"Moment of Zen" The Middle Class Myth and China’s Future with Noah Smith
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Jun 7, 2025 
In this thought-provoking discussion, Noah Smith, an economics and technology writer with a popular Substack column, tackles the misconceptions surrounding the decline of America’s middle class. He reveals how median incomes have actually risen despite fears of globalization. The conversation delves into economic shifts from the Bretton Woods system to the challenges posed by China's rise, unraveling complex narratives about wage stagnation. Smith also critiques technological fears that may hinder U.S. competitiveness, emphasizing the importance of innovation for the future.
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Middle Class Growth Misunderstood
- The American middle class was not hollowed out by globalization as commonly believed.
- Middle class wages actually grew by about 40% during peak globalization periods from late 90s to 2010s.
Oil Shock, Not Globalization
- The 1973 oil shock, not globalization, caused the wage stagnation of the 70s and 80s.
- The end of cheap oil altered manufacturing efficiency and competitiveness for the U.S. and other countries.
The Real China Shock Impact
- The "China shock" caused about 2 million lost manufacturing jobs in the 2000s due to China's cheap labor and energy.
- This hurt certain workers, but affected only a small portion of the overall economy.