This was the third single from Brooklyn-based indie rock band The National's fourth album, Boxer. The song was written by guitarist Bryce Dessner and features a horn fanfare penned by Padma Newsome, from sister band Clogs. Dessner told The San Francisco Chronicle about the song's original concept: "Conceptually I said I would love to write a song that was based on a certain polyrhythm, the four-over-three pattern, which is what you hear in the piano. It's something I, personally, have never heard in rock music. What's interesting is the song sounds like it's in four, but it's in three. The harmonies and the way I'm playing the piano music are actually incredibly simple—sort of like 'Chopsticks' simple—with this really weird rhythm. At the end we said, Oh, wouldn't it be cool if we had a horn fanfare, so Padma wrote this very Steve Reichian minimalist horn fanfare."
The song is a commentary on a generation lost to disillusion and apathy. Vocalist Matt Berringer explained to The Quietus that it is about "where you can't deal with the reality of what's really going on, so let's just pretend that the world's full of bluebirds and ice skating."
An instrumental version of the song was used for a Barack Obama campaign video during his 2008 United States presidential campaign. "We were a little bewildered, because the song is not patriotic by any means," Berninger told The Guardian. By discarding the vocals, the producers transformed the song into an optimistic advert full of smiling people holding "hope" and "change" signs.
The National made their television debut on July 24, 2007, performing this song on the Late Show with David Letterman.
Guitarist Aaron Dessner discussed with Q magazine Obama's use of the song. He said: "we've never met Obama but we had a few people in their administration who were fans. When they first asked permission to use Fake Empire we wondered, Do they know it's about how f---ed up America is and wanting to leave? Later these right-wing bloggers criticised Obama for using an 'unpatriotic' song."
The album cover is a photograph of the band performing at producer Peter Katis' wedding.