What is Community First Economics?

The story of The Big Kahuna points to a simple truth we’ve lost: an economy is healthy when money circulates. Money is like blood, and it needs to move around in a healthy body. But what is the goal?

For decades, our economic policy has been designed to make that money pool at the top, not flow. They called it “trickle-down,” and we’ve been waiting for the drip ever since. Between 1979 and 2021, productivity in the U.S. grew by 65%, while hourly pay for typical workers grew by only 17%. The money didn't trickle down, it got vacuumed upward.

Community First Economics starts from a different, foundational principle: the purpose of an economy is to enable the pursuit of happiness.

That phrase from our Declaration of Independence is the operating instruction for a free society. It names the ultimate goal of these United States. And you cannot pursue happiness if you’re drowning in rent, terrified by medical bills, or working three jobs just to keep the lights on. In New Hampshire today, 51% of renters are “cost-burdened,” meaning they spend more than 30% of their income on housing. You cannot pursue happiness in a community stripped of its main street businesses, its shared spaces, or its sense of common future.

When I first moved to Newmarket in 2010, I was paying $595 to live in a one-bedroom apartment. I split that with my girlfriend. Later we moved into a house with roommates and a yard, but never paid more than $600 for rent. When my son was born, we lived in a two-bedroom apartment (before we bought the building the restaurant is in) that cost $950. That was 2015. Today that same apartment is $2200. Young people are routinely paying double or triple what I was paying just 10 years ago. 

The Failed Promise of Trickle-Down

Trickle-down economics, the governing economic philosophy of the last forty years, has a simple premise. The theory goes that if we cut taxes for the wealthy and for corporations, reduce regulations, and let capital move freely, the rich will use that extra money to invest, innovate, and create jobs. The benefits of their enriched activity will then, like water dripping through cracks, eventually “trickle down” to workers in the form of higher wages and to everyone in the form of a booming economy.

But the story was a fairy tale. The reality has been a major transfer of wealth from the middle-class to the rich. Since the major trickle-down tax cuts began:

• The wages for the top 1% have skyrocketed 171.7% since 1979 while bottom 90% wages have seen just 32.9% growth.

• The share of national income going to the top 1% has risen to over 20%.

• CEO pay has grown by 1,460% since 1978, while typical worker pay has grown just 18% (adjusted for inflation).

In a 2020 RAND Corporation study, researchers estimated that if incomes for the bottom ninety percent had grown at the pace of the overall economy since 1975, they would have earned about 2.5 trillion dollars more in 2018 alone. They would have earned about 47 trillion dollars more in total from 1975 to 2018. In plain terms, a huge share of economic growth that used to lift typical families has flowed upward for decades. 

Why? Because the trickle-down theory was flawed. The wealthy didn't reinvest most of their windfalls in productive Main Street businesses or worker pay. They invested in financial assets, stock buybacks, mergers, and real estate, which further inflate the wealth of those who already own assets, driving inequality. In 2022 alone, S&P 500 companies spent over $922.7 billion on stock buybacks, money that could have raised every employee’s salary by thousands of dollars.

We were sold a philosophy of growth, but what we got was a system of extraction. Community First Economics starts from the opposite, evidence-based principle: true prosperity doesn't trickle down, it is built from the ground up, in the financial strength and security of everyday people and the towns they call home.