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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.

Compare Chart 1 and Chart !!.

Here is a chart showing the free cash flow of businesses......

Chart I  Free Cash Flow of businesses......
Chart 1

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...

Chart II.  Re-investment Track Record
Chart 2
(Thank you koosah for the charts.)

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.

Rather than invest in plants and equipment, businesses are primarily using their funds to repurchase their own stocks in order to boost management earnings and ward off hostile take-overs, pay dividends to stockholders, and accumulate large cash and bond holdings.

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 across our lifetimes..

    1.Price and pay freezes.
    2.Government set and regulated prices.
    3.Lower tax rates.
    4.Cash incentives from taxpayers to reinvest.
    5.Pleas and entreaties from the Oval Office.
    6.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. I can't wait to see 2013's numbers, for I expect to see real investment increase there as well, thanks to the Biden higher tax rates on the top half-percent. However those higher tax rates implemented at 2013's beginning, sent financiers scurrying and bargain empty-homes were bought up en masse by investors with cash which subsequently brought up the floor of the housing market (perhaps to our future peril).  It also accounts for stocks becoming an receptacle of liquidity to hold cash,..explaining the record highs .... It appears those tax rates need to go higher.
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.
A very real example. In Delaware, we had 3 banks growing up which were institutions, their names carved last century in old stone buildings downtown, lasting for decades and then within a year or two, all disappeared, bought out, very close to each other.  Bank of Delaware, Delaware Trust, and Wilmington Trust. are no more, now owned  by other entities. Commerce Bank, which was neighboring New Jersey based,  had the same fate.

Yet they had lasted for years post-New-Deal because prior to giant tax cuts, big buyers never had enough free money (or free regulations) to buy them out.  Just think: job losses.  In Delaware there are now 3 less bank presidents.  18 less VP 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 our local MBNA not been snarfed up by an outside conglomerate, which itself was enveloped into Bank of America..

So giving more money to businesses and corporations in this case, actually cost us good 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, cuts down on excessive cash.  It is the only thing we know 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.   the 1%.  Much better off!  Likewise, those politicians running interference for the 1%; are also 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.... like a forest, quietly inching up to our castle's walls...

Originally posted to kavips on Thu Feb 20, 2014 at 10:18 AM PST.

Also republished by Community Spotlight.

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Comment Preferences

  •  Why is Chart I GDP and Chart II NDP? (4+ / 0-)
    Recommended by:
    Lujane, StrayCat, NYFM, J M F

    Also, wouldn't putting the tax rates you're referring to onto Chart 2 help illustrate your argument for higher taxes better?

    •  So you can compare apples to apples (19+ / 0-)

      "What it is:

      Net domestic product (NDP) represents the net book value of all goods and services produced within a nation's geographic borders over a specified period of time.

      How it works/Example:

      Gross domestic product (GDP) is the broadest quantitative measure of a nation's total economic activity. Net domestic product (NDP) adjusts this figure by subtracting depreciation on the country's capital assets (housing, machinery and vehicles, for example). The depreciation is officially referred to as the "capital consumption allowance."

      The Department of Commerce releases NDP data for the U.S. economy at 8:30 a.m. EST on the last business day of the quarter.

      A common equation used to calculate NDP is as follows:

      NDP = Gross domestic product (GDP) - Depreciation

      Similarly,

      NDP = Consumption + Government Expenditures + Investment +Exports - Imports - Depreciation

      See the GDP definition for more on the components used to calculate GDP.

      Why it Matters:

      Net domestic product provides insight into the age or obsolescence of a country's assets, as well as how much the country has to spend to maintain its current GDP. After all, if the country does not replace the capital value lost to depreciation, GDP will fall.

      Note, for instance, that if a country spends $3 trillion on new assets but also records $4 trillion in depreciation, there is no real capital-related economic growth going on, no matter how much the country may publicize the $3 trillion in spending. Similarly, growth or shrinkage in the gap between NDP and GDP can indicate growing economic stagnation or "progress" in a country"

    •  Actually you do not need that (22+ / 0-)

      to show that taxes should be higher. Just look at the Engineers report card on American infrastructure.

      http://www.infrastructurereportcard.org/

      It is really sad that infrastructure spending used to be a bipartisan thing without that much fight.. now we are falling apart because of the obstructionists in the house.

      When the stimulas plan was put forward the last thing the republicans wanted was infrastructure spending that would happen year after year throught President Obama's first term so they insisted that ALL infrastructure spending had to be shovel ready...

      That was insanity on a bun.

      27 billion out of 780 billion went to shovel ready infrastructure as bridges are falling down around us.

      •  Hi, since Republicans didn't support (4+ / 0-)
        Recommended by:
        indie17, NWTerriD, Cliss, Broken

        the stimulus, why did anyone pay attention to their demands in the first place? I realize we were new to the depths they would stoop in obstruction but that should have been laced with strings of support if we gave them a single sentence in the bill.

        •  I think the answer to your question is two-fold. (10+ / 0-)

          One is that the president likes to think of himself and promote the idea that he's 'every man's' president. He's not democrat or republican, he's Bipartisan President.

          The other is that too many democrats are as corrupted by big donors as are republicans. They merely play the game of politics to get elected, but once in office kowtow to the corporate demigods that can keep them there.

          In other words, we have a corrupt Congress and a President that is unwilling to (or naive to the fact that he even has to) stand up to that corruption.

          I'd even go so far as to suggest he sees the corporate influence over congress as the reason the country has flourished all those pre-Great Recession decades.

          He'd be wrong of course.


          "We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." - Louis Brandies

          by Pescadero Bill on Fri Feb 21, 2014 at 07:10:48 AM PST

          [ Parent ]

        •  We did not have 60 in the Senate (4+ / 0-)
          Recommended by:
          Mimikatz, JerryNA, Kathy Scheidel, Broken

          and had to have some Republican votes.

          Al Franken was not seated until July 2009.
          So we had 58, if you include Liebermann, the independent who promoted John McCain for President.
          Specter was still a Republican.

          The Republicans filibustered initially, forcing the bill to have 60 votes.  Kennedy, who was very ill already, had to make a surprise appearance to overcome the filibuster.  He did not even vote on the final passage due to his illness.

          Deals were made to get the votes of Snowe and Collins.  Specter also voted for the bill.

          In addition, I agree with some of what Pescadero Bill said.

      •  We don't really need to increase taxes at all. (4+ / 0-)

        Why not? Because there is a huge Peace Dividend just sitting around waiting to be tapped into. We no longer are fighting the War on the People of Iraq. Our forces in Afghanistan are being scaled back.

        So there is all this lovely money just sitting inside the Government's Federal Budget.

        Except, Wait for It -we need to modernize our military. I mean: our nation being a bigger spender on defense items than the next 26 nations combined is just not good enough. We have to spend and spend and spend.

        90% of the Counties in California now have MRAP's. These vehicles cost over $ 350,000 a piece. Our schools are in shambles, our roadways a joke, local  community godsends such as public swimming pools are closing due to no County official having $ 15,000 for pool repairs, but hey! each county has an MRAP! With County officials announcing to the public that they accepted  the MRAP's  because Wait for it - the vehicles are free. (Only a moron thinks something offered by the government is free.)

        Additionally we will never see much advantage in having a Peace Dividend because what is not being spent for insane purposes by our Military and DOD, is being spent on Surveillance. Why there could be a terrorist out there somewhere!

  •  Taxes on financial market speculation, and (18+ / 0-)

    commodities, would be popular and doable. Personally, I'd go for confiscatory rates to make it a better investment choice to back a mom-and-pop shop rather than gamble.

    But it wouldn't really take a very high rate to bring in a meaningful flow of much-needed cash which could be plowed back into the real economy.

    I don't see how we get that without first getting Legislators to publish the amount of money they want to pass laws like suggested; with a chance to then crowd-source bribes compelling arguments in the form of money.

    There's the rock upon which all rational plans to deal with real-world problems crashes -- somebody else pays the lawmakers more than we do. Without fixing that, or getting those who cannot be bought into office, it's hard to move forward, really, on anything.


    Actual Democrats: the surest, quickest, route to More Democrats. And actually addressing our various emergencies.

    by Jim P on Thu Feb 20, 2014 at 12:18:46 PM PST

    •  I do not think that is very workable. (2+ / 0-)
      Recommended by:
      nextstep, kck

      Mom and Pops are great for local economies but they can never achieve economy of scale. So if Apple was still working out of their garage, without those gamblers willing to speculate and give them the speculative capital they needed, they would still be sitting in the garage.

      •  There's "investing" and there's "speculation" (27+ / 0-)

        Someone traded operating cash for a percentage of ownership in Apple, and everyday in America, people are risking money in new business ventures.

        That's investing.

        A majority of the volume on Wall Street equity markets nowadays in attributed to autonomous computer programs that execute thousands of trades per second to realize a .0001 cent profit each.

        http://en.wikipedia.org/...

        Or, commodities futures:

        http://www.nytimes.com/...

        That's speculation, and it's a driving force in today's income inequality.

        I'm living in America, and in America you're on your own. America's not a country. It's just a business.

        by CFAmick on Thu Feb 20, 2014 at 01:18:07 PM PST

        [ Parent ]

        •  I agree (1+ / 0-)
          Recommended by:
          nextstep

          I should have stipulated the difference between an actual speculative investment and some of what falls under "speculation" on wall street. But the word "confiscatory" really hit me. The idea that my wealth can be confiscated because of the risk I chose to assume is wrong in my mind.

          •  That's a loaded word (7+ / 0-)

            Certainly, a tax of 95% or more on assets held for less than one second wouldn't be "confiscatory," but would curb a dangerous financial practice that places all of us at risk.

            I'm living in America, and in America you're on your own. America's not a country. It's just a business.

            by CFAmick on Thu Feb 20, 2014 at 01:37:20 PM PST

            [ Parent ]

          •  If there were confiscatory taxes on derivative (12+ / 0-)

            profits, and speculation in commodities, there would never have been the current 'stagpression' nor would prices for things be as high as they are.

            Make a distinction between 'investment' in the Real Economy (which is what I meant by 'Mom & Pop Store') and the gambling addiction as practiced by Respectable Organized Crime (aka the big banks), and you'll see what I mean.

            PS: Apple is so profitable because of near-slave-labor; Microsoft is so ubiquitous because it was first with a product and a good salesforce. In point of fact, both companies have put a cap on real innovation in the computing field. We should be much more able for much cheaper if they weren't so dominent. But Cartels and Monopolies, and what rates they get taxed at, are another topic.


            Actual Democrats: the surest, quickest, route to More Democrats. And actually addressing our various emergencies.

            by Jim P on Thu Feb 20, 2014 at 02:43:05 PM PST

            [ Parent ]

            •  Oh, and take whatever risk you want. With your $$$ (7+ / 0-)

              The Bankers take bad risks and humanity pays for it.


              Actual Democrats: the surest, quickest, route to More Democrats. And actually addressing our various emergencies.

              by Jim P on Thu Feb 20, 2014 at 02:44:42 PM PST

              [ Parent ]

            •  Sales force had nothing to do with it. (5+ / 0-)
              Microsoft is so ubiquitous because it was first with a product and a good salesforce.
              Microsoft forced hardware makers to agree to pay a license fee for every computer they shipped, whether it actually shipped with Microsoft's product or not.

              This gave hardware makers a strong incentive to ship only computers with Microsoft's product preinstalled, since they were going to have to pay the license fee anyway.

              The monopoly was imposed at the hardware manufacturing level, not at the customer level via a "sales force."

              The Dutch kids' chorus Kinderen voor Kinderen wishes all the world's children freedom from hunger, ignorance, and war. ♥ ♥ ♥ Forget Neo — The One is Minori Urakawa

              by lotlizard on Fri Feb 21, 2014 at 04:46:52 AM PST

              [ Parent ]

            •  Apple is no nearer slave labor than is Microsoft (1+ / 0-)
              Recommended by:
              fhcec

              (MS) or anyone else who goes out of the US (mostly to China) to get cheap wages.  ALL Apple's competitors use foreign factories (mostly Chinese).  Apple had to do this to compete.

              At least while Jobs was alive, Apple was THE source of innovation in consumer electronics for the world.  Without Apple we would still be using MS/DOS.  The look and feel of all windows operating systems were copied from the Apple Mac. Other Apple innovations that invented new industries: ipods, itunes, iphones, ipads.  

              Apple was the source of major innovation, from which the US benefits big.  Not MS, IBM, HP, TI or others, who seem happy with "bigger and faster (duh)" but not really better.  

          •  Let's remember that it's PROFIT, not WEALTH... (2+ / 0-)
            Recommended by:
            JerryNA, Broken

            ...that is taxed.

            I'd also argue that it should be morally superior to tax risk-taking than to tax actual labor.  The government does give you a deduction for risks that don't pan out, but there's no such deduction for labor lost to taxes.  (I speak as one who has seen this first-hand; I bought two "penny stocks" a while back as a risk.  They both had the chance to go up very nicely, but instead--and I mean this literally--went down 92% and 98% in value, respectively.  I lost out on the risk, but I'll get a deduction this year that will offset profits on other fronts.)

            "Life is the crummiest book I ever read - there isn't a hook, just a lot of cheap shots, pictures to shock, and characters an amateur would never dream up." - Bad Religion

            by TheOrchid on Fri Feb 21, 2014 at 09:27:47 AM PST

            [ Parent ]

        •  Stock trading should be outlawed. n/t (0+ / 0-)
      •  Financial speculation is not the same as VC. (3+ / 0-)
        Recommended by:
        J M F, JerryNA, Broken

        And high-speed micro-trading is also not the same as VC.

        "What could BPossibly go wrong??" -RLMiller "God is just pretend." - eru

        by nosleep4u on Fri Feb 21, 2014 at 05:41:45 AM PST

        [ Parent ]

      •  And they never could have sent all their (1+ / 0-)
        Recommended by:
        Broken

        manufacturing jobs to concentration camp factories in China if they hadn't achieved such scale.

        The free loading bums at Apple took invented innovative products based on a  technology revolution made possible by American taxpayers and kept walking. I want our seed money back.

  •  It's like you're allowed to hollow (8+ / 0-)

    out more and more of an enterprise's value and wealth, or siphon off more of the cash flow, but still retain the full value of the original structure on paper.

    It'd be like if you had a $1 billion chunk of gold, and sold $900 million worth of paper backed by the gold, but still valued your ownership at $1 billion.

    I'm living in America, and in America you're on your own. America's not a country. It's just a business.

    by CFAmick on Thu Feb 20, 2014 at 01:04:21 PM PST

  •  What a complete surprise. Who would expect (2+ / 0-)
    Recommended by:
    koosah, Bob Guyer

    predatory capitalists to be predatory.

    That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

    by enhydra lutris on Thu Feb 20, 2014 at 02:05:00 PM PST

  •  No disrespect intended, but (1+ / 0-)
    Recommended by:
    DaveDC

    if your entire diary hinges on two charts, you'd have done much better to put the chart images in your diary.

    I distrust those people who know so well what God wants them to do, because I notice it always coincides with their own desires. - Susan B. Anthony

    by pajoly on Thu Feb 20, 2014 at 03:03:12 PM PST

  •  Here are images of both charts: (11+ / 0-)

    Chart 1

    Chart 2

    Somebody told me that you had a boyfriend who looked a girlfriend that I had in February of last year.

    by koosah on Thu Feb 20, 2014 at 03:10:11 PM PST

  •  I wanted to put this in the body but didn't ... (5+ / 0-)

    But thank you, Jimmy Carter.  We knew so little about economics back then to really, fully appreciate what you accomplished in your term.

    You were just ahead of our time.

  •  I Want My Money Back! (8+ / 0-)

    Obviously, we have it all wrong. We should tie the top tax rate to the unemployment rate. I think of it as pay-for-performance (for the rich). Their claim is that if you give them money, they'll create jobs. I think it should be the other way around: They create jobs and then we pay them the money by cutting their tax rates.

    We should make the top rate something like 50% plus the unemployment rate. So, right now, it would be around 58%. BUT, if they just created a lot of jobs, then it could go down to 57% or even lower!

    •  Interesting idea I hadn't heard before. (1+ / 0-)
      Recommended by:
      Liberal Thinking
    •  A great idea, but our government officials don't (1+ / 0-)
      Recommended by:
      Liberal Thinking

      like spending money on anything but war and offensive and defensive military hardware and software, and now Surveillance stuff.

      •  well, because the military hardware (0+ / 0-)

        companies write in big bucks for their congress critters and for contractors and subcontractors in the districts of cooperating congress critters.

        Stop that - and we'd have less high cost military spending that are over and above what we need.

        Jobs and campaign cash... thru military spending - what's not to like if you're a congress critter?

        "There's nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires." - President Obama

        by fhcec on Sat Feb 22, 2014 at 11:55:21 PM PST

        [ Parent ]

  •  For onc, a "must see!" diary that lives up to its (2+ / 0-)
    Recommended by:
    lotlizard, koosah

    name. :-)

    These are important insights, and a powerful visualization of them.

    Rather than invest in plants and equipment, businesses are primarily using their [profits] funds to repurchase their own stocks in order to boost management earnings and ward off hostile take-overs, pay dividends to stockholders, and accumulate large cash and bond holdings.
    •  Most "must see!" diaries boil down to "watch TV!!" (2+ / 0-)
      Recommended by:
      NoMoreLies, koosah

      Whereas one of the best things we could do to improve our "ecology of mind" would be to watch a lot less TV or, as some people did in the Sixties and Seventies, get rid of the TV entirely.

      The Dutch kids' chorus Kinderen voor Kinderen wishes all the world's children freedom from hunger, ignorance, and war. ♥ ♥ ♥ Forget Neo — The One is Minori Urakawa

      by lotlizard on Fri Feb 21, 2014 at 05:04:10 AM PST

      [ Parent ]

  •  Other ideas: (11+ / 0-)

    1. Guaranteed annual income
    2. Single payer health care
    3. Banks can only be banks (not investment banks, not hedge funds, not commodity traders) and must  keep their business boring
    4. Massive buy out of high interest credit card debt and conversion to low interest (by the Fed) i.e. give money to those who will spend it instead of to the banks. That people are paying 30% interest in this time of ZIRP is INSANE.
    5. Massive reform of higher education - this is where all the new debt is being created (it is freaking scary). Higher education institutions continue to suck dry and make permanently poor/enslaved the youth of the nation. No wonder no one has money, nor will they for generations.
    6. Increase the minimum wage.

    “If equal affection cannot be, Let the more loving one be me.” W.H. Auden

    by taonow on Fri Feb 21, 2014 at 03:56:02 AM PST

  •  Recriminalize Bribery & Influence Peddling & (3+ / 0-)
    Recommended by:
    J M F, mkor7, JerryNA

    TAX the GODDAMN FILTHY RICH BASTARDS.

    Start filling up our prisons with whore politicians, shyster lobbyists who buy them, and psychopathic GREEDmongers from corporate Amerika who pay to get politicians to ri the system in their favor.

    •  Add this to your list... (1+ / 0-)
      Recommended by:
      fhcec

      Every time a homeless person or an uninsured sick person dies, or somebody gets shot by a crazy it strikes great fear into the minds of many others.  That is TERROR!  The people responsible for causing or allowing this to happen are TERRORISTS.  Why not have Homeland Security ship a few of them off to GITMO and forget about them.  And then let their buddies know that HS is watching them.  Oh, and add a few lawyers and judges to the list, maybe.

  •  So, you're saying (2+ / 0-)
    Recommended by:
    kkjohnson, JerryNA

    a rising tide doesn't lift all boats? But it's such a catchy sound bite.

    The United States does not negotiate with terrorists - that includes Republicans.

    by frsbdg on Fri Feb 21, 2014 at 08:14:00 AM PST

  •  Systems diagrams, stocks and flows (0+ / 0-)

    growing and declining as incoming and outgoing flows are adjusted would also paint a nice picture of the dynamics of the system. The stock of middle class wealth and education declines as the stock of top corporate wealth increases as the flows of capital move from real economy investment to increasing the (work-less, almost risk-less) wealth of the wealthy.

    Love = Awareness of mutually beneficial exchange across semi-permeable boundaries. Political and economic systems either amplify or inhibit Love.

    by Bob Guyer on Fri Feb 21, 2014 at 08:20:39 AM PST

  •  Throw in technology displacing workers (1+ / 0-)
    Recommended by:
    JerryNA

    ..and you have a perfect storm.

    The system needs re-tooling at least, and replacement at most.

    Dear future generations: Please accept our apologies, We were roaring drunk on petroleum -Kurt Vonnegut

    by Anthony Page aka SecondComing on Fri Feb 21, 2014 at 08:43:30 AM PST

    •  I vote for replacement (0+ / 0-)

      Re-tooling gives us the boom/bust cycles which anyone over 30 is familiar with. In the final analysis capitalism is based on greed, one of the oldest vices of mankind. It also is self-destructive at it's current level of evolution, as in planetary destruction of resources and populations.

      The economy of scale that so many espouse as a saving feature of globalist driven capitalism can only be achieved in a supply side driven economy. Actual demand is ignored, misinterpreted, or twisted to fit the cheapest possible methodology of manufacture and distribution (off-shore labor and big box store wage levels are examples).

      Consider for a moment that Supply Side driven economics is the economics of feudalism. The peasants will accept whatever is offered to them because there are no other options. The Classic Capitalism that is so fervently elevated to a sacred level by it's devotees is rarely exhibited in this age, except in the smallest of niche markets.

      In essence Capitalism has and always will evolve, by concentrating the means of production and distribution into the hands of a very small group of people. This results  in a feudalistic minded, supply side driven economy that will always have extreme imbalances in wealth distribution. Resource driven economies on the other hand are always demand driven and eliminate activities that promote exploitation of people and over consumption of resources by removing the "profit motive" as the sole economic driver.

  •  Executive incentives (1+ / 0-)
    Recommended by:
    JerryNA

    are probably more screwed up than any other part of the economy.

    None are so hopelessly enslaved, as those who falsely believe they are free. The truth has been kept from the depth of their minds by masters who rule them with lies. -Johann von Goethe

    by gjohnsit on Fri Feb 21, 2014 at 09:29:22 AM PST

  •  Re-packaging the message (1+ / 0-)
    Recommended by:
    EliseMattu

    My simplistic thought is basically large pools of idle money is fundamentally bad for the economy/capitalism (almost like a cancerous tumor).  Both sides get red in the face with their re-hashed arguments on fairness between classes....but I'd almost re-frame the argument to a less emotional debate about evils of large pools of idle money and basing more tax law benefits on direct real  investments like infrastructure/US jobs/small/medium entrepreneurship.

    The word currency even implies that success is about the flow of money...stagnation is the ultimate source of problems.  

    If I could re-built the tax code, capital gains would be lumped with regular incomes with the progressive tiered taxation scheme (because most cap gains aren't necessarily investments in anything real).

    If high idle money people/corp's want big tax deductions....show you directly invested in infrastructure, people, and small R&D/entrepreneur launches.  If the Walmart 5 hire 250,000 US based people at $30/hour (which would be documented in their tax return directly---no hand waving trickle down, real documented trickle down) and paid for nearby infrastructure improvements...then sure their tax rate goes way down to the Mitt Romney levels.  But if they hired nobody at a living wage, say hello to your new 85% tax rate for all income over 20 million dollars.   If you hide money over-seas...I'd kick in some serious grime reaper tax rates on that idle money maneuver.

    Never understood why accounting of jobs and infrastructure improvements for the biggest corps wasn't more directly in the tax code.  Tax the tumors in society, reward smart investment.  

     

    There's room at the top, they're telling you still, but first you must learn how to smile as you kill. -J Lennon

    by noelcor on Fri Feb 21, 2014 at 12:06:35 PM PST

    •  Never understood why? (0+ / 0-)

      Because campaign funds to legislators to make sure they don't include tax consequences like those you describe.

      "There's nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires." - President Obama

      by fhcec on Sun Feb 23, 2014 at 12:15:01 AM PST

      [ Parent ]

  •  It sounds like the companies are preparing for (0+ / 0-)

    the TPP and other trade pacts to take effect. They don't want to leave themselves open to the predatory finance capitalists and lose control over their companies. I think they know that they were suckered into debt just like the rest of us.

  •  Production infrastructure (2+ / 0-)
    Recommended by:
    BeninSC, fhcec

    Great article and fascinating comments: his is one of the most interesting useful blogs I have seen lately.  But I keep wondering how to get beyond the financial, ie. capital reinvestment as a question of cash.
    With the industrial infrastructure of the US dismantled in waves over the past 50 years as corporations move the production of goods somewhere else, it seems logical that investment in the US is only in financial juggling - isn't that all that happens here?  Except for pork-barrel nightmares of inefficient military hardware production and the service industries of "education" and "health care."  Did I miss anything? "Food."
    So in order to reinvest, there needs to be some ongoing production to invest in, no?

    •  Increasing ongoing production would be wonderful, (0+ / 0-)

      as would unions for the workers. We have a lot of work to do, indeed.

      Welcome from the DK Partners & Mentors Team. If you have any questions about how to participate here, you can learn more at the Knowledge Base or from the New Diarists Resources Diaries. Diaries labeled "Open Thread" are also great places to ask. We look forward to your contributions.

      "The opposite of war isn't peace, it's CREATION." _ Jonathan Larson, RENT -9.62, -9.13

      by BeninSC on Sat Feb 22, 2014 at 06:02:01 PM PST

      [ Parent ]

    •  To briefly answer your question. (1+ / 0-)
      Recommended by:
      fhcec

      (which means I leave a lot out),  the answer is raising tax rates.  Then, bad as it sounds, offer tax cuts as incentives to get the result you want....  

      The secret is not that we are really concerned about taking money from people to pay our bills; we are using it as a carrot-stick to get people to say "shucks, I might as well reinvest in capital infrastructure."
      If we raised the very top marginal rate up to 50%, for example, (which was the actual level of Ronald Reagan's first tax "cut" in his first term,  along with the caveat that we said "one could write off all they invested in capital improvements, the incentive would be there to spend money on oneself instead of paying it in taxes.....
      Furthermore we must specifically said that "oh, yeah.  this only applies to domestic investment.  Foreign investment gets zero deduction and all foreign funds will hereby be taxed at 50%".
      Now someone like iApple has to figure out whether the cheap labor and biting higher taxes are a better moneymaker than higher American labor balanced against lower taxes...

      As a society, it really matters little to our economy if the corporate structure is investing tons of money, or if our government is taking their excess profits  which as we see above, they are not re-investing, and investing tons of money..... Either way we get more people working!

      The nice part, is that the efficiency is higher if we just let business do it themselves....

      I don't know your age, but historically, big businesses (IBM) would assess on the 15th of December their financial outlook for the entire year, and between the 15th and 30th work contracts would just fly out of their headquarter's doors.  

      It was a large part to those big ticket contracts that we had a good economy from the 1940's to the 2000's at which point the construction industry basically shriveled up...
       As the charts above show, that investment is not happening now...

      Also it used to be that R & D departments were brimming with people;  

      it didn't matter how much it cost because that money would otherwise go to the Fed if it wasn't coated out as an expense..
      .  Corporations thought it far better to have people working on new ideas which could innovate them into the next decade, than simply hand that money over...

      Our current failing infrastructure could actually,(thanks for bringing that up) be a great selling point to get those higher taxes passed through Congress. I never have thought of that before.  

      It would be awesome if our political party said "we need to do a massive bridge and rail infrastructure do-over, but unlike Republicans who borrowed money. we are going to pay for it as we go, by taxing the tops incomes with an infrastructure tax rate at 50%.
      .. We could sunset that provision based on not a specific time limit, but on when we achieve full restoration....  Sort of how a foundation does when they restore a historic building... They keep asking until it is done...

      Hope that helps.  Thank you for asking, seriously...  That infrastructure selling point to the American People was alone worth the question...

  •  The part about the banks in Delaware, (1+ / 0-)
    Recommended by:
    fhcec

    it struck home for me.  I live near Jacksonville, Fl.  I used to live in the city.  When we moved there in 1977, there was a local bank called Barnett Bank.  It was a bank willing to give ordinary people a chance, loan money to start small businesses, to military families to buy cars, ect.  We did business with them, financed a car, it was a great experience.  They cared, took good care of their customers.  They gave $10,000 to a single mom in our area to start a business, one that ultimately became a multimillion dollar business, and that woman bought what was then the Independent Life building, renamed the Modus Building. I used to clean her house, which was 10,000 square feet.  A teacher I worked for when I was a teacher assistant was one of the major stockholders of the bank; they used to give him free pens and pencils with the bank logo.  Then Bank of America bought them out.  They haven't been as good neighbors as our old Barnett Bank.  One of my customers I clean for, her husband is a retired lawyer, who worked for the old Barnett and stayed on with BOA for a while, but retired as soon as he could because he felt they were unethical.  He gets his retirement from BOA, but he doesn't use them to bank with.  He uses USAA credit union.  Those hometown banks really were great, really cared about the community and the people.  Not so the giants that have swallowed them up.

  •  The simple translation... (0+ / 0-)

    Trickle-down economics was a scam from day one!

    I call it trickle up economics, because it always ends up in that fat cat's mattress...

    I have compared the money cycle to the water cycle, or a blood cycle, etc., a healthy system circulates the goods, an unhealthy one collects it in an icecap choking out life on earth...

    So don't be that skeleton still waiting for those drops to trickle down from the mercy of the fat cats...

  •  Tea Party should learn (0+ / 0-)

    There is a constant pressure by tea party members to keep wages and unemployment benefits down because that would put pressure on the individuals to find better work, or work to start with. Well, businesses should also be on a short leash. They should not get subsidies, tax breaks, and so on. That would give them the incentive to expand their operations in order to improve profits. Today's businesses are just overfed and unable to work. They need challenges and not protection by tea party gurus.

  •  conservatives (0+ / 0-)

    conservatives are absolutely insane, not stupid but nuts.

  •  Free Cash Flow Chart 1 (1+ / 0-)
    Recommended by:
    fhcec

    See that peak on the right side of the chart?  It's getting higher.  It's nothing but a giant gambling stake.  

    Maybe you've read this before in one of my posts:
    Do they have a right to impoverish millions of Americans because some philosopher convinced them of the sanctity of amassing personal wealth? Should they really have a sacred freedom to take wealth beyond what they can possibly spend on their own needs and put it into a gigantic Wall Street gambling pool where it does nothing useful except slosh back and forth between winners and losers like so many mountains of poker chips?

    How long can the game continue?

  •  More true (0+ / 0-)

    words have not been spoken. Geeze, we need some people with some sense in Congress. Money OUT of politics sure would help. Thanks Roberts. He is one man that needs to be out of the supreme court. Yesterday sounds about right.

  •  GOP only sees taxes and regulations as solutions (0+ / 0-)

    but business investment and higher employment depend upon higher consumer demand that can only happen with more money in the hands of the 99%. The 1% can only buy so many houses, boats and cars and the rest of their money goes to offshore accounts to avoid taxes. If a 99 percenter wins some lottery money, he pays regular income taxes. If a 1 percenter makes the same amount of money in an investment opportunity, he pays at the capital gains rate. Both risked capital and got back more than they invested, but one came from an economic class more favored by the law.  

    •  Consumer demand? (0+ / 0-)

      Hmmm, disposable income.  Consumer choices.  Remember the day?
      Where I stand among the 99%, the whole paycheck is going to food, housing, transportation, utility bills and debt payment.  Nothing left for optional consumption.

  •  The only thing corporations are investing in... (0+ / 0-)

    is the development of new billionaires.  Of course this means sticking it to the workers and destroying the environment but hey every new billionaire is blessed by god so they can do whatever they want.  god will provide for the wretched little people.

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