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The Pope, the Bible and Trickle-Down Economics

As Pope Francis points out, there is no hard evidence that trickle-down economics has worked for anyone, except the rich. The pope judged it and found it wanting. And he is right.
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Pope Francis gives his blessing during his weekly general audience in St Peter's Square at the Vatican on January 8, 2014. AFP PHOTO/ Gabriel BOUYS (Photo credit should read GABRIEL BOUYS/AFP/Getty Images)
Pope Francis gives his blessing during his weekly general audience in St Peter's Square at the Vatican on January 8, 2014. AFP PHOTO/ Gabriel BOUYS (Photo credit should read GABRIEL BOUYS/AFP/Getty Images)

Several weeks ago, conservative politicians and pundits paused from brutalizing the interests of poor Americans long enough to attack Pope Francis for daring to criticize certain aspects of the prevailing economic order in his address, Evangelii Gaudium ("The Joy of the Gospel"). He charged it with being "unjust at its root" and "incapable of feeling compassion at the outcry of the poor... as though all this were someone else's responsibility. We know that talking about responsibility for your neighbor is always a deal-breaker for the libertarian crowd. But what really raised conservatives' blood pressure, libertarian or not, was the pope's read of trickle-down economics. He declared, "Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power."

Because a dunce cap would not fit over the pontiff's miter, his angry critics chose to declare his words foolish instead. Fox News' Andrew Napolitano condemned the pope's statements as "wide of the mark." The radio comedian, Rush Limbaugh, carped, "he [the pope] doesn't know what he's talking about when it comes to capitalism and socialism." One Catholic leader called him "the Joe Biden of our era." Conservative congressional budget guru Paul Ryan echoed Limbaugh's dismissal of the pope as clueless, albeit in nicer terms. "The guy is from Argentina," said Ryan. "They haven't had real capitalism in Argentina."

However, with the approach of the 50th anniversary of the War on Poverty which, by the way, conservatives have always staunchly opposed, they are eager to keep their opposition to the social safety net out of the spotlight. So some of them have softened their public tone by claiming to share the pope's deep concern for the poor. Conservative leaders like Ryan and Newt Gingrich have publicly lauded the pope for his stand against poverty. Ryan praised him for "breathing new life into the fight against poverty," despite being a foremost advocate of the economic policies the pope so passionately targeted. However, what Ryan, Gingrich or any conservative politician will not praise is the pope's stance against the structural forces that cause and maintain poverty. And chief among them, according to the pope, is trickle-down economics.

The term "trickle-down" is attributed to a quip by Will Rogers: "Money was all appropriated for the top in hopes that it would trickle down to the needy." The basic idea of trickle-down economics is that if the already rich are further enriched, some of their increased wealth will trickle down to lowlier Americans. Conservative intellectual George Gilder's rationalization of trickle-down economics ignores its inherent elitism and instead paints it as almost magnanimous: "A successful economy depends on the proliferation of the rich," he said. "The function of the rich is fostering opportunities for the classes below." For my money, though, it is a folksy anonymous adage that best describes the thinking behind trickle-down economics: "If the horse has better hay to eat, the birds will eat better, too."

Trickle-down is not really an economic theory; it is an economic rationale for an elitist ideology of privilege that gives primacy to the interests of the rich. Trickle-down requires an extremely wealthy class that, historically, has gone hand in hand with a high degree of economic inequality. And what is the nature of the wealth that is supposed to trickle-down to the rest of us? It is whatever is left after the rich have satisfied all their wants. Indeed, there is exceedingly little evidence that proponents of trickle-down have ever given significant consideration to whether it really does result in wealth trickling from the coffers of the very rich to the lower reaches of society, nor how much will trickle down or how quickly. What is known is that the primary tool of trickle down -- reduction of taxes on income, capital gains, financial estates, and loosened financial regulations -- is solely aimed at an extremely small, elite group of people and no one else.

As Pope Francis points out, there is no hard evidence that trickle-down economics has worked for anyone, except the rich. In fact, instead of wealth trickling down, it has actually trickled up. Ronald Reagan, whose administration enthusiastically embraced trickle-down economics, tried to make it more palatable to the public by calling it "supply-side" economics, as David Stockman, Reagan's budget director, willingly admits. The sound-bite hungry public ignored the "supply-side" euphemism, however, and dubbed it "Reaganomics." But name changes cannot mask facts. Between the years 1981 and 1990 -- nearly all of them during Reagan's presidency -- the after-tax incomes of the poorest 20 percent of Americans dropped by 12 percent, while the after tax incomes of the wealthiest one percent increased by 136 percent. Conservatives since Reagan have continued his pugnacious quest to institutionalize trickle-down as the government's dominant economic philosophy. Largely as a result of their efforts, the chasm between rich and poor today is the widest on record and getting wider. In fact, when measured against inflation and productivity gains, workers' wages have actually declined while the rich have gotten much richer. Reagan's abiding iconic status among conservatives and their recurring praise of his policies reflect how deeply entrenched trickle-down is in their collective economic psyche.

It is important to note that in his address the pope did not criticize the "free market," as some of his critics charge. What he did decry was undue, idolatrous faith in the power of markets to be the final arbiters of justice and wellbeing. Neither did he criticize capitalism in toto, another charge leveled against him. He only decried certain aspects of it, such as what he called "idolatry of money," "inordinate consumption," and a "throw away culture" that treats people like "goods to be used and then discarded." In point of fact, the pope never mentioned capitalism. What he specifically took to task was trickle-down economics. Yet, by their comments, conservatives would have us believe -- wrongly -- that trickle-down economics, free-markets and capitalism are all the same. They would rather that the non-rich have no inkling that trickle-down is not the only game in town. But actually, there is a capitalist alternative to trickle-down economics: call it trickle-up, or demand-side economics.

Instead of lowering taxes on the rich with the hope that wealth will flow to those below as with trickle-down, under trickle-up economics taxes are reduced on the lower economic classes, with the increase in after-tax income going straight to them. Thus, rather than increased income from tax breaks going into the coffers of the rich, trickle-up economics places the increased after-tax dollars directly into the pockets of the middle-class and the working poor. Because the middle-class is the largest segment of the American economy, more dollars in middle-class hands means greater consumer spending, thus increasing demand which, in turn, would strengthen the economy from the bottom up -- not the top down -- and give the economic benefit of tax breaks and related measures directly to those most in need of it.

Thus, in economic terms, the pope's critique of trickle-down economics is on firm ground. In religious terms, his ground is even firmer. In every division of the Hebrew Bible both governing authorities and individuals are admonished with the responsibility to serve the needs of the poor first, and also in every social situation. For instance, in its description of the ideal ruler, Psalm 72:1-4 declares the ruler's primary responsibility: "May he judge... your poor with justice.... May he defend the cause of the poor of the people, give deliverance to the needy." The book of Proverbs counsels, "The throne of the King that faithfully does justice to the poor shall be established forever" (29:14). Moreover, the biblical Law Codes prescribe measures for keeping economic inequality from becoming too extreme, including just lending and distribution procedures and rudimentary market regulations (e.g., Exodus 20:22-23:33; Deuteronomy 12-16; Lev. 17-26). And a primary theme of biblical prophets like Amos, Isaiah, Micah and Ezekiel is divine condemnation of those in power for their mistreatment of the poor.

As for the Jesus of the gospels, he speaks of poor people and their mistreatment more than any other subject except God. Well-known passages include "blessed are you who are poor" (Luke 6:20) and Jesus' dramatic proclamation that his spirit-driven messianic ("anointed") purpose is to "bring good news to the poor"(Luke 4:18). In parables he also condemns those with riches and power who shirk their responsibility to the poor, as in Matthew 25: "as you did not do it [i.e., feed, clothe, shelter] to the least of these, you did not do it to me," not to mention his raging in the Temple against economic exploitation of the common people (Mark 11: 15-18). The list goes on. (For a fuller treatment, see chapter three of my book, The Universe Bends toward Justice).

It is a deep sense of love and compassion and the biblical imperatives of his faith that moved Pope Francis to speak out against the destructive structures and practices in the current economic system. In this system trickle-down economics looms large. The pope judged it and found it wanting. And he is right. In the final analysis, trickle-down economics has not succeeded in any of its aims except one: It has made the rich richer and the poor poorer.