Horseshoe theory is the idea that the far left and the far right converge toward each other, even if they’d both vigorously deny it. Populism, as practiced by both the left and right ends of the horseshoe, has never just been about telling people popular things, such as “ice cream is delicious.” Rather, it’s telling people: “Ice cream is delicious, and you aren’t getting your fair share of the ice cream because you are a helpless victim living in a rigged ice-cream system, and here are the people responsible that we will take to task for you, and by doing so restore your rightful ice cream.”
That was more or less the sales pitch of the populist of the moment: socialist Zohran Mamdani, who clinched the Democratic nomination in the New York City mayor’s race by arguing the city needed revolutionary change. And, with some names changed, it’s a huge part of the MAGA pitch, too.
Today, both the progressive left and the MAGA right seem to run on imaginary—or at best, horribly exaggerated—grievance.
Populism pits “the people” against “the elites.” It requires the finger-point and the class conflict. And it requires things to be very bad, or else there’s not much for the populist leader to fix.
It is also about zero-sum grievance. It’s about telling people they are getting the shaft and our side is the one to unshaft you, extracting vengeance for you along the way. It’s inherently anti-republican (small r), replacing constitutional, individual, and minority protections and rights with the will of the 51 percent (often fewer are needed) who you can convince about your “populist” revanchist policies that will undo all real or imagined past wrongs done to them.
Now, there is nothing wrong with a good grievance—that is, if the grievance is justified and the solution to the grievance reasonable. The left can justifiably point to Americans without health insurance. The right can justifiably point to a border that was consciously left open for many years. Examples abound.
But today, both the progressive left and the MAGA right seem to run on imaginary—or at best, horribly exaggerated—grievance. The uniting theme is that the average American has it terrible these days, and only their chosen end of the horseshoe can fix it. People will go to extremes only when they are convinced things are terrible—and there’s a cottage industry, again both press and politicians, working on selling that story. […]
Wages are the most important component of the flow of financial resources households can use for consumption and savings. But households receive resources from other sources as well, including government transfer payments, social insurance receipts, and businesses. Overall household income tells the same story as wages: Real household income has never been higher than it is today.
And not just for families at the very top. According to the Congressional Budget Office (CBO), families in the 51st to 90th percentiles of the wealth distribution had an average wealth of $1.3 million in 2022, the most recent year data are available. That’s up from around $500,000 in 1990, after adjusting for inflation.
Consumption is an even better indicator of prosperity than income or wealth. It’s how much we all actually get to enjoy life (economically speaking). Spending on personal consumption is at a record level. Now, it might be fair to argue that this consumption is a big part of the looming debt problem America must eventually reckon with, but that would be a howler of an argument from either end of the populist horseshoe, as both the progressive left and MAGA right seem to be big fans of ignoring this issue.
When assessing the best time to be alive, it’s important to give special attention to low-income Americans. The CBO’s income data show that inflation-adjusted post-tax-and-transfer income for the bottom 20 percent of households more than doubled from 1990 to 2021. Real income grew more for low-income households than for the median household. The inflation-adjusted wealth of families in the bottom 25 percent was also at an all-time high in 2022. These families saw their average real wealth triple from 1990 to 2022.
Misery requires ideology.