The Conscience of a Liberal by Paul Krugman

Yesterday I discussed the chapter of Paul Krugman's The Conscience of a Liberal dedicated to his political and economic argument for prioritizing health care reform. This chapter comes near the end, and serves as Krugman's plan for reinvigorating and validating America's belief in liberal ideology. This is essential in light of the thesis of the book, which Krugman recognized might be "economic heresy;" that politics and government policy drive economic reality:

Can the political environment really be that decisive in determining economic inequality?... [W]hen economists, startled by rising inequality, began looking at the origins of middle-class America, they discovered to their surprise that the transition from the inequality of the Gilded Age to the relative equality of the postwar era wasn't a gradual evolution. Instead, America's postwar middle-class society was created.

The second and third chapters of the book trace this history, from what Krugman deems "The Long Gilded Age" from the 1870s until the New Deal, "a period defined above all by persistently high levels of economic inequality." Krugman then points to the great contrast posed by the 1950s, when economic equality was at its height; the poor were less poor, the rich were less rich. It was, Krugman argues, "The Great Compression." It was the era of the middle-class. Krugman argues that this was not driven simply by some natural market forces, as was originally believed:

The Long Gilded Age, they thought, was a stage through which the country had to pass; the middle-class society that followed, they believed, was the natural, inevitable happy end state of the process of economic development. But by the mid-1980s it was clear that the story wasn't over, that inequality was rising again.

While some continued to offer market-based explanations for these trends, Krugman looks elsewhere. He argues that "the Great Compression is a powerful antidote to fatalism, a demonstration that political reform can create a more equitable distribution of income--and, in the process, create a healthier climate for democracy." He goes through a variety of factors, including government support for unionization and rules established by the National War Labor Board, all quickly establishing an increased economic equality that remained stable for decades.

Krugman also demonstrates that once Republicans became resigned to the survival of the New Deal, with Truman's victory in 1948, politics became less acrimonious, with room for conservatives in the Democratic Party and liberals in the Republican Party (evidenced by significant overlap between the voting patterns of the centrists in each party, unheard of today).

Of course, if government policy can effectuate a dramatic rise in economic equality, it can also engineer the opposite. Much of the remainder of Krugman's book explores just that story: the rise of movement conservatives, their exploitation of cultural issues to distract voters as they tried to dismantle the New Deal, and the resulting return of vast economic inequality.

Krugman brings up Thomas Frank's What's the Matter With Kansas?, which I discussed last week. Unlike Frank, however, Krugman does not believe movement conservatives rode to power exclusively by converting working-class voters on cultural issues. Though he admits he was "bowled over" when he first read it, Krugman suggests that "voting has become more, not less, class-based over time, which is just what you'd expect given the change in the nature of the Republican Party."

Still, something has allowed movement conservatism to win elections despite policies that should have been unpopular with a majority of the voters. So let's talk about the noneconomic issues that conservatives have exploited, starting with the issue that Frank oddly didn't mention in that glorious rant: race.

Krugman discusses at length the racial component of the so-called "culture wars," and makes a convincing argument that movement conservative outrage over states' rights, welfare, and crime was little more than a series of dog-whistles to tap into conscious or subconscious racial biases and thus successfully sever the New Deal coalition between Southern whites and the rest of the Democratic Party. He also explores the role of the Red Scare, and the "Rambofication" of the Vietnam War, which retroactively claimed the American soldier had been stabbed in the back by weak-kneed liberals back home.

Fortunately, this movement has gone too far, played the race card and the culture war too often. What the 2006 mid-terms suggested, and the recent election has confirmed, is that America can no longer be scared into voting against its self-interest. As Krugman details, the Iraq War has cost the Republicans their credibility on national security. The country is growing less white, and whites are growing less racist. And Americans' views on homosexuality, women's rights, and other culture war issues are becoming increasingly liberal, particularly among the younger demographics. Thus we see the GOP increasingly marginalized as a regional party. No longer are Southern whites the base upon which to build a larger conservative coalition; instead, the lunatics have taken over the asylum.

Krugman's book is an exceptional effort at demonstrating the influence that political decisions can have on economic realities, charting the history of how that influence was wielded by liberals and conservatives in the 20th century, and suggesting a way forward for liberal ideology through progressive politics. Krugman proudly states that "Liberals are those who believe in institutions that limit inequality and injustice. Progressives are those who participate, explicitly, or implicitly, in a political coalition that defends and tries to enlarge those institutions." We are witnessing the rise of both.