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In his years as an op-ed writer for the New York Times, economist Paul Krugman has gradually shifted to a more outspoken liberal position, with political imperatives steadily overtaking his former mode of espousing a gently left-leaning version of economics orthodoxy. In the 1990s, Krugman’s pieces for a lay audience would patiently present pro-globalization arguments in the face of environmentalists, activists, and protectionists; or express healthy skepticism about the internet bubble while defending Greenspan’s refusal to prick them—basically conventional economists’ views.


But since George W. Bush came into office, Krugman responded to the disastrous administration with what it so obviously demanded from anybody in a position to be influential; that is with unguarded, untempered criticism of the stream of deceptive, careless, divisive and destructive policies that it and the Republicans in Congress have perpetrated over the past seven years. These columns made him a hero to the recently resurgent liberals, and he now apparently feels empowered to speak in his most recent book as their conscience.


cover art

The Conscience of a Liberal

Paul Krugman

(W. W. Norton)

cover art

The Paranoid Style in American Politics

Richard Hofstadter

And Other Essay

(Harvard University Press)

The book’s title, of course, is a play on Barry Goldwater’s 1960 manifesto The Conscience of a Conservative, which sought to articulate right-wing principles and admonish moderate Republicans who had allegedly sold them out through bipartisan cooperation with “socialist” New Deal programs. Fittingly, Krugman wants to present the inverse argument, that bipartisanship was the key to American prosperity. He explains how Goldwater-inspired “movement conservatives” like Bush were ever able to seize control of the government in the first place, and what Democrats should do to reverse the rising income inequality conservatives have deliberately instigated.


Though Conscience of a Liberal sweeps over 100 years of American political history, it seems derived mainly from an argument among pundits and economists that sprung up after Thomas Piketty and Emmanuel Saez extended their work on income inequality in America and revealed that it had widened under Bush after narrowing somewhat during the Clinton administration (see “Income Inequality in the United States, 1913-2002”).


Conservative economists were quick to say that this is natural and inevitable, because “skills-biased technological change” leads to the better-educated reaping greater economic rewards, and because when the highly skilled operate in a large, wide-reaching economy, small distinctions in talent can be leveraged into huge disparities in the reaped rewards. Any correlation with between income inequality and politics was a matter of the newly enriched class electing politicians that represented their wealthy interests after the fact—that is, as income inequality widens, the country grows more Republican, and wealth concentrates in the hands of a few, who can purchase political power from the party more conspicuously eager to sell it.


Krugman rejects these views and argues the opposite is true—that growing income inequality is mainly a politically driven phenomenon. This is actually a more optimistic scenario, for if income inequality spawns oligarchs who can dictate politics, we would be caught in a irreversible spiral toward plutocracy. But if political polarization makes the ground fertile for income inequality, the trend can be reversed when political winds change, as they did after the Great Depression and, if the 2006 election was any kind of harbinger, as they are now.


The essence of Krugman’s argument is that a small cadre of wealthy backers were able to forge a conservative movement committed to hyperpartisanship, which would enable a Republican government to reasonably reject the center when it governed and remove all the obstacles to limitless capital accumulation. Thus, the estate tax and progressive income tax rates are slashed, unions are neutered, and poorer voters are systematically disenfranchised.


At the same time, the network of conservative think tanks (American Enterprise Institute, the Heritage Foundation) and their various press organs (The National Review, the Wall Street Journal editorial page)—supported by the superwealthy to forward their aims—have helped promulgate conservative memes that have corroded norms that once constrained executive pay and corporate greed. Krugman neatly uses this point to sum up the means by which our culture has changed: Citing the work of Lucian Bebchuk and Jesse Fried, who argue that only investor outrage contained C.E.O.‘s salaries, Krugman points out that:


to the extent that [Bebchuk and Fried’s] view is correct, soaring incomes at the top can be seen as social and political, rather than narrowly economic phenomenon: high incomes shot up not because of an increased demand for talent but because a variety of factors caused the death of outrage. News organizations that might once have condemned lavishly paid executives lauded their business genius instead; politicians who might once have led populist denunciations of corporate fat cats sought to flatter the people who provide campaign contributions; unions that might once have walked out to protest against executive bonuses had been crushed by years of union busting. Oh, and one more thing. Because the top marginal tax rate has declined from 70 percent in the early 1970s to 35 percent today, there’s more incentive for a top executive to take advantage of his position: he gets to keep much more of his excess pay. And the result is an explosion of income inequality at the top of the scale.



Thus, the Republican regimes of the past 25 years, starting with Reagan, managed to usher in a “Great Divergence” after prosperity and welfare-state policies had given America a giant middle class, with fewer in poverty and very few ultrarich. Now, a disproportionate amount of the nation’s income goes to those in the upper percentiles, while incomes have hardly improved for the middle class since 1972. The disparity aggravates problems of social comparison, in which people feel deprived not because they don’t have enough but because other people conspicuously have more and are systematically locking up all the society’s positional goods.


But if widening income inequality brings such misery, why did American court the politics that spawn it? How did the movement conservatives manage to win elections while promoting policies that were actually harmful to most Americans in a time when prosperity (fomented, Krugman argues, by Eisenhower era bipartisanship that consolidated the social safety net) had made the middle class as strong as it has ever been in the country’s history?


In his assessment of this question, Krugman owes a debt to historian Richard Hofstadter, who wrote The Paranoid Style in American Politics, an influential account of how reactionary politics operate in America. Hofstadter believed that the fact Goldwater could have been nominated at all would be the high water mark for the American forces of reaction. Bush’s presidency, unfortunately has proven otherwise. Just about everything Hofstadter wrote about Goldwater’s curious coalition remains true about Bush’s: both fused those with ultraconservative economic views (the sort who believe a social safety net breeds weakness) with an aggrieved lower-middle class who see politics as an arena to reclaim lost status (via moral crusading and culture wars) rather than protect their material interests.


But whereas Goldwater was regarded skeptically in his time and effectively framed as far outside the mainstream, a complacent media in 2000, intent on lambasting Gore, allowed Bush to pass for a moderate, “compassionate” conservative. Once he won and gained political capital from the events of September 11, he enacted the Goldwater agenda of 1964: heedless economic individualism and impulsively belligerent foreign policy derived from simplistic absolute principles and pursued with religious conviction. (In Goldwater’s famous words: “Extremism in the defense of liberty is no vice, and moderation in the pursuit of justice is no virtue.”)


Some shared values hold this coalition together: Radical free-marketeers and moral prescriptivists have in common a belief that privation is a useful social tool, whether it be to cull the herd of its weak members or to punish sinful wastrels. From their point of view, suffering is generally deserved and indicative of some personal flaw that might harm the social body.


Beyond this, they share a belief in the individual’s ultimate ability to overcome any circumstances, which are also always deserved—always one’s own responsibility. But moral crusaders believe their uncompromising views, typically derived from stern religious codes, make their politics rise above greedy selfishness and are legitimized to the degree that they are impractical and thus apolitical. Their disregard for public opinion (sinners’ beliefs are negligible) seeks to destroy democracy in a fundamentally different way than those with radical economic views, who would prefer that the government atrophy from a lack of funds and cease to function—as with antitax activist Grover Norquist’s oft-repeated dream of shrinking government to a size at which it could be drowned in a bathtub.


Hofstatder points out that Goldwater did little to forward conservative causes; rather he broke the back of practical conservatism in the Eisenhower mold—the bipartisanship Krugman celebrates—and enabled Johnson to push through the Great Society reforms. Krugman’s hope in this book is that the revulsion Bush has inspired in American voters has done the same.


Krugman also borrows from Thomas Frank’s thesis.  In What’s the Matter with Kansas?, Frank claimed that Republicans won elections by convincing working-class Americans to vote against their economic interests by tarring Democrats as elitists, abortionists, and atheists. Krugman has an even more straightforward answer: race. “The legacy of slavery, America’s original sin, is the reason we’re the only advanced economy that doesn’t guarantee health care to our citizens,” Krugman writes. “White backlash against the civil rights movement is the reason America is the only advanced country where a major political party wants to roll back the welfare state.”


The old Democratic coalition, he explains, included Southern Democrats who were still angry at the Republican party of Lincoln, but once Lyndon Johnson pushed civil rights forward, movement conservatives realized they could exploit race as an issue to divide Democrats and prevent the expansion of government services and protections, some of which, after all, would be extended to blacks. (It also didn’t hurt, Krugman mentions, that immigration has left a sizable portion of the working class unable to vote.) With race as a wedge, the era of bipartisan cooperation was brought to an end, opening the door to the possibility of governing as if the opposition doesn’t exist and catering instead to the small bloc the preserves electoral victories (whether these are belligerent nativists or Christian zealots or grasping oligarchs), an art George W. Bush has perfected.


But now, Krugman argues, with Bush’s governing approach discredited and racism comparatively on the wane, the Democrats have the opportunity to forge a new election-winning coalition that requires no compromises to reactionary tendencies, the way the old coalition had to accommodate the South. And with this new assurance of power, the party can complete the New Deal by supplying its crowning piece: guaranteed health insurance for all Americans.


In the prescriptive section at the end of the book, Krugman devotes a chapter to his ideas about health care, running through the familiar statistics about how little Americans get for the money the country collectively spends on health care, how many Americans are uninsured, and how efficient other countries’ systems are. Health care is generally paid for by private, for-profit insurance companies in America, and they spend much of their money and energy trying to prevent “medical losses”, their term for having to actually pay for clients’ health-care expenses. Having the state assume ultimate responsibility would, of course, remove some of these perverse incentives. But the objections of entrenched interests (insurance companies, drug companies, probably your family doctor) would have to be overcome, something that proved impossible in 1993, the last time serious reform was attempted.


Throughout the discussion, Krugman is careful not to indict Hillary Clinton for that failure, perhaps in an effort not to create a side show in his own book that might be useful in opposition research. His ideal reform policy—a single-payer system, essentially an extension of Medicare to cover the entire population—looks nothing like the individual-mandate proposal Clinton is campaigning on, and he has criticized plans like hers in the past as “Rube Goldbergian” exercises in choosing complicated solutions over straightforward ones. But here, with the hope that his book will be adopted and promoted as a campaign strategy manual, he is quick to accept political realities and stump for something similar to Clinton’s new approach.


But Krugman is very anxious to see offered in any reform package an option for individuals to buy into Medicare if they choose, so that private insurers would then be forced to compete with a government option; he believes that government would win this competition, driving private companies out of the health insurance business altogether. Voila!—socialized medicine by market means.


Paul Krugman

Paul Krugman


Krugman’s other policy recommendations have to do with reducing income inequality, and like his health-care proposal, these sound a lot like the ideas already being touted by the Democratic presidential hopefuls: nonspecific rhetoric promising a more progressive tax code and a pro-union slant to federal labor policy. But ultimately, his overarching philosophical point is more significant than any policy proposals and is, in its way, as inflammatory as anything in Goldwater’s book: Essentially, Krugman wants to leave us convinced that conservatism in America is equivalent to an eagerness to embrace the tactical advantages that derive from racism and authoritarianism, while liberalism (which has paradoxically become more conservative in the traditional sense) seeks to protect the guarantees a democratic society can offer its citizens.


By framing the political spectrum in such a way, Krugman may be hoping to discredit the very label conservative, so that it could be used as a cudgel the way liberal had been used by the Limbaughs of the world the past few decades.  In that light, Krugman’s title takes on a new meaning. He means us to find ourselves asking, “Who in good conscience could be anything else but a liberal?”


Robert Horning has developed a substantial body of work in PopMatters' music reviews, concerts, film, and TV sections. His writing has also appeared in Time Out New York and Skyscraper. In his PopMatters column, "Marginal Utility", Rob bridges the abstract and concrete aspects of consumerism. His writing is as grounded and approachable as an everyday trip to the grocery store. Rob has a BA and MA in English Literature; his interests in social theory, economics, and sociology generates his solid background knowledge for "Marginal Utility" and informs his music reviews. For more Rob Horning, be sure to read the Marginal Utility blog.


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