The problem with that theory, Ashok, is that products and services don't seem to be getting any cheaper. Where is the money going then? It's going right back to the stockholders and corporate execs. Sure, some of this is re-invested, but it seems that the investment is going off-shore. See Tim's comments aboves. I worked for a retail company a few years ago that was way behind the technology curve, but a profitable company all the same. A software engineering team designed an outstanding warehouse inventory system that was going to save the company millions in the recovered cost of damaged/lost inventory as well as improved efficiency and more accurate ordering/tracking system. A lot of people expected the company to finally lower some of its prices so that it would be more competitive in the marketplace with other retailers. That didn't happen. We saw a significant savings to the company, millions of dollars freed up, which went right back to the top. Trickle down indeed! The odd part of this was, that we have seen companies like Wal-Mart prove that by lowering prices and keeping them that way, people are inclined to buy more and do more business with the company. The company I worked for didn't see it that way. They decided instead of trying to lure people into buying more, they'd just keep the money they were saving on the warehouse software. Trickle-down economics worked in a different culture. A culture that believed that investing in your employees would bring in a good return. A culture that believed investing in your customers would gain their loyalty. However, our focus has become increasingly on the short-term gains, even if it might come with long-term consequences. This is pretty much a scorched earth policy of economics adopted by many corporations today. Get what you can out of the business now, and let the following management deal with the fallout.
Legend has it that if you rub the right tiny ad, a genie comes out.