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jj
Lv 5
jj asked in Politics & GovernmentPolitics · 1 decade ago

After reading this article and becoming a little more educated in economics?

would you say wealth flows up or hold to the failed idea that it trickles down?

http://finance.yahoo.com/news/Why-supermarket-stoc...

Update:

so Vianna Lee how do you explain inheritance, sweepstakes, lottery, or any of the various ways it is gained without work?

Update 2:

creation crusher 5000 I suggest you read a little before talking nonsense.

Update 3:

<<<There isn't a magic spell to just cast over the Nation and Poof! Business is booming!>>

nope but deregulation of trade sure was a magic wand to do the opposite. Poof and business are dropping.

Update 4:

NDMA

inflation is a natural part of the economic world.

As the economy expands, standard of living will rise and inflation will do the same. It is affect by monetary policy but monetary policy is not the immediate cause.

There is no true way to stifle inflation without stifling an economy.

Update 5:

Toni P I'm sure it would be the most efficient way, but most efficient way does not always translate to the best for everyone or the majority.

10 Answers

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  • ?
    Lv 7
    1 decade ago
    Favorite Answer

    The truly educated understand that it is a symbiotic relationship..

  • Brad
    Lv 5
    1 decade ago

    Neither

    That article is about why Supermarket stocks are doing poorly. That is obvious. The Federal Reserve's inflation is driving up food prices and the depression that the Federal Reserve caused by its previous credit expansion (and which was prolonged by government interventions in the market to "bailout" failed businesses and "stimulate" big government) are going to be very bad for supermarkets. People have less money because resources were wasted on a housing bubble rather than on productive investments. Grocery stores are being forced to raise their prices at a time when people do not have the money to be able to afford to shop as often. Obviously, that isn't going to be good.

    Wealth can "trickle down" in the absence of inflation and other government programs to redistribute wealth (these usually redistribute wealth to the wealthy, as those are the people who have the clout to influence politicians). When government inflates the currency or "regulates" businesses (regulations are almost always written by large and politically connected firms to get rid of smaller competitors), wealth will flow upward.

  • NDMA
    Lv 7
    1 decade ago

    Inflation is the result of too few goods chasing too many dollars. Quantitative easing amounts to putting more dollars into the economy but without more goods inflation results. It has nothing to do with trickle down or trickle up it has to do with faulty monetary policy.

    Asker: Other briefly during the civil war during the greenback period Inflation did not exist in the US Economy until the formation of the FED in 1913. The Industrial Revolution 1820 - 1860 saw the greatest growth in the economy prior to the close of WW II. The so called Gilded age 1965 to 1900 saw the greatest economic growth in the US, when the US became the # 1 in the world for manufacturing output. All without monetary inflation. That would be impossible if your understanding of Inflation (Keynesian School) was correct.

  • ?
    Lv 5
    1 decade ago

    Your article proves no point that wealth flows up or down. Basically the reason the supermarket companies are feeling a pinch is because some of them cater to the low income (Wal-Mart) and others like Kroger offer more stores closer to your home.

    The Kroger near my home is less than 2 minutes away. Wal-Mart is 20 miles. At the cost of gas being $3.09, why would I burn 2.5 gallons of gas to save $10 to $15. If I use coupons I can accomplish the same thing without being inconvenienced.

    The point of the article was that incomes are down due to the 9.8% unemployment and higher end stores like Kroger and SuperValu are seeing a slight drop where people who are looking for the lowest price are going to discounters Wal-Mart, Target, Dollar General, etc. because they are watching their pennies.

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  • 1 decade ago

    Economics depends on the citizens. If you have a negative tone in the nation where everyong thinks gloom and doom you will have one reaction to the flow. If you have a nation with an upbeat tone encouraging growth and business, you will have a different reaction. You also have flow coming from the Fed. but might have State Gov. Stiffling the growth within certain states... Nothing is black and white. There isn't a magic spell to just cast over the Nation and Poof! Business is booming!

  • 5 years ago

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  • 1 decade ago

    The best way to deal with this is to get rid of our capitalistic system. I bet this article is irrelevant to somebody that have millions in stocks and dividends.

  • 1 decade ago

    It certainly failed to trickle down when Obama redistributed $787 Billion.

  • Anonymous
    1 decade ago

    Wealth is earned. Wealth can only come through jobs and producing, therefore it can only be created by the private sector.

  • Anonymous
    1 decade ago

    Fail.

    Wealth flows in circles. You need to become more educated in economics, what little you know isn't working.

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