Finance:A rising tide lifts all boats

Short description: Economical aphorism

"A rising tide lifts all boats" is an aphorism associated with the idea that an improved economy will benefit all participants and that economic policy, particularly government economic policy, should therefore focus on broad economic efforts.

Origins

The phrase is commonly attributed to John F. Kennedy, who used it in an October 1963 speech to combat criticisms that a dam project in Arkansas that he was inaugurating was a pork barrel project and helped popularize the meme.

These projects produce wealth, they bring industry, they bring jobs, and the wealth they bring brings wealth to other sections of the United States. This State had about 200,000 cars in 1929. It has a million cars now. They weren't built in this State. They were built in Detroit. As this State's income rises, so does the income of Michigan. As the income of Michigan rises, so does the income of the United States. A rising tide lifts all the boats and as Arkansas becomes more prosperous so does the United States and as this section declines so does the United States. So I regard this as an investment by the people of the United States in the United States.

However, in his 2009 memoir Counselor: A Life At The Edge Of History, Kennedy's speechwriter, Ted Sorensen, revealed that the phrase was not one of his or the President's own fashioning. It was in Sorensen's first year working for him, during Kennedy's tenure in the Senate, while Sorensen was trying to tackle economic problems in New England, that he happened upon the phrase. He wrote that he noticed that "the regional chamber of commerce, the New England Council, had a thoughtful slogan: 'A rising tide lifts all the boats.'" From then on, Kennedy would borrow the slogan often. Sorensen highlighted that as an example of quotes mistakenly attributed to Kennedy.

Michael W. Moynihan, Kennedy's first spokesman for the Office of the United States Trade Representative, is also credited with being the initial drafter of the phrase in Kennedy's 1963 speech to a conference of the General Agreement on Tariffs and Trade.

In subsequent decades, the phrase has been used to defend tax cuts and other policies in which the initial beneficiaries are high-income earners.

Meaning

The expression also applies to free-market policies, in that comparative-advantage production and subsequent trade would theoretically increase incomes for all participating entities. It is said to be a favorite proverb of former U.S. Treasury Secretary Robert Rubin.

However, the term has also been used in recent years to highlight economic inequality. Gene Sperling, Bill Clinton's former economic advisor, has opined that, in the absence of appropriate policies, "the rising tide will lift some boats, but others will run aground." British Labour MP Ed Miliband said at a party conference that “they used to say a rising tide lifted all boats. Now the rising tide just seems to lift the yachts.” New Zealand Labour MP David Parker has stated that "We believe that a rising tide of economic growth should lift all boats, not just the super yachts."

Earlier uses

The phrase appears in a January 1910 article in the Boston Evening Transcript, about Christian missionary work, which states that "The question was asked several limes, what about work at home? The answer given was that a rising tide lifts all boats."

In addition, the phrase (水涨船高) has been used in the Chinese language for centuries and first appeared in The Gallant Maid (兒女英雄傳), a novel by Wen Kang, a Manchu-born Qing dynasty author.

See also

• Grow the Pie (phrase)
• Supply-side economics

External links

• Hines, James R.; Hoynes, Hilary W.; Krueger, Alan B. (August 2001). "Another Look at Whether a Rising Tide Lifts All Boats". NBER Working Paper No. 8412. doi:10.3386/w8412.