"Econ 102" with Noah Smith and Erik Torenberg The Middle Class Myth, China's Future, and What Really Happened in 1971
160 snips
May 15, 2025 Listeners dive into the myth of a declining American middle class, uncovering surprising wage growth during globalization. The discussion highlights the complexities of America's manufacturing landscape and challenges the narrative surrounding trade deficits. Key events from 1971, like the Bretton Woods collapse, are examined for their role in shaping economic dynamics and China's rise. Cautious notes on China's technological advancements contrast with urban planning challenges, while the podcast also addresses divergent political fears about innovation in the U.S.
AI Snips
Chapters
Transcript
Episode notes
Middle Class Not Hollowed Out
- The American middle class did not hollow out overall despite manufacturing job losses in some areas.
- Median incomes rose and wage stagnation occurred mainly in the 70s and 80s, not during peak globalization.
America Less Globalized Than Thought
- America has never been highly globalized in terms of imports relative to GDP.
- Other countries like China, France, and Germany have much higher import penetration.
Oil Crisis, Not Bretton Woods, Changed Economy
- The end of Bretton Woods in 1971 depreciated the US dollar, opposing globalization effects.
- The true shock in the 1970s was the 1973 oil crisis, which ended the era of cheap energy and affected manufacturing globally.