The Heritage Institute report estimates that under amnesty the average legalized illegal household will take in $43,900 in benefits while paying a little over a third of that in taxes. Those numbers are grim from the standpoint of a tottering economy being asked to take on an even bigger pile of debt and they reveal an even grimmer view of the future.
Set aside the political debates, the tensions over multiculturalism, entitlements and the great political divide and those numbers reek of a country whose only future is poverty.
Subsidized poverty, even if we had the ability to continue subsidizing it forever, is still poverty. A Food Stamp Nation made up of slums full of bodegas and check cashing places does not offer any kind of future. Its only growth industries are in expensive government jobs or cheap service jobs leading to an economy of two tiers; one for workers and another for political workers.
“A report came out recently which showed what most Mexicans had long suspected – there is almost no social mobility in the country whatsoever. If you are born into poverty the chances are very high that you will die poor too,” a BBC report from Mexico concludes.
Now substitute America for Mexico. Imagine a society sharply divided between the working class and the government class where political connections mean more than any single other factor.
The report begins with the daughter of the Federal Attorney General for Consumer Protection shutting down a restaurant because they wouldn’t give her a seat and ends with two wealthy women abusing a police officer by calling him “asalariado” or “wage earner.”
Asalariado is becoming an insult in the United States. And the irony is that amnesty for illegal aliens may complete the process through which the people who came here looking to find opportunities that didn’t exist in Mexico will turn America into Mexico.
America hardly had any class issues because both the rich and the poor worked. A Carnegie or a Rockefeller might be able to buy and sell a thousand ordinary men, but still started out at the bottom of the ladder and never stopped working. To have proper class issues, you need a permanent leisure class to create that gap between those who work and those who do nothing.
In a dynamic economy, a leisure class is largely unsustainable. Inheriting a pile of money and then doing nothing is not likely to end well. But a dynamic economy depends on social mobility. An oligarchy regulates the economy into an impoverished predictability in which there is hardly any social mobility and a permanent leisure class. Its permanence depends not on the economy, but on its control.
Or to put it another way, suppose you have X millions of dollars to invest. Do you look for undervalued companies with a future or companies with political connections? In a dynamic economy, you invest based on merit. In an oligarchy, you invest based on political connections because the idea or the model are mostly worthless. The economy is divided up into spheres of influence carved out by interests and guilds.
In the age of Obama, a smart strategy is to invest in politically connected companies with bad business models and then get out before they go down. Nothing of worth or value will be created. Instead the wealth will circulate within the oligarchy and pay out profits with money harvested from the Asalariados, the suckers still trying to claw their way up instead of phlegmatically accepting their plight and cashing their government checks.
Eventually either the checks will get smaller or the price of milk will get higher. The Asalariados may look like suckers in the short term, but they’re still getting ahead in the long term. The grasshopper may shop for groceries without checking prices while the ant grits his teeth at the cash register, but when the economic freeze comes, it’s the ant who has the skills to survive.
But the oligarchy is designed to keep the ant from climbing too high. The last time the ants climbed too high, feudalism collapsed and gave way to the free enterprise economy, and most of the thinkers of Europe spent centuries trying to figure out how to put everything back into a neatly controllable natural order with lots of farms and lots of cheerful people working on them without complaint.