David Leonhardt, a senior writer for the New York Times, has tracked the U.S. economy for decades. Starting in the late 2000s, he began to notice that the statistical evidence was telling him a disheartening story about the decline of the American dream. Whether it was stagnating wages for most workers, the decreasing likelihood of children born into each generation to economically outperform their parents, technological slowdowns, or the life expectancy of Americans relative to other high-income countries — by every indicator, the United States as a whole seemed to be losing the sense of inevitable progress that had long defined it. 

In his magnificent new history, Ours Was the Shining Future, Leonhardt examines how America succeeded in delivering “the most prosperous mass economy in recorded history” starting in the 1940s and how the American Dream receded for most citizens in the 1980s and beyond. Using both economic analysis and deep historical research, Leonhardt uncovers the critical ways in which “democratic capitalism” characterized the U.S. during the presidencies from the 1940s through the 1970s, a period that spanned the terms of Democratic presidents like Franklin D. Roosevelt and Lyndon Johnson but also Republican presidents like Dwight Eisenhower and Richard Nixon. A combination of circumstances, policies, and attitudes brought about what historian James Truslow Adams (who coined the term “the American Dream” in the 1930s) envisioned as “a better, richer, and happier life for Americans of every rank.” 

In this podcast episode, Leonhardt discusses how the critical factors of political power, enlightened corporate culture, and government investment operated in a virtuous cycle during the four decades after the end of World War II to bring about widespread prosperity. But after 1980, a reversion to what Leonhardt calls “rough-and-tumble capitalism” meant that these critical factors moved the country into a vicious cycle instead. Leonhardt emphasizes that “the Great Stagnation” of the past four decades — as the working class and lower middle class have experienced it, at any rate — can be overcome. But failure to do so will mean that “every problem we have in our society becomes much harder to solve if we don’t solve that.”


David Leonhardt: Americans keep telling pollsters that they think the economy’s bad. It’s been twenty years since most Americans said the country was on the right track. Let’s take that seriously, rather than, as I think some economists have done, sort of torture statistics to say, “Actually things are much better than everyone thinks.” I don’t think they are.

Geoff Kabaservice: Hello! I’m Geoff Kabaservice for the Niskanen Center. Welcome to the Vital Center Podcast, where we try to sort through the problems of the muddled, moderate majority of Americans, drawing upon history, biography, and current events. And it’s a great pleasure to be joined today by David Leonhardt. He is a senior writer for the New York Times, and currently writes The Morning Newsletter that goes out to the publication’s many millions of subscribers. He also contributes to the paper’s Sunday review section. He joined the Times in 1999, after stints at Business Week and the Washington Post, and in 2011 he was awarded the Pulitzer Prize for Commentary in recognition of his skill at making complicated economic questions comprehensible to a general audience. And he is the author of the recently released book, Ours Was the Shining Future: The Story of the American Dream. Welcome, David!

David Leonhardt: Thank you, Geoff. It’s great to be here.

Geoff Kabaservice: Great to have you with me. I’m going to lay my cards on the table right at the outset and say that I think your book is a stunning accomplishment. It’s a luminous narrative of the economic and political history of the modern United States, it’s dazzling in its insights into the deeper forces that have shaped the country, and it is fascinating in its portraits of the familiar and unfamiliar figures who, as you put it, “helped cause both the rise and fall” of “the most prosperous mass economy in recorded history.” So congratulations!

David Leonhardt: Thank you so much, Geoff. I really appreciate that.

Geoff Kabaservice: I’m also frankly gobsmacked by the fact that your very first ink-and-paper book turns out to be a work of such erudition and power.

David Leonhardt: Thank you. It’s incredibly nice of you to say. It is my first book, which is funny because I’ve been writing many thousands of words for many, many years. But I had never found a subject that I was passionate enough about to want to spend the multiple years digging into archival work, reading oral histories, reading very old newspaper articles until now or until recently, which was this whole subject of: How is it that our society, that was so good for so long at producing rising living standards for most people, lost its way?

Geoff Kabaservice: And you did just a superb job of that. Just on a somewhat gossipy note, I had Franklin Foer on my podcast a few weeks ago, and he described the experience of writing his Biden book in the same Compass Coffee in D.C. where you were writing this book.

David Leonhardt: Yes, I love talking about this. Frank and I acknowledged each other in our Acknowledgements. Frank and I knew each other a little bit. We had mutual friends, we’d worked together. I wrote a chapter for a book he had edited years ago. But we really didn’t know each other that well until we realized that, just as you said, we were writing our books in the same Compass Coffee shop in Washington. He was writing his in the front of the shop, I was writing mine in the back. And over many months, we basically took a coffee break every day from writing our books with each other. We spent fifteen or twenty minutes mostly talking not about our books. But we also swapped a lot of ideas about the books.

And I do think there is a connection between the books. Frank, as you well know and as your listeners know, part of what he describes is why the Biden administration has taken a different approach to economic policy than some previous administrations — than all recent previous administrations in some ways, including Democratic administrations. And I think what he talks about in that book, and particularly his chapter focused on Jake Sullivan… In many ways my book, even though it’s coming out six weeks after Frank’s, is a prequel to his. I am describing some of the underlying forces in history for why a Democratic administration decided, “Wait a second, the economic policies that we’ve been pursuing may have done a lot of good in certain ways, but at root they failed to solve the underlying problem of the stagnation of American living standards and soaring inequality.” And so there’s not only this nice personal connection, but there’s actually a connection between Frank’s book and mine.

Geoff Kabaservice: That is interesting, and you do describe the perceived need to turn away from neoliberalism. I’m sure we’ll get to that. I also am just frankly kind of happy to think that the 1920s Viennese writers’ cafe culture of Stefan Zweig and Arthur Schnitzler lives on along Massachusetts Avenue in DC.

David Leonhardt: Yes.

Geoff Kabaservice: So I’m definitely going to want to know more about how this book came to be as well as what it’s about. But to start with the definitional question, what has the phrase “American Dream” meant since it was coined by historian James Truslow Adams in the 1930s?

David Leonhardt: I think that the date of its coining is really important, because I know “the American Dream” is such a widely used phrase. I feel like it’s now — not always, but frequently, particularly in intellectual circles — used ironically or with a little bit of a wink. And I think it’s important to remember that it was not coined by a marketer and it was not coined during a particularly happy time in our country’s history. But it was coined earnestly. And what James Truslow Adams talked about was “that American dream of a better, richer, and happier life for Americans of every rank.” He suggested that that idea was arguably the United States’ greatest contribution to the world.

And he wrote that in 1931 — or the book was published in 1931, so he’s probably writing it in 1930. It’s the depths of the Depression. Hoover’s still in office. The stock market has crashed in ’29. FDR is not elected until ’32. And he talks about the Depression and the challenges to it. And yet he essentially argues, as I put it in my book, that the notion of progress is embedded in the idea of the American Dream. So think of those three words that are at the heart of Adams’ definition: better, richer, happier. They’re comparative words. They’re relative words. It’s this idea of things improving over time. And he specifically says “of every rank,” so the idea of social mobility is built into it as well. And despite how dark things were in the country at the time, despite the challenges it faced, he laid out this idea of the American Dream. If you look in newspapers, you’ll find “American” and “dream” next to each other before his book, but it’s kind of coincidental. As we know the phrase, Adams really invents it.

And he ends the book on this profoundly optimistic note that I stole for my title with only a slight tweak. He quotes Mary Antin, an immigrant from Russia who had written her own memoir about coming to the United States, and she’s sitting on the steps of the Boston Public Library… Mary Antin comes to this country not knowing English. She learns English through the Boston school system and the public library. She becomes a published poet as an incredible young woman. And she writes in her book, “Mine is the shining future.” That really embodies the American Dream. And so the title of my book is Ours Was the Shining Future, which plays off Antin.

And so I do think it’s important, as much as we may mock the American Dream in certain ways now, to remember what’s good about it and what’s real about it and how influential it has been over the years. There’s a reason why the most famous protest speech in American history is “I Have a Dream.” And Martin Luther King makes very clear — he uses the phrase himself — he is playing off of the American Dream.

Geoff Kabaservice: “It is a dream deeply rooted in the American Dream,” he in fact says.

David Leonhardt: Yes.

Geoff Kabaservice: Listeners do not see the visual track to this, but you and I are looking at each other and I happen to notice that in the background in your office you have a graph of the reduction of Napoleon’s forces as he goes to Moscow and then beats a miserable return. And one of your great strengths as a journalist at the New York Times has been your ability to use those kinds of vivid graphics to make economic and political points.

And in the very early part of your introduction, you have a graph showing the life expectancy at birth for the United States and twenty other high-income countries. And the United States starts out at the top of those ranks, and life expectancy does go up over time for the United States, as for those other countries, until the last few years when it has plummeted rather precipitously. But what’s really sad about this graph is that it shows the other high-income countries overtaking the United States and then continuing to go up in life expectancy, and really almost the United States ceasing to be in comparable company with those other countries. And I just wonder: When did you start to feel that the American Dream had receded? How did you come to this perception?

David Leonhardt: As you kindly noted, this is a book of narrative history, but it’s also a book with economic analysis embedded in the narrative history. And that chart that you just described is the very first chart in the book. And in some ways, the book is an attempt to solve the mystery of that chart — and it’s a grim mystery for the United States.

In 1980, the United States had a fairly typical life expectancy for a high-income country: higher than some countries, lower than others. And by about 2005 or 2006, the United States had the lowest life expectancy of any high-income country in the world: lower than Japan, lower than South Korea, than Canada, than Western Europe, even lower than some European countries that are not quite as rich like Greece and Slovenia. And what a damning indictment of our society. I mean, is there any more basic measure of a society’s ability to deliver decent lives to people than how long they live? And of course it’s consistent with a huge amount of other data on incomes, on wealth; polling data about how people feel; social indicators like the ones that Melissa Kearney discussed on your podcast recently about the number of children living with two parents.

So your question was when I began to have a sense that things were amiss. I mean, I’m an optimist by nature, as I think the book makes clear. I think that there was a moment in the early 2000s, in the 1990s and early 2000s, when you could look at the 1990s economy — which really was quite good for about five years — and you could say, “Maybe we’re back to things being pretty good.” But that moment faded. And so for me personally, I would say it was sometime in 2000s or up to 2010 where I began to look at the evidence and I said, “Wait a second. Starting in the mid- to late-1970s, or the early ’80s depending on which thing you’re looking at, a lot of indicators started looking bad. And with only short exceptions, they have been bad for more than forty years by now.” And so I think when you look at any of these long-term series, it’s really hard to say, “Wow, things are actually pretty good.”

The other thing I would say is that I think public opinion deserves some deference in a whole bunch of ways. Americans keep telling pollsters that they think the economy’s bad — and I don’t just mean this month, I mean for years. It’s been twenty years since most Americans said the country was on the right track. Let’s take that seriously rather than, as I think some economists have done, sort of torture statistics to say, “Actually, things are much better than everyone thinks.” I don’t think they are.

Geoff Kabaservice: There’s a point at which you write in the introduction, “My central argument is that capitalism remains the best system for delivering rising living standards to the greatest number of people — but only a certain type of capitalism.” And you distinguish between what you call the “rough-and-tumble capitalism” that we’ve had really since the 1980s versus what you call “democratic capitalism.” Can you explain something about those two definitions?

David Leonhardt: Absolutely. First, capitalism really is better than the alternatives. I mean, you will struggle a long time to find a system other than capitalism that has delivered rapidly rising living standards. Compare North Korea and South Korea. Look what’s been going on in Cuba for decades or in Venezuela more recently. Compare the United States after World War II to the Soviet Union. Compare China in the ’50s and ’60s, when it really was trying to conduct communism, versus China since the late 1970s when it’s opened up. I think that’s important to say, particularly I think today, particularly to people on the left. I think it’s important to say, “Hey, capitalism has a better record than the alternative.”

But I think it’s important to say to people on the right: What kind of capitalism? And rough-and-tumble capitalism — other people call it laissez-faire capitalism, free-market capitalism, these are all legitimate terms — basically is one in which the government gets out of the way. It keeps tax rates low, it doesn’t do a lot of regulation, it doesn’t do a lot of investment in things like transportation and education and scientific research. And it says the market will solve everything, because the market is very good at many things.

And I just think when you look at the evidence, that form of capitalism has not delivered. When you look at what the advocates for it — people like Milton Friedman and Robert Bork — promised, they really promised consistently rising living standards for not just the wealthy but for the vast majority of people. And I know they’ll say, “Well, but we never really tried it. If we had really tried it would’ve worked.” But I think that’s unpersuasive, because the United States moved closer to that form of capitalism than many other societies. And by various metrics — like life expectancy, which we just talked about, and income inequality — we’ve fared worse than some of these other countries. I think the form of capitalism that has the best record is, again, what I call democratic capitalism. Other people call it moral capitalism or managed capitalism. I like democratic capitalism, because I think it really captures the spirit of it.

And under democratic capitalism, the government acknowledges the market’s shortcomings. It acknowledges that, left to its own devices, the market tends to lead to a society with vastly rising inequality, where the rich attain enough political power to change the system to benefit themselves. You have “the tragedy of the commons”: our modern one is climate change. And you have the government underinvesting in things like basic research — because a lot of that early-stage stuff is just not profitable for any individual private company. They can’t know exactly where it’ll lead, so one company can’t justify doing it.

And sure, can the government get that wrong? Does it invest in the wrong thing sometimes? Yes, absolutely. But I think when you look at this economy’s record in the ’40s, ’50s, ’60s, and into the ’70s, and then compare it to its record since the 1980s, or you look at other evidence like the fact that job growth and economic growth have been a little bit faster under Democratic presidents than Republican presidents — that’s true even if you change the time period of when they get credit. That’s not determinative in and of itself. But to me, it’s very clear that a form of democratic capitalism delivers superior results to rough-and-tumble capitalism, the same way it’s clear that capitalism delivers superior results to socialism or communism.

Geoff Kabaservice: So your book is organized in two parts, with the rise of the American Dream in the years from 1945 through the 1970s, and then the fall after the 1970s. And the analytic framework with which you look at both periods is in the interaction of three forces, some of which you just laid out right now: investments, political power, and culture. So in the rise period, how were these three forces interacting with each other in a kind of virtuous cycle?

David Leonhardt: And actually, I’ll tell you a backstory. The original subtitle of the book was “The Rise and Fall of the American Dream,” which is quite accurate and describes those two sections, as you said. In fact, the advance galleys that some people have — you may have an advance galley — still has that older subtitle. But the actual subtitle of the book is “The Story of the American Dream.” And one of the reasons we changed it was that I thought as a subtitle “The Rise and Fall” was too negative. Because while in fact the first part of my book is the rise, and the second part is the fall, I do end, as you know, on a somewhat optimistic note — or at least a hopeful note, which we’ll get to later. And so I wanted a subtitle that was a little bit more neutral, that didn’t end on the fall.

But in any event, the way the three forces that you just identified — political power, culture (which I chiefly mean is corporate culture), and investment (which I chiefly mean is government investment) — they interact in the following ways. Political power is the most important of the three. And I think there’s just actually quite a glorious record of grassroots, small-d democratic movements changing this country. It was a grassroots democratic movement that built the labor movement in this country, which I think was hugely important and occupies two different chapters of my book. I think we’ve underestimated just how important labor unions are for lower-income and middle-income workers.

But it’s not just the labor movement. The civil rights movement was a grassroots movement of political power. The women’s movement was, the disability rights movement was. For people who are on the right half of the political spectrum, the anti-abortion movement has been a grassroots political movement. After the huge setback for that movement of Roe v. Wade, they formed groups. They tried to win local elections. They basically took over the Republican Party. They made sure the Republican Party appointed judges who would do what they wanted. It’s a grassroots political movement. And so I just think building political power is incredibly important. And when movements build political power, they’re able to change government policy. They’re able to change things like tax rates. They’re able to change things like investments, that we’ll get to.

But what happened in the United States is that after you had the rise of what was really a working-class political movement, much of it through the labor movement — this is the movement that elects five straight Democratic presidents, FDR four times, Truman once, although Truman effectively serves two of those five terms — what basically happened is that corporate America, which had been so incredibly harsh on labor unions and so anti-government in the ’20s, essentially realizes that it needs to make peace with this. And you see a shift in the corporate culture.

And my character who embodies this is Paul Hoffman, the CEO of Studebaker — we can talk more about him if you want — who basically believed in a more patriotic (and I use that word very deliberately) and less selfish version of capitalism. George Romney, Mitt’s dad, I think embodies it as well. And so the corporate culture really did shift. The companies did not try to earn every last dollar that they could have, as shocking as that sounds to us today. They didn’t try to repeal all the big tax increases. There were CEOs who voluntarily accepted less money than they could have gotten from their boards — in fact, most CEOs.

And then the third force is investment. And that also really stems from political power, because when you have a movement that attains political power, it basically is able to make sure that the government is doing things like building highways and building schools. And I think the investment piece is really important because it highlights how, when this is right, it’s not some big liberal victory that crushes conservatism. The greatest investor in the future as a U.S. president was Dwight Eisenhower. He was also a fiscal conservative who wanted to cut back on some of the things that Truman and Roosevelt did in other ways, but he spent so much money on science and highways and education. And he basically understood that relative to the federal budget, that stuff was relatively small; but relative to its ability to drive economic growth its effect was so powerful. And he understood that on a personal level, because the reason he was able to preside over the victory in World War II was in large part just the productivity of the American economy. The Americans did not have better strategy necessarily than the Nazis and the Japanese, but we just had an economy that produced so many more weapons than those other countries.

Geoff Kabaservice: David, one of the great beauties of your book are these wonderful illuminating portraits of people, both familiar and unfamiliar, that you insert into the narrative to illustrate the broader forces that you’re talking about. And some of them are very familiar characters like Dwight Eisenhower, but others are people who are not so familiar to listeners, such as your grandparents and your great-grandparents.

David Leonhardt: Indeed.

Geoff Kabaservice: And also some people whom you have recovered from the archives here and there. And to talk about the labor movement, you began by describing someone in Minnesota whom I frankly had never heard of before. This was Carl Skoglund. Tell me not just who he was but how you found him and why you considered him significant?

David Leonhardt: As I went into the history and read the economic research, one thing that I was very much struck by, as I just mentioned, is the real importance of labor unions, both economically and politically. And look, let me just say from the outset, I know that labor unions have their problems, like every other part of a capitalist economy. Corporations have their problems. Labor unions have their problems. I’ve been in a labor union, and I actually tell a short story of my frustration with my own labor union, in getting healthcare through it, in the book. I’ve also been a manager at the New York Times and I’ve seen the way that unions can sometimes forestall change.

So I think labor unions have their problems — individual ones certainly do. But in an economy without a strong labor movement — which is basically the economy we’ve been living in for the last forty years — you see what happens when flawed corporations are not checked by flawed unions.

And there’s this really amazing piece of research by a group of economists — when they did it they were at, I think, Columbia and Princeton. And they looked over many decades of research. It’s a nice example of Big Data. They used Gallup polls and they controlled for all kinds of things, and they were able to look at the effect that being in a union has — in a way that wasn’t so easy to do before because earnings records don’t necessarily note union status. And what they found was — and this was not a brand-new finding, they were just able to put a precision on it that people hadn’t had before — is that when you control for everything (age, experience, all kinds of things), being in a union allows people to make about 10 to 20% more than not being in a union. And that mostly appears to come out of corporate profits. It doesn’t come at the expense of economic growth. It shifts the distribution rather than the size of the pie.

So as I became persuaded of this, I wanted to think of a story to tell, and I went looking through the history. And there are fascinating labor stories: the Flint sit-down strike, the California dockworkers’ strike… But those stories are fairly well known. And I was really struck by this 1934 truckers’ strike in Minneapolis, because in the moment it was as big a deal as some of these other strikes. In fact, it’s a forerunner of the Flint sit-down strike in a bunch of really important ways.

And yet it’s slightly forgotten by history. When I was spending time out at the Minnesota Historical Society and interviewing people who knew some of the people involved — the people involved are all dead — I would go out and I would just have lunch with local politicians or local people as part of my New York Times job. And I would say, “Hey, what do you know about the 1934 strike?” And I was really struck by how many people in Minnesota had never heard of it. And it’s this incredible strike in which there is open violence on the streets of Minneapolis between the employers’ group and the unions. And the union movement is led by this radical — at different points he considered himself a communist or a socialist — a Swedish radical named Carl Skoglund, who basically set out to organize the coal truck drivers of Minnesota in a Depression winter. And they succeeded in the end. What I think is fascinating about him is both his personal story, coming from Sweden, but also some of the larger lessons that that strike highlights.

Geoff Kabaservice: You brought in an economic concept in the course of your discussion of Carl Skoglund, which is Richard Lester’s idea of “the range of indeterminacy.” How does that figure into the story that you’re telling?

David Leonhardt: I think that’s really important. Because in the free-market notion, we all have our market wage, we all have our fair wage. As a journalist I’m providing a certain amount of value, and the amount of that value is an empirical question. And the market, through the price mechanism — which really is a quite powerful and often quite efficient mechanism — will determine how much I am worth, and then the New York Times will pay me that. And if it underpays me that, the Washington Post will offer me my true market value, and I’ll leave and go to the Washington Post. And if it’s overpaying me and a bunch of other journalists, the New York Times will go out of business because it can’t make a profit.

That’s a nice theory. It just doesn’t seem to quite fit with reality, in the following way: People don’t really know exactly what the value of what they’re providing is. I don’t know what it is. And that’s where this “range of indeterminacy” comes in, which is that the value that any worker is providing is somewhere between X and Y, and no one is totally sure what it is. Your employer’s not sure, the worker’s not sure. But the employer has a better idea and also, maybe even more importantly, has more leverage over the employee.

So let’s say between X and Y — X on the low end, Y on the high end — let’s say the employer is paying me the very low end of my wage. Well, maybe I’ll quit. But if I quit, I have to go and then find another job. It’s much harder for an individual worker to quit than it is for a company to lose an individual worker. And so basically the leverage, the negotiating power, is on the side of the employer when it is between an employer and an individual employee. The employer also has a lot more information about what everyone’s making.

But when employees band together, when they decide to negotiate collectively — the name for that of course is to form a labor union — they are able to balance out the power of the corporation. And sure, the unions sometimes ask for wages that are too high, they do. But you end up with a situation in which it is more likely to be at a healthy balance if you have a company management negotiating against a union than if you do if a company management is negotiating with a whole bunch of individual employees. And that is what can explain that Big Data finding that I described before: How could it be that unions provide workers with a 10 to 20% pay boost without coming out of economic efficiency in most cases? It’s that range of indeterminacy. It’s that all of us could be paid somewhere in a range — and without a labor union, we often end up on the low end of that range.

Geoff Kabaservice: And this is the beauty, in a sense, of the cold-eyed economic approach to history. Because a lot of history tends not to focus on the power relationships that do affect things like this “range of indeterminacy.” You noted that the business community, the top business executives in Minneapolis, controlled the leading politicians from both the Republican and the Democratic parties. They controlled the newspapers. They were actually able to exert a kind of “union against unions” by putting pressure on local companies not to buy goods from companies that had signed union contracts. And that meant that wages in Minneapolis were really about a third lower on average than those of other comparable Midwestern cities. And that’s just a fascinating thing. So you can see why there would be a labor union trying to strike in response to this. But part of your message is also that union power, grassroots activity, is important, but it needs to be met by a political response as well — which it was in the 1930s.

David Leonhardt: Yes. First of all, I’d done this historical research, I’d done the economic research, and I’d become absolutely persuaded about the importance of labor unions. Then I’d done the historical research about Minnesota and was really struck by how conservative, how pro-business Minnesota was — not the way we think about it in modern times. It’s a famously liberal area: A Prairie Home Companion and all those Democratic politicians…

Geoff Kabaservice: Everyone’s nice!

David Leonhardt: Yes. But it really was this rough-and-tumble place. It was called “the Northwest Empire.” And so I’d done the larger economic research, I’d done the historical research, and then I went and I got these old federal records showing prevailing wages in different cities in 1930 and before. And there was this “a-ha” moment, which is one of the really fun parts of historical research. Oh, I had read the history about how pro-business and laissez-faire and anti-union and in many ways anti-worker Minnesota was, but then I’m sitting there looking at this table and it’s showing the prevailing wage in different industries, and Minnesota looks different from St. Louis and different from Chicago. It really looks like a Southern city up there in what then was considered the Northwest and today we would call the Midwest. And I realized, oh wow! I mean, this really mattered, the phenomenon you just described where the businesses banded together and they said, “Hey, if any one business gets a union, we’re going to stop doing business with that business to put them out of business, and then we won’t have to worry about unions.”

So why does the connection with politics matter? It matters because in the end the government has a power that nothing else in our society does. And when a union and a management come to a loggerheads and can’t agree, the government often must step in, in all kinds of ways, to decide is this a legal strike, is it not a legal strike? — and to impose a settlement on it. And for decades and decades — really for almost all of American history — the federal government had intervened pretty much only on the side of management. And one of the great changes of FDR and the New Deal is — because of some of the New Deal legislation and because of the sense that the country was breaking down and we needed to make sure people could make a living wage — they began to intervene, on the side not necessarily of unions, but sometimes with unions, sometimes in the middle, sometimes corporations. But it wasn’t inevitably on the side of corporations.

And in the case of the Minnesota strike, there’s just this amazing historical coming together of events in which FDR is taking a train through Minnesota during the strike, when the strike has already had these violent outbursts. His advisors make sure he doesn’t spend a night, doesn’t spend any significant time in the Twin Cities, because they don’t want him politically tarred by this conflict. He goes instead to Rochester, Minnesota to visit what at the time was a much less famous medical clinic run by the Mayo brothers. And the major players in the strike go to visit FDR on his train. And what basically he does is he says, “Look, the employers have to negotiate with the union.” Until then they had refused to recognize the union. They then do recognize the union. And that’s what I meant when I said Minnesota was really a forerunner of the Flint sit-down strike. The only reason the Flint sit-down strike was successful was the governor of Michigan — this is a couple years later — declined to send in the National Guard to crush the strike.

Geoff Kabaservice: You’ve worked a number of beats at the Times, and quite a few of them are reflected in this book — just as an example, the 2005 series on “Social Class in America” that you wrote for. And then you also worked I think quite closely with Raj Chetty of Harvard in the wake of the 2009 IRS release of decades of tax data that allowed longitudinal studies as to the rise and fall of equality of opportunity in America. But what’s interesting to me is that you actually leaned, I think, more on a historian’s lens in looking at the fall of the American Dream in the second part of your book, in the sense that the principle actors include: the young intelligentsia of the New Left; crime; immigration policy in the wake of the 1965 reform of our American immigration system; the University of Chicago thinkers including Robert Bork and Milton Friedman and their approach to economics; the Reagan administration; but also the Clinton administration and neoliberalism more generally. So I guess one question is why did those seem to you to be the critically important factors?

David Leonhardt: I do think I still included a lot of economics in the telling the story of the fall, but I think some of it is in the introduction. And in the introduction, I tell the story you mentioned of Raj Chetty, of how I collaborated with him not in a formal way but in a way that I really enjoyed and that I think is relatively unusual for a journalist and an academic. He and his colleagues had published these papers with more technical measures of the American Dream, and I said, “I think you really have a chance to do something that would really resonate here if you made this a little less technical and you instead said, ‘What are the percentage of people in each year over time who earn more than their parents did?’ — which I think is a very basic definition of the American Dream. I have no ability to do that research. I’m not an economist.”

And Raj said, “You know, that’s interesting. It would be really, really hard.” And I said, “Fair. I can’t do it. But I thought maybe you and your brilliant colleagues could.” And they spent a lot of time on it, and they figured out how to do it. They linked Census records and IRS records, and they were able to then do this study that has gotten a ton of attention since then. I’m guessing many of your listeners have heard the headline result of it, which is that 92% of Americans born in 1940 earned more than their parents had at the same age — that is to say they out-earned their parents, they moved up. And for Millennials, the percentage is only 50%. It’s a 50/50 proposition of whether you achieve the most basic definition of the American Dream.

So the economics is in there. But I thought it was very important to tell the history of how the three forces that you and I talked about earlier — political power, corporate culture, and investment — essentially reversed in the years since the 1970s. And so in some cases, we’re talking about relatively obscure people; in other cases, we’re talking about someone like Robert Bork, who’s hugely famous. But I think the modern memory of him is as a conservative extremist and a failed Supreme Court justice nominee. And I think the more important way to think about him is really as one of the most important intellectual forefathers of the Reagan revolution and the laissez-faire revolution in this country, that succeeded on its own terms in terms of achieving power. And I find that story fascinating, and I try to tell it sympathetically. I think the results that it delivered have fallen far, far short of what Bork and Milton Friedman and others promised.

Geoff Kabaservice: And your focus, just to reiterate, was on what Adams said in the 1930s, which is that the American Dream was to be defined by “a better, richer, and happier life for all of our citizens of every rank.” And that is where the neoliberal approach particularly fell short. And yet, curiously, that’s also where the turn of the left in this country toward what Thomas Piketty calls “the Brahmin left” also seems to have fallen short.

David Leonhardt: Yes. I think this is a really important subject. I think Piketty’s phrase and idea, “the Brahmin left,” is very important. I sometimes describe it in the New York Times as the upscaling of the left. “Brahmin left” is more eloquent than “upscaling,” but it’s basically the idea that, starting in the 1960s — and this is a history I tell in some detail through a bunch of figures who I also try to be quite sympathetic to — basically the political left in this country becomes increasingly reflective of and catering to college graduates and white-collar professionals. And the Democratic Party and the political left still believes in much more redistributive taxes than the Republican Party, so I’m not saying the two parties are equal. But basically the Democratic Party has moved away from labor unions, and that has tangible effects.

Basically every modern Democratic president has said, “We are going to make it easier for people to join labor unions. We are going to make it harder for companies to snuff out union organizing drives in the way that companies do” — we’re seeing Starbucks do it now, we’re seeing Amazon do it now. LBJ said it, Obama said it, Biden said it. And it’s always the policy that doesn’t quite get passed. So if you look at LBJ’s Great Society agenda, he gets huge things passed. He gets Medicaid and Medicare and just big, big stuff. And labor law reform is the thing that he just didn’t push over the line.

And Biden… Now, in fairness to Biden, this was much more about Congress. So I’m not saying it’s all through the presidents. But it’s the thing the Democratic Party just doesn’t get done. And it’s because I think, in part, the Democratic Party is increasingly focused on these more upscale suburbanites. The Democratic Party is more focused on social issues, and it’s less focused on economics. It’s less focused on building grassroots political power for people who don’t have college degrees.

And not just that, but I think large parts of the political left today have really become disdainful of working-class views on a whole range of subjects, and the left often dismisses all these views as ignorant or bigoted. And look, racism is a very large problem in the United States. Donald Trump, as I’ve written in the New York Times, employs racist language. He seems to have racist views. I’m not afraid of that word. What I think is both empirically wrong and politically self-defeating is for the left to say, “Anyone who doesn’t sign on to our entire agenda is bigoted or ignorant.” That’s not a good way to win people over.

And I also think it’s just empirically wrong. And if you are sitting here doubting me, I would ask you to grapple with the fact that over the past four years, Asian-American voters, Latino voters, and — to a lesser extent, but still clear in the data — Black voters have moved to the right, away from the Democratic Party. And much of that movement is among working-class people. There’s something about the Democratic Party that is telling working-class people — and not just working-class white people — “We’re not for you.” And I think that’s a huge problem in a society where the Republican Party doesn’t yet have an economic policy — or maybe doesn’t have an economic policy, I shouldn’t say “yet” — that is going to lift working people’s living standards.

Geoff Kabaservice: Your treatment of Reagan’s presidency is also quite nuanced. But you do point out that he is very unlike Dwight Eisenhower in his lack of engagement with labor unions, his lack of concern for the economic as opposed to the social and cultural wellbeing of the working class in America, and also for his significant cutbacks in government investment — whereas Eisenhower had overseen one of the greatest booms in government investment with an eye toward the future.

David Leonhardt: Look, Reagan’s just… I mean, he’s an incredibly consequential president. Sometimes you hear people saying, “Well, he wasn’t really. He didn’t get rid of Social Security and Medicare.” Okay, he didn’t transform everything. But he’s an incredibly consequential president. He had deep beliefs. No, he wasn’t a policy wonk. No, he didn’t care about details. But he had deep, consistent beliefs basically emerge in the 1950s and drive the rest of his career. Other Republicans tell him, “You’re too conservative, you can’t win that way,” and he says, “No, I believe this.”

And then he wins power during an economic crisis, and he goes much further than Ford, Nixon, and Eisenhower do — much, much further. It’s so much further that “further” may not even be the right way to describe it. I mean, he goes almost in a different direction. And he has this whole theory: “We’re going to do this and it’s going to be better for the whole American economy.”

And even if you take it, as I try to, completely at face value — they believed it would be better for everyone, they weren’t just imposing this to help the rich — it really hasn’t been better for everybody. It’s worked out really well for stock returns. It’s worked out really well for the top 1%. We can argue about how it’s worked out for the top 10%, maybe 20%. But clearly for the bottom 80 or 90%, when you look at the pace of income growth, wealth growth, life expectancy, these other measures, the post-1980 period has been much darker than the pre-1980 period.

And so I just think it’s really important to grapple with the fact that Reagan did change this country. He changed our approach to taxes, to regulations, to labor unions, to investments. It was a meaningful change. And if you landed here from another planet and you looked at how much he changed, and you looked at the country’s economic results and social results and public health results since then, you would not say that the Reagan Revolution was a glorious success.

Geoff Kabaservice: And the Reagan Revolution in a sense carried over into the Clinton and Obama administrations in the form of, again, a low level of government investment — which in many ways has led to what you call “The Great Stagnation.”

David Leonhardt: Yes.

Geoff Kabaservice: And the stagnation expresses itself not just in terms of the public wellbeing in things like life expectancy and health outcomes, but also, as you write in this weekend’s Times section, it has expressed itself in transport, in the fact that it actually used to be quicker to get from one end of the country in the 1970s than it is now.

David Leonhardt: It’s pretty amazing. I mean, the speed at which you move is a very basic measure of a society’s health and a society’s progress. And the notion that it takes longer to drive to the airport in New York or LA or any other major metropolitan area than it did fifty years ago… You don’t get there fifteen minutes early, you have to get there two hours early. The scheduled flight itself between New York and LA is longer than it was then, mostly because of air traffic. And then you have many of the same problems when you land.

I understand, I’m not saying everything has stagnated. Air travel is substantially safer, it’s cheaper — although interestingly the decline in prices has been relatively similar pre- and post-deregulation. So I get that some things have made progress. But you look around the world and in most of the world getting around is a lot quicker than it used to be thanks to new airports, thanks to high-speed rail. And in our country, it’s not just the rail system… I mean, I went back and I quote from this article in the New York Times from the 1960s, this great excitement: the Metroliner was going to get you from New York to Washington in two and a half hours. Well, that’s faster than you can take the Acela from New York to Washington today. And to me, it’s a remarkable and damning comparison.

Geoff Kabaservice: You quoted in the book from an interview that you had done in 2011 with a Treasury secretary who said that “We have a budget, and maybe a whole government, geared toward a nation in decline.” So as a last question for you, David, what kind of actions can we take to be a nation on The Upswing, to borrow the title of a recent book by Robert Putnam? What steps can we take to actually return to the American Dream as it was in the period after World War II?

David Leonhardt: The first thing I would say, Geoff, is life really has gotten better for a lot of people like me and you and I think a lot of your listeners — and by that I mean college graduates broadly. There are huge problems still in the United States, including for many college graduates. Various forms of discrimination remain a big problem. Various forms of public health are a problem that affect everybody. But by empirical measures, life really has gotten better for most college graduates, four-year college graduates.

Four-year college graduates make up somewhere between a third and 40% of adults today. We are a minority. And so if your listeners are hearing this and saying, “Well, my life seems like it’s gone better,” it probably has gone better. And part of what I would say in answer to your question is: Think about how much more difficult life has been for so many Americans than it has been for those of us who are lucky to be on the right side of the college divide.

When we all look back, we tend to tell stories about our family — this is what my introduction is, it’s a story of my own family — that are stories of progress. You mentioned my great-grandfather… He couldn’t get work as an opera singer in Europe because he was Jewish. Then he moved to the United States, he got a job as a baritone at the Metropolitan Opera, and he got fired from that job because he was Austrian and the Met fired all its Germans and Austrians during World War I.

So when I look back on that, obviously I can feel a sense of real progress. And I guess what I would say to people is: Imagine if you couldn’t tell those stories of progress over the last thirty or forty years, and you felt like you weren’t going to be able to tell them looking forward because your living standards really had stagnated in demonstrable, empirical ways when you look at the life expectancy data and the wealth data and other ways.

And so yes, I have a set of answers about building grassroots political power geared toward lifting living standards, investing more in the future, having a less selfish and more patriotic culture. And those are real answers. I would also ask people to reflect on the fact that a lot of the frustration and the anger that Americans feel today, while it can take really destructive forms — including believing things that are simply not true, including bigotry — a lot of that anger is rooted in the reality of our economy’s failure to deliver. And I think every problem we have in our society becomes much harder to solve if we don’t solve that. Climate change becomes harder to solve because people are less willing to make relatively modest sacrifices to address climate change. The United States is less likely to be a force for good in the world. It’s less likely to confront Putin and less likely to confront China if we can’t solve our own problems. And so part of my message would be: If you are as lucky as I have been, reflect on the fact that many Americans have not been. And that is a deep problem for all of us who care about this country.

Geoff Kabaservice: Well, David Leonhardt, your new book, Ours Was The Shining Future: The Story of The American Dream is one of the best histories I have read in recent decades and one of the histories where the study of the past really does point us toward a better future. So thank you so much for joining me today.

David Leonhardt: Geoff, thanks for your kind words, and thank you for having me. It was really a thrill to talk.

Geoff Kabaservice: And thank you all for listening to the Vital Center Podcast. Please subscribe and rate us on your preferred podcasting platform. And if you have any questions, comments, or other responses, please include them along with your rating or send us an email at contact@niskanencenter.org. Thanks as always to our technical director, Kristie Eshelman, our sound engineer, Ray Ingenieri, and the Niskanen Center in Washington, D.C.