The Trump administration is implementing an increasingly unpopular agenda — which suggests things might not end well for politicians who keep trying to justify the administration’s schemes.

Populists from both major U.S. political parties have ditched the founding American principles that are integral to the nation’s economic and social development. Core principles, particularly those limiting the role of government and expanding economic freedom, are increasingly taking a back seat to political ambition. These principles, though imperfectly implemented, have proven invaluable to Americans.

Tragically, the populists’ positions have been based on myths and deceit from the beginning. They insist that somewhere around the 1970s, the American middle class was hollowed out.

As this story goes, policy makers’ blind adherence to free-market ideology triggered the catastrophe by killing the U.S. manufacturing sector. Those lucky few Americans who could find new jobs took low-paying ones in the service sector, and personal-income growth flatlined for the next five decades.

It’s difficult to explain just how much is wrong with this story.

For starters, Americans’ income growth over the past five decades has not been stagnant. It’s been great — and not just for the rich. In fact, the only way to demonstrate income stagnation is to cherry-pick the data. The populists love, for example, to measure growth using one specific income type, with one specific inflation adjustment, starting from 1975.

That trick does give you the lowest possible growth rate, so it’s an effective way to “prove” that U.S. incomes stagnated over the past few decades. The problem is that pretty much every other way to measure income growth over that time shows a more robust picture.

For example, adjusted for inflation, real median household income increased 73% between 1968 and 2024. The same income measure for married couples with children — the group of Americans that was supposedly hollowed out — shows 132% growth.

Moreover, during roughly the same period, the share of American households earning more than $100,000 annually more than tripled, and the share earning less than $35,000 fell by 25%. In 1967, just 5% of American families earned more than $150,000. That share has increased steadily since then, and it’s now up to more than 33% (all income figures are inflation-adjusted).

For most of the past few decades, workers in the lowest 10% of the income distribution had stronger income growth than workers with higher incomes, and they typically earned enough to move out of the bottom 10%. For most of the period, almost 80% of Americans never spent more than two consecutive years in the bottom 10%.

Real income has risen for people across all age brackets and marital statuses, and as more women entered the workforce, men did not lose out. From 1962 to 2024, males between ages 25 and 44 saw real income growth of around 45%. Even the idea that real hourly earnings for the typical 25- to 54-year-old male with only a high school diploma fell depends entirely on measuring income from the middle of the 1970s.

The only sense in which the American middle-class has shrunk is that people in the middle have moved up the income ladder. This robust growth is devastating for the populists, but it’s not the only part of their story that’s dead wrong.

It simply is not the case, for instance, that reliance on manufacturing jobs started tanking with increased trade in the 1970s, the 1980s, the 1990s or even the 2000s. The share of manufacturing employment in the U.S. has been on the decline throughout the entire post-World War II period.

Nothing happened slightly before or after the Reagan administration to start the decline. The long-term downtrend was caused by massive productivity increases, and that’s a good thing. U.S. manufacturers now produce much more, but with fewer people. In 1950, real manufacturing output per worker was $19,500. By 2011 it was $156,500.

The typical U.S. factory worker now produces more in one hour than the typical 1947 worker did in a 10-hour day. If America tried to employ the same number of workers in the steel industry as it had in 1980, the U.S. would produce about the same share of the world’s steel as it did at the end of World War II, when the U.S. was the only industrialized country left standing.

America simply doesn’t need to employ as many people in manufacturing because it’s so much more productive. For the U.S., it’s not the case that “we don’t make anything anymore.” Real U.S. manufacturing value-added — the manufacturing sector’s contribution to GDP — reached its highest recorded level in 2022. Industrial production, the Federal Reserve’s preferred index of output, rose steadily from the 1940s all the way to the 2008 recession and remains close to its all-time high. Raw manufacturing output was also close to its all-time high in 2022, and the U.S. remains right near the top globally for this measure.

What of the notion that the manufacturing jobs the U.S. lost were higher-paying than service-sector jobs? That’s messed up, too. From 1964 to 1974, the average service-sector wage was a bit higher than in manufacturing, but the averages were virtually identical through 2024 — both coming in at just under $19 per hour.

The main point is very straightforward: The populists’ narrative of catastrophic economic failure is dead wrong. It’s also dangerous, because the populists use this story to justify clamping down on trade, immigration and basic freedoms. They want to isolate Americans and explicitly direct people’s choices to match their populist preferences.

That’s a recipe for shrinking most people’s economic opportunities, and it’s impossible for a nation to shrink its way to prosperity. If these policies aren’t soon reversed, Americans will end up with much less of the prosperity that was so widespread over the past few decades.