All you need is growth

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Trust in government has sunk to all-time lows across most developed countries. And if it is not at an all-time low, it is close to it. At every election, people kick out the previous government, vote in a new bunch, realise that they aren’t any better, and then the cycle starts again. How can an incoming government break that cycle? To paraphrase Warren Buffett, the answer is simple, but not easy.In 2011, the Quarterly Journal of Economics published what I consider one of the most important economics papers in the 21st century. Ulrike Malmendier and Stefan Nagel’s Depression Babies showed how experiences shape our attitude towards investments, the economy and politics, not just in the moment and the immediate aftermath, but for the rest of our lives. The experience of the Great Depression could be seen in attitudes some eight decades later.A new paper in the same journal looks at the relationship between trust in government and lifetime experience of economic growth. The charts below show the experience of Americans born in the late 19th and early 20th century and those born in the second half of the 20th century. The horizontal axis shows the average real GDP growth per year in the US during their lifetime (to the year shown on top of each chart) and compares it with their trust in the US federal government as measured in surveys. People who experienced higher average economic growth during their lifetime trusted the government more.Trust in government and lifetime growth experience of US cohortsSource: Besley et al. (2026)What works across generations of Americans can als…