Nostalgianomics?

Megan McArdle delivers a typically hackish column on Obama’s SOTU address. After noting her TV appearance with such bright bulbs as John Stossel and Gary Johnson, she proceeds to get after Obama for his nostalgic view of the economy. I’m not going to quote at the length necessary to completely eviscerate her points; you can click on the link should you feel the desire to beat your head against a wall. But I will quote this:

Finally, there’s the fact that the 1950s ended in the 1970s. In the 1950s, American products were envied all over the world; by 1980, they were a joke. This is not some radical disconnect; it is the beginning and end of the same process. The technocratic American institutions became sclerotic agents of inertia. Bosses whose pay was capped poured their energy into building personal empires instead of personal fortunes. Unions like the UAW began making demands on their companies so heavy that even the UAW president who had negotiated these amazing pay increases began to fear that his members had lost their minds.

So much just in this one paragraph. The conflation of some shitty cars made by the Big Three in the 1970s with all American products, a stereotype about American manufacturing at best. The gratuitous apologism for maximizing CEO pay (Megan knows her masters). The completely unsourced, uncontextualized, and probably untrue anecdote about the UAW president thinking UAW members are crazy for asking too much of their bosses. The between-the-lines blaming of union pay scales for the supposed decline of American products.

I may be critical of Obama on his economic and labor stances, but let’s be clear–the mid-20th century was the glory years of the American working class precisely because unions were so strong, forcing companies to divert resources from their ivory back-scratchers to worker paychecks. McArdle somehow sees this as counterproductive to the American economy, linking to a blog post making bizarre claims that capping CEO pay causes deep problems in the economy because CEOs are hypermasculine beasts or something and just can’t be stopped. But thirty years of Republican obfuscation of economic reality has failed to cloud one key fact–the only period in American history when working-class people got a fair shake was the precise period when unions were the strongest. She’d rather serve her corporate masters, but we should not be fooled by her capitalist shilling. Obama may not be willing to go all the way in understanding why the 1950s worked and the 2010s don’t work, but he’s at least pointing us in the right direction