HOW WE CAN SAVE AMERICA BY RESTORING SOCIAL EQUITY IN THE WORKPLACE

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THE PLIGHT OF AMERICA'S LOWER MIDDLE CLASS - PAST ERRORS, PRESENT WOES AND A PROPOSAL FOR FUTURE FIXES

An open letter to America, introducing the POPE (Point of Pay Equity) system to those interested in how new strategies the Obama administration might adopt couls create movement toward a sustained state of social equity in the country.

In the interests of getting straight to the point, permit me to skip explaining who I am save that, like Barack Obama, I'm connected to Africa by birth and also trying, in my own small way, to make democracy work better for all of us here in America.

Originally, my intent in writing this essay was to present something that the Obama campaign might use in the presidential campaign. That was way back in 2007. Ironically, though that connection is way past being useful, the relevance of the content of this essy to the condition of the economy has only deepened.
The way the race unfolded, I realized that what I had to say would not be applicable to that process. Now that Barack Obama is president and the real work of repairing the social fabric of the country continues to lag behind the challenges we presented, it's a little frustrating to see how few truly brilliant ideas are being deployed out of the White House. Many faces familiar to us from times gone by have reappeared, from time to time, among those closest to the president, harkening back to the insufficient approaches of the past. I guess that's to be expected. Still, at this juncture, it won't be experience or personality power alone that gets us out of the current jam we're in: bold new ideas, precisely articulating the method and metrics to be used, are desperately needed; not just ideas, mind you, but also the will to see them implemented, regardless of the considerable resistance to change that will inevitably arise to oppose them.
One thing is for certain: we can no longer afford that old "poke-something-with-a-stick-and-see-if-it-does-anything" mode of governance we've used so often in the past, the kind that's given us fifty different ways to deal with one kind of issue throughout the states of the nation. The rational way to deal with any given problem - particularly with respect to economic policy - is seldom found through bureaucratic improvisation. Far more exigent approaches are demanded in an age when things can go so wrong so quickly and so mightily.

The set of proposals outlined below, I believe, make a decent effort to rise to that higher measure.

But first, a short prologue is in order, along with a review of the evolution in the nation's economic processes over the past thirty years.

Why I decided to take on this project

During the course of 2008, the Obama campaign was dogged by attacks from many quarters, almost all of them of no relevance to the larger issues of our time or the good of the nation. The most problematic involved allusions and even outright lies which, even now, many still choose to cling to, though totally respected third parties have gone to great pains to demonstrate how bogus those assertions were. I'm not going to go through a shortlist here; one has only to turn the radio dial to a right-leaning talk show where the general public can call in and get on the air and, in due course, you will see what I mean.
Meanwhile, dealing with the issues of enormous import has been deferred so that an effective rearguard action against these fabrications and innuendos can be maintained, lest they gather momentum and undermine the credibility and standing of the administration.
Even as it prepared itself for an election victory, the Obama team (and the nation) would have been better served had it been allowed to direct the attention of Americans more toward how the team intended to use the powers of the presidency to deal with these difficult issues. As it was, the general mode of the contest precluded such detail.
That need for a deferment was unfortunate. Precious momentum was lost. Even then, the economy was beginning to manifest considerable damage, not just in the investment and financial sectors, but throughout, from Main Street all the way through to state operating funds. A more timely increase of attention might have helped to stem some degree of the hurt that subsequently spread like wildfire to all parts of the globe.
The trouble wasn't just psychological, as one hapless senator tried to assert (and far too many reiterated with each precious day that passed): there was real systemic damage out there in the complex that was bringing us all the wherewithal to survive, demanding substantive investments in repair before that great engine of enterprise could once more be considered fully operational.

With respect to such investments in repair, permit me to propose at least one set of ideas that could be of use in that regard. They apply to a time beyond that of immediate damage control.
When the Obama stimulus programs are all tapped out and their effects are beginning to fade into the background of our daily doings, unless we have something better to segue into, that huge investment will be judged to have been in vain by the millions hoping for something better.
These ideas, therefore, pertain to how we might harness the inherent forces of the American socio-economic complex in a systemic way and allow them to go to work and gradually heal the nation from the corrosive - and still worsening - plague of wealth dichotomization that has is relentlessly eating away at the social fabric of this country and its intertwined economic structures.
After-taxation redistribution of public revenues has been pushed by some as one kind of remedy for inequity and, to be fair, that approach has its place in the comprehensive toolbox of initiatives we need to deploy. Nevertheless, redistribution, alone, is not a cure-all for fixing the country's problems relating to disproportionate personal wealth. Americans are doggedly unimpressed by the idea of government being the Great Re-equalizer. Further, they are decidedly averse to unfunded mandates being imposed upon them from on high. So, while the potential in that kind of direction is still significant, it is far from sufficient to the cause of creating meaningful levels of social equity.

My own search for ideas has been focused more on correcting where things first go wrong; namely, at the point of pay. What I was looking for were ways to use positive and negative reciprocals on the pay distribution processes of companies that would promote greater social equity.
For more than a decade, beginning in the early 1990's, I struggled to envision scenarios whereby free market institutions, responding to ambient opportunity, might actually become leaders in a trend to reverse social inequity and gradually close the current yawning gap between rich and poor, a way where a purely private sector approach, free of government involvement, would permit a stronger middle class to evolve out of present conditions.
After much musing and countless discussions, I had to give up on the notion. The more I looked at what drove the decision-making processes of people of all different kinds in the economy, the more it became apparent that conditions were never going to get better as long as the job of fixing things was being left to the private sector alone. In fact, they were only going to get worse (interestingly, just as the population's paramount religious icon, Yeshua Ben Josef, predicted, nineteen plus centuries ago. It makes you think, how did he get it so right?).
It became clear to me, if there was to be any improvement, government would have to bring its unique strengths into play and begin to participate more constructively.

The root of the national credit problem and associated maladies

Before a disease can be cured, the scope of its root causes must first be established. That you do best by picking your way carefully back in time, starting with whatever symptoms confront you in the present.
The most obvious symptom of things going wrong with the American socio-economic system at this time is the wave of foreclosures and bankruptcies sweeping the country, along with the host of negative economic effects precipitated by that wave, not just presently but, almost certainly, for years into the future.
With regard to these troubles, most people acknowledge that our reliance on debt, as the enabler of an over-exuberant run-up in real estate values, outran the economy's ability to provide enough in earnings to allow people to service such debt in a responsible way. But few ask the next question: was it greed or just basic need that drove Americans to rely so heavily on debt? Was there, in fact, an even deeper level of inescapable drivers behind the surface mess of failed mortgages and worthless securities, more cultural, political and environmental in nature than the financial numbers, alone, indicated? And if there was indeed such a level, could it hold keys to reducing the number, and severity, of boom/bust cycles in the future?
Over the course of the past five years, I began to come up with some ideas about what steps government might take deep within the structural order of the American free enterprise system that would bring not just temporary, but abiding, relief to those who, over the past thirty years, have found themselves steadily falling behind - a plight affecting even those who have been continuously and conscientiously engaged in the work force since first becoming adults, in contravention of everything they were induced to believe by society.
Recently, as we all know, a whole lot of folks who thought they were on the right track to financial security suddenly woke up one day to find themselves in steadily worsening straits, with only a fistful of empty promises to carry them into a wrenchingly uncertain future.
Safe to say, most were betrayed by people whose judgment they had valued above their own.
To some observers, these casualties are only data points in a period of correction; to me, however, they invoke recollections of a far darker sort.
Once, about twenty years ago, in the wake of a nervous collapse brought on by twelve unrelenting years of pressure at the helm of the small manufacturing business I created, I myself became homeless for a little over a year. I know all too well the terrors of plunging into that terrifying state of uncertainty, and the kind of indelible fear it stamps into your soul over time as you struggle daily to keep on keeping up. Some days, it's hard to continue believing in being alive. The residual psychological difficulties persist for years afterward (even up to the present for me). That I - an otherwise disciplined and intelligent person - could suffer such a fate proved to me that it could happen to anyone, given the required turn of unmanageable circumstances.
As far as I'm concerned, those people who casually dismiss the plight of the many now facing similar terrors brought on by the current state of the nation's economy as just another statistical factor in a cyclical correction are either supremely ignorant about life or so lacking in empathy as to be hardly worthy of the sponsorship and protections that this social collective dutifully labors to maintain under their hides and over their heads each day. And why does it do that? In short, so that even they, the indifferent, may be free to enjoy the fruits of general providence in peace and security - fruits made possible by precisely the sort of common concern they see no reason to develop in themselves, even though they are the beneficiaries of it. To call that ironic is putting it kindly.
Based on my own experience, I know that a majority of those now in trouble will inevitably turn, along the way, to the use of some form of credit, believing it might give them a chance to get by in a reasonably dignified fashion until things improve. As a result, many will pass, or will already have passed, the event horizon of the black hole of debt whose interest load has grown so much they have no way of paying it down.
This slow compounding of individual liability, morphing into widespread social damage, should not have been allowed to go on without a decent show of urgency on the part of government to enact vigorous countervailing measures but, sadly, it was allowed to go on and the official reaction when the cracks began to show was too little, too late, for far too many.

When looking for causes behind the exponential growth in the use of credit across the nation, the one thing most often overlooked by analysts (up until the advent of the Occupy Wall Street Movement, at least) is something so elemental to our culture that we tend not to see it for the major driver that it really is. In this, we are much like a host that has lived with its parasitic companion for such a long time that it assumes it to be an axiomatic - and inextricable - component of its own natural reality.
That crucial missed perception is this: A large part of the growth in the indisciminate use of credit is simply a reflexive adaptation by people to INSUPERABLE LEVELS OF DISPARITY imposed upon them at the POINT OF PAY - the point at which the gross profit of companies gets divided up between those who have worked to earn that profit and those who manage the broader architecture of company activities and company payrolls, namely, company executives - drawn out, decade after decade. This inclement transition occurred even as the cost of inescapable expenses,agaist which they could mount only weak consumer pushback - rent, insurance, tuition charges, etc - rose faster than inflation.
Think for a moment; how could it have been different? The under-compensated employees of companies, nationwide - principally those from the middle ranks down - would inevitably look to credit to make up for being so much less generously rewarded than their top-ranking company colleagues. The alternative option was to accept being left so far behind in their standard of living as to be considered downscale by their social contemporaries - something most Americans find unpalatable, and even degrading, to some degree or another. Is it reasonable to blame them for that? From my point of view, the answer is no. From the day we're taught to walk, we're taught to be concerned about falling behind.
Don't be misled: I'm not advocating parity in pay here. It's social equity that interests me. Parity in pay and pay reflective of social equity are totally different concepts. At the heart of my investigation lay the ratios in pay behind the different types of work people perform in the productive complex that offers goods and services in exchange for money within the general economy. This exchange process occurs both as materials move up the escalator of transformation from their origins in the natural world to the outermost reaches of social collectives as finished goods, and in the form of services rendered to create benefit. If we wanted to effect better outcomes in how people were being paid, it was in this chain that we would need to make the changes required to make that happen. The points of opportunity were as numerous as the number of people employed in that chain. If, at each point, some incremental change for the better could be had, the overall effect in the chain, as a whole, would be very large.
As a retired business owner, I know full well that companies beyond a certain size need better paid management positions in order to function in a sustainable fashion while responding to changing market factors in a savvy and timely way. The highest company productivity can only be achieved through an appropriate division of oversight that allows employees at all levels to really focus in on the tasks that fall under their respective enclaves of purview, comfortable in the knowledge that their employment has inbuilt potential for advancement in responsibility and pay, as time goes by.
This kind of symbiosis is fundamental to nature. As a natural phenomenon, it predates human history by hundreds of millions of years. The eco-systems of the world evolved to be full of examples of symbiosis.
When symbioticallyy-conjoined partnerships are healthy and successful, the smaller entity carried by a host benefitting from such an arrangement is called a symbiont - a word rarely used but quite precise in meaning. Symbionts have evolved over time to not imperil the existence of the hosts they depend on, and so they prosper, too.
Regrettably, when one transposes this idea onto the corporate upper class, it seems that a significant subset seems not yet to have reached that sublime level of logical, mutually beneficial co-existence.
The ones I refer to are anything BUT symbionts. If biologists were to look at the erstwhile top executives of a good many corporations (compare WAMU, Bear-Stearns, Wachovia, Lehman Brothers, Merrill Lynch, Countrywide, Enron, Worldcom, Freddie Mac, Fannie Mae, etc.), rather than classing them as human symbionts, they would probably have to settle for the word, "parasite," instead.
Unlike symbionts, biological parasites do not play a net contributive role in the lives of their hosts. Their presence is, first and foremost, an act of calibrated extraction. When the host is weakened by surrounding developments, they either become an added liability to survival or simply move on to the next accommodating option. They are insensate to outside attacks on the vitality of host organisms, continuing to deplete and sometimes even killing them during times of great stress.
Sound like a familiar scenario?
The most puzzling thing to me is how patiently Americans continue to put up with the presence of such financial parasitism in the economic system they've paid so dearly to build.
Nakedly disproportionate diversion of the fruits of the national enterprise has become normal practice; even something the average guy or gal covets.
This attitude toward immoderate acquisition may have been the start of things going out of balance, but it was certainly not the full extent of them. Other events were being put in motion as a direct result.
Contemporaneously, the growing presence in the market of a few people with vastly disproportionate purchasing power caused the cost of certain basic needs like housing and health care to drift more towards the tastes and buying power of the upscale side of the market than the remainder of the American public.
That practice, along with various forms of speculation that attached themselves to those sectors, created a relentless up-pricing trend, lifting the costs of many key commodities far higher than they would have been had the excessively-compensated not been in the mix on the demand side of things. As the years rolled by, the under-compensated were gradually being left behind, greatly amplifying their willingness to catch up by using credit, wherever they could get it; in many cases, regardless of the terms attached.
It is a great irony that even as municipalities, government officials and banks loudly trumpeted the fact that houses were becoming ever more DIFFICULT to afford, free-and-clear, those same people were also touting the growing ease with which another great American necessity - food - could be secured. Chew on that one for a while. Why was it so important that food be kept affordable but housing not? The answer, of course, is that municipalities and banks were making greater amounts of passive income out of home values being higher. The more the values rose, the more easy money these entities stood to earn.
For all too many government officials, job security and career advancement was tied more to the inflow of such revenues than to how well those officials were serving the general public or the Greater Good.
With food, on the other hand, those same officials stood to gain nothing other than public heat from it being more expensive. When it came to food, it was easier for them to see the forest of the Greater Good than with housing, where the trees of more basic self-interest obscured the broader view.
How ironic it is then that the longstanding indifference of the body politic toward the true condition of poorer Americans should now bring us to a place where it is the price of food that is rising while that of housing is steadily tanking. For politicians, the heat is being put to the rear end now. The finger of blame is being pointed at everyone but the family dog but, in reality, if politicians really want to know who is responsible, the mirror in the nearest bathroom should do quite well.

Greatly compounding the negative social effects of the unholy differential described above was the continuing lack of a credible national social safety net, compared to other developed nations, leading people to turn to real estate - almost in desperation - as the financial hedge of ultimate resort against the potential costs of personal misfortune and old age in a highly competitive socio-economic conclave.
In response to the soaring demand for home-ownership over the past three decades, the financial industry sought to overcome the problem of steadily shrinking relative purchasing power of those in the bottom three quintiles, caused by ever-widening disparities in company pay, by engaging in an incremental process of liberalizing qualifying standards for loans and tweaking interest regimens. This wasn't a philanthropic move on the part of banks. In most cases, it was calibrated to allow people to just keep their heads above water, but certainly not to deliver them from debt once and for all - a risky but not unjustifiable business approach. After all, banks aren't social service agencies; they're there to be effective trustees of the money deposited in them, and to do that, they have to make money, not lose it.
In more recent years, the nationwide economic activity generated by loans based on the home equity created by this form of financial brinkmanship was huge; but it could only be sustained if a never-ending line of first-time home buyers stood ready to enter the market at ever higher prices, and since people weren't earning ever higher wages, that could only be accomplished by inventing ever trickier ways to package home loans, one being a type of refinancing that allowed other forms of common debt to be subsumed into mortgages. The earnings of the so-called middle class alone were no longer sufficient for many to make conventional short-term credit payments in addition to mortgage payments each month. Solution? Roll that debt under the time shelter of the mortgage on the home to reduce combined monthly debt service costs. This approach bought time; but time on unpaid principle added interest, in many cases leaving borrowers even worse off over the long run.

Home equity extraction, in turn, was totally dependent on shifting - and often arbitrary - assumptions about what people thought home resale values ought to be at any given point in time. That fuzziness in shared perception was offset by assurances from real estate professionals and government officials that home values would rise inexorably into the forseeable future, guaranteeing sellers a soft place to land in the event they were no longer able to maintain their mortgage obligations. Homeowners, trusting in the advice of a veritable cottage industry of such "experts", saw little reason to stop cashing in their home equity chits for the cash they were progressively more short of as prices rose and the wages of the lower-paid 60% stagnated or even fell. Afterall, if they really got into trouble financially, they could always sell the house for a fat profit, pay off all outstanding debt and walk away with a nice wad of cash at the end of it; at least, that was what they were being told.

Somehow, the bright sparks who dreamed up the general architecture of this liquidity system (a de facto Ponzi scheme) overlooked the two deciding factors upon which the continued viability of such financial leveraging rested - aggregate individual earnings among the growing number of those with riskier loan contracts and the continuing ability of new generations of buyers to enter the market at ever higher price points. For the rule to hold good, median earnings in question had to rise in direct proportion to the rise in median home prices. Why? Because everything depended on there always being a new generation of buyers willing to pay those prices, otherwise the bottom would ultimately fall out of demand and prices would tumble.

In the mad rush to make money in real estate, even seasoned professionals got a serious case of looking through rose-tinted glasses with respect to the financial capabilities of future buyers - this supposedly endless supply of upwardly mobile people, absolutely itching to get into first, second and third mortgages. No one seemed to be alarmed that the earnings of those who would be first time buyers - basically, middle class earners -hadn't budged since 2001, even as home values continued to climb exponentially.
A key factor to note here is that the rise in values was justified by general blind faith in continuing economic growth which, in turn, was becoming increasingly dependent upon the extraction of said equity for the liquidity that was needed to fuel such economic growth.
What you had here was one hypothetical (home prices) being dependent on another hypothetical (expanding local economic activity) that was reciprocally dependent on the first hypothetical (home prices), with both being dependent on the stagnant or diminishing wages of a sinking middle class to keep the wheels of this co-dependent relationship turning.
Separated from the cash they were borrowing against the imagined value of their homes, a fair number of those mortgagees were genuinely poor, by American middle-class standards.
Not surprisingly, a disproportionate number of those poor were black and Latinos. In North Carolina, to mention but one state, subprime mortgages constituted half of all mortgages made to blacks while the number for whites was around one in five. As a result, a higher proportion of black owners than whites are losing their homes to foreclosure in the credit correction that has ensued - another manifestation of America's longstanding lack of social equity between races.
Politicians of both major parties might note that one of the principal reasons the Republicans lost the statewide vote for the presidential election in North Carolina (and with it, quite possibly, the national race for the White House, since North Carolina was a key state in how the final stages of the race played out) was the anger of black voters at this disproportionality of hardship.
In California, a similar situation is unfolding with respect to that state's latino population.
Compounding the severity of this home loan problem and unnoticed by most, was the fact that the national level of ambient liquidity was dropping, much like an aquifer being drawn down by too many dispersed extractions, large and small. The process was almost too slow to notice, but profits and earnings across the nation were becoming harder to derive and the first to suffer because of it were lower-end wage earners.
The principal causes were many: the trade imbalance, combined with foreign remittances; the movement of cash from the general economy into private sector speculation instruments like currency trading and hedge funds; ballooning government budgets; soaring private-sector health insurance costs; rising levels of imported fuels; massive investment in offshore business operations; domestic funding of charities operating outside America and the constant net outgo of military actions the nation is engaged in (more than the rest of the world combined); all were significant contributors. This combined drain drew down the amount of money left available for general circulation throughout the domestic economic system. The burden of that pinch was transferred onto the backs of those who had the least say in how company profits were being distributed - overwhelmingly, lower-ranked workers, many of whose jobs were being exported to offshore locales, or taken over by machine technology, so that lower cost profiles on the production end of things could be achieved and shareholders and company executives could be shielded from loss. Ironically, in so doing, those same executives were undercutting the very mortgage-paying, home-equity-using sector that was keeping their side interests in real estate and other business viable prior to the collapse of the housing bubble.

Party-pooping, economic under-achievers, like myself, lacking in the more transcendent skills of financial visualization, predicted that too many straws were being piled on the back of the camel represented by the lower working class paycheck for the credit system to hold up. But then, I dropped out of college to follow my interests in music, so who was I to question the experts? Mere dilletantes who never went further than high school should not presume to question the superior insights of proven pundits and the exceedingly well-degreed. Why, on Earth, should any serious financial player give the slightest credence to the likes of amateur alarmists (such as I was at that time) whose thinking on money was so obviously limited to the kind of outdated, pedantic cash consciousness our parents taught us and their parents taught them? Now this little rant may seem peevish to the reader. In truth, but I was among those who subscribed to the preceding assumption until, at length, I began to wonder, could they all be wrong? But then, who was I to have an opinion on something so weighty? Think of it as an inferiority complex, if you like.
On the other hand, one might keep in mind that Bill Gates and Richard Branson don't have college degrees either and if they could manage to come through the past decade pretty well, maybe a college degree isn't absolutely essential to having a good nose for how things actually work.
The blunt truth of it is that money issues - even really big money issues - are remarkably less complicated than academia would like their tuition-burdened students to imagine. 99% of the best kind of money management amounts to nothing more exciting than good bookkeeping, reading the newspapers, conservative risk assessment, staying ahead of developments and exercising financial self-discipline.
That being the unvarnished truth, the spike in ARM's during the years since 2001, and the bundling and securitization thereof, was basically a reckless last-ditch attempt to make an increasingly unstable socio-economic system's books continue to look rosy to investors as the credit industry scraped for options that would allow it to go on doing business with a public whose earnings were incrementally being outpaced by the life costs they were obliged to meet. Ironically, this imbalance was actually being stoked by the credit industry itself, owing to the liquidity it was pumping into the demand side of the economy. So, instead of prices dropping along with the drop in the aggregate measure of real personal means, as they should have, they were rising, especially in real estate where successful players stood to make a tidy bundle.

Any fair-minded person is thus forced to conclude that the subprime mortgage melt-down - far from being attributable to the imprudence of ordinary people (though many clearly were imprudent) - is, in fact, the logical end result of decades of people adapting to endemic inequity in a cutthroat economy - inequity spawned, in great part, by cultivated institutional biases in company pay practices in a country where everything short of breathing costs money and personal cache is king.
Since the Age of Greed was first declared sometime back in the 1980's up until about the middle of 2008, the mainstream media indulged a slavish expurgation of executive self-aggrandizement, on the one hand, while showing little interest in the declining fortunes of those in the general workforce, on the other. Over the course of the last three decades, this growing dichotomy of respect fed, by increments, the huge disproportionality in personal status and pay that we are still stuck with - and plagued by - today. (This held true until around 2009 when journalists and commentators with a different and less diffident approach toward corporate royalty began to be heard in major newspapers).
Somehow, in a classic case of conflict of interest to society, the absolute winners in the inner circles of this dichotomized world contrived to sit on one another's executive compensation boards - a practice that remains the norm, economic crisis, notwithstanding. As if to divert attention away from the systemic erosion of the sociological integrity of the nation over the past two decades, corporate style, the corporate image and the primacy of the executive classes gradually became the stock and trade of a large section of the entertainment and print industries of this country. Most of those under fifty have known no other cultural value system.
Stridently resisting calls for greater financial inclusiveness, corporate spokespeople rushed to defend the concept of winner-take-all whenever challenged. Among the countervailing tactics employed by them were sweeping assertions that libertarian market principles are always superior (compare that with, "We're too big to let fail so, for the sake of your own good, kindly bail us out if we happen to bomb").
Another tactic of market boosters was to publicly mock those pleading caution in the face of apparently unstoppable change as foot-dragging luddites. And, of course, let's not forget the usual dark warnings against socialism's evil interference with the Free World (this didn't seem to stop some pretty big capitalists from going to Congress, hat in hand, for some pretty big socialist help when they were undone by a one-two combination punch of the tanking economy and their own bad choices).
In effect, what the neoconservative position amounted to was that accommodating market imperatives was of far greater importance to this country's place in the world than repairing its broken social system (now dragging all of us toward the brink of national - if not global - financial disaster).
It took the insuperable troubles of their core constituency to demonstrate that neo-libertarian economics was bogus as a catch-all theory and that the market did indeed have some very critical interests that it was fitting for government to both protect and regulate.

And yet, even today, after all that has transpired, between them, the image makers and the paymasters continue to leverage the disproportionate power they have over who gets what; and, true to modern American culture, the deciders unfailingly bias the split squarely in their own favor, not because they have some empirical metric that proves the worth of themselves to the companies they work for, but rather, because they wouldn't be seen dead making less than so-and-so; simple as that. In the end, like it or not, for the few at the top, the vaunted Free Market is little more than a gonad-driven playpen. To the worst of the offenders in question, the duties of top corporate management are less of a sacred trust on behalf of all who have interests in the company than an opportunity to fiercely prosecute a private quest to win at THE GAME before a gallery of their peers; and the point of the game - any game, afterall - is to dominate the play, rule the field and win, is it not?
In the process, some almost incomprehensibly wealthy winners have been made. The average 2007 pay for the nation's 400 highest-paid was $278 million. And while they've been doing so terribly well, tens of millions of others have seen their own prospects decline, as a direct result - most disturbingly, young adults who, instead of aspiring to having a house and kids when they talk about "getting ahead," are actually thinking more along the lines of being paid just enough to stay solvent and ensconced in a cramped little rental somewhere.
There's a deeply insidious social trend lurking behind this last truth in that, while a minority of more affluent young adults lucky enough not to be encumbered in pocket enjoy unfettered access to the prospect of having and raising children in the home and environment of their choice with a reasonable sense of certainty about being able to pay for that in a responsible manner, the rest of their less well-set contemporaries do not. Other countervailing considerations may exist for the young rich but money - the most potentially significant - is not one of them.
In the past, the lack of birth control options we now take for granted tended to wipe out fertility differences between rich and poor. The wages of lust were children, regardless of financial degree, and lust would have its way. Children, born rich or poor, just happened (brought by the stork, no doubt). Today, it's a different story. Access to contraception is relatively easy and the overwhelming majority of the sexually active who don't wish to segue on to having children, because they're intimidated by the financial considerations of doing so, are able to defer pregnancy, often indefinitely, until the option slips away forever. Hardly surprising, given the known costs involved in responsible parenting and the claims made on personal time by the work week of the average Jack and Jill trying to make it on something below the median income.
The sad thing is that many ache to have at least one child, if they could only summon the sense of financial security needed to take the plunge; but, these days, for many, having even one child is too daunting a financial risk.
Some argue that it is good that those with financial acumen are getting the genetic edge over those who are less inclined that way. Their contention is that, by this method, we are developing a society with the genes to help future generations become more acquisitively successful in the world (as if we weren't greedy enough already).
If this premise is indeed valid, what happened to the genes of those who were so successful in the investment banking sector not so long ago but who have ended up being so catastrophically unsuccessful of late? It's not like their genes suddenly switched off one fateful day in the fall of 2007. Obviously, genes have little to do with it. Something else was at play. Could it, by chance, have had a whole lot more to do with something far more pedestrian, like luck, timing, access to capital, geography or family connections, perhaps? Hmmmm.....So much for breeding a nation of Sam Waltons, Warren Buffets, Steve Jobses and T. Boone Pickenses.
As I look around the world to those who have done much good for society, I see many who came from the humblest financial and social circumstances. For most of them, their dedication to the public good is inseparable from their experiences in humble beginnings; and so I shudder to think what this country would be like if all we had to choose from in leaders were those who had come from wealthier backgrounds - people with no personal experience of real hardship - while the bulk of those from hard-up families were left to slide off into genetic extinction.
There's a form of passive eugenics at work in that scenario that is truly troubling and, I'm convinced, deeply malign and the only way I can see of tackling it is by finding fiscally efficient ways to get more money circulating lower down in the ranks of society; ways that engage the best of both public and private sectors. I dare say that those at the top would lament not having it a lot less than those at the bottom would welcome getting it and if we, the People, have to be the authors of that benign transfer, let it us act to make it so. The relief created would outweigh the grief imposed, resulting in a net gain for the Greater Good. Certainly, it would be better than just sitting on our thumbs and hoping for the best while society slides down a rat-hole.
Though it may not yet be clear to many of the experts, it is clear to me: continuing to give extra consideration to the inordinately rich - and the agendas that their wealth persuades government to allow them to impose on the rest of us - is something we can ill afford to be clueless, blithe or passive about.

Damage squared

From the early 1970's on, the social inequity induced by the growing practice of disproportionate executive self-entitlement insidiously undermined the economic vigor of the nation from two sides. On the one hand, it distorted the psychology of value behind the cost of essential goods and services - most importantly, rentals, home mortgages, vehicle ownership and health care - as businesses of every kind strove to appeal more to the upscale side of the market than those in the middle to bottom. On the other hand, it eroded the spending power that, in a better world, would have gone to millions obliged by geography to play in the same socio-economic sandbox as their better paid contemporaries. With that erosion in personal spending power, came a shrinking of the demand side of the economy that, in turn, obliged the supply side to stunt wage advancement and replace workers with smart machinery. Apologists for the trend touted resulting increases in productivity without adequately explaining how such increases would translate into greater happiness for the average American who wasn't one of the immediate beneficiaries of such productivity.
Even after the spate of criticism that errupted in the wake of the Great Credit Correction of 2008, the basic rationale that had been used to justify such grievous disparities in pay did not undergo significant revision. Those same disparities persist four years later.
The current phase of distribution problems we are attempting to grapple with now started sometime back in the mid 1970's. Like tectonic plates, the two basic realities of median price and median means began to move away from one another, leaving a deep rift between them. Compounding the problem was the fact that the ratio between the median wage and the average wage - a reliable indicator of how well earnings are distributed across society - began to drop, signaling a migration of pay away from the middle toward the top. This gradually widening gulf in means was a space that the financial services industry thought it could capitalize on by offering to bridge with credit. The thinking of the day was that such a bridge could yield a handsome return in interest payments, over time, paid out of the aggregate earnings of those soliciting such help in order to stay afloat financially and included in the life of society. I don't fault that they chose to do business meeting an obvious need. What I fault was the fatal miscalculation (based on the kind of folkloric optimism for which Americans are renowned among nations) that it would all just work out in the end. Any educated realist could see that such casual lending was bound to end in financial calamity, but the industry pursued the option with reckless abandon anyway, mainly because the people who were in that business were making very good money and, almost to a man, believed they would know when to jump ship.
Why did the top people in the financial services sector err so badly? Perhaps it was because the super-successful had so divorced themselves from the daily struggles of more average Americans, financial and otherwise, that they lacked the subjective immersion required to realize that they were expecting blood to flow from a turnip, that, regardless of how hard they squeezed, the result would always only be turnip juice. For a few, no doubt, it was that old game of financial chicken; the trick being to know when your luck had peaked and to get out before you got caught with your financial (or ethical) pants down.

Compounding the whole picture of the crazy runup in property prices fueling lending was the fact that, once they got into their homes, those who had bought them would want nothing more than for prices to rise as quickly as possible - forever, preferably - so they could put a whole lot of distance between where they had come from and where they wanted to get to. The inflation in value would allow them to supplement their incomes with equity extraction while still maintaining a cash-out fall-back position greater than what they owed on paper. It was like getting money out of fresh air, without raising a finger, and altogether too many bought into the heady magic of it, with nary a peep of concern from government, at any level. Somehow, the possibility of a run on the market, that would rip the very guts out of the demand side and send prices tumbling, though talked about, never really took hold until it was too late for most overstretched purchasers to sell their houses for what it would take to expunge their debts. Once underwater, they became instant prisoners of their mortgages. Real estate companies, for their part, were happy to pull out all the stops to make the deals keep coming. Everybody was in it for the money and while this giant scam was on a roll, for those who cashed out soon enough, the winnings were exceedingly good.

Calls from below for moderating the rise in home prices through government action so that homes would not be priced out of the reach of potential first-time buyers fell on deaf ears. People in industries connected with real estate, and those eager to see the held equity in their homes grow, were adamantly opposed to the idea of any kind of government intervention designed to preserve a sustainable form of affordability. Any who dared express misgivings were characterized as alarmists and their concerns deemed nothing more than the whining of losers. Among those who thought they were doing so very well, it was a classic case of "I'm OK, Jack; pull up the gangplank. Full speed ahead and damn the torpedoes!"
Under normal circumstances, buyer restraint would have held prices from going up faster than market realities could support, but these weren't normal times. The rampant extension of credit, with too few prerequisites, gave people an inflated sense of prosperity and the resulting lack of reasoned caution, nationwide, encouraged prices to rise faster than a technical analysis of general disposable income could justify, even with the so-called "help" of credit.
All the while, as a result of the credit industry's subsidization of personal purchasing ability, people felt less compelled to negotiate for pay increases or scrounge for better home-buying deals. Instead, they were encouraged to believe that they could get ahead without such wage/price concessions. Between the two options - trying to persuade your boss to pay you more or just getting a home-equity loan - taking advantage of readily proffered, apparently cut-rate, credit seemed a lot easier, psychologically speaking, than negotiating with management for better compensation. That fewer workers saw fit to join unions to press for better pay and working conditions in the last couple of decades, can be attributed, in large part, to a false sense of rising financial capability engendered by incrementally easing credit terms.

When it comes to improving one's lot, ducking the issue and taking the easy way out rarely proves to be the wisest path in the long run. This case was no exception. Quietly, the financial approaches that people were taking to make ends meet were gnawing away at the nation's storehouse of owner-held home equity - a figure that rested, in large measure, upon people's confidence in the general economy - until, in the beginning of 2008, the nation awoke one day to the scary news that homeowners held less in equity in their homes, as a bloc, than they owed for the combination of first having purchased and then borrowed against those homes for every kind of other expense imaginable - an unprecedented situation in the history of the nation. Not just that, mind you, but the dread prediction that equity values would fall in the not-too-distant future and significantly increase the unfavorable ratio between indebtedness and held equity. The stage was now set for the dark events that were soon to commence. It was just a question of where the first crack would appear; after that all hell would break loose.

At the same time real doubts were beginning to be voiced, it was reported that the earnings of the richest quintile had risen 34% in the years between 2001 and 2006 alone, effectively allowing that group to pay out-of-pocket for whatever they needed, free of the inconvenient extra sting of attached interest - yet one more factor contributing to the pace at which the financially privileged were pulling away from the huge bulk of their fellow citizens. Those at the very tip of this gilded class had seen a meteoric rise in compensation - up 300% since 1979 for the top 1%, compared to only a rise of 1% for the bottom quintile whose basic life costs quadrupled during that time.

This striking difference between how most people were having to manage their financial affairs and how the richest of Americans were able to go about it fed the dichotomy that opened up during the second term of the Clinton administration and the first years of the new century. By the end of 2007, the richest one hundredth of the population owned fully a quarter of all the wealth in the country and the trend feeding that imbalance was accelerating, pushing prices up on one side and lower-end earnings down on the other.

It was never a case of whether the struts supporting that gigantic, overloaded credit bridge would give way (financial inventiveness notwithstanding), just when. On that fateful day, the standard thought forms feeding general confidence about what homes were actually worth would go too, turning the securities based on the values of a significant fraction of those homes into junk that brought down top-flight investment houses and their insurers, along with a good chunk of the main-street economy across the nation that had grown fat on spending based on the extraction of imaginary wealth from homes across fifty states, courtesy of banks, large and small; banks who would suddenly reverse course on the bullish propaganda they'd been disseminating, get cold feet and freeze nearly all lending while they came to grips with what was happening. But before it actually happened, not many people wanted to talk about the possibility of that kind of collapse occurring. The imagination reeled in the face of it. So many, at so many levels, were so deeply invested in this grand, nationwide illusion of being able to get rich through real estate that they found it preferable not to be informed, let alone discuss how they would deal with it should things happen to go sour.

The coup-de-gras and final insult to prudence was the stunning magnification of losses created by unregulated credit default swaps - a nest of bogus financial assurances that made a complete mockery of what combined purpose the American dollar and law ought be put to in a civilized country.

In one case, in an effort to dress perfidy up in prudence, the federal government kept the main purveyor of credit default swaps, American International Group, a private insurance house that had greatly over-leveraged itself, afloat to the tune of $180 billion. To be fair, when one considers the alternative, they could hardly have done otherwise, and yet, ordinary working people everywhere are hard put to understand how this giant row of financial dominoes could possibly have been allowed to be set up. To say that it's made them cynical about how the government they sponsor exercises oversight is something of an understatement.

The ultimate cost of such public cynicism should not be underestimated. There are certain grand initiatives the nation badly needs to undertake. The tenor of public opinion could spell the difference between victory or defeat in the one war we really do need to win - not the War on Terror, but the war against catastrophic climate change driven by increased economic activity on the part of the many nations competing to develop their economies. Lose that one, and none of this will matter.

Revisiting old assumptions in assessing how to dig ourselves out of this mess

OK, so now profound upheaval in that credit bridge is proceding apace. Millions of abandoned and ailing mortgages are still clogging the system and a large part of the still performing ones represent upside-down assets - houses whose current market worth is less than the principle still owed on them - effectively chaining owners to homes in areas from which they can't move.
Long-term economic damage - caused mostly by a severe dirth in available credit, formerly based on presumptions of increases in home equity, now debunked - has spread to most economies of the world where that kind of bank activity took place. In many cities and towns, nearly five years after the demise of Lehman Brothers, the bottom in home values hasn't been reached yet. The knock-on effect has been a significant drop in consumer demand. The lower levels of the world's work forces have been hit the hardest by this, in no small way because management in many businesses has adapted to the slack off in demand by investing in initiatives and equipment that allow reductions the number people on payroll, even as net profits rise. The resulting drag on levels of gainful employment has had blow-back effect on many of who invested in large amounts of high-risk mortgage-based securities - individuals, funds, banks, even nations. With respect to financial institutions, more than a few did not survive. Though the worst of the initial wave of failures may be over, the situation in the general economy is still pretty dicey.
Here at home, the Obama campaign's erstwhile rallying cry of "Yes, we can!" now rings somewhat hollow against the persistent tide of economic distress. Taking a page out of King Canute's book, President Obama now acknowledges he doesn't have a definitive way of waving a wand and stopping the overall tide of economic gloom. Nor does he pretend to know how much more of the general economy the tide of financial gloom will ultimately drown. What he does know is that there is little that he - or anyone else - can do to effect a quick repair and that it will have to run its course before things can improve. But doing "little" is not the same as doing "nothing", and to the extent that doing "little" amounts to doing "something', whatever "something" happens to amount to, he should do it.

While the bulk of the damage was first concentrated in the world of large and sophisticated financial organizations, it has now spread to the humblest corners of life and the furthest ends of the planet. Greece groans under draconian austerity measures. Spain lists toward the tipping point. Portugal hangs on by its fingernails. Italy trembles in dread. What will happen to purveyors of other kinds of credit is anybody's guess. No doubt, there'll be challenges to the sector as people attempt to keep up with the combined cost of their monthly mortgage payments and life's other critical needs at precisely the same time that businesses are looking to be less dependent on labor and putting the squeeze on so many people's earning prospects. In particular, there is the issue of the tertiary education debt that many people (mainly younger adults, but not exclusively) now take on in an effort to maximize their chances of staying out of the ranks of the unemployed or the underpaid. School loans can easily excede what it would take to buy a serviceable home in any one of a thousand economically depressed urban communities across the country. Once they graduate, it's a fair bet that the number of jobs available in the disciplines they studied for will be fewer than those seeking them. How will those who fail to find the work they were aiming to get repay those loans? And what kind of displacement effect will the repayment load of school loans have on the credit-worthiness of the nation's next generation of potential first-time home buyers? Will the price of homes have to drop even further to be able to tempt them into taking the plunge? Add to that, the imposition of mandated health insurance premiums and the prospects for another great slump seem possible, if not probable. There are many other unknowns, but if past consumer crises are anything to go on, these new developments are likely to generate a lot of personal hardship. Only so much belt-tightening can be done. And if belt-tightening doesn't work, there's not much more a person can do other than turn to the last resort of bankruptcy protection.
Chapter 11 is no magic wand, however; it simply distributes one person's difficulties among those to whom that person owes money. This works with the occasional individual who gets into trouble owing to circumstances peculiarly his/her own. But when a great many are experiencing roughly the same type of hardship, the widespread use of bankruptcy protection can act like an avalanche that precipitates ever widening circles of ruin.

There's always quantitative easing of the currency supply but the reflexive traditional opposition to it is deeply entrenched. The fact that a certain rate of quantitative easing is a necessary ongoing function of the central bank of any economy in which the gross value of all forms of property is growing seems to have been overlooked by many who rail against the issuance of new money. In fact, the failure to inject sufficient money to keep the wheels of commerce rolling in a growing economy can be just as harmful as injecting too much. For the while, however, it is unlikely that further top-down cash infusion (essentially, government assistance to banks) will work to prime the uptick in economic activity that a true recovery would require. Banks have long ago abandoned the kind of micro lending that new businesses need to other, mostly smaller, economic entities, ranging from friends and family to credit unions. The years of high-roller lending cultivated an appetite for big returns that has made it almost impossible for banks to return to the business practices of yesteryear, and given the new rigor (and expense) banks are applying to assessing creditworthiness, smaller principles just don't seem worth lending.

Selective bottom-up infusion by government would be better than top-down but it's rather late in the game for that now. The government's wad is too depleted and too impeded by congress for it to be of much help to the national economy.

Essentially, from the administration's point of view, they're still in triage mode, trying to decide what needs to be saved with what they have and what they have to abandon for dead.

As for the lowering of interest rates by the Federal Reserve to encourage mortgage payers and their banks to arrange for lower monthly payments, it will be of help to some, no doubt, but as far as the more troubled mortgages are concerned, it will do little more than defer the day of reckoning. Social justice notwithstanding, the math, the state of the economy and time are all against them. Moreover, ill-advised moves of that nature could actually deepen the malaise by kicking the can down the road where the means to correct the overall economic situation may be even less available. The long-term effects of this recession seem to be worse than most economists were willing to predict. As loathe as they may be to do it, many are going to have to let go of what they thought they owned, take their losses and retreat to more tenable financial positions that they can more easily service.

While many of those so affected may have been imprudent in their choices, there is, nonetheless, a great injustice in the way these circumstances befell them. By and large, it will be the hapless, the gullible and the naive who are punished the worst for the snow job that was done on them by people they were encouraged to trust - people they believed were helping them but who, as we see now, weren't at all.

What to do about it?
No approach is going to be perfect. Still, there are ways of softening the ultimate social impact by spreading the burden of absorption among all the parties who were responsible for letting this giant train wreck occur. None should be let off the hook in helping to make better what went wrong. They include:
1.) the people who were beguiled into thinking they could afford what relatively simple logic and math showed they could not;
2.) the companies that encouraged mortgage agents to go out and find anyone willing to sign on to home-purchase contracts deliberately structured to create the illusion of affordability without the substance thereof so that these intermediaries could build portfolios of this kind of debt to sell to larger investment outfits;
3.) the companies who bought those bundles of mortgage in order to repackage them as shares for sale on the stock market, thinking they could make money, in the balance, by trading such debt;
4.) the shareholders who bought into the operations of those companies without really examining the fundamental mechanics of those instruments;
5.) government across the breadth of the nation that had every resource needed to be able to assess that the present and future earnings bases that were supposed to support the housing market were wholly insufficient to sustaining the mortgages being cooked up to get people into those properties; government that failed to act because it was so taken with the more immediate gains derived from property taxes on soaring real estate values and excise taxes from purchases fueled by home equity extraction that its representatives couldn't resist being breathless cheerleaders in the march toward disaster; government that has consistently failed in its constitutional obligation to serve the renting public's interests as conscientiously as it serves the owning public's and thus, was clearly complicit in driving unhappy renters into the cut-throat clutches of industry operatives peddling mortgages that buyers had little chance of carrying to completion; government that, though alerted to the danger looming from unregulated derivative trading and mixing ordinary banking with financial speculation, willfully acted to prohibit government regulation of that market, setting the stage for the staggering collapse that subsequently occurred;
6.) real estate professionals who, for personal gain, knowingly did things they knew to be unwise, unethical or just plain illegal;
7.) not least, by any means, those whose relentless diversion of this society's product away from their subordinates and into their own pockets laid the ground for all of the above by forcing the compensationally shorted classes to adapt to a life based on debt and financial risk.

Each of the above has a part to own in the final reconciliation of this mess, either through direct involvement or indirectly, through tax-based support of remediative action; and to the extent this new government can find ways for them to be held accountable, they should oblige them to chip in for what must be done to stop this train, take it back to where it got off course, and get it going on the right track again. The greater part of the responsibility for doing so must not be allowed to fall on the shoulders of our children or our grandchildren, while, in the interim, a massive public debt obligation and failure to serve steals their prospects and bleeds them white.

So what to do about it? As mentioned, holding all parties responsible for the home credit meltdown to account would be a fitting first step but it should not be mistaken for a longterm or comprehensive fix of any kind nor is it of substantive help to what we might need to do. For that to be the case, those responsible would need to be made to contribute financially to the cause.

An excellent place to start, I think, would be for us to formally resolve that one epoch of mistakes will not be allowed to lead to another of a similar nature. This will require making tough choices (one of President Obama's more frequently used sentences).

As much as we might like to be compassionate toward Americans with home mortgage problems, where fully justifiable and reliable loan restructuring cannot be done, we should not waste public money pretending to do so, purely for the sake of political appearances. Going too far in trying to keep failing purchasers in their homes could well create instability in other areas. Nor should we undermine credibility in our government by giving people false assurances that they will be rescued, only to disappoint them even worse later. Let's not forget the many millions of still renting Americans who have long yearned to get into a home of their own but could never quite afford the financial leap required. How long would it be before they too demanded a comparable level of financial assistance from the government? After all, do they not pay taxes, as well?
At the very least, those whom we can help with loan restructuring should not be able to emerge from the process with 100% of the purchased equity in their homes. Whatever agency helps them should own a portion of the total equity in the property for which the part owner/occupant would pay a cut-rate rent, over and above the morgage payment on the balnce of the equity. If the house were sold, the assisting agency would hold a first position lien that would have to be satisfied for the sale to go through. If we don't reduce the equity stake of rescued home buyers, we will be tipping the wealth odds against the other half of the public that, for one good reason or other, has opted to continue putting up with renting and resisted the urge to act imprudently. If we can show show that those who receive public aid in hanging on to their mortgages will have to wait longer to be free-and-clear, it will help to restore normalcy in market conditions and blunt charges of favoritism toward a prominent sector for political purposes. The elimination of such bias would reduce opposition and allow rescue programs to go forward more easily.
One way we can restructure loans without writing down the original principle amounts is by inducing lenders to void existing contracts, go back to the original date of sale, and retro-actively offer low fixed-interest mortgages over terms longer than thirty years. This would lower buyers' monthly payments but it would also slow the rate at which they accrued equity, putting them somewhere between a conventional buyer and a renter and defusing criticism on the part of those who held back. Payments already made would be applied to the new regimen.
Another way would be for the government to assume temporary responsibility for the unaffordable, inflated portion of the mortgage contracts that government was a principle party in encouraging and allow homeowners to pay off that portion at an interest rate close to zero or below zero, over an extended term, while designating the balance to be dealt with under new terms by the original mortgage servicer. The owners would not be allowed to receive money from the sale of such properties without first paying off the balance of what they owed the government. By this method, net monthly mortgage rates for the country’s most overpriced homes could be significantly lowered, saving many from foreclosure. With an astute piece of gentle arm-twisting, the Obama administration might even be able to get America’s richest to help sponsor the fund needed to make such a system operational through the sale of very low-yield bonds. We should not be oblivious to the fact that many of those richest made an enormous amount of money, not just through real estate, but also through short-selling and credit default cash-outs in recent months.

We also have to keep in mind that the only way most financially-astute renters who have been waiting in the wings will ever have of owning a home of their own in the context of a functioning economy will be when the cost of buying home real estate drops to less than around 30% of what they earn (the FHA's standard 29/41 ratio, the front end denoting a recommended percentage-of-income limit on housing expenses and the back end, the limit on total debt servicing - reader, if you don't know it, look it up). We have seen the costs to the mainstreet economy of a bigger bite being taken out of individual earnings for housing costs and we can't go back there. So how are renters supposed to make that jump into home ownership if Congress uses public money to, in effect, keep real estate values propped up artificially, while doing nothing to lift the ordinary person's take-home pay?
Making plans to aid millions who were ill-advised to buy in a way that effectively stiffs tens of millions still patiently waiting for their own shot at more justifiable opportunities may be a tempting PR move but, in reality, it would just be more junk policy adding fuel to the fire of our general dissatisfaction with the state of things.

Not that the distressed, whoever they may be or however they came to be that way, should be left to sink and drown once the consequences of their decisions have played out. At that point, society's safety net should be helping them stay materially and psychologically stable and safe in a condition that is sustainable so that those who still have it within to lift themselves up once again may have a shot at doing so. That's part of a conscionable country's obligations to those under its wing when it gives its citizens a risk-fraught society to live in, and if any money is to be spent addressing this terrible housing disaster, that is where a decent portion of it should be going.
Even then, it would be naive - if not downright disingenuous - to suggest that the bulk of those forced to go through such a jarring rearrangement of their hopes and dreams will be able to get back to where they were before the great meltdown. Take it from someone who went through much the same process in the early 1990's; once brutalized on the losing side of the social see-saw like this, most never regain the same sense of exciting life potential they had when they entered the world of adult realities. From that point on, the average person lives on the defensive, plagued by shadows of uncertainty that dog each and every prospect of a better future. If there is such a thing as a reliably faithful life companion, PTSD, occasioned by personal ruin, has to be it and PTSD in the wake of having lost one's home (or livelihood) to the designs and dealings of people more powerful or more circumspect than oneself is all too common a mental condition.

To have a true recovery, we will have to have new blood in the economy, new generations of graduates into adulthood whose dreams can fly without ever having been burdened by the baggage of past trauma.
In light of the above then, it may sound counter-intuitive for me to say that we ought to allow some social damage to occur before stepping in to help with public money. Nevertheless, for the reasons I've outlined above, I'm firmly convinced that keeping people in material situations that their financial circumstances can't justify would ultimately hurt more people worse, especially the young who now face the added hurdle of having to apply for credit under the harsher loan conditions of a chastened financial industry in a world of downsized dreams.

Over the past months of crisis, we have seen the federal government almost randomly pump huge amounts of public money into troubled banks and insurance houses. A great deal of that money went straight into the hands of investment firms and insurers whose dealings with banks and hedge funds were in danger of total implosion.
Many who are more in-the-know than I am are on record as saying that, while these interventions may have been sold as being in the longterm public interest, they may yet prove to do less than was hoped for to improve the general economic picture. Such large-scale help from the government rarely occurs without the introduction of unpleasant side effects.
A shortlist of the kinds of setback that can ensue includes:
1.) a weakening of the market processes that control the cost of vital consumer commodities (such as petroleum-based fuels and products, natural gas, manufactured goods, staples like rice, coffee and tea and housing),
2.) an accompanying inflation-driven erosion of both the effective yield and purchasing power of interest-supported retirement annuities, leading to even more strain on government services forced to respond to a corresponding rise in levels of social distress among retired people and the elderly,
3.) a bald-faced exacerbation of the wealth divide as the luck of the richest Americans is artificially propped up while those at the bottom are left to absorb the grittier impacts of economic contraction.

Significant devaluation of the dollar, caused by pumping money into the economy, would also make it even harder than predicted for generations of adults yet to come to grapple with future fiscal responsibilities that will, almost certainly, be passed on to them by today's baby boomers for ultimate reconciliation.

These interconnected impacts and the ways we might tackle them are complex to understand, tricky to predict and difficult to lay out on paper. There are so many present and future unknowns. But one thing is for sure: they are not something we should think we can indefinitely put off coming to grips with. The population's future prospects wobble on a knife edge right now and, given some new shock, conditions could deteriorate faster than most could ever imagine, let alone deal with.
For some, economic Armageddon has already arrived, very often in the form of an ostensibly helping hand. When people have difficulty obtaining even the most basic goods and amenities, as is the case in some areas of the country right now, it becomes that much easier for profiteers, hucksters and opportunists to fleece them in their hour of difficulty.

A word needs be said about the Bush administration's tax give-back economic stimulus approach at this point. While it was clearly an ad hoc measure taken on the fly without a whole lot of consideration as to how it could have been more specifically targeted to stimulate consumer spending, it did at least reach the bottom and, as such, may well have been a superior stimulus instrument than the top-down infusions conducted by the Obama administration, a large share of which was simply absorbed into the asset bases and bottom lines of very big companies in the financial sector.

Such infusions, done very occasionally and very astutely can provide a vital assist to the momentum of the general economy in the wake of some massive setback but, almost invariably, they come at a price of some kind.
If the source is borrowed money, public infusions levy a longterm drain on future budget capability and saddle future generations with having to pay off that debt. Further, by obviating widespread damage, they also preclude the kind of opportunity space that a revolutionary upgrade in social conditions so often appears to need in order to be given a chance to work. The danger is that the useful and the harmful are simply patched together again, with nothing systemic having been done to preclude similar cycles of ruinous activity (like real estate speculation) from reoccurring in the future.
If, on the other hand, the source is the national mint, and the money printed fails to create a broad base of lasting real value, inflation will result.

Lest I leave the impression that I think that failed homebuyers should simply be left to their fate because that's the name of the game in our system, let's remember, people were told, ad nauseum, that there was little by way of a dependable public back-up behind them for the years ahead and that they should do anything they could to build equity that would act as a hedge against being wiped out. Over the past decade, it was general consensus among wonks and pundits that banks should pull out all the stops to help buyers achieve home ownership and those interested in a more secure future should do whatever it took to find a mortgage provider that would accept them.
"There's a mortgage plan for everyone!" went the old saw. It was the mantra of the century for the real estate industry, along with such gems as, "Houses will only get more expensive in the future." The implication, of course, was that if you had reached 35, or so, and still didn't own a home of your own, you had to be some kind of deadbeat or chump. I know; it was what my wife and I were told when we were dumped out of our rental home so the landlord could capitalize on the improvements we had made over seven years of living there by selling the property out from under us. He made a cool $200,000 profit from selling the house. Our protestations that perhaps we deserved something for our pains were met with incredulity that quickly turned to sustained hostility on his part and passive complicity on the part of participating real estate agents. The position we found ourselves in, they said, was ultimately our own fault for not having bought our own house: anyone who really wanted a home could afford one. The math, however, showed us we could not.

Given that kind of social pressure, should they who betted so badly then be saddled with the lion's share of the blame and the material misfortunes for having taken the advice of the experts, gambled on a purportedly sure thing and lost everything as a result? I think not. A part, yes, but the whole blame, no.

Actually, with this writing, I'm much less interested in who should be faulted for this mess than in how the system could be fixed to produce more middle-class earners (with the exception, perhaps, of this feckless system of government that has so consistently under-performed in defending social equity, relative to other developed countries - a government that seems all but incapable of building safety net systems worthy of the nation it is charged to serve and protect from harm).

One important point worth remembering is this: Once the dust has settled, as long as those causal earning differentials I'm concerned about remain in place, what better option will people have than going right back to gambling on high-priced real estate, fueled by debt, to secure their futures, all over again?anks

NEW OPTIONS - Two prospective anti-poverty programs government could implement to pre-emp a return of property bubblemania and reckless speculation

None of the preceding amounts to rare insight, except perhaps, for this: my contention that it was point-of-pay inequity that laid the initial groundwork for the credit bubble and its subsequent collapse, and that it will do so again for another round of boom and bust if government does nothing to induce the private sector to correct the ongoing maldistribution of company pay. Not until late in 2009 did I begin to hear of others coming to the same general conclusion. My hope is that this line of thinking will gain more traction, not just among policymakers, but with those for whom it matters most - the ordinary working men and women of America who make up the bulk of the electorate.
Accordingly, the first option I would like to propose is a system of incentives I believe would go a long way toward incrementally fixing America's workplace pay inequities after the effects of the ongoing correction fade from the front pages of the nation's newspapers, so that, with the passage of time, people may find it easier to cover their many day-to-day expenses with what they earn, as opposed to relying on credit. (This may be a somewhat novel concept, I'll admit, to the staggering multitude who have known little else during their adult lives than being in a constantly revolving state of debt, just to survive.)
The strategy I envision would trade easy access to public capital for moderation within the pay structures of corporations. Through the use of mathematically controlled reciprocity, presumptuousness and avarice in the workplace, with respect to compensation psychology (and the disparities and social problems that follow) could be significantly tempered. Acting in concert with one another, these mathematical tools comprise a system that would integrate payroll graphs into the broader struggle to improve social equity in America.
In return for their participation, companies that signed on to participate in this effort would be afforded access to substantial capital assistance at far-below-market rates, in proportion to their accrued social equity performance scores and the size of their respective payrolls. These figures would be computed with each quarterly payroll report and added to an accrual account managed under government authority.

I call the proposed program Point-of-Pay Equity - POPE, for short.

OPTION ONE: THE POINT-OF-PAY EQUITY SYSTEM

Briefly summarized, the POPE System seeks to bring greater social equity to how people are paid and how they are taxed over the full course of their lives, relative to one another. This part of the essay describes three points of action, or "legs", where constructive government participation can induce positive changes in these areas. Though I have limited the scope of this essay to three such legs, it would be a mistake for the reader to construe that I believe them to be the limit for what could be included under the POPE System. Optimally, the reader would consider these ideas to be more of a good beginning than a complete and finished product.

Section A: The First Leg of the POPE System

The First Leg of the plan is to tempt financially sound companies to voluntarily participate in making their pay graphs reflect greater point-of-pay equity by making those payroll graphs less concave. In doing so, they would gain calibrated access to very cheap capital, depending on how well they scored in that regard, as measured under the program's formulas. The hope here is that, in time, as thousands of companies continued to participate, the sum of all the gross profits of their collective enterprise would become more evenly distributed over a broader swath of earning levels all across the nation, giving Main Street more access to that money before it floats off to Wall Street and other destinations in the financial sector via the bank accounts of the rich. The secondary effect of this gradual strengthening of the middle class would be an incremental escape from the surcharge in interest attached to things purchased, allowing more take-home pay to be spent on other forms of retail activity, along with gradual growth in the demand side of the economy.
The nut of this approach boils down to making that access to cheap capital dependent upon a mathematical measure of how well each company performs in the distribution of its gross payroll set-aside. This we can do quite simply by comparing the area under the actual pay graph of each quarter to the area under an imaginary straight-line graph of ideal distribution drawn from the lowest paid to the highest paid.
If pay were perfectly distributed, this imaginary line would be the payroll graph of the company and the area under the graph, in terms of the units used in the vertical and horizontal axes, would equal the company gross payroll. The more the actual gross payroll falls short of the imaginary payroll, the smaller the ratio of the actual sub-graph area to the imaginary and the lower the resulting social equity score; the rationale being that, in making top end pay higher (and the graph swoop upward), money (area) had been moved out of the middle ranks to pad the upper ranks, most notably the few highest paid - precisely what we don't need if we are to rebuild America's economic core and the root cause, in my opinion, for the recent past's explosion in credit assistance sought by middle class earners.
In this manner, as the quarters rolled by and social equity performance points were earned, the company would gradually increase the limit it could borrow at rock-bottom rates (pending a verifiable good cause to lend on the part of the fund's loan management staff).
If the company redeemed points earned, and took out the money represented by those points, the company's Social Equity Credit Access (SECA) account would be drawn down by the number of points extracted.
Irrespective of points gained, companies would still have to demonstrate good repayment capability, on a case-by-case basis, for such loans. The points accrued would simply establish how much cheap credit the company in question was qualified to borrow, relative to how much pay it had disbursed among employees in earning those points.

As long as participating firms continued to exist, unredeemed credit access points would not be lost if the option to use them were not exercised. They could be cashed in at some rational fraction of the unused (or unusable) credit access earned over time under POPE requirements (or, perhaps, sold to another company desirous of points, subject to regulatory requirements similar to those behind carbon credits).

In the First Leg of the POPE system, the figures that are needed to rate the equity performance of any given payroll are the highest pay, the lowest pay, the total payroll of the company and the number of employees (including officers). That's it.

The gradient of the pay graph, relative to the number of employees involved, would not affect how much capital could be borrowed, though it would have relevance in determining how much of their pay the top three earners in the company could actually take home - a concern dealt with in the supplementary Second Leg. That is because, for the account to be truly effective in promoting social equity, we have to prevent company executives from trying to meet the goals of the First Leg by reducing pay at the bottom to make the pay graph straight. The Second Leg's corrective action is exerted by customizing a membership fee top earners must pay in order for their company to be in "The POPE Club", so to speak. In deriving a socially equitable custom membership rate for each of the three top earners, the calculations of the Second Leg take into account job context factors that are relevant. Those factors are the following: 1.) what the best-paid receives, 2.) what the least-paid receives, and 3.) how many other people have to be considered in the payroll.

The math here is pretty basic. For the sake of preserving such readability as this rather dry topic may have, I've relegated the actual formulas to a separate addendum, which genuinely interested parties may get on request.

Again, it cannot be overstated that such loans would still have to be justified against projected repayment capability after the loaned money had been deployed in whatever manner the company intended. From society's point of view, this program would not be an extension of charity; it would be the collective interest at work in the form of a mutually-beneficial partnership.

Very simple and doable, in principle, and, I'm prepared to bet, potentially very useful to meeting the employment challenges of the foreseeable future through stimulation of the demand side of the economy.

With the appropriate organization and outreach in place, the First Leg, alone, would be a very significant step towards narrowing the gap between the rich and the middle earners of the country. It would be useful in reversing our recent slide, in the eyes of the world, with respect to quality-of-life issues and our ability to govern for our own social benefit.

On a cautionary note, in the years ahead, it is very probable that more than a few companies that have under-performed in both the financial and social equity arenas will be turning to the People's government for help to get them through the time of protracted structural adjustment we have just entered. To make it fair for those who had entered the program in prior years, new inductees would not be eligible for help on an upfront basis. Any help given should be predicated on at least a year's worth of quarters having gone toward the accrual of account points.
The People, through their government representatives on the management team of the fund, would need to see sustained progress before rendering any assistance extended under this program. When I say, "the People," I don't mean some select group within the government; I mean the whole 300 million person taxpaying, news-reading society from which such cheap credit had been solicited - the People of these United States.
Failing some better reciprocal of an alternative nature (I can't imagine what that might be), it is only right that the price for being given access to cheap credit should be a company's willingness to participate in a productive way in both the First and Second Legs of the POPE system for a full financial year, minimum.

Section B: Beyond the First Leg - Why we need to focus more pointedly on top-end corporate compensation with a Second Leg

As I reflected on the implications of the First Leg of the POPE system, it became apparent that, while straightening pay graphs would be a useful start to mending the mal-distribution of means in the middle of the American financial spectrum, it only addressed half of the problem of inequity - namely, stealing from the middle.
By itself, the First Leg - the program that rewards straightening of company pay graphs - could only go so far toward the overall goal of improving social equity in America. Though it would help to regularize the distribution of pay within any given company's pay structure, the perceptive reader might note that it would do nothing to discourage executives shifting pay from the very lowest paid to the middle, in an effort to meet program requirements without reducing their own pay, which would create an even worse condition of pay inequity. That would be a catastrophe! Nor would it do anything to level the playing field between cash-rich companies and companies on a tight financial leash or go to bat for companies that provide higher levels of employment opportunity for the income they bring in, versus those who opt to replace workers with mechanized production so that shareholders and executives can fatten their take, while their laid-off workers deal with the challenges and terrors of losing their livelihoods.
While I have nothing against companies trying to become more efficient when not doing so threatens their ability to stay afloat, I draw the line when it is done for no better purpose than cutting some people out of sharing in the general providence for the sole purpose of inflating the wallets of top dogs and shareholders. I stand by this even though I'm just as capable as the next guy of feeling good when the stocks I own rise in value. Social gain trumps personal gain.
For that reason, I knew that I had to add a Second Leg to work in concert with the First Leg to reduce the concentration of pay at the top and shift more pay to the bottom. Straightening the graph would not be enough: the high end had to be pulled down and the low end up, as well. In order to make that happen, the system would need a much more pointed stick than any associated with POPE's First Leg. This stick would have to be directed very specifically at the rump of the pay packages accorded the top three in the pay hierarchy of each company electing to participate in POPE. I settled on the idea of making eligibility for POPE back-up being contingent on the top three positions agreeing to pay an equity-responsive membership fee. The fee would be a percentage of their pay, determined by a complex formula applied to their total compensation package, minus the amount of federal income tax they had paid. In the interests of reasonability, the formula would factor in the context in which that pay was earned.
Once I had an acceptable Second Leg, I would have a persuasive companion measure to the initiative to straighten company pay graphs that might coax the more stupendously compensated into thinking that the American economy, at heart, was really more about sharing than about shaving.

Too radical? Or simply stating what's been conveniently overlooked?

If you're contemplating this for the first time, you might be somewhat taken aback by the boldness of this approach; but please don't blink. If getting the executive class to board the same train into the future as the rest of us is what we're really after (which, I believe, it should be), we - the rest of the nation - need to get serious about what will have to be done to make that happen. It's clear, the magnificently paid aren't getting there on their own and crunch time is fast approaching for the demand side of the economy.
Keep in mind: as long as other Americans are doing their patriotic duty somewhere in the world on behalf of all of us, and showing that they care enough about the common good to risk losing all to protect it, some comparable reciprocal of a nobler nature is demanded of each of us, in whatever capacity we happen to find ourselves, as civilians. That particular quid pro quo pertains more specificly to those who would embody roles of responsibility and authority in society.
If you happen to be one of the above, at the very least, that means rendering faithful service to those who trust in you to protect the one thing most central to their day-to-day survival – their livelihoods. Given that fact, if that role of responsibility and authority happens to be as an executive in a corporation, the first in order under that mandate are your fellow workers serving under the aegis accorded you, even as they protect your interests in the faithful discharge of their own responsibilities. Notice: I did not say shareholders. Shareholders (yes, I am one such) take potluck because they're wagering, for better or worse, with what is essentially surplus to them (or should be) on the outcome of events in which they play no active role. They're essentially little more than economic hitchhikers going along for the gamble. There's nothing surplus about a working person's livelihood.
The growing quest to find a sustainable, sharable future for humans on planet Earth is a matter of life and death for billions who have yet to grow up. As such, it is the moral equivalent of the greatest war this nation has ever fought - World War Three, if you will. It's time to get with the program and quit making excuses.
Consumer demand - and the natural resources required to meet that demand - have finite limits. The gross domestic income that arises out of that equally finite process called the GDP must suffice for ALL the financial needs of the American populace. It may be a big pie, but it is not an infinitely expandable one. Other nations are clamoring for their own piece of it on the world stage, even as the non-renewable sources entrained in powering all of these economic systems grow more strained by the day. So, as far as the U.S. is concerned, that part of the pie that depends on offshore natural resources is gradually shrinking. Even the might of America's financial and military sectors cannot prevent that. The only alternative to intelligent apportionment and disciplined use is naked dispossession by force of arms - an option that Americans, to their credit, have repeatedly rejected as inherently alien to the nature of their deepest convictions about themselves.
Increasingly, it will become a co-trust between government, management and labor to see that whatever economic activity the nation can envision, initiate, supply and fuel suffices to keep all boats afloat, all beds sheltered and all stomachs adequately fed; and do so without helping to cave in Earth's faltering life-support systems, already shown to be falling short of replenishment against mankind's extraction rate by approximately 30% - a situation that is obviously unsustainable.

Some, without thinking, will characterize these proposals as punitive. Be assured, I'm not the slightest bit interested in punishing anything or anyone. That would be pointless and counterproductive.
Actually, these proposals are far more structure-providing - toward the goal of promoting fairness within a sustainable economy - than anything else. Their reason for being is to bring huge amounts of benefit to tens of millions of hard-working Americans. There's nothing punitive about that!
When given a structure to help support the best exercise of conscience, with no exemptions for favoritism's sake, people are remarkably ready to do what is right and good, regardless of where they happen to live. It's the government's job to show leadership in that regard, not just with a bunch of feel-good rhetoric or vague pointing in the general direction of what they'd like the private sector to fix, but by taking concrete steps to provide the structure required.

In building the justificational groundwork for this approach, an important point we need to keep in mind is that corporations aren't private in the same pure sense that sole proprietorships are. In the past, Congress saw fit to extend a blanket of protection under which people doing business could operate free of the shadow of full personal accountability hanging over the heads of their principal officers. Without such protections, companies of size also became sizeable liability risks to those who owned and managed them. One could lose everything. The prospect of such unlimited financial exposure was an impediment to the general growth of commerce and discouraging to the kind of company size that would allow the discharge of the very large contracts the country depended on to develop properly; like railways, big buildings, factories and large public contracts, for instance.
Accordingly, Congress legalized the framework for a type of business where the assets of company officers would be immune from what creditors could seize to remedy financial liabilities created by the miscalculations of said officers. Thus, the American corporation model was born. Sole proprietorships have simpler reporting requirements, greater operating freedom and greater private earning potential, but the downside for them is that their owners do not enjoy the immunities against financial setbacks extended to the chief officers of corporations (who often earn huge salaries even as the companies they manage run up huge losses).
Another aspect of corporate identity that makes corporations beholden to the society they're sheltered by derives from the fact that they readily avail themselves of various forms of assistance proferred by federal agencies sponsored by the American taxpayer.
The fact that most share-held corporations could not grow, or even effectively operate, without the constant protective partnership and background sponsorship of the public sector seems to have escaped the comprehension of many corporate compensation boards. They seem to take these special public protections for granted, as if the sponsors of such protections - we, the People of this country - owed as much to them and expected no conscionable quid pro quo from them in the planning of their payrolls.
Well, guess what? In most cases, even when you're owed, if you ask for nothing in return, nothing is exactly what you’ll get.
It's time for the People of the United States to stand up and demand their rightful due from the corporations their money protects and helps, namely, pay scales that are conducive to the establishment of the kind of social equity that Americans have fought for, died for and made lay-away payments on for the past two hundred and forty-two years!
It isn't absolute measures of pay that we're talking about here. Absolute measures of pay, by themselves, mean nothing. When it comes to preserving amity in the family of the American People, the only thing that counts is relative pay. When people see a large difference between what they're able to earn and what someone else no better at his job is bringing in (as in a whole lot more), they want to know that the difference can be justified without credulity being stretched. Too often, these days, there is no justification that can suffice.
While pay differences are necessary, without a clearly justifiable basis for such differences, overt disproportionality creates poisonous feelings between individuals - resentment, envy, outrage and even outright hatred. But the picture of lost felicity doesn't stop there.
There are also social impacts to consider – as in law and order. Any form of glaring disproportion in means between people who share any kind of connection - a family, a workplace, a neighborhood, a city, a state, a country or a planet - that is arguably unfair to the lesser paid parties, will, inevitably, fuel negative consequences of every shape and size and the combined drag of those consequences will leave that collective falling short of the security they might otherwise have enjoyed.
Just ask those who have lived in deeply dichotomized societies for any length of time. The countries in question may differ in language, culture and resources but, without exception, they all exhibit similar afflictions - economic backwardness, educational regression, disease, widespread deprivation-based suffering, official corruption, high levels of crime and environmental despoilation.
My own experience in this regard, as I mentioned, comes out of growing up in South Africa and living in South America. South Africa, currently considered by many to be one of the most crime-plagued industrialized nations in the world today, is a textbook case of what happens when social equity is ignored by government over a protracted period of time. Few Americans realize that the primary impetus behind the establishment of apartheid was not racial psychology but, rather, an attempt to protect the privileged economic status of whites just as increasing numbers of the country's Bantu and mixed-race people were finding ways to get the kind of education that would provide access to professional careers and more equitable measures of pay.
The blind hatred that resulted in the tragic and senseless death of American aid worker, Amy Biehl, was a direct result of apartheid closing the door to reducing the disparity between the prospects for whites versus those left open to non-whites. By the time she arrived to do social work in the townships of the Cape, that hatred was at a fever pitch. She wasn't killed for who she was, but for the systemic inequity her white skin represented and because she failed to fully comprehend that being American and noble-hearted alone would not indemnify her against that kind of unreasoning rage.
Ironically today, a different version of that same bad blood is being directed at black refugees from Zimbabwe and Congo by South African blacks. The newcomers are considered job stealers by natives whose relative lot is still inexcusably dire more than a decade after apartheid was abolished.
The lessons Americans need to learn from the example of South African apartheid are these: one, relative disparity is deeply destructive of everything people hold dear in civil society and two, once the damage has been done, the better part of society has to work very hard for a very long time before social improvement of any kind can be realized.
By continuing to be largely oblivious to the worsening wealth dichotomy in our own country, we are definitely pushing our luck toward a socio-economic tipping point, after which things go downhill fast.
So why hasn't improvement come earlier?
For one thing, up until now, no one has managed to come up with, and popularize, the necessary snappy syntax Americans tend to respond to best drive home why such disparities in personal circumstance are, in essence, demonstrably anti-American. There needs to be a buzz in the air before we can come together as one and act.
As a result, each of us in the struggling classes must rest content, feebly clinging to the outside chance that somehow, someday, one's ship will finally come in and all one's money-related troubles will go away, opening the door to living as one has always yearned to live - truly free and financially secure. Fat chance.
That's precisely the sort of never-never rationalization they - the controlling elite - want the working masses to subscribe to (and be complicit in reinforcing) so that more inclusive social policy never gathers enough steam to force its way into the domain of the entrenched privilege they’ve worked for two centuries to create, ever since Cornelius Vanderbilt laid the groundwork for it. Over the years, they've done a pretty good job of characterizing progress toward greater inclusiveness in such a way that it remains indefinitely tabled under the suspect banner of "socialism" (as if the principal agents protecting their state of material privilege - the armed forces, the U.S. Postal Service, the Social Security Administration, Medicaid, Medicare, primary education, the judicial system, the interstate system and any government department you care to name, including the Federal Trade Commission and The Securities and Exchange Commission, and now, the Federal Treasury itself - were not basically socialist in structure, financing and operation).
So far, that approach of pretending to deplore something while discreetly welcoming all the advantages it can provide, has proven to be a very useful, albeit disingenuous, strategy for America's wealthiest and most successful. On the other hand, the knee-jerk support of the would’ve-if-they-could’ve-been rich (once the political infantry of those opposed to all things socialistic in structure), can no longer be counted on in the wake of that contingent's gut-wrenching discovery that they’d shot themselves in the economic foot with their unquestioning sponsorship of neo-liberal economic policy. Too late, they realized they'd been duped by Wall Street. Worse, they were being ditched by the thousand by companies who no longer deemed their services essential to the making of a profit, now that IT had made automated service, robotization and off-shoring so accessible.
In addition, as other more socialistically organized countries have begun to outperform us in key areas of demographic importance, such as healthcare, the electorate has begun to tire of hearing "Wolf!" every time anything remotely collectivist in nature comes up for debate.
We, the public, may be a little slow in separating truth from hypocrisy but, in the end, our collective thinking process tends to cancel out the usual pitfalls of personal bias and show itself more astute than any panel of spinmeisters or policy wonks could ever hope to be. Therein lies the intent of democracy, after all.
For anyone who cares to see it, the writing is on the wall for the status quo of recent years. The younger and more burdened half of the population finally found its way to the polls and delivered a drubbing of historic proportions at the ballot box to those who gave us what we must now fix.
This spontaneous movement - the campaign to elect and support Barack Obama - owed its strength not as much to its apparent assets as it did to the outgoing opposition's proven flaws and spectacular high-handedness in the use of national assets when they had the helm of our ship of state. The public was not just dissatisfied; it was fuming. The state of the nation was deplorable and the public was itching for change representative of purposes it could be proud of paying taxes to support. We would hear it expressed firsthand several times a day - ordinary people, sick and tired of the same old political shenanigans and looking to the prospect of a new political order that would usher in a more benign and enlightened form of governance that could not be corrupted, intimidated or distracted from taking on the work of creating a more positive and inclusive substructure to the common life of our nation.
As a result of these powerful yearnings among citizens, the Obama campaign enjoyed the provisional ideological backing of a preponderance of Americans of independent mind and generous heart who had no declared party affiliation, as well as a good many of those once affiliated who had finally broken with past habit and refused to be told what to think by the party machinery of opinion grooming.
I say "provisional" because, as we have seen, these people could easily get a bad case of voter’s remorse if what they were getting wasn’t exactly what they had had in mind. The support of the independent voter constituency should not be considered in the bag but, rather, in a state of waiting to see how things play out.

Being able to advance a politically discomforting option over a foolish one with facile public appeal is the mark of the kind of leader the country needs right now. Leaders who have to wait for public opinion to show them where to lead before they'll go there are not actually leading; they're just managing. Right now, we’re going to need a lot more than simple management expertise.