Democratic Sen. Elizabeth Warren derided so-called trickle down economics on Wednesday, telling a group of workers that the American middle class has been crippled by the policies at the expense of the rich.
“Many feel like the game is rigged against them,” Warren said at an AFL-CIO summit on wages. “And they are right. The game is rigged against them.”
She offered credit to Obama for recent improvements to the overall economy, but said every cent of increased income in the past 32 years has gone to the rich, largely because of supply side economic policies implemented by Republicans and Democrats. (RELATED: Dems Accuse Republicans Of Trying To Trick Voters Into More Trickle Down Economics)
“Trickle-down was popular with big corporations and their lobbyists, but it never really made much sense,” she said. “George Bush Sr. called it voodoo economics. He was right, and let’s call it out for what it is: Trickle-down was nothing more than the politics of helping the rich-and-powerful get richer and more powerful, and it cut the legs out from under America’s middle class.”
Rather than increase federal spending in an effort to boost demand and consumption in a recession, Arthur Laffer’s supply side theory, championed by Ronald Reagan, relies on tax cuts and deregulation to create incentive to produce goods and services. Because the benefit to consumers is less direct, critics coined the derogatory term ‘trickle-down economics’ for the theory.
Warren said the theory has been tested and it failed. And while cutting taxes and deregulating markets may sound good, the policies are not about helping the average American, but are about giving corporations the freedom to whatever they want to make a bigger profit.
“The trickle-down experiment that began in the Reagan years failed America’s middle class,” Warren said. “Sure, the rich are doing great. Giant corporations are doing great. Lobbyists are doing great. But we need an economy where everyone else who works hard gets a shot at doing great.”
Despite a growing clamor for Warren to run for president, she has said repeatedly she will finish out her term as senator, and has no intention of running.
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