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It’s a pun off of the word stagflation which was short for stagnant inflation. Stagpression is short for stagnant depression. It is the most accurate indicator of our economic situation today, and tomorrow, and tomorrow, and tomorrow…
We seem to be in a Depression. but we aren’t. The Housing market is recouping, jobs are consistently growing, energy costs have dropped, corporate profits are now at record, higher than just before the 1929 crash, and an all time record high stock market.. We should be booming. But we aren’t. We still have too high of an unemployment both on and off the books, we still have depressed low wages, we have lost massive wealth within the middle class over this century so far, we have record high student loan debt, we have low consumer confidence, Hence, one class of America is booming. The other class is still in Depression mode. Hence we are in Stagpression….
It is easy to see why.
Here is a chart showing the free cash flow of businesses……
Record highs. See? Record highs. We should be growing faster than China, we have so much investment money at our fingertips. But no.
Here is our investment track record…
Ironically as we gave our businesses more and more money with lower taxes, less regulation, tax funded price supports, hand-tied their unions, and made free new technology at our taxpayers expense, despite all these perks and incentives, they invested less. So what are they doing with their money? Pick up any financial publication and read the headlines. They all will let you know.
None of which help our economy. It is as if we work hard, buy their products, and they put that money into a mattress. Soon, we are going to run out of money. Fortunately the Fed has filled the gap by printing more and giving it to banks for free. It too, filters though the system, and when it gets to the top, it goes into the mattress.
Instead of recycling money, we are letting the tap flow from our printing presses to the top echelon of our society… Now do you get it?
What is missing is a system that recycles the materials back into our economy so we have less money we need to print. If we were talking about paper, we would be saying we need to recycle paper to keep from cutting down more and more trees simply to fill up our landfills….
We need a system to return that money to the bottom so it can rise again and again and again.
Here are the options that have been tried.
- Price and pay freezes.
- Government set and regulated prices.
- Lower tax rates.
- Cash incentives from taxpayers to reinvest.
- Pleas and entreaties from the Oval Office.
- Higher marginal tax rates.
Only one of these has worked. Can you guess which one? If you guessed higher tax rates spur reinvestment you are absolutely correct.
Notice the rates of reinvestment climbing in each of these presidencies: Eisenhower, Kennedy-Johnson, Carter, Clinton each time Congress legislated higher marginal tax rates. Also notice the drops under Nixon, Reagan, and George W. Bush as Republicans cut the taxes… The Bush Tax Cuts held through Obama’s first term, and account for today’s sluggish reinvestment. More precisely, the reinvestment turned upwards under Obama until 2010 when Republicans took over Congress, and has fallen since. I can’t wait to see 2013’s numbers, for I expect to see real investment increase there as well. However those higher tax rates on the top half percent implemented at 2013’s beginning, sent financiers scurrying and bargain empty homes were bought up by investors with lots of cash which brought up the floor of the housing market (perhaps to our future peril). It also accounts for stocks becoming an area of liquidity to hold cash,..explaining the record highs ….
So we have an opposite relationship: cutting taxes increases corporate profits which go elsewhere other than reinvestment back into the ecnomy.
Increasing taxes, cuts into the Free Cash Flow, and funnels some of that flow over to reinvestment projects.
Ever wonder how Delaware’s 3 banks lasted for decades and then all disappeared very close to each other? Bank of Delaware, Delaware Trust, and Wilmington Trust. are now owned by other entities. (Wilmington Trust had some hand in cutting off its own foot). Commerce Bank, which was New Jersey based had the same fate.
They lasted for years because big banks never had enough free money to buy them out. Just think. In Delaware there are now 3 less bank presidents. 18 less bank officers, and who knows how many clerical workers are missing because the work goes to the owners headquarters, not located here…. One still wonders if our state could be better off, had MNBA not been bought up by an outside conglomerate.
So giving more money to businesses and corporations in this case, cost us jobs… and destroyed 3 long termed Delawarean corporations…
That was one example. Across this nation, in every city, every county, every state are millions more….
Raising the tax rates drives re-investment. It is the only thing we know of so far that consistently works to drive re-investment. Everyone who insists on cuts and de-regulation, no matter how they spin it, is pursuing a policy that has been completely disproven by reality and fact and of course, recent history..
Are you better off than you were under Clinton? Your income level will probably determine your answer….. Because yes, some people are indeed, a lot better off. John Carney. Tom Carper. Chris Coons, Jack Markell, to name 4 off the top of my head…. Better off too, are those who these four represent… the 1%. Much better off!
If you find someone willing to raise taxes, stick to them like glue. They are the ones who will lead us back to prosperity…..
Until then, economic stagpression will continue…. continuing through tomorrow, and tomorrow, and tomorrow….(at a) petty pace that creeps from day to day….
Two dynamics that should both be helping children are working at direct opposites. Opposing each other.
Education Week digs into this and weighs in on the mostly academic fight going on regarding our math standards. Some of you who have been here a while will remember our horror over taking the Smart Balanced Assessment tests for the age groups of our children. Many of you responded, that whereas the math concepts were not that difficult (for adults mind you), it was next to impossible to discern what the question-asker was requesting because of imprecise use of language…. The wording was very confusing.
To fill you in… recently two researchers challenged the Common Core assertion that it would make children college and career ready. Their research essentially boiled down to the fact that Common Core did not test beyond Algebra II. Most 4 year colleges and universities required Trig, Calc, or Pre Calc. in their admissions guidelines. If you were applying to Harvard and didn’t know what a “tangent” was, well guess what? (Tangents will not be taught in Common Core)… Only a 2 year community college will accept an entrant having only Algebra II knowledge who doesn’t know what a “tangent” is.. . Therefore the argument that Common Core would make education worse than it is today, is very valid.
The math question designer for Common Core, countered that the researchers were using false standards to describe “College and Career Ready”. A few 4 year colleges also do not have Trig, Calc, or pre-Calc entry requirements, he countered a child “could” get into a 4 year college with Common Core. He argued the disagreement was only about language. By “career and college ready” … Common Core was describing entry into 2 year community colleges, he stressed. The Common Core question designer said that what the researchers were arguing for, was instead, STEM entrance requirements.
it would appear that if you as a parent, had dreams of your child being rather intelligent and possibly going into a lucrative career involving science and math, you should be very afraid that Common Core will damage your child so much by putting him behind in his earlier years, that later, the STEM concepts will not be able to filter in……
For the record… Milgram, a professor emeritus of math at Stanford University, and Stotsky, a professor of education at the University of Arkansas, are two members of the common-core validation panel who refused to approve the standards.
The authors of the report decry that politicians are so out of touch with the mathematical field, ” “They do not seem to understand that [the] Common Core’s standards do not prepare high school students for STEM areas in college.”
If you remember President Obama’s State of the Union speech in 2010 where Common Core was announced, he decried our backwardness in turning out engineers… Common Core aggravates that national problem. Common Core intended to make engineers, was hijacked by corporate interests who were more interested in having people say the right things to collect on past-due debts already owed…..
In less than 8 short months, Common Core is turning into the biggest sham ever foisted upon the American people.
Please read Steve’s reports on Delaware’s offshoot of Homeland Security here, here and here….
We are getting our money’s worth with this bunch, that’s for sure… I wonder when they’ll let civilians drive it? I think the monster mile would be a good test track for civilians to get the opportunity….
Can you imagine seeing this thing pass you on the Delaware Memorial Bridge and at the apex it goes sailing off into the sky? What will they think of spending our money on next…
(I want one btw. )
Today in order to capitalize upon the fact that the fourth quarter economy sank (even though it was because of the downward pressure due to the threat of sequestration forced upon Congress by the Tea Party), they wheeled out Arthur Laughter Laffer to make a dire predictions….
He is on their short list of who-to-call-when-we(FOX News)-NEED-a-dire-prediction…..
Because….. He is well known for making “dire predictions”..
“Economist Arthur Laffer told his clients on July 26, 1982, that (Ronald Reagan’s) Tax Equity and Fiscal Responsibility Act, which raised taxes by about one percent of GDP, “will stifle economic recovery,” “retard economic growth,” and undercut “the economy’s ability to enter into a period of expansion.” On August 20, 1982, he told his clients that TEFRA, Tax Equity and Fiscal Responsibility Act, “will tend to lengthen and deepen the recession.”
Instead, ….. No one could have been more wrong…
On August 20, 1993, Laffer told his clients, “Clinton’s tax bill will do about as much damage to the U.S. economy as could feasibly be done in the current political environment.” He said that interest rates would rise and the stock market would fall.
Once again, it would be hard to find a forecast that was more completely wrong….
And now! Today,… well, there he goes again….
“You have the whole output of the economy shrinking. Not just expanding more slowly, it`s absolutely shrinking,” (lol, see by how little, below)… Laffer told Fox News’ Eric Bolling…
“That’s catastrophic,” the former adviser to President Ronald Reagan added. (Did anyone else catch the stupendous irony of that? Oh, Wow. You can’t make stuff like that up).
“You can explain some of that by sequestration, and defense spending was down lot and all that. But you still have a rotten economy. And it’s still too bad. We know how to fix it, by the way, a low rate flat tax, spending restraint, sound money, free trade.” (See George Bush’s Economic Record.) Laffer was responding to reports Wednesday that the U.S. economy contracted 0.1 percent in the last quarter of 2012…
Yes. Laffer was responding to reports Wednesday that the U.S. economy contracted 0.1 percent in the last quarter of 2012. Quote: “You have the whole output of the economy shrinking. Not just expanding more slowly, it`s absolutely shrinking,”
Recalling his years as one of Reagan’s top economic advisers, Laffer said Reagan actually cut the highest tax rates (From 70%-50%; they are 35% now) He said “we made a mistake” by phasing in the cuts, which he said caused the 1981-82 recession. But he said the economy took off in 1983* when the cuts (and 1%GDP tax increase) went into full effect. *
“This place just went like a rocket ship,” he said. “I think we had 7.5 percent growth in 1983 and 5.5 growth in 1984, just this boom that lasted for years and years.”* (*lol)
(Conversational excerpts provided by Newsmax)
Isn’t it sad, and a little funny, that the political party which won’t release any of their candidate’s tax forms, is the very same that requires everyone to be processed for an ID with birth certificate, social security card, drivers liscense or photo ID, and two residential confirmations, in order to vote.
They don’t have to prove nothing… but you do.
This story is making it’s way up the charts… It is about the perils of navigating the private insurance labyrinth, being kicked out, and finding salvation in what?…… A government run Health Care Program.
Bottom line… Private Insurance ain’t what it was under Clinton’s 1990’s… If you haven’t gotten sick lately, then talking smack about Governmental Healthcare, makes you a stupid-ass hypocrite.
Bottom line.
Right click to open full image… Pictograph Courtesy of Viral..
So, can someone tell me again, why we shouldn’t tax the rich, and instead, balance the budget on the backs of everyone else?…….
I seem to be missing that little detail where that all makes sense……
The following is what the Vision Committee of Occupy Wall Street struck up as their vision statement….
It’s not practical.
Take the first line:
We Envision: [1] a truly free, democratic, and just society; [2] where we, the people, come together and solve our problems by consensus….
“Where we the people, come together.” Ok, how many people will you get together and where? 25, in a library side room? 40, in a Union Hall? 120 in a fire hall? 300, in the county building’s auditorium? 7000, in Frawley Stadium (hope it doesn’t rain)? 140,000 in Dover Raceway (fifteenth largest stadium in the world) and then what, where do the rest of our 307 million conglomerate?
Perhaps one could do it on-line. But how do we know that result is real, and not hacked? No, there is a reason that a representative system is best. For one, you just have to argue good sense into a few heads at a time, not millions who aren’t getting all the details of the argument.
Secondarily, as recently portrayed within the Occupy Movement, it often takes sooooo long for pure democracy to reach a consensus. and as illustrated by Occupy Oakland when they tried to throw out a trouble maker. There it was possible for him to stack the group in open meetings and thwart the necessary and significant change. Can you imagine what Republicans would do if we were discussing all policy in open forums and having everyone vote upon them? It takes one bad apple to ruin things in a pure democracy, and the Republicans are much larger than a party of one.
[3] where people are encouraged to take personal and collective responsibility and participate in decision making;
I’m sorry, I’d like to be at the meeting, but I have to work.. or I have to watch my kids, or I have this Dr.’s appointment made months ago, or my kid’s starting in the game tonight, or I have to volunteer at the food bank, or I have to see a movie and report on it for school, or I have to get my finances in order,….
How many of us make meetings now? How will it be any different in our future? Sorry honey, no sex tonight. I have to go vote on whether we raise country revenues by 33 million or 32 and 3/4 million… It’s very important you know.
[4] where we learn to live in harmony and embrace principles of toleration and respect for diversity and the differing views of others;
Forget it! There is no way I’ll sit in the same room while a corporate fat cat whines about the fact that he’s losing money….. He should be in jail. After all he’s done to ruin America? Why should I tolerate and respect his views? Ain’t happening….
[5] where we secure the civil and human rights of all from violation by tyrannical forces and unjust governments;
Define unjust governments: What happens if my government blocks my Internet access because I downloaded a free copy of Roger and Me? Wouldn’t that be unjust?
[6] where political and economic institutions work to benefit all, not just the privileged few;
If unions support and elect a candidate, don’t they, then having the inside ear, become the privileged few? If churches can bend the inside ear of their candidate, don’t they get to include themselves among the privileged few? When Mayor Barry got reelected, didn’t crack dealers consider themselves the privileged few? Whoever wins an election, or helps win an election, becomes the privileged few. Whether he’s a small town operator, or owns a wealthy conglomerate, if he has the ear, he gets his way… Currently, it’s the one percent that has control. But that can change in an instant.
[7] where we provide full and free education to everyone, not merely to get jobs but to grow and flourish as human beings.
We do that: the concept of high school is broken; it doesn’t work.
[8] where we value human needs over monetary gain, to ensure decent standards of living without which effective democracy is impossible;
We did that with the Great Society. We pumped welfare money into black and Appalachian neighborhoods and wound up creating dependent societies who could not function without welfare money. Unemployment never dropped, because there was no incentive. Why work when you could live for free? No matter how much we pumped in, their standard of living still sucked.
[9] where we work together to protect the global environment to ensure that future generations will have safe and clean air, water and food supplies, and will be able to enjoy the beauty and bounty of nature that past generations have enjoyed.
Build a city? or preserve open space? People always will win over animals.
Although these are thoroughly impractical, they are nice platitudes. They would be nice standards to place in a Miss Manners Guide to Congress, at least as a guide on how Congress should act civilly among themselves to in turn represent the greatness of what they do, and the respect of whom they represent.
But they are impractical in a real world. Only one person could sabotage a meeting under these guidelines. The assumption behind these platitudes is that everyone want what’s best for America.
That is a lie. We saw Republicans sell America down the river last summer solely to help their party’s chances November 2012. You and I got dissed; they get elected (and then dis us up even more… )
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