy-related global-warming scams, but this was peanuts compared to artificially inflating equity and bond assets. If you actually listened to Mr. Bernanke, he readily admitted that artificially inflating asset prices of the wealthy was supposed to “trickle down” to jobs for the great unwashed.

In the long run, equity prices reflect economic growth, they do not cause it; but try telling that to Mr. Obama and Mr. Bernanke.


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