About a half-century before The Great Depression philosopher and “classic liberal” professor, William Graham Sumner, of Yale developed a lecture against “progressives” titled “The Forgotten Man.” “As soon as A (a progressive) observes something which seems to him to be wrong, from which X is suffering, A talks it over with B (another progressive), and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine . . . what A, B, and C shall do for X.” Sumner said that what was wrong was the indenturing of C to the cause. C is the forgotten man, the one who pays.

In FDR’s first great speech he promised to champion “the forgotten man at the bottom of the economic pyramid.” At that moment in 1932 presidential candidate Roosevelt flipped the meaning of “liberal” on its head, ending the focus on individualism and substituting a focus on groups, reinstituted slavery (C), and trash-canned the Constitution. FDR went to war against C (mostly private enterprise) and substituted X for C as Sumner’s “forgotten man”. Still today – three-quarters-of-a-century after FDR’s speech – liberals (new meaning) obsess about groups. They make as X such as Blacks, Hispanics and Latinos, Gays and Lesbians, the Disabled; refer to them as “communities”; and try to make them “vote for a living” rather than work for a living (as individuals do).

Atop the list of groups or communities for liberals is "The Poor". Aside from the fact that the Constitution does not enumerate any power to the federal government to rob from Pete (C) to pay Paul (X), there are other problems with liberal (new meaning) thought. First, except for the small percentage which is mentally or physically disabled, poverty is a behavioral disorder. Second, poor today doesn’t mean poor tomorrow and visa versa. Third, the average poor person in America today is richer and wealthier than (a) the average middle-class person in, say, France today, (b) the average middle-class person in America in1960, and (c) the average rich person in most of the world today. Fourth, they’re fat.

Only about an eighth of persons in the lowest quintile of earners remain there after two decades, and many are in the third or fourth quintile. Some from the top quintile go bankrupt, lose a business, and drop into the lowest . . . temporarily. For a young person the formula for not being poor is simple. First, graduate from high school, even a government school. Second, get and keep a full-time job, work hard and improve skills. Third, get married before bringing a child into the world, stay married, and don’t have a child until it can be afforded . . . by you, with your money, not Pete’s (C’s) money.

Many Baby Boomers learned as teenagers an “entitlement mentality”, thanks to FDR’s New Deal. Then as those youngsters were approaching adulthood, locking in their fundamental values which would guide their adult lives, the New Deal got supersized by LBJ and his Great Society, and then the Hillary Rodhams became A’s and John Kerrys became B’s. Being “on welfare” got mainstreamed for Xs who didn’t follow the young-person formula (society’s Pauls) and paying for welfare became a growing tax and burden on Cs (society’s Petes). Even at that, a recent Knoxville, Tennessee mayoral candidate called for a “living wage” for X’s, this despite the top 50 percent of earners paying 96 percent of all federal income taxes. Giving money to "The Poor" doesn’t reduce poverty one bit. Behavior modification will. Learn the formula. Follow the formula. Discipline.

“The rich keep getting richer while the poor keep getting poorer”, is the consensus. Democrat presidential candidate John Edwards says, “. . . there are two Americas, not one . . .” Democrat presidential candidates all echo in sync. Obviously not buying the conventional wisdom, I wrote October 14, 2007 that a high percentage of earners in the lowest quintile had moved up even to the middle quintile or higher during the last two decades; and that some from the top quintile had gone bankrupt. And I wrote that for a young person the formula for not being poor is simple. Did I get letters? Of course, the writers who claimed they couldn’t get out of poverty had all violated at least two proscriptions from my formula. Former Texas congressman Tom DeLay once said, “Demagoguery beats data.” Nonetheless, let us forge forward with some data.

A U.S. Treasury report, published in November 2007, confirms that Democrat prexy candidates and consensus are wrong and that Pete is right. Between 1996 and 2005 income earners over age twenty-five increased their earnings in real dollars by an average of 24 percent. Of those who were in the lowest earnings quintile in 1996, their earnings grew by 90.5 percent by 2005, almost double. The second-lowest quintile earners had their earnings grow by 34.8 percent. The third, fourth and fifth quintile folks achieved gains of 23.3, 16.6 and 10 percent respectively. The actual data, then, suggest that while the rich keep getting richer, the poor (of 1996) for the most part (a) aren’t poor anymore and (b) are getting richer even faster than the rich. The conclusion would be even more dramatic if earners under age 25 were included, and if “other income” were counted. (Welfare transfer payments, subsidies, IRA payouts for retirees, etc. are about 75% of “income” for “the poor”.)

There’s a lotta class and wealth envy in America these days. Demagoguery achieves that. So for those who can’t be happy unless the evil rich are getting hosed, here are more data. Splitting the top quintile further, of those in the top ten percent in 1996 their earnings grew by a mere 2.9 percent while the top five percent lost 6.8 percent. The top one percent lost 25.8 percent of their earning power during those ten years. Is that cheering I hear from the whiners? A return to the demagoguery I see and a rejection of the data? Treasury research data show that: (1) Being poor for most folks is a life stage (young, unskilled and inexperienced) or temporary condition (lost a job or business or just got whacked by a house fire or medical emergency). (2) Talking about “the poor” ala Edwards, Clinton, and Obama makes as much sense as talking about “the pregnant”. They’re both temporary conditions, not groups or communities. (3) At least between 1996 and 2005, the sorta-rich kept getting slightly richer while the super-rich kept getting poorer while the poor kept getting richer and the middle class wasn’t doin’ bad either. Herein repeated is the young-person formula for not being poor. First, graduate from high school, even a government school. Second, get and keep a full-time job, work hard and improve skills. Third, get married before bringing a child into the world, stay married and don’t have a child until it can be afforded – by you and with your money, not Pete’s money. I recommend teachers share this (data, not demagoguery) and discuss this with every freshman in high school. Except for someone with a major disability, poverty is a behavioral disorder. It’s a choice. Behaviors have consequences.

The previous tableaux have applied for decades. America has been a land of opportunity for those who were industrious and made smart choices. Illegal discrimination has been subliminal, for the most part unintentional, and most injurious to the discriminator. Since January 20, 2009 – and to a lesser extent in the couple of post-election months preceding – the landscape has radically changed. My earlier-stated and iterated formula is now invalid. The formula for not being poor in America is neither understandable nor executable by an individual. The “American Dream” can no longer be sought, only “hoped” for.

Unemployment is 9.8% nationwide, according to the U.S. Bureau of Labor as of October 2. That rate has doubled in 22 months, and the numbers have risen from 7.6 million to 15.1 million. I hate to report this, but that’s the good news.

That’s the “official” unemployment statistics, what’s known as “U3”. “U6” measures U3 plus those who became too discouraged to continue to hunt, plus those who took part-time or significantly-lower-skill positions, plus those only marginally-attached (temporary). That rate as of October 2 – again according the U.S. Department of Labor – is 17% n nationwide.

The U6 unemployment rate as of June 2009 (the latest I can find) for black teens is 56%, U.S.-born Hispanic teens is 47%, black young adults with a high school degree is 44%, black high school dropouts of all ages is 41%, U.S.-born Hispanic young adults with only a high school degree is 35%, all teens (16-17) is 32%, young adults with only a high school degree (18-29) is 30%, and all Americans 15.9%. In Michigan, California, and a few other states these percentages are much higher yet. According to even the N.Y. Times the U6 for Oregon reached 23.5%, 21.5% in Michigan and Rhode Island, and 20.3% in California in late Spring.

Technically, America is in a recession. And amid that recession the federal government passed and imposed an increase in the minimum wage, thus to exacerbate the above figures, minorities as always hardest hit. In reality, however, America is in a transformation, one imposed by the federal government with malice aforethought. The “recession” is manufactured via government fiscal and monetary policy, by the substitution of the rule of an oligarchy for the rule of law, by the intentional trashing of the U.S. Constitution and the dismissal of the Declaration of Independence, and by the successful takeover of America by liberal-fascist statists hell-bent on erasing liberty in favor of tyranny. The “recession”, then, isn’t a phase; it’s structural.

A gradual smaller American economy, a weaker America, a poorer America, a more-government-controlled America has been the new norm . . . for a century at least.  A geometric decline rather than arithmetic is the this-year-new norm.  Given this new reality, America’s run-of-the-mill, everyday, garden-variety, college –graduate homemaker is focused on what? Dancing with the Stars, American Idol, Entertainment Tonight, People, Sudoku, the crosswords, and youth sports. They are convinced that the 401k-now-201k will again become a 401k or 501k, despite the near-impossibility of said happening. So, what’s the new paradigm? How does a young person avoid becoming poor? What should she or he do?

Governor Bradford of the end-of-the-15th-and-beginning-of-the-16th-century Virginia Colony recognized a disaster in the making.  It was the commune, based on "to each according to his needs and from each according to his abilities."  The Colony had experienced a 25% annual death rate for its first two years, mostly from starvation.  He asserted leadership, and got commitment to individual liberty and property, each family owning its own plot and reaping its own harvest.  The result was surplus, and trade with both England and the natives (Indians).  Resulting was the first Thanksgiving, whereat both the Indians and the settlers celebrated the new prosperous reality.

From his pre-Adam-Smith aha-experience (eureka) discovery, we have finally returned full-circle.  And I think it important to note here that if the Constitution had been honored, defended and protected, and adhered to, this could not have happened.  Mohamed El-Erian, ceo of Pacific Investment, said on Bloomberg October 5th that today's unemployment picture -- with its depth, its breadth, its demographics, and its seeming hopelessness -- is and will be the "new norm".

Entrepreneurs and their small businesses know exactly what they want from government:  nothing.  Leave me alone.  Get outa da way.  Executives at what used to be small business, but are now large, know exactly what they want from government as well: either nothing or provide protectionist policy that mitigates stiff competition.  For great examples study either General Electric (GE) or Archer-Daniels Midland (ADM) . . . or both.  As many small and mid-size business have gone under, along with some large (but not deemed "too big to fail"), those jobs are now gone, never to return.  In recent decades at least, more than 70% of new jobs have been created by small business, and today's federal government is systemically discouraging anyone from taking on the incredible risk of entrepreneurship.  So, what’s the new paradigm? How does a young person avoid becoming poor? What should she or he do?

Last Thursday I had my annual physical exam and semi-annual check-up with my internist.  After some lab tests and the like, we sat down and he asked me if anything were "bothering" me, you know, like coughs or headaches or chest pains and the like.  And I said, "Yes".  I said that I wondered whether he'd still be my highly-valued doctor two years hence.  We agreed that he might not.  When the President or Speaker or Majority Leader talk of cutting "healthcare costs", what they're actually talking about is cutting medical-care prices.

When the federal government takes over the "system", its sole motivation will be to reduce its costs.  To do that, they will dictate that my doc cut his prices by, say, 20%.  His overhead is 65%; his costs are what they are.  His pre-tax  will, therefore, drop from 35% of gross to 15%.  Then, the following year the federal government will dictate that is original price be dropped 40% total or another 20%.  At that point, he'd be working an entire year in order to lose money . . . structurally.  What would he do, cut overhead or just get out?  He'd get out.  Hey, he could just accept a lower standard of living, become a homemaker and stay-at-home dad, and leave it to his wife to bring home the bacon.  Woops, she's also an internist.

Though we didn't discuss, it, my guess is that they'd move, leave the country.  So, what’s the new paradigm? How does a young person avoid becoming poor? What should she or he do?  Heck, how do you and I avoid becoming poor?

It's difficult to read through those U6 demographic statistics and not have the mind wander to contemplating what the impact might be on burglaries, robberies, gang activity, drug consumption, assaults; with increasing anger and anomie the impact on homicides and rapes, arsons.  It's difficult to hear the El-Erian assessment without wondering  just who it will be that pays the more-than-$900,000 per household in unfunded American obligations now in place.  But, those aren't the questions here.