Horseshoe Politics: Why Both Populist Poles Misread America's Economy — and What Actually Works

Spend a few minutes listening to the theatrical voices of the American left — Sen. Bernie Sanders, Sen. Elizabeth Warren, or Rep. Alexandria Ocasio-Cortez — and you'll hear a familiar claim: the nation is collapsing under a rigged system that demands radical government redesign. Spend equal time with figures on the New Right — including Vice President J.D. Vance, Sen. Josh Hawley, or nostalgic commentators yearning for an idealized 1950s America — and you will hear a strikingly similar diagnosis.

Both camps declare the American experiment to be in peril: the economy broken, society unraveling, and only sweeping state power can restore order. Despite their mutual distrust, the most extreme wings of left and right now share much in common.

The horseshoe effect

Political scientists describe this convergence as the "horseshoe" effect: as movements drift from the center, their trajectories bend toward one another. Both sides increasingly distrust markets, seek intrusive industrial management, favor protectionist measures, romanticize manufacturing jobs, and resent the disruptions of global competition. In short, both oppose many of the liberal economic principles that helped make the United States prosperous.

The targets differ — the left often blames corporations and the wealthy, the right points at immigrants and trade — but the proposed remedy is similar: more centralized control and top-down solutions. That shared impulse obscures another, more immediate risk: a government expanding its commitments while spending beyond available resources, edging toward fiscal strain.

On nostalgia: As commentator Kevin Williamson has observed, nostalgia can be manufactured and misleading. The 1950s — sometimes held up as a social and economic golden age — were marked by shorter life expectancy, higher poverty by current standards, legal and de facto discrimination, limited opportunities for women and minorities, persecution of LGBTQ people, and far fewer household conveniences than today.

What the data say

The left's narrative that the economy is fundamentally rigged against working families deserves scrutiny as well. Economists Michael Strain and Clifford Asness note that we live in a historically affluent mass society: typical workers' real wages are substantially higher than two generations ago. Post-tax incomes for the bottom fifth of households have more than doubled since 1990, and wealth for the poorest quarter of U.S. households has roughly tripled. Consumption — a strong measure of everyday well-being — is at or near record highs.

Those statistics do not erase individual hardship, but they contradict the dominant narrative of national economic collapse.

Why pessimism is risky

Pessimism matters politically. When voters believe they are living through an economic apocalypse, they are likelier to support remedies that have performed poorly historically: price controls, heavy industrial planning, higher trade barriers, and expansive centralized economic management. Such policies tend to reduce incentives, raise costs, and produce shortages — outcomes that would deepen, not solve, real problems.

Real problems — and clearer causes

There are genuine challenges: housing costs are high and rising in many markets; child care and health care remain expensive for many families; energy infrastructure needs modernization; and immigration is often poorly managed. But these issues frequently stem from policy choices and regulatory barriers rather than market failure alone.

• Local zoning and land-use rules limit where housing can be built.
• Lengthy permitting and restrictive approvals raise energy costs by blocking pipelines, transmission lines, and new generation.
• Child-care costs are amplified by regulations unrelated to safety or quality and by limited supply.
• Health care is complicated by overlapping federal and state rules, mandates that distort prices, and systems that limit competition while subsidizing demand.
• Tariffs raise the price of inputs for American manufacturers and are embraced by elements of both the left and right.

A pragmatic policy agenda

To lower costs and expand opportunity, a set of supply-oriented reforms is better grounded in evidence than sweeping top-down redesigns. Practical measures include building more housing, reforming permitting processes, expanding energy capacity, revising child-care regulations to encourage supply while protecting safety, removing or reducing tariffs that raise production costs, and allowing more legal workers into the economy. These steps focus on increasing supply and competition rather than expanding centralized control.

These policies require humility and incrementalism, not grandiose visions of redesign. They also demand political will to tackle vested local and federal barriers. If the goal is broader prosperity and resilience, policymakers should prioritize reforms that widen opportunity and lower costs rather than promises of sweeping state control.

Sources referenced: Michael Strain, Clifford Asness, and commentary by Kevin Williamson.