It’s Pin Action Economics, Not Trickle Down

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Remember a while back when the heads of the auto companies appeared before congress? They had their heads handed to them for taking private jets to Washington. Splashed that all over the front pages and across the airwaves.

There’s a second leg to this story that isn’t getting the same attention. Immediately after this occurred companies began canceling bookings on private flights and stopped making new ones. Orders for new jets by companies disappeared down a rabbit hole into Neverland..

The result? Private service airlines and manufacturers have laid off thousands of their personnel. Congressional talk caused good paying jobs to walk. People and companies with money stopped spending it. Other people lost their jobs. Those people are forced to cut back on their spending. Affecting those who partially depend on that spending….

A pebble tossed in the water, expanding it’s wave…..

I think we need to reopen the purely political piece of trash rhetoric laughingly referred to as “trickle down.”
For an economy to be healthy and growing money must flow freely through the nation as blood through the body. Jim Cramer on his Mad Money show refers to this effect, as it relates to companies, as pin action. It’s a hot summer. Air conditioners sell well. Air conditioning manufacturers do well. Freon manufacturers do well. Parts manufacturers do well. And so forth…

This holds true at all levels of economic activity. Including the wealthy. The wealthy do well. They buy stuff like, say, jewelry. The retailer does well. The wholesaler does well. The miners do well. All along this food chain people do well. Sales people, managers, assemblers, miners, investors, et al do well, All have money to circulate, to spend.

The Socialist Democrats have demeaned this for decades as “trickle down economics.” They do that to paint a picture, for the sake of winning, to justify pounding the rich. Not to promote truth. Disincentivize the rich from spending and you collapse the entire food chain. All the rhetoric in the world won’t stop the truths of pin action economics any more than it could stop an asteroid from striking the Earth.

Pin action economics is the reality and won’t be denied.

The GM Proof

All agree. If Gm went out of business the effects would be far reaching. (http://www.time.com/time/business/article/0,8599,1862737,00.html) GM employees would be thrown out of work. Parts suppliers would themselves be driven out of business. More workers hitting the streets. City economies collapsing. Businesses that depend on spending from GM employees would whither. Their suppliers would spiral down.
And on and on….

Pin action economics.

It’s easy to see in the face of disaster. The effects are rapid and undeniable. Plus the news media, always thirsting for the misery of others, have played it up endlessly. What is less obvious is that pin action economics built this chain. As GM grew so did the suppliers, the cities, the businesses that served the people.

Pin action economics. It works two ways. And it is the dishonest rhetoric of “trickle down” that deserves an unmarked grave.

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