Revealing the Secret Trickle-Down Game Plan

The Pitch: Economic Update for Thursday, October 12th, 2023

Friends,

I’m excited to share that on October 31st, Civic Ventures founder Nick Hanauer is publishing a new book with The Nation’s national affairs correspondent Joan Walsh and Donald Cohen, the Executive Director of research and policy nonprofit In the Public Interest. It’s titled Corporate Bullsh*t: Exposing the Lies and Half-Truths That Protect Profit, Power, and Wealth in America. The book is a fun, funny, informative exploration of how the wealthy and powerful have managed to manipulate ordinary Americans into supporting policies that run against their own best interests. It can be read cover-to-cover in one sitting, or set out on your coffee table as a conversation starter to dip into from time to time.

From factory owners claiming in the 19th century that child labor builds character to Lee Iaccoca arguing in 1971 that “shoulder harnesses [seat belts] and headrests are a complete waste of money,” CEOs and other captains of industry have always falsely claimed that regulations and higher wages will only hurt the very hardworking Americans they’re intended to help. And if you scour the historical record — as Don, Joan, and Nick have done in Corporate Bullsh*t — you’ll see that these trickle-downers have been making the exact same arguments for over 200 years.

The reviews are coming in, and people are loving the book:

“A welcome user’s guide to maneuvering the thicket of lies that constitutes so much discourse today.”
— Kirkus Reviews

“If you ever feel like you’re fighting the same bogus corporate arguments over and over, read this useful book. It will help you respond to every standard BS claim and teach everyone the truth.”
— Robert B. Reich, former U.S. Secretary of Labor and author of Saving Capitalism

“As an elected official, I hear these lies from corporate special interests all the time: Raising taxes on the rich will kill jobs, raising the minimum wage will hurt the very people it’s intended to help, and regulation will destroy business. None of them are true, but they’re carefully crafted to trick working people into prioritizing corporate interests over their own. Corporate Bullsh*t pulls back the curtain on their game plan and makes a compelling argument for reforms to grow America from the bottom up and the middle out.”
— Congresswoman Pramila Jayapal

Click here to preorder Corporate Bullsh*t now.

Corporate Bullsh*t is an excellent tool for anyone who wants to combat trickle-down ideology, because it reveals that trickle-downers have always followed the exact same battle plan when they want to slash taxes, pay criminally low wages, or strip the teeth from regulations. It’s the same set of arguments that your uncle uses on Facebook to claim that union workers have no right to demand higher pay. Knowing these arguments will make you a better-informed consumer of the media and a better communicator on economic issues.

The book helpfully breaks down these claims into six different categories — a kind of taxonomy of trickle-down lies. To demonstrate how people in power use these age-old economic threats even now, I thought I’d walk you through each category, show you a historical example from the book, and then offer a modern example of that claim pulled from recent issues of The Pitch.

1. It’s Not a Problem

The first thing that corporate spokespeople and trickle-down politicians always try to do when confronted with a new regulation is to argue that the problem doesn’t exist at all. Corporate Bullsh*t reveals that corporate gaslighting has stretched from West Virginia Governor G.W. Atkinson claiming in 1901 that there was no need to regulate his state’s coal industry because “It is but the natural course of mining events that men should be injured and killed by accidents” to a Lead Industries Association spokesperson claiming in 1970 that “there is no evidence that lead in the atmosphere, from autos or any other source, poses a health hazard.”

Corporate gaslighting continues to this day — the first thing the wealthy and powerful do when faced with a consequence is to deny the existence of a problem. I recently wrote that the Biden Administration successfully levied a near-quarter-billion-dollar fine in a price-fixing case against drugmaker Teva Pharmaceuticals. When Teva was first charged with price-fixing three years ago, the company issued a statement warning that this case has no merit and the government “only seeks to further restrict patients’ access to important medicines and healthcare.”

2. The Free Market Knows Best

Once reality finally forces corporate interests to admit that there’s a problem, they almost immediately argue that free-market capitalism, not government regulation, is the best solution to the problems that they have caused. As Nick, Joan, and Don report in Corporate Bullsh*t, the U.S. Chamber of Commerce in 1973 argued against workplace safety regulations by claiming that “Employers do not deliberately allow work conditions to exist which cause injury or illness.”

This is the go-to industry argument against The Biden Administration’s recent push to bar unpaid medical bills from harming people’s credit scores, a commonsense policy that will prevent illness or accidental injury from destroying a person’s entire life. But of course Scott Purcell, the CEO of collection industry trade association ACA International, warned that making an exception for medical debt would create distortions in the market: “It is unfortunate that the CFPB and the White House are not considering the host of consequences that will result if medical providers are singled out in their billing, compared to other professions or industries.” In other words, regulations would somehow wipe out medical care in the United States unless hospitals are allowed to bankrupt people for the audacity of getting into a bicycle accident, just as Milton Friedman intended.

3. It’s Not Our Fault, It’s Your Fault

In Corporate Bullsh*t’s third chapter the gloves come off, and the wealthy and powerful begin to point fingers anywhere but at themselves. They blame their workers for getting into industrial accidents, they blame consumers for incorrectly using their products. The Lead Industry Association in 1950 even tried to blame parents for their own industry-wide mishandling of toxic products: “The only seemingly feasible means of coping with the childhood [lead poisoning] problem is that of parental education,” they wrote.

As soon as United Auto Workers workers went on strike last month, The Chamber of Commerce began pointing fingers away from the corner offices of the Detroit Three auto manufacturers, arguing that striking UAW workers were putting the entire economy at risk by striking. Union president Shawn Fain, they wrote, “has to think about this, too — the long-term financial viability of these three companies.”

But as I wrote in The Pitch at the time, “it’s silly to claim that this strike or the wage gains that unions are calling for threaten the livelihoods of this company when workers are simply asking for the same wage increases that management has given to themselves — especially when these companies have already raked in $21 billion in profits this year so far, and handed $5 billion of those profits away to shareholders in the form of stock buybacks this year.” Why should workers who are only asking to be made whole after years of wage stagnation have to prioritize the long-term health of their employers, when the employers themselves are giving away profits with no strings attached?

4. It’s a Job Killer!

We at Civic Ventures have the most hands-on experience with this particular corporate lie, because many of us were closely involved in the Fight for $15 that erupted in the Seattle area ten years ago — in fact, the Seattle minimum-wage fight has its own case study in Corporate Bullsh*t. We were told that raising the minimum wage to $15 would wipe out half the restaurants in the city, or that prices would rise so high that people would travel thirty minutes away to another city to order steak. (Neither threat came true, obviously — Seattle’s unemployment rate is lower now than it was a decade ago, and employers are having to pay above the current city minimum wage of $18.69 per hour just to attract workers.)

But Corporate Bullsh*t also documents the fact that employers have been arguing for over a century that any raise or regulation would kill all business. In fact, two years after the Triangle Shirtwaist fire killed 146 garment workers and New York City moved to create the city’s first fire code regulations, a spokesman for New York’s manufacturers warned fire safety regulations would lead to “the wiping out of industry in this state,” and one year later the head of the Real Estate Board of New York reported that “thousands of factories are migrating to New Jersey and Connecticut in order to be freed from the oppressive [fire safety] laws of New York State.”

Just last week, I wrote in The Pitch about a judge affirming a new law in New York City that would establish a minimum wage for gig-economy food delivery workers, starting at $18 an hour and eventually rising to $20 per hour by 2025. Uber spokesman Josh Gold issued a statement warning that the new minimum wage “will put thousands of New Yorkers out of work and force the remaining couriers to compete against each other to deliver orders faster.”

Never mind the fact that tens of thousands of workers subject to minimum-wage laws have been delivering pizza and Chinese food in New York City for most of the 20th century. These claims are never true, but they often frighten workers into voting against their own best interests, under the belief that a low wage is better than no wage, when in fact no such trade-off is necessary because when more workers have more money, they spend those wages locally and create jobs with their consumer demand.

5. You’ll Only Make It Worse

As the authors explain in Corporate Bullsh*t, the wealthy and powerful will go to nearly any extent to ensure that they get a nice big tax break from their pet politicians. And one of the most alarming ways they argue against government spending is by claiming that investments in working Americans only made the country worse. In the mid-1800s, the administrators of an early poverty reduction program in Beverly, Massachusetts argued against their own program, reporting that “The idle will beg in preference to working; relief is extended to them without suitable discrimination. They are not left to feel the just consequences of their idleness.”

In the 150 years since, politicians have picked up this banner, arguing that welfare, food stamps, unemployment, and other social safety net programs will only make Americans lazy and idle. A few years before he became an economic adviser to President Trump, Larry Kudlow summed up this wrong-headed philosophy: “Now I don’t want to sound unnecessarily coldhearted. I like to think I’m compassionate. But supply-side economics is about incentives. And if we re-incentivize unemployment, it will surely diminish the will and the effort of our working people to find new work. That is an economic principle,” Kudlow said.

But of course it isn’t. We recently learned that when Congress let the Child Tax Credit payments that were part of President Biden’s American Rescue Plan lapse, America’s child poverty numbers more than doubled — from a record low of 5.2% last year to 12.4% this year. This is middle-out economics in action: When people have money in their pockets, they spend that money on basic needs, and that spending creates jobs. Everybody wins.

Senator Ron Johnson of Wisconsin, though, argued against the CTC with one of the ugliest statements I’ve personally ever seen: “People decide to have families and become parents; that’s something they need to consider when they make that choice,” Johnson said, adding, “I’ve never really felt it was society’s responsibility to take care of other people’s children.” There’s so much wrong with this statement that I don’t know where to begin: The wrongheaded idea that making sure children don’t starve is “taking care of other people’s children,” or the frankly moronic idea that society doesn’t pay for the end results of child poverty in a million other ways when we choose not to end it through direct cash payments. Of all six of these lies, this is possibly the most morally reprehensible.

6. It’s Socialism!

And the last type of corporate lie documented in Corporate Bullsh*t is definitely the dumbest. Any time leaders enact any policy that would improve the lives of ordinary Americans, trickle-downers love to frame it as “socialism,” which has been a boogeyman in American politics for more than a century. My favorite harebrained example of this leads the “socialism” chapter of Corporate Bullsh*t, when Senator Thomas Gore of Oklahoma in 1935 argued against the creation of Social Security by asking, “Isn’t this socialism? Isn’t this a teeny-weeny bit of socialism?” (Representative Paul Ryan would update Gore’s argument in 2012, when he announced that Social Security “is a collectivist system.”)

The book documents all the programs and policies that the wealthy and powerful have tried to frame as socialism through the years, from taxes on the wealthy to New Deal economic relief programs to the federal minimum wage to the Civil Rights movement of the 1950s and 1960s.

Most recently, the “s”-word reappeared in the public discussion when President Biden passed his Covid relief programs, which helped the American people weather the economic shock of the pandemic and caused the American economy to bounce back from Covid more dynamically than just about every other economy in the world.

If you’ll recall, when Americans rejoined the labor force after Covid, they were able to demand higher wages from their employers, and extractive low-wage employers responded not by raising their pay but by putting signs in their front windows lamenting the fact that “no one wants to work these days,” even though unemployment was headed toward record lows. Right in that time when low-wage American workers were getting the biggest raises of their lifetimes, the National Republican Congressional Committee released an unintentionally hilarious statement that Chipotle menu prices had risen because “Democrats’ socialist stimulus bill caused a labor shortage and now burrito lovers everywhere are footing the bill.” It’s a statement that’s almost perfect in its stupidity.

What you’ve read in this email is just the tip of the iceberg presented in the book. I encourage you to preorder Corporate Bullsh*t now. I don’t think you’ll be disappointed — it’s a funny and informative walk through the ways that the rich and powerful have tricked the American public into voting against their own best interests. And now that these tricks have been categorized and identified, we better understand their trickle-down gameplan, and we can more effectively fight back.

In next week’s issue of The Pitch, we’ll get back to the business of making a new economic paradigm that leaves all this trickle-down nonsense where it belongs — in the past.

Be kind. Be brave. Take good care of yourself and your loved ones.

Zach