The Deadly Horseshoe: Populists from Both Sides Claim America is Failing. The Data Disagrees.

Spend a few minutes listening to the most dramatic voices on the American leftsuch as Senator Bernie Sanders (IVt.), Senator Elizabeth Warren (DMass.), or Representative Alexandria Ocasio-Cortez (DN.Y.)and you'll hear warnings of a nation on the brink, burdened by a rigged system that they claim requires a radical governmental overhaul. Similarly, a brief conversation with figures on the New RightVice President J.D. Vance, Senator Josh Hawley (RMo.), or those nostalgic for a 1950s-style Americareveals comparable alarms. Both sides argue that the American project is failing, that the economy is broken, and that society is deteriorating, insisting that only expansive governmental authority can save the nation.

Although these groups often present themselves as opposites, their perspectives share surprising similarities. Political scientists describe this as the "horseshoe" effect: as each side moves further from the political center, it curves toward the other. Both the left and right populists are skeptical of markets, advocate for tighter control over industries, favor protectionist policies, idealize industrial labor, and resent the consequences of global competition. Essentially, both reject the fundamental principles of the liberal economic framework that historically fueled American prosperity.

Their narratives diverge only in the villains they blame: the left targets corporations and wealthy individuals, while the right focuses on immigrants and trade. Yet both insist that only centralized political control can secure a better future, ignoring a critical issue: government is already overextended, overspending, and edging toward fiscal instability.

As noted by commentators at The Dispatch, the New Right's nostalgic vision of the 1950s is more myth than reality. That era saw shorter lifespans, higher poverty rates by modern standards, legal and systemic discrimination, limited opportunities for women and minorities, persecution of LGBTQ+ individuals, and far fewer consumer goods and technological conveniences. The idealization of this period neglects the economic and social constraints many Americans faced.

Conversely, the left's claim that the U.S. economy fundamentally disadvantages working families also diverges from reality. Analyses by economists like Michael Strain and Clifford Asness show that the United States today is the wealthiest broadly affluent society in history. Real wages have risen significantly over two generations, post-tax incomes for the lowest quintile have more than doubled since 1990, and wealth among the poorest 25% of households has tripled. Consumption, a key measure of well-being, is at record levels. While challenges remain, the narrative of widespread economic decline is inaccurate.

Excessive pessimism can be harmful. When citizens believe an economic collapse is imminent, they may support policiessuch as price controls, industrial planning, increased trade barriers, and centralized managementthat historically fail to produce the promised benefits. Such approaches are part of why many criticize the modern economy.

That said, some economic difficulties are real: housing prices are rising, childcare and healthcare remain expensive, energy infrastructure is insufficient, and immigration is poorly managed. However, these problems are largely due to government restrictions rather than the market itself. Local zoning laws restrict homebuilding, energy costs are driven up by regulatory barriers, childcare regulations inflate expenses without improving quality, healthcare complexity stems from layered mandates and subsidies, and tariffs raise production costs. The solution is not radical centralization but targeted reforms.

Addressing these issues effectively requires reducing government overreach, expanding housing availability, streamlining permitting processes, enhancing energy capacity, liberalizing childcare regulations, removing trade barriers, and welcoming more workers. These practical, supply-oriented measures promote opportunity and efficiency while respecting a free-market framework. Unlike populist visions of sweeping economic redesign, these solutions are grounded in evidence and realistic policy.

Author: Ava Mitchell