Goldberg: The Democrats have a vision problem on economy

By Jonah Goldberg

Head to the local big-box electronics store and buy: a Panasonic home theater system ($500), an Insignia 50-inch plasma HDTV ($700), an Apple 8GB iPod Touch ($175), a Sony 3-D Blu-ray disc player ($219), a Sony 300-CD changer ($209), a Garmin portable GPS ($139), a Sony 14.1-megapixel digital camera ($200), a Dell Inspiron laptop ($450) and a TiVo high-definition digital video recorder ($300).

This is not an endorsement of any of these products. I don't own any of them. But you can fill your shopping cart with these items for less than $3,000. The average American worker needs to work 152 hours to earn that much money.

In 1964, however, the average American worker could buy one pricey stereo from Radio Shack after working 152 hours.

What's the point? Well, there's a big one. We are often told the American working man is so much worse off than he used to be. And if you measure income one way, you can make that case.

Indeed, the Democratic Party in recent years has become obsessed in looking at the economy in that one negative way to justify its avocation: giving more stuff to the poor and middle class because they are “falling behind.”

The wealth of nations, according to Adam Smith, the founding father of the market economy, is not measured in GDP or cash reserves. Rather, it “consists in the cheapness of provision and all other necessaries and conveniences of life.”

By that standard, American wealth in general, and the wealth of poor Americans, has skyrocketed in the last half-century, and the government had relatively little - though certainly not nothing - to do with it.

Food has gotten steadily cheaper - for everybody - over the last century. For instance, American Enterprise Institute economist Mark Perry calculates that eggs cost about one-tenth as much as they did at the beginning of the century.

So, what has gotten more expensive? According to St. Lawrence University economist Steven Horwitz, there are only four areas that have become more expensive over the last century as measured in their “labor price”: housing, cars, higher education and medical care. With the arguable exception of a college degree, all are marked with wildly improved quality. And the main reason for rising medical and college costs (and to a lesser degree housing costs) is that the government has distorted the market by “helping.”

For example, Rep. Paul Ryan, R-Wis., underwent LASIK eye surgery in 2000. He paid cash, and it cost $2,000 an eye. “Since then,” he told the Washington Post, “it's been revolutionized three times and now costs $800 an eye. This sector isn't immune from free-market principles.”

No, but it is protected from them.

None of this is to say the middle class and the poor aren't facing tough times, or that our government policies are perfectly suited to their needs.

The air has been thick with claims that government needs to get much more deeply involved in the private sector. According to Obama and Co., only government can provide what the working people in America need, and “doing nothing” is the only unacceptable suggestion. “The one thing I don't want to hear,” as Obama likes to say, is that more government isn't the answer.

Maybe he should get his hearing checked by the same guy who did Ryan's eyes.

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