Pope Francis condemned trickle-down economics and the world of inequality and exclusion it fosters in the first apostolic exhortation of his papacy:
“Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed.”
Many of the pontiff’s criticisms of trickle-down economics are true of the American experience. The policies that began with Ronald Reagan have not benefited middle and working class Americans, while deregulation spawned a reckless financial system that nearly destroyed the financial industry in a historic recession — a recession in which the most affluent have rebounded from far more easily than other Americans. Three decades of high-income tax cuts have proven equally ineffective. The Bush tax cuts aided the wealthy but did not reach the middle and lower classes as promised, resulting instead in “the worst wage and salary growth and total compensation growth of any postwar economic expansion.” In short, the wealth never trickled down.
As Francis suggested, these flawed policies have not been able to cure society of its ills. Many of the social problems his exhortation touches on are problems the United States continues to grapple with:
The exclusion of the poor: Pope Francis noted that economies grounded on the relentless, selfish pursuit of wealth lead to the marginalization of the poor. The belief that only the fittest survive leads to the exclusion of those that fail to thrive. Francis asked, “How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?”
Donny Kyker, the founder of the Jesus House Odessa shelter, was faced with the reality of such marginalization when his volunteers found a homeless man who may have frozen to death as temperatures fell below freezing on Saturday night. “This is why we do night strikes, this is why we find people that are in need, and we did not find him that night,” Kyker said. “This is where we could really use the community’s help.” On a given night, nearly 600,000 Americans are homeless, with 100,000 experiencing chronic homelessness. According to the Department of Housing and Urban Development, an additional 100,000 homeless could be removed from programs and kicked back onto the streets due to the automatic budget cuts known as sequestration.
The growing inequality gap: Francis condemned the global economic system that has seen the very few profit while so many fall further behind: “While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few.”
In the United States, income inequality is at levels not seen since the Great Depression. And whether it’s billionaire Charles Koch advocating for the elimination of the minimum wage or mammoth banks bemoaning regulation, the apostles of trickle-down economics have, in Francis’ words, rejected “the right of states, charged with vigilance for the common good, to exercise any form of control.”
The new idolatry: The blame for society’s ills, according to Francis, goes back to worshipping profits. “The worship of the ancient golden calf (Exodus 32:1–35) has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose,” he wrote. “The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings; man is reduced to one of his needs alone: consumption.”
Capitalism, of course, has lifted standards of living across the globe. But in an unequal system, the more affluent can exploit low-income workers without sharing in the profit. The first quarter of 2013 saw American workers increasing their productivity, but their wages fell 3.8 percent, the largest hourly pay drop in the 65 years of keeping that statistic. Meanwhile, CEO salaries reached record highs of $9.7 million in 2012.