The American Dream Isn't Dead: Opinion

NEW YORK (TheStreet) -- I usually don't respond to ramblings of pessimists offering euphoria through increased government intrusion into our lives. The evidence is overwhelming in favor of free markets supporting higher standards of living compared to wealth destroying central planning.

However, in the spirit of America's Independence Day on Thursday, and to give thanks for living in our opportunity-filled land, I'm offering an alternative conclusion from an iniquitous article I had the displeasure of reading on MarketWatch.com by Rex Nutting.

According to Nutting, America's dream is dead. But let's read it in his own words:

"Whatever happened to the promise that anyone could build a better life by honest labor? That my life would be better than my parents', and that my kids' lives would be better than mine?"

"That America is gone..."

My first "what the hell?" is how does a man living the American dream write about the dream's demise? Didn't Nutting appreciate the irony of his own commentary? Maybe he didn't think anyone would notice? He could get a job serving drinks or, alternately, unemployed standing on a soapbox telling all who will listen about how he can't find employment because the American dream is gone.

Unless he's suggesting the government is forcing him to sit at his computer and type, he's exhibit A of what's wrong with his own article. Nutting can't have it both ways. Is he free to seek out opportunities and create a better life, or is he forced to live the life of a government official's edict?

The second "what the hell?" arrives quickly after the first. Nutting writes:

"...the rich.... and forcing the poor to survive on an increasingly frayed safety net."

Since when was anyone forced to survive on a social safety net? Also, when did the dream turn into living on the labor of others? Is sitting on the couch playing video games while waiting for government handouts part of the hopes and aspirations of the founding fathers?

Of course not, and higher taxes on producers while increasing handouts only decreases the former and increases the latter.

This isn't North Korea. If you think there's greater opportunity somewhere else, you're free to leave. It appears not everyone at MarketWatch received the memo that, in America, border guards are not preventing people from leaving. If you're poor and no longer feel America offers "the dream," you're totally free to seek better opportunities somewhere else.

Speaking of North Korea, it's becoming one of the last preventing exit. China, Russia, East Berlin and other old-school examples of border guards preventing people from leaving are evaporating fast. They're abandoning central planning in favor of market-based economies.

The next "what the hell?" is a combination of using outlier examples and faulty logic to tug at your emotions. Nutting questions the appropriate salary for NBA star LeBron James, and in the process demonstrates his own lack of economic understanding :

"Do we need to pay superstars exorbitant amounts of money to get them to show up for work every day? Clearly not."

The answer is clearly yes, because if the Miami Heat offered James $1 million per year (an "exorbitant amount" to some), James wouldn't show up for work. Here'ss why.

The question wrongly predicates the Miami Heat is the only team competing for James' labor. Nutting's assertion that James doesn't have a choice and the Miami Heat is overpaying crumbles in the light free market competition. Part of the American dream is the possibility of having the Chicago Bulls and Los Angeles Lakers compete for your talent.

If the total compensation offered by the Miami Heat isn't competitive with other basketball teams, workers won't show up because they will go elsewhere. The same can be said about every employer and employee relationship (not impacted upon by government interference).

CEOs in America make more because the corporations compete for talent and are worth more. It's disingenuous to compare larger and more productive companies such as Apple's ( AAPL), Wal-Mart's ( WMT), or Google's ( GOOG) CEO salaries with European companies worth a fraction in value. If you're a shareholder, you want the best chief you can afford to manage your company.

Not only is it ridiculous to represent that companies and employees shouldn't freely negotiate on their own without government interference, but to do otherwise adds a clear moral hazard.

Unlike Nutter, I believe adults are not only smart enough to negotiate on their own, but it's in their own best interest to be left alone to do so.

The last "what the hell?" at first may seem to have merit, but fails miserably under scrutiny. Nutter confuses equal opportunity with equal results. He uses widening income equality as evidence the American Dream is gone. Nothing could be further from the truth.

In short, he suggests the economy is static and the pie is only so large. If someone takes more, it means someone else receives less. But the economy isn't static, it's dynamic.

For example, think about life for the typical American in the 1800s compared to today. Clearly the size of the pie has grown. As total wealth increases, it's normal and natural for top level employment opportunities to grow. As businesses compete for talent, wages increase.

Isn't the whole purpose of studying and working hard so that employers will compete for your talents? Who genuinely has the best vantage point and motivation to decide which CEOs are "mediocre" or not? Even if Nutter is correct that some CEOs are overpaid, aren't those decisions best left to the actual investors?

I suspect as America continues to be the land of opportunity and our economy grows, we will increasingly read about widening income equality. However, that's an indication of prosperity, not the end of the dream. Don't ever let them fool you into thinking they know what others should be paid more than the people actually cutting the check.

What a sad miserable existence it must be for Nutter and those who think like him. We live in the greatest time of our civilization, longest life expectancy, and are citizens of a country that produces millionaires like no other. I guess for some it's not enough and also I suppose it's never enough.

As for myself, I was born with a plastic spoon in my mouth, but it doesn't mean I haven't received two scoops of opportunity to experience the American dream.

During this year's Independence Day celebration, I will enthusiastically bask in the glory that comes from knowing my three magnificent sons will probably enjoy a higher standard of living than their parents, just as I have. Because the American Dream is far from dead, it's alive and well.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Robert Weinstein currently blogs, mentors traders, and writes several weekly columns in Rocco Pendola's Option Investing newsletter from his home in northern Wisconsin. Robert tends to focus on the psychological importance of goals, risk mitigation, emotion, and relatively short term market exposure. With nearly 30 years of studying and investing experience, Robert has experienced the many ups and downs in the financial markets and uses the knowledge gained to maintain balance. Robert believes the best way to make money investing is to avoid losing it. The best way to avoid losing is to know what emotional traps lay in the path of investors and learning how to avoid them. Robert is a voracious reader of financial related books often completing more than one book a week while not trading or writing. Robert contributes to his blog at paid2trade.com on a regular basis with an emphasis on studying behavior finance.


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