Can We Please Stop Lying About Obama?

Opinion|Can We Please Stop Lying About Obama?

There’s a story haunting American politics. It’s a story told by right-wing populists like Donald Trump and JD Vance and left-wing populists like Bernie Sanders. The story goes something like this: There once was an America, in the 1950s and 1960s, that made stuff. People could go off to work in factories and earn a decent middle-class wage. Then came globalization and the era of market-worshiping neoliberalism. During the 1990s and early 2000s, America signed free trade deals like NAFTA. China entered the World Trade Organization in 2001. Jobs were shipped overseas. Factories shut down. The rich prospered while members of the working class got pummeled and ended up voting for Trump.

The problem with this story is that it’s 75 percent bonkers — historically inaccurate on nearly every front.

In the first place, there never was a market-worshiping era of pure globalization. As the economics writer Noah Smith has noted, top marginal tax rates were significantly higher in 2016 than in 1992. Federal spending on social programs went up, not down. Government policy became more progressive (favoring those down the income scale), not less. Much of the economy grew more regulated, not less. U.S. tariff rates were basically stagnant.

The era between the start of the Clinton administration and the end of the Obama one was not a libertarian/globalist free-for-all. It was an era of mainstream presidents who tried to balance dynamism and solidarity.

The second problem with the populist story is that it gets its chronology wrong. America really did deindustrialize. As the American Enterprise Institute economist Michael Strain has shown, wages really did stagnate, but they did so mostly in the 1970s and 1980s, not in the supposed era of neoliberal globalism.

Smith helpfully divides the recent American economic history into three eras. There was the postwar boom from 1945 to 1973. Then there was the era of oil shocks, a productivity slowdown and wage stagnation, from 1973 to 1994. Then there was a return to higher productivity and higher wage growth, from 1994 to today. That is to say: Median wages have grown since NAFTA and the W.T.O., not declined.