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Perspective ~ Pundit In Wonderland

by Sheldon Richman for the Foundation For Economic Education

In one of those boilerplate articles about the deteriorating American middle class, Washington Post columnist Harold Meyerson last September pointed out that a new Pew Research Center survey revealed that an increasing number of people think we live in a country divided into “haves” and “have-nots” and that more people now put themselves in the second group.

“In 1988, fully 59 percent identified themselves as haves and just 17 percent as have-nots. By 2001, the haves had dwindled to 52 percent and the have-nots had risen to 32 percent. This summer, just 45 percent of Americans called themselves haves, while 34 percent called themselves have-nots,” Meyerson writes.

He continued: “Harder times have come to left and right alike:The percentage of Republicans who call themselves haves has declined by 13 points since 1988; the percentage of Democratic haves has declined by 12 points.”

But curiously, while more people who identify with the two major political parties say their position is worsening, they nevertheless disagree over the divided-nation question. “The percentage of Democrats who say America is divided between haves and have-nots has risen by 31 points since 1988; the percentage of Republicans, by just 14 points,” Meyerson writes. “Indeed, though that 13-point decline in Republicans who call themselves haves has occurred entirely since they were asked that question in 2001, the percentage of Republicans who say we live in a have/have-not nation has actually shrunk by one point since 2001. (It had increased 15 points from 1988 to 2001.)”

Have and have-not what exactly? Meyerson has little to say about that rather obvious question beyond mentioning job stability and retirement security, as though being without those things is equivalent to being in poverty. Nevertheless, he offers an explanation for why Republicans are more reluctant to acknowledge this great division in our land: “Apparently, so great is Republicans’ loyalty to the Bush presidency that they’re willing to overlook their own experience. And, in many cases, to attribute the nation’s transformation solely to immigration, rather than to the rise of a stateless laissez-faire capitalism over which the American people wield less and less power” (emphasis added). Excuse me? Stateless laissez faire? The U.S. economy—more precisely, the American population—has been laden with taxes, regulations, and the consequences of political privilege for decades—make that centuries. Corporations, rich farmers, and government contractors rake in billions of dollars every year. “National security” is the catch-all rationalization for all manner of subsidies. Trade restrictions, despite the heralded trade agreements, funnel tons of cash directly from consumers’ pockets to business coffers. Taxes, regulations, and patents, at most an inconvenience to incumbent corporate giants, stifle small and would-be competitors, depriving consumers and workers of new products and opportunities. Monetary central planners manipulate economic behavior and distort relative prices for political ends. Call it what you will, it’s not laissez faire.

Laissez faire would mean that people and goods could cross the borders unimpeded by Immigration and Customs Enforcement agents. Does Meyerson think that happens now? If it were happening, people from south of the border desperate to get here in search of a better life wouldn’t have to risk life to avoid detection, and unreadable multi-page trade agreements would be superfluous. But goods and people can’t cross borders merely in response to people’s wishes because government officials have arrogated the authority to say who and what may cross.

This intervention helps explain why people aren’t better off than they are.But this is a different issue from the one Meyerson raises. He talks as if more and more people really have become “have-nots.” This is hard to accept when it is empirically falsified just by walking down the street. Has it escaped his notice that people from virtually every socioeconomic group are carrying iPods and multi-function cell phones, wearing up-to-date clothing, and driving nice cars? At home they enjoy products their grandparents would have regarded as high luxuries—if they could have imagined them at all.

There is no clear divide between rich and “poor.” Rather, there’s a continuous spectrum of wealth and income in the United States, with even the poorest enjoying astounding affluence by historical and even current world standards. Truly freeing the market would assure that anyone with ambition could share in that standard of living.

The news is filled with trouble in the financial and housing markets because many people are unable to pay their subprime mortgages. Chalk it up to another failure of the Federal Reserve System, says Gerald O’Driscoll.

The United States has no free market in medical care, but it’s freer than anywhere else. So why do those international rankings place the country so far down the list? Jim Peron says the competition is rigged. With the driver’s license transmogrifying into a national ID card, it’s hard to believe that you once didn’t need permission from the government to drive. Becky Akers guides us on a historical journey. Beware the word “need.” Although it lacks precise meaning, it’s the trump card that justifies all sorts of government intrusions. Gary Galles explains. Can the government intimidate a company into sabotaging its own employees’ defense against flimsy criminal charges? Roger Donway says: You bet it can. The late Murray Rothbard was known as “Mr. Libertarian” because of his voluminous pro-freedom writing on economics, political philosophy, sociology, and history. How can one become acquainted with such a body of work? Start with David Gordon’s introduction in these pages. In the columns this issue: Richard Ebeling marks the anniversary of the Bolshevik revolution. Donald Boudreaux spells out what government control of medical care would mean. Robert Higgs shows how we got tax withholding. John Stossel wonders how dead farmers can collect government subsidies. Charles Baird reports on progress in paycheck protection. And David Henderson, reading the claim that good health and pharmaceutical profits conflict, protests, “It Just Ain’t So!” Our book reviewers have been chewing on tomes about twentieth-century totalitarians, history from the Great Depression on, justice, and property rights. 

This article was originally published by the Foundation for Economic Education (FEE) in The Freeman on November 2007.

About The Author

Sheldon Richman is the editor of The Freeman and In brief. The Foundation for Economic Education (FEE), one of the oldest free-market organizations in the United States, was founded in 1946 by Leonard E. Read to study and advance the freedom philosophy. FEE's mission is to offer the most consistent case for the "first principles" of freedom: the sanctity of private property, individual liberty, the rule of law, the free market, and the moral superiority of individual choice and responsibility over coercion.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.