Daniel Kasenda

Daniel Kasenda

Aspiring Political Economy Observer and Thomas Sowell fan

Analysis 3 Aug 2018

Much has been said about trickle down economics but not much has been studied about it. Politicians and even intellectuals have used the term plenty of times, although ironically, almost never by economists. Yet it is a political expression that still prevails around the world. The stubborn rhetoric was shown recently in Indonesia through two leading public figures. Despite opposing each other in current economic issues, both actually used and agreed on the theory of trickle down economics. It says much about the rigor of the expression if public figures on opposite sides would use the same term to make a point, albeit with different agendas. Unfortunately, trickle down economics actually has no degree of common and theoretical sense, and even evidence.

The general idea of trickle down economics is that the rich get richer by being given most of the wealth, and that their wealth will only eventually "trickle down" to the poor. Thus, supposedly making the poor more disadvantaged and ending up with mere scraps. A more vivid definition would be what a Labor Party MP from New Zealand described as "the rich pissing on the poor." The usual method of choice in trickle down economics, public figures would espouse, is the reduction of taxes on businesses and the rich. This would in turn, although the rich would end up with more wealth due to low tax rates, lead to more benefits and wealth to the poor because it would eventually “trickle down” to them.

Analysis 6 Mar 2018

Early this year in Indonesia, the House of Representatives (“DPR”) passed a law which stipulates that the House’s ethics council (“MKD”) can take legal actions against a person, a group of people or a legal entity that disrespects the dignity (“kehormatan” as stated in the article) of the House and its members. The issue while serious, isn’t that the DPR members and law members are acting in their self-interest. That’s nothing new and everybody acts in their self-interest anyway. The real issue and dangerous assumption behind this, is the idea that “kehormatan” is under the dominion of the state, not with us.

Of course everybody has the right to have their honour or dignity defended. In schools, we have principals and teachers. In communities, we have parents and friends. Between us, we have our “guts”, pride and position. But when it comes to the government, that’s a wholly different and dangerous matter.