The term “trickle-down economics” refers to the policy of providing across-the-board tax cuts or benefits to businesses in the belief that this will indirectly benefit the broader population. The term has been attributed to humorist Will Rogers, who said during the Great Depression, that “money was all appropriated for the top in hopes that it would trickle down to the needy.”

Today “trickle-down economics” is closely identified with the economic policies known as “Reaganomics” or supply-side economics. President Reagan used trickle-down policies to bring the U.S. economy out of recession in the 1980s.

President Obama used a different form of trickle-down policies by giving billions of dollars to banks and government agencies. To date, the economic growth and job creation have yet to appear.
There is an alternative, however, called “trickle-up theory.” This is the idea that those of us who actually work for a living and pay the taxes and buy the goods tell the bureaucrats and elected officials what we want and what will really improve our economy.

An area where trickle-up would be especially effective is in the area of health care reform. Survey after survey reveals that the vast majority of Americans are not in favor of having the government dictate our health insurance choices.

Energy policy is another area where, if allowed to work, trickle-up economics would have a big impact. Again, consumer research indicates that most Americans are in favor of renewable energy sources such as ethanol, biofuels, wind, solar and even nuclear power.

A consumer attitude study conducted by the Indiana Corn Marketing Council revealed that 70 percent of Hoosiers were in favor of government support of biofuels. A national survey by Gallup in 2009 showed 77 percent of Americans favored more government support of new energy sources.

This is a much higher approval rating than health care or the stimulus package got. In fact, it is a much higher approval rating than the President has.

When asked why they support biofuels, Hoosier motorists said because it reduced our dependence on imported oil. They also cited lower gasoline prices and environmental benefits.

Reducing our nation’s dependence on imported oil has been a major talking point for this and the previous administration. But few, if any, meaningful steps have been taken to move our nation closer to that goal.

Even as oil blackens the Gulf of Mexico, Democrats and Republicans remain too intent on gaining political advantage in November to deal with energy policy in a bipartisan manner. If our elected and appointed leaders paid more attention to public opinion and less attention to media opinion, we would have energy policy reform and not have health insurance reform.

If we had a bit more trickle-up theory, our leaders would understand that the only measure of economic growth more Americans care about is having a job — a real job, not one working a few months for the census department.

If people have a job they feel secure about, they will buy cars and houses, charge things on their Visa cards, and do all the kinds of things that will generate economic activity.

This simple fact has been lost on government economists who think they can bribe people with cash for clunkers and energy assistance programs.

It is not a coincidence that the states with the best job markets are also states with thriving ethanol industries.

In 2009, Nebraska and North Dakota had the highest job creation indexes in the nation. Both have strong renewable energy industries.

A just released study by Informa showed that, in Indiana, for every one ethanol job, six others were created in other industries. Right now most of those jobs are here in the Midwest, but as cellulosic ethanol production ramps up, renewable fuels will be produced in other states including Oregon, Connecticut, and New Jersey, all of which have the worst job markets.

Americans are deeply divided on many issues; but, according to trickle-up economics, two things most people want are more jobs and less dependence on imported oil. Ironically, biofuels can help achieve both these ends.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Gary Truitt may write to him in care of this publication.