Remember the Trickle-Down Effect? Well, this writer lives on a bit of hilly land up in the Winterless North and has recently seen the Trickle-Down Effect in action, or maybe we should say ‘inaction’. There is a spring high up on the land and it produces a nice flow of water all year round. However, although the spring-fed pond at the top of the hill remains full, in the summer months the flow that feeds a little brook that runs down the hill and feeds two of the lower paddocks tends to dry up on its way down the hill.
This is the Trickle-Down Effect in its most basic form. It’s not the trickle Down Effect that Mr Ronald Reagan and his ladyfriend Margaret Thatcher dreamed up. (The TDE is most often attributed to Reagan’s side but as he spent most of time on Thatcher’s lap sucking his thumb we’ll give the Iron Lady some credit too). But it’s as near as damn it for this column’s purposes.
Madge and Ronnie told us that if we make the rich richer, that is feed the pond, the water or money will run down the hill and feed the rest of us. Ergo the rest of us will somehow benefit by all the money that falls out of our rich friend’s pockets and lands on the floor for us to pick up.
But we’re forgetting evaporation.
Just like our spring fed pond up the top of the hill the rich people will store their money in great wads of cash reserves, and just like when a long hard summer is predicted a good land owner will clear out the spring fed pond in preparation that the water reservoir should be plentiful to last the whole season, the rich tend to stop spending their money when the economy shrinks, and they may even lose some as interest rates plummet and their cash no longer works as hard for them.
We can see this happening at the IRD with the recent cheerful news that the tax people have finally agreed on a solution to their endless RFPs requesting new and shiny things and zippier ways of doing things that tax people do, namely annoy us lot.
The IRD is now going to hand over all of its upgrades and development to some nice people from France called Capgemini who have somehow convinced them that despite them having no presence here in New Zealand that they would be the best people to handle the next phase of the Kiwi tax man’s computer needs.
The Trickle Down Effect will begin once Capgemini begins to spend all of its NZ budget on local talent to help deliver solutions to the benefit of all and sundry at the Inland Revenue Department. Capgemini will employ many people here in NZ and will spend liberal amounts of money on everything from desks to pencils. None of the pond will evaporate and all of the water poured into the pond will trickle down and feed the entire country. In the words of Mr Tui, yeah right!
Maybe what we’re forgetting is that in those dry months not only does the little pond fed brook dry up but the farmer moves his prize cows into the paddock containing the spring fed-pond and they drink directly from it. Thus it gets more and more shallow until not only has it stopped flowing altogether it will take a few major rain storms to fill up once again. The benefits are that a cow that has had plenty of water and thus will provide milk. And we all know what the most valuable part of milk is, cream. So let’s wonder who gets the cream? The answer lies in simple science. Next time you have a full cream bucket of milk in your possession, where the cream has settled to the top, try pouring that bucket on some sloping ground, and watch that trickle-down effect in action. It’s true we get the skimmed milk, but the cream stays at the top.