Tim Geithner; Retention, Rewards, and Krugman Realizations

DN!>Paul Krugman (12) on $1 Trillion Geithner Plan to Buy Toxic Bank Assets

copyright © 2009 Betsy L. Angert.  BeThink.org

Negotiations began in November.  Decisions were reached during the month of December.  By January, a retention bonus was awarded to the individual considered most superlative within the staff.  President Barack Obama presented the gift.  American International Group, Incorporated [AIG] executives did not receive the windfall.  Nor did someone “separate” from the previous President garner the honors.  Gold was not placed at the door of a New Deal Democrat.  No, dollars and command were delivered to a truly Progressive person.    Insider, Timothy Geithner was the recipient of a title that would sustain his service.  Mister Geithner was given a reward that was worth far more than mere millions in greenbacks.  Power and influence are priceless.

President Obama granted these “commodities” to one who worked to ensure banks and other financial institutions would continue to flourish just as they had in the Bush Era.  Now, the man with copious clout, wants more.

Indeed, Tim Geithner has already taken the reigns.  He has worked to set more rules.  Separate from Congressional approval for increased authority, and regardless of what regulatory standards the House and Senate might pass, Secretary Geithner, happily ensconced in President Obama’s favor, has begun to broaden his horizons.  He expresses his expansive preeminence, and all are a twitter.

New-found fame, a brighter, well-funded future befits the man whose face now appears everywhere.  Greater authority is as Tim Geithner was groomed to acquire.  Indeed, Secretary Geithner grew accustomed to attention and awards.

Perhaps, Timothy Geithner’s desire for further recompense, economically or emotionally, began when he was but a boy.  In his youth, the now Secretary of Treasury saw what could be wrought if one was well-connected.  His lineage allowed him to look into a world of affluence and advantages.  

Maternal grandfather, Charles F. Moore, was an adviser to President Dwight D. Eisenhower.  Mister Moore also served as a Vice President of Ford Motor Company.  “Dad,” Peter F. Geithner, was with the Ford Foundation.  Tim Geithner’s father oversaw the project that Ann Dunham, President Obama’s mother gave birth to.  Stanley Ann Soetoro and Tim’s Dad, developed microfinance programs in Indonesia.

This association alone might have helped Mister Geithner realize his path to the White House.  Some theorize, President Obama and Tim Geithner formed an invisible bond, one that ties them together today

Money, power, and privilege were given to Timothy Geithner from birth.  The more the lad “earned,” the more he hoped to receive in return.  A graduate of Dartmouth and John Hopkins, initially Tim Geithner worked for Kissinger Associates, Incorporated.  He then entered government, just as his forebears had.  Geithner first joined the Department of Treasury in 1988 and worked in three administrations for five Secretaries of the Treasury in a variety of positions.  He served as Under Secretary of the Treasury for International Affairs from 1999 to 2001.  He was Director of the Policy Development and Review Department at the International Monetary Fund from 2001 until 2003.  Then, he headed the New York Reserve.  He befriended the acclaimed Economist Professor Paul Krugman.  The two are associates within The Group of Thirty, a Consultative Group on International Economic and Monetary Affairs.  It is no wonder President Obama was impressed and wanted to retain the financial expertise of one so esteemed.

Previously, the Secretary had succeeded, even exceeded expectations.  With each step, the esteemed Economic wizard takes, greater gratitude and gilt are given.  Hence, he moves forward.

Secretary Geithner addressed Congress on March 24, 2009.  He and his cohort, Federal Reserve Chairman Ben S. Bernanke affirmed a need to be endowed with exceptional authority.  The two concurred.  The AIG catastrophe confirmed “a basic and tragic unfairness – that those who were prudent and responsible in their personal and professional judgments are harmed by the actions of those who were less careful and less prudent.”  Many would agree.  

On paper, the proposed request for increased control over financial institutions, other than banks, seems reasonable.  If Congress approves of the strategy, Federal authorities could seize a failed fiscal establishment.  Many believe the measures are long overdue.  However, several hesitate.  When they consider the fact, Secretary Geithner might be the person to decide the fate of these firms countless express concern.  Perchance, he is not the person to have or hold such extensive power.  

Esteemed Economist, and colleague Paul Krugman expressed disappointment after Mister Geithner revealed his bailout plan.  Nobel Prize recipient Krugman wrote in The New York Times, “”In fact it fills me with a sense of despair.”

“The Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt,” the Princeton University Economist explained, as he cited specifics within the proposed strategy.

Might the man Professor Krugman long admired not be competent to oversee the fringe financial institutions? Those who were uncertain Tim Geithner was ever the best, the brightest, or the person to be retained, are now joined by others who originally had confidence in the now Secretary of Treasury.  Since the appointment, and ample intangible appropriations were bestowed upon Secretary Geithner, the choice issue may be a moot point.  Only the battle for a bigger role, increased responsibility to regulate remains a subject of contention.

The Obama Administration, mostly through Tim Geithner, has compared the proposed process to the work of the Federal Deposit Insurance Corporation.  This favored institution protects depositors from bank failures.  Regulators can take control of a troubled depository, place it under the authority of the FDIC, and then, quickly, and competently, restructure the reserve

Perhaps, that is the most significant difference.  With consideration of the current economic crisis, and crucial assessments, the Secretary made prior to this plea for greater rule, Timothy Geithner showed no evidence of being swift or skilled in his ability to seize the moment or reign in American Insurance Group’s excesses.

As the former president of the New York Federal Reserve, Mister Geithner is the one Obama Administration official who is associated with the Bush-era bailouts.  Once AIG was under Federal control, public servants say, compensation arrangements were rarely, if ever, discussed.  In December, long before Tim Geithner received his own abundant reward, an initial $55 million in bonuses was delivered to the Insurance Group executives.  

At the time, the glorious Geithner did not decry the greed.  Indeed, even on this date late in March 2009, as he answered questions before the House Financial Services Committee, Secretary Geithner stated, “It’s a difficult balance.”  He then further explained his belief; the government should not dictate detailed executive compensation limits to bankers.  Timothy Geithner empathized with those who had been given retention bonuses.  Indeed, while he did not give voice to the thought, the Secretary understood, he too was a very recent beneficiary of such graciousness.

Perhaps, opponents of greater government oversight appreciated the more individualist posture Treasury Secretary Geithner presented. However, a few felt a vital veracity must be pondered.  An individual Presidential appointee [Geithner], and an agency [FDIC] with ample autonomy, are not one and the same.

Intentionally, the Federal Deposit Insurance Corporation, unlike the Treasury Department, was designed to be separate from the political process.  The bureau acts in accordance to law.  Should Congress consent to the Geithner request, a person who is profoundly affiliated with a partial, political body, would have the authority to take possession of a business that displeases the White House.  Granted, supporters assure those who challenge the proposal, only corporations in crisis would be seized.  Nevertheless, dissenters declare, corporate collusion with government insiders would remains a concern.  A poorly regulated financial institution potentially would corrupt the government [further?].

Policy-wonks state, the power to take over banks or other alternative financial entities need be part of a broader regulatory structure.  Limits are set on the risks that economic establishments can take.  Therefore, the need for seizures is, and must be, more fully linked to violations.  The Obama Administration has expressed a desire to increase regulations on firms that might be eligible for seizure under the proposed law.  However, specifics have yet to be furnished.  

For now, the focus remains solely on the Treasury Secretary.  Tim Geithner seeks greater power than was given to him in the form of a gift, his title.

Unequivocally, Tim Geithner has received many accolades.  Perchance, he was and is deserving.  Secretary Geithner offered a welcome plan to resolve the mortgage meltdown the day before his most recent plea.  Wall Street applauded the strategy, as evidenced by a record rise in stocks.  The headlines for the long-anticipated program that would remove bank toxic assets and revive the financial system, bedazzled those with money to spend.  Rescue Plan, With Fine Print, Dazzles Wall Street. Urged on by his success, Secretary Geithner had reason to  hope he could garner greater authority.  Those with big bucks see his increased powers as a bonus.

Yet, the apprehension Nobel Prize Economist, Paul Krugman expressed on March 23, 2009, the day before this recent hearing hangs over the head of Treasury Secretary Geithner. Thankfully, rancor for the subprime solution seems to receive less attention, at least amongst the House Financial Services Committee.  Possibly, acrimony over Geithner’s past performances is also forgotten.

For a time it seemed Professor Krugman too had been willing to forgive and forget.  There was a time the Princeton Professor was with those who sanctioned the selection of Tim Geithner to Treasury.  Doctor Krugman had thought as President Obama did; Tim Geithner should be retained.  His mere presence in the Administration would be a worthy bonus.  Only months ago, Krugman approved of Geithner and his work.  In his article, The grown-ups are coming, the stellar observer of economic policy sardonically noted the Tim Geithner was an improvement in contrast to the  Bush Best and the Brightest.  

Paul Krugman spoke highly of his associate from The Group of Thirty, a Consultative Group on International Economic and Monetary Affairs.  That is, until Tim Geithner introduced his solution for toxic assets relief.

Perhaps times have changed.  Certainly, there is reason to think Timothy Geithner has not.  Nonetheless, earlier impressions and associations formed long ago linger in the present.

The New York Times Columnist and Economist publicly offered his “Despair over financial policy.” However, in a recent interview with Democracy Now’s, Amy Goodman, Krugman was reluctant to say the person who ascribes to lemon socialism, Timothy Geithner must go.

Paul Krugman as others may not have yet come to terms with contradictory views of the man who now Heads the Treasury.

Prior to the prize bequeathed on Mister  Geithner, all of his actions appeared above board and in alignment with the ethical standards President Obama set for his Cabinet.  The beneficiary of perks and power was perceived as an individual who had sacrificed much in order to serve his country.  Tim Geithner was subjected grueling to Senate hearings.  His records were scrutinized. To be certain no one would have reason to question the calculations, a highly respectable résumé was submitted.  

Before his selection, Mister Geithner served as President of the New York Federal Reserve Bank.  In his career, he worked closely with former U.S. Federal Reserve Chief Alan Greenspan, Bush Treasury Secretary Henry Paulson, and head of the Federal Reserve Ben Bernanke, and oh yes, venerated Economist Paul Krugman.  

Overdue taxes were paid to ensure that all appeared proper and in order.  That is, at least some of the levees never accounted for were remunerated  Other outstanding tariffs, Tim Geithner was told, need not be paid,  The statute of limitations had lapsed.

Just as had been with much else in his life, Tim would be forgiven for his forgetfulness or failures to do what most think ethical.  No one would think to inquire of the enormous sums the Head of Treasury would garner for his friends, former colleagues, and himself.  People were expected to consider the pittance he “earned” as a civil servant and be reassured, Tim Geithner is committed to the good of the country.  After all, were he still with his previous employer, investment firm Goldman-Sachs,  Secretary Geithner’s salary would have been far greater.  

The power Timothy Geithner garnered throughout his life cannot be counted.  Personal financial gains for friends, former colleagues, and himself are ample.  Influence is near infinite.  Why not, some might say, give Geithner more authority to rule.  He has “earned” it.  Perhaps, one day in a sequel to Professor Krugman’s recent tome, “America the Tarnished”, the established Economist will reject the cry, “Why not indeed.”  He might even pen prose that state more directly  Timothy Geithner, his retention, and the rewards he has already received  are a significant part of “the crisis [that] has cost America much of its credibility, and with it much of its ability to lead.”

References for a Geithner Rule to be realized . . .

Updated Reference . . .

The Free Market


copyright © 2009 Betsy L. Angert.  BeThink.org

A child shrieks.  Her fever is high; it has been for days.  As the time passes, her condition worsens.  Blood, sweat, and tears roll down the little girl’s cheek.  Her mother gently, strokes the tot’s forehead.  The loving parent, who lost her job a month earlier, knows there is little else she can do.  Spare dollars, she has none.  Change has not come.  Without health insurance or an income, this woeful woman believes she can only lean forward and say, “Honey, everything will be all right.”  The free market will take care of us.

The mother recalls the sentiment of her former employer.  Reluctantly, as the reality of the recession set in, he closed the shop he owned for more than two decades.  He tried to console his tearful staff and himself.  Sorrowfully, he said, “The free market will take care of us.”  

Would the free market care for a sick child or a workforce ill with grief?  Might the free market offer job insecurity, a benefit lost long ago?  Could or would the free market ever calculate the  number of unemployed and underemployed who do not appear in the statistics sited.  American society is economically sick.  Spare dollars, we have none.  Change has not come.

In America, an adult man cries out in pain.  Emotionally he is distressed, economically depressed.  Although he is highly educated, and was esteemed in his field, today, he too cannot claim to be gainfully employed, at least not any more.  Ego aside, monetarily he has lost it.  He never imagined he would be out of work, let alone for this long.  On the radio and television he hears, Republicans in Congress feel they were “left out” when the economic jobs bill was drafted.  He knows not whether to laugh or cry.  

“No one asked me if I might be included in decisions that directly affect my life,” the woeful, out of work mister muses.  “Left out?”  The man, who once made a six-figure salary, is now left out in the cold.  This once successful gentleman cannot pay his mortgage.  The bank has foreclosed on his home.  His future is grim.  Spare dollars, he has none.  Change has not come.

Yet, persons sheltered from a physical and financial storm speak of the extraordinary system that made America a superpower.  Those opposed to the stimulus package proposed by the President of the United States believe the free market will take care of us.  Nothing needs to be done.  The job market will improve some time soon.  This crisis is but a blip.

Information from the Conference Board, a global, independent membership organization that delivers knowledge about management and the marketplace, is but a sign of our current recession.

Two million job losses are predicted for 2009; 2.6 million were lost in 2008.  There is no need to worry.  For now, spare dollars, Americans have none.  Change has not come.  Nonetheless, we can be certain Centrists and those on the Right believe, “The free market will take care of us.”  

Those most affected by a long time lack of regulations, the people who did not benefit from a free market mentality, whimper, and wail.  For them, this economic crisis began near a decade ago.  Deregulation dominated and a monetary downfall was delivered.  Those desperate for change to come understand, citizens of what was once one of the wealthiest countries in the world, lost employer benefits years before they received a pink slip.  

Few average Americans have been able to send their children to college for decades.  Without constraints, the cost of a University education has increased 268 percent over the last thirty years.  

The housing bubble did not suddenly burst this past September.  The fragile foundation that held up the American economy was shaky long before the commercial real estate market felt the quake.

These common folks plead with the Administration.  They say, as they did during the two-year Presidential campaign,  “Spare dollars, we have none.  Change has not come.”!

Faces flushed with despair delivered their message this Fall.  They waited to vote.  When the free market did not take care of them, they elected an Administration they hoped would.  

Today, these persons wail.  The woe has worsened.  The White House hears their cries.  The new President asks Legislators to shed a tear for their constituents.  Each Senator and Congressperson swears they do.  However, some howl for voters who live in luxury homes.  Others sob for those who have nothing left.  Each declares; spare dollars, we have none.  Change has not come.

In quiet moments, anyone in this country might be victim to the inertia weighing heavily on Americans.  No one is sure what tomorrow might bring, monetarily.  Countless workers fear they may be next in an unemployment line.  Small business owners, squeezed, ponder the possibility of a financial failure  Even bellwether Blue Chip companies feel the pinch.  Dividend dollars will not be paid to investors.  More companies are likely to fail.  Reports are fifteen (15) Companies Might Not Survive 2009.

Throughout America, tears and fears flourish.  The free market has taken care of us all.  It is debatable whether a lack of government regulations has done this country well.  Indeed, those in Congress deliberate.

In the countryside, there is agreement; misery multiplies.  Most would say “There is no pain-free cure for Recession.”  Consensus amongst the citizenry and members of Congress could be, “It is time for all of us to tighten our belts.”  Americans now spend less, save more, and sob as they anxiously await relief.  

Wunderkinds on Wall Street maintain; “This too shall pass.”  Persons on Main Street are concerned that they, or their progeny, might pass before any evidence of prosperity is realized.  Centrists in Congress crouch in the corner.  They remain proud, possibly calmed by the knowledge that they can insist that the Administration must, as Nobel Prize recipient, Economist, Paul Krugman states be  “comforting [of] the comfortable while afflicting the afflicted.” Thus, “the Destructive Center,” also a term coined by Mister Krugman, will preserve the status quo, and stimulate a more catastrophic economic slump.  

In the name of the free market, more taxes will be cut.  Less regulations on businesses and banks will be realized.  Average Americans, in greater numbers, will walk to soup kitchens, sell trinkets that were once treasures, tend to loved ones who are injured, ill, and without medical coverage. Common citizens in the country will cry out.  Rather than hear the pleas of the poor and the newly impoverished, members of Congress, those who are well-off, the financially secure, and steadfast will say, “The free market will take care of us all!”

References for Recession . . .

Income Inequity. The Real Reason the Rich Get Richer. ©

Income inequity has been in the news of late; disparity is increasing.  Jared Bernstein, of the Economic Policy Institute, wrote of this in,  “The Catch-Up Economy.”  Paul Krugman, a writer-economist for the New York Times shared his views in “Left Behind Economics.”  Economics Professor J. Bradford DeLong comments on the subject.  However, it seems to me that the views of these learned economists are limited.  While assessing the statistics, I think experts miss the substance, what lies behind simple “economic” causes and effects.

For years, scholars have discussed whether the situation has changed or remained the same.  They discuss cause and effects.  Intellectuals say the middle class is shrinking.  The prosperous are not growing capital as expected.  The “super-rich” are becoming wealthier.  Academicians and regular Americans alike wonder, what are we to do?

Welfare is reformed and the results are devastating.  Proposals are submitted to increase the minimum wage.  Yet, this solution was too little too late.  It was also tied to amendments that would ravage federal revenues and thankfully, or not, the measure did not pass.  People ponder the discrepancy between rich and poor as though it were unusual; however, for me, this subject is not a novel one.

It has been on my mind for as long as I can remember.  I was born into a household of means; however, the family that cared for me, the people I felt closest to lived the inner city.  I spent much time traveling from one neighborhood to the other.  The disparity was striking.  As a child, I began to theorize, what caused such a discrepancy.  Why were the rich so prosperous and the poor so impoverished?  Why did they not intermingle freely?

Being intimately a part of two very different worlds simultaneously, my mind was stimulated; questions flooded my reality.  Fortunately, I was encouraged to think about my concerns and ask of these.  My earliest memory was of the streets, which ones were used when and by whom.  I was well aware that freeways were the preferred passageways for the affluent.  Expressways allowed for a free-flow of traffic.  There were few if any visual distractions.  The highways were walled off from the city.  Slums were not seen; nor were those living there heard from.  As the affluent passed through town, all was a blur.

Those with lower incomes were more likely found on the slower urban streets.  I often heard how dangerous the metropolitan thoroughfares were.  Yet, I played on those avenues when with my second family.  I lived there for days at a time.  People were always pleasant to me.  There was a sense of community in these ghetto boulevards.  Still, the well-off avoided these roadways.  I concluded the rich did not wish to see the poor.  They did not want to be reminded of what they had created and allowed to flourish.

The moneyed preferred to believe that all were thriving, just as they were; thus, they created a world that allowed them their beliefs.  However, in truth a large portion of society was barely able to survive.  In fact, I think the affluent knew this, and purposely, conveniently chose to ignore it.  They knew that they had imposed their reality on the poorer public in order to prosper.

The rich understood they needed the poor to serve them.  A less-well-informed, undereducated, underprivileged population could and would meet the needs of the affluent.  Those born with silver spoons in their mouths trusted that they would associate with the proper people.  They would be groomed, breed, and grow greater.  The rich would learn how to build empires and indeed, they have.

It is my contention that the most affluent among us centuries ago established a system that they knew was flawed; nevertheless, it endured.  I think, the idea of scarcity, supply and demand breeds a world divided.  This economic theory presumes there is only so much to go around; resources are limited.  Therefore, those that have, horde, and those without, want.  All are dissatisfied, thinking there is never enough, though in truth, there is.

Man creates deficits and depletes resources; nature replenishes continually.

For the most part, the poor have been unwittingly satisfied to just pass.  In earlier eons, the poor and middle class were not punished so severely for their station.  There was a time when those of lesser means still had hope and some were able to do well and move out of poverty, though their numbers were always kept in check.

A modicum of security, with the potential for limited growth quelled the masses.  As a consequence of the freight experienced during the Great Depression Americans embraced the approach of President Franklin Delano Roosevelt.  Even the wealthy were willing to accept the initiation of Public Work programs.  More people were able to have a scrap of safety.  After all, “The only thing we have to fear is fear itself.”

As revealed by Journalist Teresa Tritch in The Rise of the Super-Rich,

In post-World War II America, between 1947 and the early 1970’s, all income groups shared in the nation’s economic growth.  Poor families actually had a higher growth in real annual income than other groups.

Still, they remained humble and subservient.  Most felt well taken care of.  Businesses offered benefits, and the government was a supposed friend, or so it seemed.  Employees were loyal to those that served them, not realizing, in truth, they, the laborers were servicing the master.  For without a working force there was no wealth for the entrepreneur.

In those post-World War II years, labor and productivity increased.  Workers produced more materials.  Corporations were generous with their profits.  The economy grew and entrepreneurs were willing to share.  Actually, the government demanded this.

Government policies worked to ensure that productivity gains translated into more pay for Americans at all levels, including regular increases in the minimum wage and greater investment in the social safety net . . . Full employment was also a government priority.

Fair wages, generous salaries, and reasonable benefits were given to employees.  Laborers were recognized for their worth.  A happy worker is and was a good worker.  A satisfied staff would serve the customers well.  The businessmen and women would benefit; corporate owners would reap the greatest rewards.

In those years, unions were a driving force.  Workers had bargaining power.  Of course, that was before the Reagan reign, and prior to his presidential dictums, those that promoted union busting.

Then beginning in the

mid-1970’s until 1995, the trend reversed.  The gap between the rich and poor widened at a rapid clip.  The upper echelons ?” generally the top 20 percent of American households ?” experienced steady gains, while families in the bottom 40 percent were faced with declining or stagnating incomes.

Once again the planets were aligned, or at least an ancient economic theory was.

For centuries, there was a well-known belief that twenty percent of the population owned eighty percent of the wealth.  In 1906 one man, Italian Economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of dollars that he observed within his own country.  Later that code would be named the Pareto’s Principle.  This principle presupposed that there was only a given amount of assets.  These limited treasures must be divided among the masses.  However, because the supply was small and the rich already retained much of the wealth that was, there was little leftover for those of lesser means.  As the population increased the prosperous became more so; they understood the rule of 72.

This canon is evident in recent reports.

Rich people are also being made richer, recent government data shows, by strong returns on investment income.  In 2003, the latest year for which figures are available, the top 1 percent of households owned 57.5 percent of corporate wealth, generally [realized as] dividends, and capital gains, up from 53.4 percent a year earlier.

The Center on Budget and Policy Priorities, a Washington think tank, compared the latest data from Mr. Piketty and Mr. Saez to comprehensive reports on income trends from the Congressional Budget Office.  Every way it sliced the data, it found a striking share of total income concentrated at the top of the income ladder as of 2004.

• The top 10 percent of households had 46 percent of the nation’s income, their biggest share in all but two of the last 70 years.

• The top 1 percent of households had 19.5 percent (see graph).

• The top one-tenth of 1 percent of households actually received nearly half of the increased share going to the top 1 percent.

Whether we speak of centuries past or the present, the poor continue to pound the pavement.  They were, and are, searching for their lump of salt.

In America, the Puritan work ethic feed and feeds the folly of scarcity, sacrifice, and service well.  The standard suggests

a Calvinist value emphasizing the necessity of constant labor in one’s calling as a sign of personal salvation.  Protestants beginning with Martin Luther had re-conceptualized work as a duty in the world for the benefit of the individual and society as a whole.  The Catholic idea of good “works” was transformed into an obligation to work diligently as a sign of grace.

  However, few noticed that the most well-off worked little.  They had and have servants, slaves, and subordinates.  For many of the moneyed, wealth was and is handed down.  The truly well-to-do worked and labor little; yet it was believed and thought true today, they are superior and certainly would be well received at the Pearly Gates.

It was and is the majority population, the masses that labor diligently.  The poor and the middle class hope to get ahead.  At least they yearn to stay solvent.  The middle and lower classes sweat, they slave, they survive, and looked forward to salvation.  They do this while the wealthiest continue to reap greater gains from their toil [capital gains.]

It seems obvious that the populace has adopted a misleading notion, that there is only so much to go around, or they believe that they must pay their dues before they can prosper.  It seems to me that people, for the most part accept their station, and expect others to recognize theirs.

Those of color, minority races, ethnicities, or creeds rarely are given opportunities to excel; nor do they truly and deeply believe they will be able to do so in a society such as ours.  Individuals in the middle, as few as there are nowadays, are gratified when they have enough.  They expect little more than meets their needs.  They have been taught not to crave more than creature comforts.  They learned their lessons well.  The wealthiest among us are the masses mentors.

In 1906, Italy, and in America today, I think poverty is imposed.  Scarcity is supported; the idea of abundance for all is avoided, intentionally.

I have actually heard many prosperous persons speak of their need and desire to keep the poor, poor.  Thus, I present my personal theory for your “consumption.”  I think until we truly address the issue of attitudes, and more importantly, the perception of scarcity, nothing will change.

I believe this myth was originated within the world to preserve opulence for the few.  The fable has long been maintained by “superior” beings.  The blue-bloods believe they are deserving.  Thus, they deem it just.  The poor and impoverished must sacrifice their souls while working in meaningless jobs; they must spill their blood while the rich wage war and they do.

I proclaim the legend is not true.  There is abundance for all.  Let us look at nature.

If we enter the ocean and exit with a bucket full of water, we will leave no hole.  The space we made will be filled instantly.  If we scoop up a pail of sand, no void will be visible.  Within minutes the wind, the water, and Mother Nature herself will replenish what we took away.  Granted we can strip the land naked.  Nevertheless, we cannot kill it, though human beings certainly try.

A polluted pond will produce algae in abundance.  Life grows.  A concrete highway will not seal away the weeds.  Look between the cracks.  Consider the bugs, the vermin, and viruses.  Man tries to kill these; yet, they never truly die.  More emerge where others once existed.

You may question my thinking and suggest our limited supply of oil.  I offer this.  Were it not for man’s spoils, his need to accelerate the depletion/reproduction cycle within his surroundings, the Earth would be replenishing the petroleum supply.  Actually, it is.  We simply steal from the source before it can create greater resources.

The super rich have created the illusion of scarcity and we all believe it.  They have sold society this package of goods and we buy it.  Those that live lavishly have created a civilization of consumerism.  They need us and we want to be them.

However, contrary to popular belief, I think a world of disparity devastates our social order.  I have little complaint for the rich getting richer.  I struggle with the poor getting poorer, and the comfortable middle becoming less so.  Again, I contend there is abundance for us all.

I invite you to explore.  Please take some time to assess life, the real world of plenty, and the artificial world of scarcity.  Observe it from an alternative perspective.  I ask you to be cogent; are you accepting and expecting less because you were taught, “you should.”

Please witness nature and absorb the wisdom.  Watch the plants, the animals, the insects, the water, the sand, and see for yourself.  Ponder the prospect.  Were it not for the influence of man would resources be in balance, reproducing and reducing only to ensure stability and beauty?  I think they would.  Oh, what we do and have done.  Then we wonder why is there income inequity.  We continually create it.

~ You may enjoy discussions on the New York Times article, Real Wages Fail to Match a Rise in Productivity, By Steven Greenhouse and David Leonhardt. August 28, 2006.
• Brad DeLong offers, Greenhouse and Leonhardt on Real Wages and Productivity
• Max Sawicky presents The Poverty of Pedantry
• Mark Thoma tenders Paul Krugman: Wages, Wealth and Politics

Plunge into Poverty, Pass into a Life of Simple Pleasures, or Seek the Land of Plenty . . .

The Catch-Up Economy, By Jared Bernstein. The Economic Policy Institute. August 22, 2006
Left Behind Economics; [Op-Ed], ByPaul Krugman. New York Times. July 14, 2006
Jared Bernstein, Economic Policy Institute.
The Official Paul Krugman Web Page
J. Bradford DeLong
Pulling Apart, A State-by-State Analysis of Income Trends. By Jared Bernstein, Elizabeth McNichol, Karen Lyons. Center on Budget and Policy Priorities and The Economic Policy Institute. January 2006
Driving Forces Behind Rising Income Inequality: Tracking the Internet Debate, By Brad DeLong, Economist. August 20, 2006
Welfare Deform — A Sad Anniversary, By Robert Reich, Former Secretary of Labor. August 23, 2006
Real Wages Fail to Match a Rise in Productivity, By Steven Greenhouse and David Leonhardt. New York Times. August 28, 2006
The Rise of the Super-Rich, By Teresa Tritch. New York Times.July 19, 2006
Wages, Wealth And Politics; [Op-Ed], ByPaul Krugman. New York Times. August 18, 2006
Paul Krugman: Wages, Wealth and Politics, By Mark Thoma. Economist’s View. August 18, 2006
Rural Oregon Town Feels Pinch of Poverty, By Erik Eckholm. New York Times. August 20, 2006
As rich-poor gap widens in U.S., class mobility stalls,By David Wessel, The Wall Street Journal. Friday, May 13, 2005
Protestant Work Ethic. Wikipedia.
Scarcity. Wikipedia.
Dividend and Capital Gains Tax Cuts Unlikely to Yield Touted Economic Gains, By Joel Friedman. Center on Budget and Policy Priorities. Revised October 7, 2005
Pareto’s Principle – The 80-20 Rule. About.
The Rule of 72, By Joshua Kennon. About.
Supply and Demand. Internet Center for Management and Business Administration, Incorporated.
Economics Basics: Demand and Supply Investopedia Incorporated.
“The Long Tail: Why the Future of Business Is Selling Less of More”,The 98 Percent Rule. By Chris Anderson. USA Today. July 11, 2006
Richest Are Leaving Even the Rich Far Behind, By David Cay Johnston. New York Times. June 5, 2005