Far-Left and New Right Align Against Free Markets, Experts Warn

The American political landscape has witnessed a curious alignment between the far-left and the New Right, both advocating for increased government intervention in the economy. Figures like Bernie Sanders, Elizabeth Warren, and Alexandria Ocasio-Cortez express concerns about a nation on the brink of collapse due to a rigged economic system. Similarly, JD Vance, the Vice President, and Josh Hawley, a Senator from Missouri, echo these sentiments, yearning for a return to an idealized version of 1950s America. This shared narrative reveals a striking similarity in their perspectives, despite their apparent ideological differences.

Both factions view the American experiment as failing, citing a broken economy and societal decay. This shared pessimism is leading to a growing distrust of free markets. Political scientists have identified this phenomenon as the “horseshoe theory,” where the extremes of the political spectrum bend closer to one another. Each side expresses a desire to micromanage industries and enforce protectionist measures while romanticizing manufacturing jobs. Such sentiments pose a challenge to the liberal economic principles that have historically underpinned American prosperity.

The far-left attributes the nation’s challenges to corporations and wealthy individuals, while the New Right points fingers at immigrants and international trade agreements. Despite these differing narratives, both groups converge on the belief that the path to a brighter future requires increased political control. They overlook a crucial issue: the risk of an expanding government that spends beyond its means, leading the nation towards a fiscal crisis.

In a recent commentary, Kevin Williamson of The Dispatch highlighted the dangers of nostalgia, arguing that the idealized 1950s were not as utopian as some claim. During that era, life expectancy was shorter, poverty rates were higher, and discrimination was prevalent. The notion of a golden age ignores the harsh realities faced by various marginalized groups during that time.

Conversely, the left’s narrative of persistent injustice and economic disadvantage for working families fails to align with current data. According to research by Michael Strain and Cliff Asness, published in The Free Press, the United States is experiencing unprecedented wealth among its citizens. Real wages for typical workers have risen significantly over the last two generations, and post-tax incomes for the lowest-income households have more than doubled since 1990. Furthermore, wealth for the bottom quarter of U.S. households has tripled, with consumption levels reaching record highs.

While it is undeniable that many Americans face economic challenges, the prevailing narrative of decline does not reflect the broader economic reality. The dangers of widespread pessimism should not be underestimated. When citizens perceive dire economic conditions, they may support policies that could lead to further economic distress, such as price controls and increased government intervention. Historical evidence suggests that such policies have consistently failed wherever they have been implemented.

Despite the long-term resilience of the American economy, issues like high housing costs, expensive child care, and inadequate energy infrastructure persist. However, these challenges are often exacerbated by governmental barriers rather than the principles of capitalism or global trade itself. Local zoning laws frequently hinder housing development in areas where demand is highest, and regulatory frameworks complicate energy projects, driving up costs.

For lasting solutions, the focus should shift towards reducing government size and influence. Strategies such as increasing housing supply, reforming permit processes, expanding energy infrastructure, and liberalizing child care regulations could foster a more competitive and dynamic economic environment. These approaches emphasize supply-side solutions that are grounded in evidence, rather than the top-down management favored by populist movements.

Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, argues that the populist narratives from both extremes fail to address the fundamental issues at hand. A more effective path forward would involve humbly acknowledging the need for reform rather than pursuing grandiose visions of economic redesign.