By Howard Gunn

Jan 20-2023

  

A quick general review before turning on the handheld boob tube and telephone. 

First, I also want to wish everyone a Happy New Year and give you some things to consider, as fiscal 2022 unfolds. 

The House of Representatives has a failing right-wing conservative Cult of Ignorance stalworth for leadership. It also has a group of unhappy cult minions serving with the majority in the House of Representatives of the United States.

The Republican Party, which produced the ongoing deficit problem with tax cuts for the rich, offshoring, and deregulation in 1981-1992, 2001-2008, and 2017-2021, will not be passing the tax-correcting or regulation legislation needed to curb the monopoly pricing generated inflation in 2023 and 2024. 

The House majority will fail the people of the country while trying to win the 2024 federal election cycle by leveraging gerrymandered house districts and conspiracy theories. Knowing your opposition and the enemy and saying no to them is democracy in action. 

2018 and 2020 election-Voters revived the House of Representatives and Senate

Nancy Pelosi and the Democratic Party-led House passed the funding legislation the nation needed to fix the 2020 economic disaster. 

The ill-advised tax cut in 2017, the failed trade war, and the mismanagement of Covid created the Republican Recession of 2020. Quick action by the Democratic Party-led House saved the day and the economy.

Mr. Chuck Schumer, the new leader of the Senate in 2021, joined with the House legislators to create the most effective economic quick fixes in the history of Congress.

 

Mr. Biden is now the most successful job-creating president in history after two years of riding the Democratic Party legislative success wave from the Democratic Party-led Congress. 

Inflation raised its ugly head in fiscal 2021 

Its cause was the supply chain disruption from the failed trade war, the additional supply chain disruptions from mishandling covid, the new World War start-up in Ukraine, and the monopoly retail pricing disaster that Republicans had facilitated while creating the recession. 

Our Federal Reserve responded to the new inflation rate with the traditional fix of interest rates. Increasing rates will slow down demand and inflation, in a lot of situations. The Fed did not grasp the new circumstances and what had brought the pricing monopoly into existence.

 

The FED interest rate hikes did not fix the monopoly pricing inflation problems in fiscal 2022. They will fail again in fiscal 2023 and 2024. 

Voters destroyed the promising 2023 and 2024 fiscal years in the 2022 election cycle

Sadly, our new Republican House does not have the skilled legislative leadership to address or resolve the economic problem created by previous tax cuts, deregulation, and mishandling of their Party’s trade war. 

Our unique inflation problem needs new legislation. The Federal Reserve interest rate changes do not solve the legislation gap. The fiddling with rates will not be successful. Monopoly pricing is impervious to interest rates.

Congress needed to pass the legislation in fiscal 2022. 

They needed to raise taxes on high-wage earners, capital gains, and business profits. They also needed legislation to raise the minimum wage and reduce the monopoly price-raising processes. 

Because it was an election year, the previous Congress did not pass the tax legislation in fiscal 2021. Congress stayed focused on repairing the 2020 Republic Party Recession. 

Alas, the voters in the gerrymandered House Districts failed to stop the Cult of Ignorance House victory in the 2022 federal election. The Democrat Party House majority slipped away. So did the ability of Congress to fix the regulatory problems and the tax rates.

State Voters saved the Senate from the Republican Red Wave disaster. The small Democrat majority in the Senate will not provide the Senate the leverage needed to push the Republican House to do its job correctly.

The Funding Legislation of the US comes from the House of Representatives

The conservative Republic Party rapture proponents and the apocalypse cult minions elected to the House in 2022 will fail the country, themselves, and the people over the next two years. 

The House will not pass legislation to increase taxes, lower deficit spending, increase the minimum wage, or reduce the monopoly pricing processes that are driving inflation. 

Their Congressional failure to produce the new funding legislation will drive inflation up and pull the next Republican Recession forward in time.

Nancy Pelosi and a Democrat Party team of House members did not win the 2022 election. The House leadership and members needed to generate the important new legislation in 2023 do not exist in the House in 2023. There will be no new taxes to pay down the debt or fix monopoly price inflation in fiscal 2024. 

The irresponsible Republican Party leadership in the House will not be passing any Build Back Better legislation nor any tax-increasing legislation for the next two years. They will babble about cutting spending, threaten to turn Ukraine over to Russian forces, and try to leverage the debt ceiling via blackmail tactics that will damage the economy.

Tax cuts for the rich, Republican Party deficit spending, excess corporate profits, a failed trade war, and monopoly pricing led the nation into the 2020 recession. Spending cuts to “starve the beast” in the 2024 election year will be their Republican political blather until then.

The monopoly pricing of goods and services and the lack of regulations are now producing inflation in 2022 and will continue to do it in fiscal 2023.

The misguided, misinformed, and misanthropic November 2022 red-wave voters in the gerrymandered House districts ignored the Democratic Party’s recession-fixing Build Back Better legislation in 2021 and 2022. 

Instead of the Democrat’s Build Back Better Program and fixing the economy in 2023, red-wave voters voted for those that prefer another Republican recession or stagflation from the monopoly pricing. 

The Republican Party will plant a false flag conspiracy lie to blame their House’s failure to pass the needed legislation on the Senate and Presidency. This type of deceptive fraud relies on voters buying the babble. 

The Republican Party hopes you voters will not realize that all economic-affected legislation must come from the House of Representatives, according to the Constitution. And, based on the Republican Party House votes against Build Back Better legislation in 2021 and 2022, the new Republican-led House will not pass any meaningful legislation over the next two years.

The Gerrymandered House District Voters have spoken

The Republican Party’s misanthrope elected to lead the House in 2023 cannot address the economic problem created by the Republican Party. 

He does not have the intellectual skills, operational capability, or support from the Cult of Ignorance minions serving in the House with him. 

Any effort to increase taxes and regulate monopolies would conflict with party propaganda. 

It would also expose the excess profits and monopoly pricing problems the Republican Party created with the tax cut in 2017 and the misguided trade war that the United States lost in its 2020 deal with China.

The ongoing Covid pandemic, the Flu, RSV, and conservative Republican collaborators are still hurting consumers and workers, long after the Trump tax cut for the rich, the failed trade war, and the 2020 recession stung the economy. 

Republicans in the new House majority will fritter away the legislative opportunity to fix the problems. 

Their legislative incompetence will produce another Republican recession or stagflation.

With the right-wing propaganda blaming the Democrats, the lack of legislation might generate the red wave of Republican voters needed to capture the Congress and White House in 2024.

A unique aspect in this two-year Republican House cycle is a democratic-led Senate and President. Both entities will try to stop the Republican economic disaster with bipartisan input. I doubt if it will work, but there is hope.

Congress today needs to raise taxes on corporations, private businesses, top-income earners, and capital gains.

 

Congress should use the extra money to shrink the deficit interest payments, increase the minimum wage, grow the workforce participation rate, forgive the student debt, and modernize the US workforce and its economic focus.

The voter failure in the 2022 elections will instead produce a death knell for the economy. 

More Inflation, excess profits, and a Republican-produced recession aftermath with inflation-stagflation are in the cards. Republicans will try to hang their House snafu on the Democrats in the 2024 election cycle.

Congress and the Federal Reserve have different inflation solutions.

The Federal Reserve economic theory embraced by Keynesian believers implies that higher interest rates and making it more expensive to borrow money will slow down consumer spending. 

It is true in economic environments where demand is driving inflation. It is not true in the current US economy where monopoly pricing is the driving force. 

Demand is not the problem. Demand is not driving up prices and creating inflation. Excess profits are driving up prices. In short, monopoly pricing is increasing profits, driving up prices, and causing inflation. 

Supply chain issues created by the recession, the pandemic, the failed trade war, and the start of World War 3 in Ukraine weakened supply chains. The lack of products caused the hoarding issue by a small portion of society. That blew over. People are not increasing demand and driving prices up.

The relevant Keynesian theory of demand does not apply in an economy where employment is down 3.5 million workers versus 2019 and 2020. 

With 3.5 million fewer workers, demand is not at an all-time high. Raising interest rates will punish workers and may even stimulate inflation and generate the unique fresh problem of a shrunken national workforce. 

The Fed’s interest rates are not the solution to the current economic problem. 

We need Congress to reduce interest payments on its debt. They also need to expand payments on social programs that modernize the workforce and increase worker wages. 

Congress has been doing an excellent job expanding program payments while ignoring the interest payment problem. The plan to cancel interest payments by forgiving education loans is currently being blocked by cult leaders and misinformed fools.

 

The Nation needs tax hikes on top wage earners, corporate profits, and capital gains to reduce the deficit spending rate now. Congress also needs to increase the minimum wage and increase federal spending investments that create jobs and modernize the nation’s workforce.

Job declines and losing worker participation in the economy began when inflation was under control. 

The Trump Tax cut and Trade War had kicked in, while Covid was raping the economy and the government was misinforming people.

Economic observations from 2017 to January 2021 are not Political Party propaganda. 

Observation of the Build Back Better legislative efforts of Congress in 2021 and 2022 and the job recovery results are also not babble.

We collect facts by making observations. The analysis of the facts leads to conclusions. These conclusions often help make future decisions and sort through alternatives. 

120,000 companies closed during the pandemic. Over a million people died. Ten percent (10%) of the workers also became unemployed. 

Our recession hit the economy at about the same time as the 2017 Republican tax cut for the rich reduced tax take and the misguided Trade War results were kicking in with higher consumer prices. The results were higher prices and supply chain disruptions. Higher prices at lower volumes result from monopoly pricing capability.

The combined disaster hit the economy like a ton of bricks. Entire companies and Supply Chains fell apart. Companies were raising prices for consumers. The start of the price increase was to account for the tariff war. China locked down and Russia started World War 3 to exacerbate the problem.

 

Recession occurred. Businesses put in motion operational plans to downsize labor and supplies. They also increased prices to take profitable advantage of the weakened economy.

Our pandemic and recession also stimulated the Congress of the United States to address and fix the problem. 

The House calvary to the rescue voter plan worked. The voters voted the Republican Party out of the House of Representatives in the 2018 mid-term election. In the 2020 election, voters replaced the Republican Senate leadership as well. Congress’s embedded 2016 political gap problem got solved and Nancy and Schumer produced the fix.

2019 and the Democrat Party-led House of Representatives

Do you remember when Nancy Pelosi explained to Treasury Secretary Stephan Mnuchin that the delay was unacceptable, and she needed to get the Family First Corona Virus Response Act out? 

She and Congress needed the law to provide funding for testing kits, paid leave, and food stamps. Mnuchin and Trump got the message and signed off the next day. 

The Democrat House and Republican Senate also passed the Care Act in 2020 as a fallout of the 2019 pandemic disaster. Congress passed little other legislation until after the 2020 election kicked Republicans out of Senate control.

2021 and the Democrat Party led Congress

Nancy Pelosi and Chuck Schumer’s recovery legislation began in 2021. 

The Democrat-based Congress with the vice president’s tie-breaking vote gave Joe Biden the chance to set the record for the fastest recovery from a recession in history. 

The same Democrat Party Congress team also got Joe recognized for creating the most jobs ever in two years, as the Democrat-led Congress Building Back Better legislation rolled out. 

Most Republican members, and every misinformed Republican conservative in Congress, voted against the Pelosi-Schumer recovery legislation from the Democrat Party.

The Democratic Party in Congress and the Presidency got over ten (10) million people back to work in two years. 

The problem is that the Republican recession had killed off workers, companies, and jobs in ways that shrunk the workforce by 3.5 million jobs in 2019 and 2020.

At the start of 2023, we have ten (10) million open jobs and only six (6) million unemployed people looking for jobs at today’s participation rate and wages. 

Consumption and consumer demand are not at an all-time high. 

3.5 million fewer workers and their families are consuming less today. The Fed Interest rate increases in 2023 may increase inflation pressures on the unemployed and have a negligible impact on production or a positive impact on inflation/stagnation.

In fact, with 3.5 million fewer people working than there were in 2020, demand for goods and services is down compared to 2020. If demand is down and not up, what is causing our current inflation? 

Profits have been growing faster than labor costs. This has been true for most of the past two years. This anomaly implies excess profits are driving inflation, not demand or consumption.

A quick quote might help clarify the issue. “Monopolistic pricing, the failed Trade War being passed along to consumers, excess corporate profits from monopoly pricing, and the ongoing wage exploitation through outsourcing, causes the inflation,” according to Robert Reich (12-13-2022).

The impact of these causes suggests that the Fed’s increasing interest rates in 2023 will also contribute to inflation. 

The probability only increases if the Republican House spends its time examining its various inane conspiracy theories, and the prefabricated conservative lies about spending and the Deep State federal employees causing the Republic Recession and loss of the Congress and the Presidency.

Our four-year march into recession (2017-2020) and two years of inflation were attractive enough to unwind the Congressional Calvary that fought off the Republican recession.

Let’s hope the Fed’s persecution of workers with higher rates does not worsen inflation or create stagflation in 2023 and 2024. 

 
 

Howard J. Gunn