Renewed Trickle-Down Push

Lately we are seeing a renewed push for trickle-down economics. Of course, this is all based on the claims that the economy is doing well, even with tariffs, sanctions, etc.

Let me address the claim that the economy is doing well first because that is a complete fabrication.

The major part of this claim is based on the performance of the stock market. I have been covering this issue quite a bit for some time. The stock market rose in the last few years because of stock buybacks. Absolutely none of that has to do with the consumer economy and is often at direct odds with the job market. In January this year, a positive report came out stating employment and wages were up. The following day the stock market had a massive drop.

In recent months we have heard of companies laying workers off due to tariffs. Yet the stock market did not start dropping until interest rates went up. Laying workers off runs in tandem with decreasing production. Yet they can only decrease production if consumer sales are on the decline, even with tariffs. Tariffs cause a price increase of similar products across the market, so any increase at all means the same product will remain competitive with other manufacturers. Example: If Ford must increase prices by 10%, so must Toyota, GM, etc. Layoffs are not necessary unless all vehicles are selling less. Then the decrease comes only after the decreased sales are evident.

Side note: The same companies did not increase production or hiring when they got a tax break.