President Trump’s startling win in 2016 ushered in a new era of economic populism. Ever since, both parties have been vying to offer a new economic deal to blue-collar Americans, whose earning power had been declining for decades.
They could use a new deal. According to the Federal Reserve, real median earnings for non-college workers fell 14 percent over the past 40 years, while those for workers with a bachelor’s degree or higher have grown by 14 percent.
Opportunity in America looks very different to people on opposite sides of the diploma divide. Whereas non-college workers contend with downward mobility, the highly educated rise into tonier precincts of upper-middle-class affluence.
This disparity disfigures our society, and populists across the political spectrum are right to want to redress it. Unfortunately, they have proved better at posturing as working-class tribunes than at tangibly improving their lives.
President Biden presided over a nearly $5 trillion public spending binge aimed at rebuilding a pandemic-stricken U.S. economy “from the bottom up and middle out.” But Bidenomics ultimately struck out with working families, who identified it with rising living costs and eroding purchasing power.
Although he owes his reelection mainly to inflation, it didn’t take Trump long to break his promise to focus on batting it down. Instead, he’s launched a global trade war that’s driving prices back up for consumers and businesses, choking economic growth and provoking retaliatory tariffs on U.S. exports.
An angry Trump lashed out at Walmart last week for announcing price increases, instructing the retail giant to “eat the tariffs.” That’s not an option for thousands of smaller businesses operating on slim profit margins.
After four years of steady growth, the U.S. economy has shrunk 0.3 percent since Trump’s return to the White House. Like Bidenomics before it, MAGA populism is failing working Americans. Both are based on dubious premises about what’s gone wrong and how to fix it.
Populists blame trade agreements and globalization for decimating factory jobs. This ignores structural changes that have affected all advanced economies — rising education levels, more women working, growing demand for services, the digital revolution. It also vastly overstates the power of policy to either cause or reverse deindustrialization.
Trump is taxing most imports to shield U.S. companies from foreign competition and induce them to bring manufacturing jobs home. Yet America already has nearly half a million unfilled factory jobs.
The share of U.S. workers in manufacturing has been falling steadily since 1950, to just eight percent today. Is it worth risking a new bout of inflation and possibly a recession to bump that number up a few points?
Americans aren’t buying Trump’s prescription for a “new golden age” built upon protectionism and autarchy. The Chicago Council on Global Affairs reports that 84 percent of Americans say trade is good for their standard of living and good for the U.S. economy (79 percent). Strikingly, 55 percent — including nearly half of Republicans — want Washington to pursue a global free trade policy, up from 34 percent in 2024.
No wonder Trump is crawfishing away from his “beautiful” tariffs and trying to cut new trade deals with Great Britain and China. Yet even as his right-wing economic populism implodes, progressives continue to clamor for a left-wing version.
They see it as the antidote to “neoliberalism,” which they define as a fixation with free markets, free trade, global economic integration and fiscal austerity that supposedly gripped both parties over the last four decades.
The populist left demands a “post-neoliberal” agenda — conveniently forgetting that in Bidenomics, it already got one. In his first major decision, Biden sided with progressive economists pushing for a massive $1.9 trillion stimulus bill. They dismissed warnings that a big dose of deficit spending would ignite inflation.
Biden also put trade policy in the deep freeze, left some Trump tariffs in place and embraced industrial policies to “reshore” factories and supply chains, nurture domestic chip manufacturing and invest billions in electric cars and clean energy production.
The White House hired a left-wing academic to launch an unsuccessful bid to break up America’s most successful tech companies. And Biden made good on his promise to be the most pro-union president ever, intervening on labor’s behalf in organizing drives and even walking a picket line with striking workers.
While Biden can take credit for new investments in chip fabs and clean energy production, much of his spending on education and infrastructure, including on rural broadband, has yet to yield positive results.
From January 2023 to January 2025, manufacturing jobs dropped. And while union membership under Biden saw a modest uptick (240,000 workers), the share of unionized workers fell below 10 percent as the workforce grew.
Bidenomics won raves from progressives but Bronx cheers from working-class voters. They linked heavy government spending to high prices and resented what they saw as Democrats’ inattention to their economic struggles.
As The Atlantic’s Jonathan Chait concluded in a Bidenomics post-mortem, “The notion that there is a populist economic formula to reversing the rightward drift of the working class has been tried, and, as clearly as these things can be proved by real-world experimentation, it has failed.”
Non-college Americans aren’t asking for statist “solutions” — protectionism, unrestrained deficit spending and industrial policies larded with superfluous social policy mandates — that flout basic economics and common sense.
Populism, as practiced by Biden and Trump, has foundered on the patronizing premise that working families want yesterday’s factory jobs back. But they know the economy has changed and want to be part of where it’s going, not where it has been.
Will Marshall is president and founder of the Progressive Policy Institute.