Let’s discuss the different economic theories mentioned in the Democratic National Convention speeches and which will come up in the Republican National Convention- Top-Down and Bottom-Up Economics.
Top-Down Economics is basically what we’ve been doing since Ronald Reagan’s infamous Trickle-Down Economics.
The theory goes like this - if you give corporations tax breaks and they make big profits they will choose to be generous with their employees, increasing their pay and benefits. This helps the economy overall.
Bottom-Up Economics works exactly opposite. That theory goes like this - if employees are paid more and their benefits are great they are more productive and more creative, thus making the company more profitable and competitive. The more profitable and competitive the company is the better for our overall economy.
I’ll juxtapose two companies everyone knows so you’ll get a clear idea of how each policy effects YOU and then you can decide whether you think top-down or bottom-up is best for your family and better for the over-all economy.
I’ll use Wal-Mart and Google and I’ll use layman’s terms.

Wal-Mart is currently the largest retailer in the entire world. Right now. Despite everything you hear on the news about how terrible our economy might be Wal-Mart isn’t really hurting.
According to The International Herald Tribune, Wal-Mart’s Net income rose 4 percent to $4.096 billion for its fourth quarter ending Jan. 31, 2007, from $3.94 billion a year earlier. That’s in one quarter (3 months) - not one year.
Now I’ve heard that when Sam Walton was alive he operated with the notion that he should take care of the employees who work so hard for him.
But, today Wal-Mart, with all its profits is ALSO one of the biggest users of our welfare dollars because it chooses not to pay its employees enough to eat food and live in shelter.
YOU, The American Taxpayer, “paid a total annual welfare bill of $2.5 billion for Wal-Mart’s 1.2 million US employees in 2003,” according to Inside the Leviathan by Simon Head.
“Less than 40 percent of its employees [had healthcare coverage] in 2003 and 2005substantially below the average for other large employers and direct competitors; In 2005, a Wal-Mart worker with a family of four would have to pay health care costs equal to 30 percent of their income before receiving most benefits, according to The Center for a Changing Workforce report on Wal-Mart’s use of our Medicaid and SCHIPS tax money.
“Five percent of [Wal-Mart’s] Associates are on Medicaid compared to an average for national employers of four percent. Twenty-seven percent of Associates children are on such programs, compared to a national average of 22 percent. In total, 46 percent of Associates children are either on Medicaid or uninsured.”
Wal-Mart regularly lobbies Congress to NOT raise the minimum wage on the grounds that it would infringe on corporate profits. It also regularly lobbies Congress so that it won’t have to provide health coverage to its employees. McCain says lowering their tax obligation will improve the economy.
It will improve Wal-Mart’s economy because their employees can only afford to shop at Wal-Mart and we’re paying for their employees’ food stamps and healthcare - but will it improve YOUR economy?
My question is - at what billion or trillion dollar mark is Wal-Mart going to feel it has “enough profits” to take care of its employees expenses’ rather than leaving the burden on us - middle-class tax payers?

Conversely, let’s look at Google.
Google, from everything I’ve read, operates from the idea that its employees are the most creative and productive when they are financially secure with great pay, great benefits.
With great pay and great benefits none of the burden is on the tax-payer to pay for fundamental necessities and they have enough money to spend anywhere they like. That’s fantastic for the economy and the tax payer.
Google doesn’t lobby Congress to maintain the minimum wage below the poverty level, because they don’t see any benefit to paying their employees minimum wage. They believe they get the most productivity and creativity out of their employees by paying them more money.
Google even allows employees 20% of their worktime to work on independent projects. Why? Working on their own projects, checking their email, designing the church newsletter or the their kids’ soccer schedule breeds creativity and Google knows they will benefit economically from that.
Benefits abound at Google: They have free gourmet health-conscious cafeterias - hungry employees can’t think. They take care of those pesky chores and time sucks like car washes and oil changes, hair cuts, they pay $500 for takeout food for the first month after your family welcomes a baby, they have a gym, masseuse, a laundry mat, child care and doctors onsite to make their employees’ lives easier.
Google regularly tops the #1 charts for best places to work, including Fortune Magazine’s AND regularly tops the charts for growth and profits - which, is great for everyone’s overall economy - not just theirs.
Look around - does it look like Google’s bottom-up policy’s are hurting their bottom line or increasing it?
Why does Wal-mart not pay their employees enough to live?
Because we, the middle-class taxpayers, let them.
In political science both top-down and bottom-up economic theories have creditbility.
But, in real life - which one makes most sense in the way it’s playing out in our current economy?
This election when we’re talking about the economy and taxes it’s really going to come down to this question - do you want to pay for Wal-Mart to make profits and simultaneously refuse to pay their employees enough to live on?
Vote for John McCain if you think that’s our country’s best bet.
If you think Wal-Mart’s tax margins are “good enough” to start imposing some regulations on how little they are allowed to pay their employees then vote for Barack Obama.
When we raise the minimum wage, require corporations to offer family medical leave insurance and institute universal health insurance that takes families OFF welfare and THAT saves us taxes.
Would you rather be in the “middle” of a top-down or a bottom-up economy?
Which world do you want to live in - a Google World or a Wal-Mart World?
Tags: #dnc08, barack-obama, election-2008, john-mccainShare This