Trickle or Treat


There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosper, then prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosper, their prosperity will find its way up and through every class that rests upon it.
The current tax package debate is not the source of this statement. Instead, we need go back well over a century when in 1896, before a rapturous gathering of Democrats at their national convention in Chicago, William Jennings Bryan delivered his memorable “Cross of Gold” speech.
It does remind us, however, of just how long we’ve argued over this issue. Bear in mind Bryan was not here considering the merits of a tax cut for the corporate wealthy; a federal income tax would not be imposed until early in the next century. Rather, the Democratic nominee for president is thundering his opposition to decades of top down largesse provided by Washington, designed for the benefit of the powerful and well-to-do. This was the age of the Robber Barons (Carnegie, Rockefeller, Vanderbilt, Stanford, etc.), and while they skillfully and ruthlessly built their empires, employing innovations and outmaneuvering their rivals, they were also the beneficiaries of generous assistance from the federal government. Quite often it came as the result of a quid pro quo with government officials and influential politicians on the receiving end of sizable donations from the private sector.
Laissez-faire might have been the prevailing economic ethos, but on the ground one often discovered an obliging helping hand. Washington provided enormous tracts of land to the railroads that were laying tracks in every direction, one reason they overbuilt, overcharged and often slid into bankruptcy. The government dispatched the army out West primarily to clear away the Indians (and see to it that they remained on reservations set aside for their confinement). Federal topographers mapped out western territories and directed miners and mining companies to precious metals deposits. A succession of tariffs on imports put money in the hands of domestic producers by keeping out foreign competitors or making their products more expensive. (Tariff revenues did, however, produce a surplus in the Treasury, which was then, it should be noted, distributed as pensions to Civil War Veterans.) Most critically, government leaders, both at the federal and state levels, proved ever willing to furnish troops or militia forces to quell labor unrest and break strikes – a contributing factor in the decline in workmen’s wages throughout most of the period.
So, a “leak through” from the top worked hardly at all in this period (1865 – 1900), a time when fabulous wealth stood in marked contrast to widespread poverty. And indeed it was the rich and powerful that helped defeat William Jennings Bryan in 1896. Still, shortly thereafter, the United States would enter a remarkable period of Reform (1900 – 1916). Bryan’s urgent message to America would not go unheeded.)

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