Rogoff: Embracing Inflation

Kenneth Rogoff says inflation is the answer:

Embracing inflation, by Kenneth Rogoff, guardian.co.uk/Project Syndicate: It is time for the world's major central banks to acknowledge that a sudden burst of moderate inflation would be extremely helpful in unwinding today's epic debt morass.

Yes, inflation is an unfair way of effectively writing down all non-indexed debts... Price inflation forces creditors to accept repayment in debased currency. ... Unfortunately, the closer one examines the alternatives, including capital injections for banks and direct help for home mortgage holders, the clearer it becomes that inflation would be a help, not a hindrance.

Modern finance has succeeded in creating a default dynamic of such stupefying complexity that it defies standard approaches to debt workouts. Securitisation, structured finance and other innovations have so interwoven the financial system's various players that it is essentially impossible to restructure one financial institution at a time. System-wide solutions are needed.

Moderate inflation in the short run – say, 6% for two years – would not clear the books. But it would significantly ameliorate the problems...

No one wants to relive the anti-inflation fights of the 1980s and 1990s. But right now, the global economy is teetering on the precipice of disaster. ... Unless governments get ahead of the problem, we risk a severe worldwide downturn unlike anything we have seen since the 1930s.

The necessary policy actions involve aggressive macroeconomic stimulus. Fiscal policy should ideally focus on tax cuts and infrastructure spending. Central banks are already cutting interest rates left and right. Policy interest rates around the world are likely to head toward zero; the United States and Japan are already there. ... Steps must also be taken to recapitalise and re-regulate the financial system. ...

Most of the world's largest banks are essentially insolvent, and depend on continuing government aid and loans to keep them afloat. ... As the recession deepens,... bank balance sheets will be hammered further...

When one looks across the landscape of remaining problems, including the multi-trillion-dollar credit default swap market, it is clear that the hole in the financial system is too big to be filled entirely by taxpayer dollars. ...

That brings us back to the inflation option. In addition to tempering debt problems, a short burst of moderate inflation would reduce the real (inflation-adjusted) value of residential real estate, making it easier for that market to stabilise. Absent significant inflation, nominal house prices probably need to fall another 15%... If inflation rises, nominal house prices don't need to fall as much.

Of course, given the ongoing recession, it may not be so easy for central banks to achieve any inflation at all right now. Indeed, it seems like avoiding sustained deflation, or falling prices, is all they can manage.

Fortunately, creating inflation is not rocket science. All central banks need to do is to keep printing money to buy up government debt. The main risk is that inflation could overshoot, landing at 20% or 30% instead of 5-6%. Indeed, fear of overshooting paralysed the Bank of Japan for a decade. But... With good communication policy, inflation expectations can be contained, and inflation can be brought down as quickly as necessary.

It will take every tool in the box to fix today's once-in-a-century financial crisis. Fear of inflation, when viewed in the context of a possible global depression, is like worrying about getting the measles when one is in danger of getting the plague.

Comments

[Gavin]

In a democracy inflation will be most damaging to those who are most likely to vote, the elderly. Inflation will also be the most beneficial to the highly indebted and the least likely to vote, young adults.

It will be politically very difficult to propose inflation as the solution to our financial troubles. Now, if we were a dictatorship like Zimbabwe, it would be a piece of cake to let the printing press solve our current problems (and introduce new problems).

[im1dc]

anne, note that the 10% Stock Returns are NOMINAL, not REAL.

Oh, and they are PRE-TAX too.

How Stocks Have Returned 10% Per Year

Henry Blodget | Dec 2, 08 2:44 PM

An NPR listener sent the following note after hearing my interview with Madeleine Brand this afternoon:

Mr. Blodget,

I heard your comments today on NPR's Day to Day. You commented that
the broad stock market return has averaged 10% a year, long term. I
looked back to 1950, the earliest data I could find for the S&P which was
17.29 back then. If it had gone up 10% a year since that time, the S &
P would be over 4000 today. Yesterday's S&P close was 816. I suggest
that you recalculate and give the listener's the correct correct number
or substantiate your claim.

Did I screw up?

No, thankfully. It's just that the 10% number includes dividends, which is the way people normally look at stock market returns. On a pure price basis, returns have been far lower.

In fact, here's an approximate breakdown of the 10% average return for the last 80 years:

4 points: Dividends
2 points: Real EPS growth
3 points: Inflation (reflected in EPS growth)
1 point: Multiple expansion

Now that stocks have finally dropped back to fair value again, I thinkt the long-term return from here is likely to be in the average range again. The multiple expansion might not continue, and dividends are currently about 3%, not 4%, so it could be lower. But the dividend payout ratio could rise again, and it may be that structural changes (more cash-efficient services companies vs. low-return-on-capital industrial companies) will lead to continued PE expansion.

http://clusterstock.alleyinsider.com/2008/12/how-stocks-have-returned-10-per-year

[there is a chart at the link]

[Bruce Wilder]

Duh.

(Note to Obama: Appoint your own man as Chairman when the time comes, and make sure he clearly understands that bringing down inflation is a job for 2013.)

[anne]

The Vanguard S&P 500 stock index has returned 10.02% after costs since inception in September 1976. That should be fine for anyone. Since stock indexes did not exist before, actually calculating returns before 1976 is of marginal importance. No matter though, if the point is to be terrified of investing there is always a way to be found.

[bob mcmanus]

and make sure he clearly understands that bringing down inflation is a job for 2013

Great succinct comment at 5:32.

I am really worried about C Romer. I think she is in line for the Fed Chair.

AFAIK, the only progressive solution to the deficits and inflation would be confiscatory levels of marginal taxation and I am not certain Romer would not be open to redistributive reform.

I desperately focus on Romer only because she seems the best of the lot.

[Seth]

... and engineering exactly 6% inflation for exactly 2 years will be all in a days work for the rocket scientists who told us there was no housing bubble. How reassuring.

[anne]

The Vanguard long-term investment grade bond fund has returned 8.14% since 1973, and that is fine as well. Inflation is not the issue with either such long-term investment.

[kthomas]

Hi anne. So, Vanguard....you site them alot, amiga.

Since all things economic are cyclical, I'd expect that we will be rosy again after, oh, 30 more years. 1973 was quite some time ago.

It will be more than interesting to see how the future of robots (robotics, in general) will change things.

This idea that inflation is good, or more to the point, can help us get out of this mess....hmmm, very suspect. Hasn't monetary polcy failed, or is the jury not in yet? Personally, I've had it with inflation and am very very happy with the deflation (ESPECIALLY IN HOUSING!!!)I am seeing these days. Keep sliding, baby.

[S]

how exactly does inflation make home prices more affrodable? Short answer it does not. Wage inflation isn;t happening regardless of how much money the Fed prints. And the little thing this misses is the rest of the world appetite for the dollar. As fWhitehead said, there is no solution here. Something is going to get destroyed in this process: it is either the enduring confidence in the US, the dollar, the appetite for equity, the Federal Reserve or other. The choice is not about inflation or no inflation, it is about what gets destroyed.

[ken melvin]

"... (yes) inflation (might) -- be -- helpful in unwinding today's epic debt morass."

But it won't provide any cure for the problems.

[End]

And so it ends. The US will now export its preference for the public to hold savings in the form of non productive inflation hedges.

John Maynard Keynes-The Great Slump of 1930..."...upon what do the profits of the producers of capital-goods depend? They depend on whether the public prefer to keep their savings liquid in the shape of money or its equivalent or to use them to buy capital-goods or the equivalent. If the public are reluctant to buy the latter, then the producers of capital-goods will make a loss; consequently less capital-goods will be produced; with the result that, for the reasons given above, producers of consumption-goods will also make a loss."

[Easy Money]

Yay, let's set a little fire. Sure, we can control it. Just like we controlled the credit crisis for more than a year. Sadly, we're doomed to get a lot colder for a while and then overrun by a hyper inflationary fire.

These clueless cooks will find out inflation is something you can easily unleash, but it will come back to destroy you at the worst possible time. So many pundits with bazooka's that have no understanding of the core of the problem - big banks and CDS's.

[FairEconomist]

We desperately need a little inflation; not for the debt relief (it's unfair, as is pointed out), but to get us out of the liquidity trap. 6% for 2 years would be great. I agree, though, that in the current crisis engineering a precise level of inflation will be very difficult.

[M Quinlan]

Yes S, bang on target. Any inflation would have to be matched by wage inflation to reduce the debt load. In a world of declining income for the vast majority, justified by a race to the bottom, beggar thy neighbour labour market, inflation at even this level will mean the poorest starve.
Soak the rich, reverse the regressive income distribution of the monetarist era, it's the only solution.

[robertdfeinman]

I've been saying that governments find inflation irresistible and here is the first trial balloon right on schedule.

Inflation is good for governments in debt (almost all of them), but bad for banks. Good for mortgage holders, but bad for non-unionized workers.

Now who is running the economy these days - the financial sector. They are the ones who least like the prospect of inflation, so their lackeys at the Fed and the Treasury aren't likely to do anything to displease them.

On the other hand the wars will need to be paid for and the rest of the government may find stiffing our foreign friends who are holding a lot of our debt the least politically unpalatable way to do it.

Policies are no longer "good" or "bad" it's just a case of whose ox gets gored.

[calm'Oleary]

The great unfolding is making a mockery of "conventional wisdom"...and building a mounting distrust for "workouts" "workarounds", "workabouts", (anything with "work" in it is worth a try) that may be just a continuation of the practices that started the unfolding...now that authorities have located the big tent of cheek-turners right audience.
Persuasions like this:No one wants to relive the anti-inflation fights of the 1980s and 1990s. But right now, the global economy is teetering on the precipice of disaster. ... Unless governments get ahead of the problem, we risk a severe worldwide downturn unlike anything we have seen since the 1930s. are startin to make think there might be a market for skycatchers.

[quantum_flux]

Grumble!!!

[WTolles]

Calling for inflation represents the weak-kneed response of politicians, and that is precisely what has caused the current crisis. When the cost can't be contained, inflation will give the government more money to solve the problem. This causes most homeowners to feel that the only way to get ahead is to establish debt, and let inflation reduce the debt. Increased levels of this over the last 40 years have led to this problem. "Hair of the dog." Inflation is a narcotic that stimulates what temporarily appears to be beneficial, but the hangover can be devastating. We've had enough of this deficit spending!

[quantum_flux]

Maybe we should just go by the Russian Rouble instead of the Big Mac now. Grumble!

[quantum_flux]

How about eliminating company trade secrets and shortening the length of time for patent protections in order to stimulate some competition? If there is anybody who despises secrets and patents, it's a know-it-all physicist like myself. I want to start a company up, maybe I'll start one Chinese style since that's where the competition is going!

[ed_finnerty]

Without having any idea how it would be possible to do this...

I think that the way out of this is to inflate everybodies wages by 25%

with apologies to Ravi Batra - i think he was right but like the Baron de'Rothschild - early

[X Man]

Use Fed policy to jack up inflation? Greenspan's reputation is on the ropes, but the conventional wisdom is still in thrall to Greenspan's anti-inflation views. Of course we could also use trade policy to raise prices, but that goes against the whole free-trade WTO ideology that the ruling class bows down to. So we're stuck with priming demand by some combination of handing out tax cuts/credits and propping up balance sheets.

Nonetheless, I'm expecting some serious inflation to kick in sometime around 2010-2011. Here's a couple reasons why:
After years in the wilderness, U.S. trade unions are about to make a comeback. Corporate America has kicked workers too hard for too long and the bill is coming due. And the new administration will be loathe to rein in the unions. This will lead to higher wages across a number of sectors, but particularly services and energy and processing industries.
$49 oil will not last long, countries like Russia, Venezuela and Iran simply can't afford it. Look for OPEC & friends to cut supply and drive the price back up to the $75 range.
Inflation already a big deal in China, Vietnam, and some of the other countries that make the cheap stuff Americans like to buy. Higher costs will continue to be passed on to consumers here.

[bullbust]

Hooray.

First deflation so that those in debt go bankrupt and transfer their assets to the banks.

Next inflation, to bankrupt those who are salaried.

This is perfect. A plutocrats dream.

Which economist is going to stand up and admit that this was the end game all along - inflate?

None of these pigmen and corporate thugs and thiefs will lose anything close to what loot they amassed by this inflation.

It is only the foolish middle-class salaried worker and the retirees and the few savers (with their measly 401K and assets) who would lose. Those who benefited zilch from the boom are now going to be plundered by inflation.

Confiscate the ill-gotten wealth and fund public spending. Tax the hell out of the banking & economist cabals and . Oh, that would be taboo? Isn't it? Goes against the free-market kill-your-mother philosophy that goes under the name of economics.

Why should this robber-baron system be saved by inflation? Because some paid economist is out shilling for his overlords? Get rid of all the economists. Economics is too serious to be left to economists.

[Bruce Wilder]

rdf: "Inflation is good for governments in debt (almost all of them), but bad for banks."

Why "bad for banks"? I tend to think a modest inflation is actually pretty good for banks.

rdf: "Policies are no longer 'good' or 'bad' it's just a case of whose ox gets gored."

And, you think this is a new development?

[kthomas]

OPEC producers are not interested in jacking up prices. The political ramifcations are very serious. The sheiks would rather see us get our act together before they send us all over the edge.

The last few weeks have again demonstrated just how impotent OPEC is becoming.

[julia]

on the positive side, inflation will make entitlements less of a burden to the young as COLAs will keep on underestimating the amount of adjustment needed to maintain the real value of the payments.

it's the only way to apply the much needed restrain on entitlement spending on a democracy with AARP's lobbying power (sad, but true). congress cannot even schedule a talk on the topic for god sakes.

[Crhis]

Good or bad, inflation has usually been in the final solution, after others have failed, to get out of messes like the one we are in. Inflation is not difficult to create. But you have to decide to do it and then act.

[a]

"With good communication policy, inflation expectations can be contained, and inflation can be brought down as quickly as necessary. "

Just so I know - is he talking about the rate of inflation or the price level here.

Say prices go up by 50% in one year, and we decide that this is too high. Is Rogoff proposing a year of big deflation to get us back in line?? Or is he just saying the next year we can be sure of having a small rate of inflation?

[reason]

I'm with Bruce Wilder on this, I think inflation is good for banks. The problem is RDF you are forgetting that Banks don't need to make a real return on loans, because most of the money is not theirs - they just need a positive cash flow. Are you arguing that inflation pushes down the margin between their lending rates and borrowing rates? If so, why?

[reason]

And RDF - I'm pretty sure that moderate inflation results in lower default rates which is definitely good for banks.

[rufus]

FairEconomist says...
"We desperately need a little inflation; not for the debt relief (it's unfair, as is pointed out), but to get us out of the liquidity trap. 6% for 2 years would be great. I agree, though, that in the current crisis engineering a precise level of inflation will be very difficult."

Spot on!

Yes, inflation is an unfair way of effectively writing down all non-indexed debts... Price inflation forces creditors to accept repayment in debased currency. ... Unfortunately, the closer one examines the alternatives, including capital injections for banks and direct help for home mortgage holders, the clearer it becomes that inflation would be a help, not a hindrance.

As Rogoff states, 'Re'-inflating asset values and debasing currency is the only way to lessen the impact of these current and future (not yet reaized) non-indexed debts. I don't think embracing deflation is a strategy we want to see played out.

[rufus]

FairEconomist says...
"We desperately need a little inflation; not for the debt relief (it's unfair, as is pointed out), but to get us out of the liquidity trap. 6% for 2 years would be great. I agree, though, that in the current crisis engineering a precise level of inflation will be very difficult."

Spot on!

Yes, inflation is an unfair way of effectively writing down all non-indexed debts... Price inflation forces creditors to accept repayment in debased currency. ... Unfortunately, the closer one examines the alternatives, including capital injections for banks and direct help for home mortgage holders, the clearer it becomes that inflation would be a help, not a hindrance.

As Rogoff states, 'Re'-inflating asset values and debasing currency is the only way to lessen the impact of these current and future (not yet reaized) non-indexed debts. I don't think embracing deflation is a strategy we want to see played out.

[Julio]

Inflation in (nominal) house prices would also lift the real value of the "toxic assets" that depend on them. So the banks would do OK too, no?

[Joen]

Inflation would be good for every tax payer in the US and bad ... very bad for the Chinese.

[bakho]

It is wages that need inflation, but they are deflating under current conditions. As manufacturing and BigAuto shed jobs, wage deflation will accelerate. If with a bailout, BigAuto will shed workers in large numbers. The only way to prevent wage deflation is government demand for production, until enough money has been redistributed to raise consumer demand.

[rufus]

Joen says...
"Inflation would be good for every tax payer in the US and bad ... very bad for the Chinese."

Wouldn't the Chinese be more negatively impacted by a cycle of deflation here and/or in Europe, being they are net exporters?

[robertdfeinman]

There are two kinds of inflation. I'll call them uniform and lumpy.

In uniform inflation one just changes the size of the yardstick. This has been going on since the beginning of the industrial age when money started replacing land as the measure of wealth. Before this no one thought anything of having rents set for 99 years or for a tenant's life. Unfortunately uniform inflation doesn't really exist in the modern world.

Lumpy inflation is when some aspects of society can adjust to the change in "value" of money better than others. The net effect is the transfer of wealth from those who are trapped into fixed incomes and towards those who are not. This means, not only those on fixed incomes, but workers without bargaining power and those who hold long-term financial instruments like bonds.

The situation is now more complicated than it was during, say the 1970's, because we are now a debtor nation and have to be concerned with keeping our financial backers happy. If we water our money too quickly then foreigners will look elsewhere to invest. The USSR for most of the 20th Century is a good example. It wasn't just that communism was abhorred by those in the US, it was that the Soviet's had reneged on the czarist debt. Notice that Russia finally had to pay this off before the west would start investing in the non-communist state to any degree.

We have never faced such a situation in the US and are unprepared with how to deal with it. Nixon got rid of the gold standard to float out of the Vietnam debt, but there are no such obvious tricks available now to do the same thing with our present military adventurism.

There are already movements for an Asian IMF and other regional associations which will bypass the US-controlled IMF and WB. The US is likely to find itself shut out of the next big round of international development financing. Meanwhile the vast majority of citizens will be getting absolutely as well as nominally poorer.

Let's hear some suggestions as to how to deal with this, rather than the usual angels on a pin discussions when reality doesn't conform to some pet academic ideology.

[Too Much Fed]

Is that 6% price inflation with or without wage inflation???

If it is without, what stops the fed from printing currency and "giving" it to the bondholders (especially foreigners) to lower the dollar and keep some goods and services prices high and asset prices (especially stocks and housing) high???

says...

Let's hear some suggestions as to how to deal with this, rather than the usual angels on a pin discussions when reality doesn't conform to some pet academic ideology.

During the last 8-10 years, the shadow banking system, totally unregulated, created credit far exceeding the capacity of the economy to pay it off. Now there are a lot of parties holding these "spurious" claims on the economy, which simply cannot be met. Inflation would be acceptable, if the economy as a whole had benefitted equally (or even anywhere close to equally) from that binge. But that was far from the case. It primarily benefitted the top 1%, and disproportionally the top 0.01%.

Inflationists are now arguing that everyone must equally suffer the consequences - whether you benefitted from the binge or not. In fact, they are arguing not even that, but worse - those who gained little, must disproportionately suffer. Those who don't have wage protections and those who live on fixed incomes must get screwed.

I have no sympathy for arguments that the rich hold bonds or China owns bonds or the wealthy suffer most. That does not work in practice. The rich may lose bragging rights (who has the biggest dick), but really - when you have 100 million and you lose 12 million (Apprx 6% for 2 years as claimed), what effect does it have? Try that when you live on fixed income of a $1000 and you lose 120. Or you clerk at the supermarket and your wages get cut 12% ?

Booms and busts concentrate wealth because of these kind of asymmetry - those who gained the least lose the most. Inflation is a tool that aids in this theft.

Economists are beholden to pet ideologies. Hence these kind of ridiculous solutions which rape the weakest. Nothing ever will make them give up their pet system of the invisible hand. They do not care how people live and suffer. All bow down to the system.

If the this free market, this sacrosanct, omniscient, omnipotent market cannot distribute the losses proportionately, then the hand of government should forcibly do it. Market be damned, and the academic ideology be damned. Bring back the pitchforks.

[Fred]

>Too Much Fed says...
>Is that 6% price inflation with or without wage inflation???

Mostly without. The middle-class boobs are much more concerned about falling house values and 401ks than about declining standards of living. Very well, a democratically elected government of a nation of boobs has to give the boobs what they want. Strongly increased housing and stocks values (above CPI), moderately increased prices and social security pensions (equal to CPI), slightly increased wages (below CPI), no increases on private pensions.

Winners: stockholders, corporate bondholders (risk premium decline will offset rise in risk-free yields), house-owners, business owners, workers able to compete internationally at their current real wages. (Corporations would be big winners, but their benefits flow to the stock and bondholders, so no need to count them separately. Financial corporations are typical long lenders and short borrowers and so should theoretically be hurt by unexpected inflation, but the Fed would likely protect them by keeping short rates low, as a number of people already pionted out.)

Losers: retirees with private pensions (as opposed to just social security), most workers, treasury bondholders.

My personal preference has long for a bonfire of bankruptcies followed by a massive fiscal stimulus (tax holidays for everyone making under $100K) and threats of debt repudiation and tariffs if foreigners don't provide their own fiscal stimulus. But since no one dares go that route, then bailing out the rentiers and priviliged classes via inflation is probably the best way to get the recession over, unfair though it might be to the poorer classes of society.

[Fred]

Booms and busts concentrate wealth because of these kind of asymmetry - those who gained the least lose the most. Inflation is a tool that aids in this theft.

You tell 'em! Problem is, like I pointed out above, these infernal IRAs and 401ks, together with the worldwideAnglo-Saxon worship of everything connected with real-estate, have caused the middle-class to lose sight of the fact that their jobs are their only real source of wealth. Hang out in any forum with 20-something Republican males, all of them employed in middle income jobs, and they are far more concerned about dropping house and stock prices than with stagnant wages (other than blaming the latter on Mexicans and affirmative action).

[datadave]

I tend to agree that inflation is inevitable but too much is very destructive.

Inflation and Deflation at the same time? Or as Dr. No calls it 'stag-deflation'?

For workers w/o income improvement (and many w/o income period)Inflation is a disaster: higher food bills, higher necessities. Result: Deflation of demand, More printing of money helps banks and govt. and hurts everyone else.

But on the otherhand, a moderate degree of inflation w/ 'cola' adjustments for all would be a good policy in the short term. No cola? No demand. So a mixed inflationary/deflationary stagnation would be seen if some sort of income support isn't added. With the huge outlays expected for poverty relief, inflation is probably inevitable.

Taxing the rich is necessary as they are the only ones that made money in the latest bubble. (but a gradual increase to not upset them too much.)

[1 Time Event]

"With good communication policy, inflation expectations can be contained..."

No one will believe that this is a one time event. The ability of the public sector to borrow from overseas entities in emergencies will be far less if overseas entities have to factor in a periodic 20% inflation.

[Alberto]

...and how would it be possible to create inflation in the current situation? and who can guarantee that it will not spiral to 10% or even 15%?
Good evonomics ideas for an academic paper, a bit less for real time economics

[Null_And_Void]

There needs to be some moral clarity about what is proposed here:

Engineering inflation is theft plain and simple.
It is stealing from creditors and savors and giving to debtors and spenders.

In the present situation it is designed to bail out reckless real estate speculators of all descriptions, investors in mortgage backed securities as well issuers of CDS contracts who failed in their due diligence.

For all the rest it is a form of wealth redistribution:
Those who receive the newly printed cash first benefit the most and those who receive it last don't benefit at all.

It is a thoroughly immoral enterprise.

[dj_marv]

Can someone please graph the relationships between the U.S savings rate as a percentage of wages relative to inflation from, say, 1920-2008. Then please graph the growth in consumer debt as a percentage of wages relative to inflation. I think you'll see something very interesting.

Consumers have decreased savings and increased indebttedness for the last 50 or so years. This has happened all the while we have moved from 1 income to dual income households. Logic would suggest that savings should have gone up as more household members produce income. That, however, is the complete opposite of what we have seen happen in the last 40 years. Consumer debt has risen and savings has declined.

Why is this? Are we less frugal than our parents? Are we bad savers? Have we become a nation of "gotta-have-it-now" consumers? Or are other factors at work here.

If anyone can point me to a study on this conundrum and its effect or causes, I would really like to read it.

Thank you!

[Phillip Huggan]

dj, leisure time has decreased as well. At some point Neocon thought in USA morphed into making rich people richer. Rather than building a society, a world, based on quality-of-living and/or health, Americans have been tricked by Republicans to make rich people much richer. I think the wealthiest 100 Americans make more than the poorest billion. That is about 600 million university degrees and maybe 300 million small businesses lost.
On your graph you'll find the savings rate plummet exactly where the rich get even richer. The same thing is happening in Canada now as we fall into the Reagan-trap. Our child poverty rates are falling through the bottom 1/2 of the OECD and here, it is the media that is primarily responsible for undoing childhood public education. Our oil-sands PM has companies like BCE and Canwest to dumb down the public just like GWB had Fox and CNN.
Taxing the rich and windfall-jobs is superior to inflation and deficit-jobs, is superior to doing nothing. Not always true but certainly since Reagan.