Who Has Freedom in the American Economy? Increasingly, Just the Rich

Shutterstock | nuvolanevicata

  •  
  •  
  •  
  •  

Last week, former Louisiana Governor Bobby Jindal published an op-ed in the Wall Street Journal bemoaning popular support for progressive policies that seek to expand the social safety net to support millions of Americans, arguing that these people don’t understand the “true cost” of such policies and that Republicans need to “make the case for freedom.”

Let’s make that case for freedom. It starts by asking one simple question: Who has it?

A few million — around 1%, or maybe a little more — of Americans have enough wealth to live well without doing the traditional 9 to 5 routine everyday – they don’t have cubicles, or bi-weekly paychecks, or water cooler conversations. And they’re so far removed from the everyday hustle of a Wal-Mart worker that it’s an unfathomable lifestyle to them. I, for example, have not “worked” for a living in over five years.  The vast majority of my income comes from selling stock from my portfolio. I can spend all of my time doing this advocacy work — or sleeping late — or going to the art museum — or going to Broadway shows, or doing whatever I want. That counts as “freedom” to me. I have the freedom to do more-or-less whatever I feel like doing.

If I definitely have freedom, what about everyone without a stock portfolio or a financial manager? The vast majority of adult Americans younger than 60 need to work for a living, for better or for worse. The majority of those people don’t have nearly enough money to retire. In fact, 40 percent of them don’t have enough liquid assets to cover a $400 unexpected expense – over 60 percent don’t have enough to cover a $1,000 expense.

Let’s think for a second. One group consists of wealthy individuals who don’t work for a living, whose money works for them via special tax incentives for the rich and well-paid financial consultants. The other group consists of working people who often live paycheck to paycheck, or need every penny of the few savings they do possess to safeguard against financial ruin from any of the unpleasant curveballs life tends to throw our way. Now, which group is more likely to start the next billion dollar business?

Take Facebook as an example. When Mark Zuckerberg was building the company, he could not only afford to work without pay for months, he was actually working at a net loss for a period, paying out money for servers and whatnot.  He was able to do that because his parents could support him while he and his associates worked without pay building the company. Coming from a well-to-do family with a certain amount of generational wealth, he had the exact kind of built-in safety net that Republicans continually rage against.

The Republican worldview is that providing people with a social safety net fosters dependence and disincentives work — they believe that a person on welfare, for instance, soon becomes so addicted that they are unable to do anything, let alone hold a job.  And that worldview, somehow, makes sense to them. With that thought process, starting a business only makes sense as a last resort for someone who has no means of support, because they have nothing to lose.

Here in the real world, there are already millions of people who have nothing to lose, and they aren’t the ones investing in new business ventures – they’re trying to feed their kids, make a living, save up enough for things like houses and cars in the hope that they can build their wealth up enough over time just to feel a bit more secure. People with truly nothing to lose will quickly find some job to make money, often falling victim to the trap of payday lenders never to emerge.  

Business requires a degree of risk-taking that might as well be a luxury. The people who have the time and resources guaranteed by family or previously earned wealth – a social safety net by any other name – are the ones that are free to take those kinds of risks. They have the key freedom needed to innovate and take chances on big ideas, the exact one that Franklin Roosevelt used to justify his plans for a publicly available social safety net nearly 75 years ago – freedom from want. Even if Republicans prefer not to acknowledge it, it seems a very obvious truth that freedom from want is the only thing that guarantees the freedom to innovate. If they were serious about providing American opportunity, they’d start with securing that freedom.

Related Posts