What is “Bubble-Up” economics

A good way to visualize “trickle-down” economics is to watch the water bubbles in an aquarium that happens to be using a “power filter”. Power filters pour water over the top of the aquarium into the water, creating water bubbles that circulate down to the bottom of the aquarium.

power-filters-2

Frankly, most people already understand “trickle down” economics well enough that they do not need a visualization tool.

However, an aquarium visualization tool can teach us about more economic issues and systems than just trickle down. So I will use the basic “power filter” aquarium to establish a basis for an “aquarium metaphor”, and then introduce variations in an effort to learn about “trickle out” economics and “bubble up” economics.


For my diagrams:

  • an aquarium represents a country
  • water represents the population
  • water depth represents wealth stratum … … upper water = upper class, lower water = lower class
  • oxygen bubbles represent money.


This first diagram shows that trickle-down can and should work in a closed environment. Basically the wealthy class keeps their capital at tax time, but spends their money on employees and goods such that their money successfully permeates the full class spectrum.

The goal with trickle-down was that the best money managers would be enabled to make strong innovative decisions with their annual holdings and that money would make it to the lower-class via normal market mechanisms.


The problem with diagram A is that it only works in a closed environment … but America is not a closed environment.


If an aquarium (eg. America) is connected to another aquarium (eg. china), then the trickle-down process is disrupted as water bubbles (eg. money) flow out. This can happen when a member of the wealthy class buys stock in a foreign company, or when he buys an expensive foreign car, or outsources various aspects of his company. This is dangerous because the lower class will never receive the oxygenation necessary to maintain a healthy environment in the lower economic strata. (It should be mentioned that if an equal amount of water bubbles flow back into the aquarium, then balance will be maintained.)


Bubble-up economics, on the other hand, ensures that oxygen gets to the lowest classes.

aquarium_aerator

The oxygen is mechanically delivered to the bottom, where it is released. This bypasses the wealthy’s exploitable opportunity to trickle-out for their own profitability. Economically speaking, the money is mechanically delivered to the lower class via social programs, such as job training, small business investment funds, municipal projects, and other Productivity-Oriented Social Programs. Productivity-Oriented Social Programs are not the same thing as welfare.




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