Blouman: I would argue that our current economic crisis directly stems from the economic theory known as Trickle-Down Economics, or Reaganomics; the idea that if taxes are cut for the very rich, the money will magically make its way into the pockets of the working class. This has never been proven effective (for a more useful model, examine John Maynard Keynes' system), and its propagation by Reagan and the Bushes only made the rich richer and the poor poorer.
When the working class has less money, they buy less. When less is bought, the companies that produce goods (such as automobiles) have less capital for wages, making the working class collectively poorer yet. As these companies spiral downward, the stock market follows, taking with it the funds that the rich invested (rather than spending) in these corporations (which paid the extra capital out as CEO wages and bonuses and spent it in stock buybacks rather than increasing worker wages). Follow? So, the money the rich got in tax cuts is where now? Gone. Down the drain, poof, disappeared, because it never existed. Isn't the stock market just wonderful that way?
