Name: The Conscience of a Liberal
ISBN: 9780393333138

The Conscience of a Liberal

Today's most widely read economist challenges America to reclaim the values that made it great. Here he studies the past eighty years of American history, from the reforms that tamed the harsh inequality of the Gilded Age to the unraveling of that achievement and the reemergence of immense economic and political inequality since the 1970s. Seeking to understand both what happened to middle-class America and what it will take to achieve a "new New Deal," Krugman has woven together a nuanced account of three generations of history with sharp political, social, and economic analysis. This book, written with Krugman's trademark ability to explain complex issues simply, may transform the debate about American social policy.--From publisher description.

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pm90May 2017

I actually have a couple of sources for this :). Apologies for the late reply, I also have a day job ;)

I would recommend Krugman's Conscience of a Liberal for an entertaining read. He referenced another book, aptly called Inequality[1], which I'm currently going through. Its a little more academic prose so its not something I can finish quickly (in short, its not an entertaining read...not that all books have to be of course).

Both of these books examine historical precedents for income inequality and attempt to analyze the current situation as well. I think they did a fair job, although I am open to change my mind if there is a better explanation. But these and other books, such as Dark Money[2], and just general news about the scummy activities of people like the Koch brothers have made me more convinced of this viewpoint.

Now to address your comment...

> Only a minority of companies in the US even have executives that get the much maligned high pay and bonuses in the last decade or so. What about the massive percentage of wealth that didn't fall into this category? They may have gain significantly from globalism but that was hardly the result of US tax policy alone.

This is most certainly not true [0]. From [0] and from Krugman's book, you can see just how much the changes in tax policy has incentivized ballooning executive pay and created a new class of executives, who may not be as rich as the landed/inherited, but are certainly "rich". And this class has grown and become more enriched due to globalism, the opening of foreign markets and plummeting of labor costs, both due to automation and cheap foreign labor. I almost think of it as a weird form of trickle down effect, where most of the wealth goes to the very rich but a little (relatively insignificant but in absolute terms very much so) trickles down to the executive class.

> Lets not forget that democrats were in power for the last 8yrs and the state has only grown exponentially since the 1990s under both republican and democrat governments. Just because tax rates weren't the extremes of pre-1980/1970s doesn't make them low. They've been relatively consistent while the middle class income dropped.

Yes Democrats were in power for 8 years but how many of their policies could not be enacted due to obstructionism? But lets not get into that area here: 8 years is a relatively small time to create/destroy inequality. And I don't see any Democrats pushing for tax cuts on the rich, especially cutting estate taxes, which affect only the very rich.

> The complexity of the tax code and lack of competitiveness with international countries may have heavily influenced inequality. But it was hardly the result of explicit tax reduction for the rich...

Its not the complexity of the tax code but its very nature. The top tax rate for personal income is around 35% in the US whereas it is much higher in other developed economies. And the sources that I've listed point to historical trends that prove the same point: once you have a class of super wealthy, they will inevitably influence the Government to reduce their tax burden no matter how that is achieved.

> The idea that tax havens are something that were merely a matter of weak policy is naive. Even worse than the drug war hawks.

I don't think that comparison achieves anything but hyperbole so I'm not going to comment on it.

> Just because the middle class didn't keep pace with the wealthy doesn't mean only the wealthy were at fault. The fact the middle class lost wealth is hardly singularly the fault of the wealthy. I know this narrative sells well in politics but it's very short sighted.

I think you're conflating wealth with income. The middle class, by their definition, is not wealthy (at least in the same country; middle class in US is most certainly more wealthy than in India, say). The US middle class hasn't lost wealth, its their incomes that have not been growing as fast as the incomes of the wealthy. Its unfortunately not just politics: investments in people reap great benefits for society. If a country fails to invest in the health and education of its citizenry because its unable to raise the revenue to do so by the wealthy, then its most certainly the fault of the rich.

> Even if the US adjusted tax policy to redistribute a larger chunk of taxes towards the middle class it would hardly make a dent in the new reality in the fact there is hardly a middle class economy like there used to be. So you must either develop a new middle class economy or you get temporary perks of taking it from the wealthy. This is the big whale in the room that the Bernie bro guys are ignoring. The likely scenario is that the wealthy would become continually less competitive over the years, shift way more money over seas, and the middle class would be in the same situation with a little bit more money for a short period.

I don't think that is likely. Sure its a changed reality now, and I certainly don't see what other future markets will open up, but this new reality demands a healthy, educated workforce to operate it. Income redistribution is less about taking from wealthy and giving it to the poor as much as taking from the wealthy and investing in institutions/programs that can assist the most vulnerable in society. More taxation by itself won't make the wealthy less competitive... I mean, how does that even happen? On the contrary: educating a kid from Inner City Detroit might give us the next Steve Jobs.

> Gov spending under any administration that enacts those policies would largely offset most of the gains going directly to the people regardless (which is good if it results in universal health care, but little else if it's not sustainable).

You seem to imply that all Govt. spending is wasteful which is most certainly not true. Surely its not perfect, but that's another problem that needs fixing.

Also, you asked for a source but failed to provide a single one for any of the many many assertions that you have made.

[0]: https://www.amazon.com/Pay-without-Performance-Unfulfilled-C...

[1]: https://www.amazon.com/Inequality-What-Can-Be-Done/dp/067450...

[2]: https://www.amazon.com/Dark-Money-History-Billionaires-Radic...

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giardiniFeb 2017

That was true in the USA from the 1950s through the 1980s. Since then the middle-class has been more than decimated. Paul Krugman's book "Conscience of a Liberal" tells how/why this happened:

https://www.amazon.com/Conscience-Liberal-Paul-Krugman/dp/03...

I'm conservative in general, but I agreed with Bernie Sanders on (at least) 3 issues and have a 4th bone to pick with USA politics:

1) Privacy is paramount; the government should stay out of our lives as much as possible. "Terrorism" is no excuse for a government to monitor its citizens.

2) Taxes must be severely increased on the wealthy. "Death taxes" must be restored and income taxes raised on the wealthy. To do otherwise creates a situation where wealth accumulates to individuals w/o bound.

3) corporations must not be allowed the rights of persons. Campaign finance reform must occur and the power of special interests must be cut.

Until we restore heavy estate taxes ("death taxes"), income taxes, and reduce the political power of corporations as well, the USA will continue its long slide toward an economy like Mexico's, where there are only the poor and the rich, and no middle class.

Finally (something Sanders would likely avoid):

4) as part of (3), non-profit corporations and all foundations, public or private, (churches, foundations, organizations, etc.) should be both taxed and audited. Today they're little more than an end-run around taxation. They are too powerful politically. They're controlled by their founders and their families. They are economically inefficient - releasing their resources (by breakup, taxation, etc.) would boost the economy greatly.

During the Middle Ages the British and French took possession of the (then) Roman Catholic Church's lands, possessions and clergy. After all, the Church _was_ meddling in the political, and not the spiritual, realm. I think its time for the USA to do the same:

"Dechristianization of France during the French Revolution":

https://www.google.com/url?url=https://en.wikipedia.org/wiki...

"English Reformation - Wikipedia":

https://en.wikipedia.org/wiki/English_Reformation#Actions_by...

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pm90Jan 2017

I don't think it is as fragmented as you explain it to be. There has been a broad agreement that the principles of the New Deal work; they have worked before and they would work now. However, there has been a deliberate effort by (a few) of the ultra-rich to subvert New Deal policies and this has been done through the creation and continued funding of institutions dedicated to what Krugman calls "movement conservatism". I would suggest 2 books: "Dark Money" and "Conscience of a Liberal" to get a better idea of the world that we operate in right now.

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giardiniOct 2015

Not "evil networks" but "entire network".

"I can't see how an employed and wealthy population could be a bad thing."

It isn't. But what we're facing is a _small_ employed and extremely wealthy fraction of the population together with a _huge_ low-paid supermajority of the population.

Small business owners want fewer and less taxes, no unions, lower wages, lower healthcare costs, fewer worker protections, etc. Left to themselves they would drive wages to zero. Small businesses join others to support certain non-profits that lobby in Washington, DC on their behalf. Nothing illegal, but one must ask such questions as: "Where are the lobbyists for low-paid workers?" or "Who will support the workers' families after the workers die from inhaling toxic substances day after day?" These are questions in which the small businessman's lobbyist has no interest.

In one chapter "Conscience of a Liberal" Krugman histories the development of this relatively new conservative and wealthy network of individuals and not-for-profit corporations. Read/skim the book for details:

http://www.amazon.com/Conscience-Liberal-Paul-Krugman/dp/039...

One of Krugman's points is that the middle class is disappearing in the USA: wealth distribution now mirrors that which existed in the so-called "Gilded Age" of the Rockefellers, Carnegie et al (late 19th-early 20th century): a small percentage of extremely rich people and a large percentage of poor, with a very small middle class.

FDR's New Deal, by increasing taxes radically on the wealthy (both inheritance and income taxes) and increasing wages, brought a strong middle-class into existence. That middle class has been the engine of the US economy but is dwindling. The solution is to restore taxes and support the worker's causes.

Gilded Age:

https://en.wikipedia.org/wiki/Gilded_Age

"Why We’re in a New Gilded Age" by Paul Krugman:

http://www.nybooks.com/articles/archives/2014/may/08/thomas-...

The Rich, the Right, and the Facts: Deconstructing the Income Distribution

http://prospect.org/article/rich-right-and-facts-deconstruct...

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dimitarMay 2022

Ignore the Nobel prize for a moment and see his other accomplishments:

He is one of the most influential academic economists by number of citations, started a whole new field of Applied Economics (New Economic Geography).

His textbooks (including Econ 101 and International Economics, 12 editions since 1987!) sell very well, which must mean that they are well regarded by the professors that assign them.

In policy debates around the response to the Great Recession he revived the Liquidity Trap idea central to which was admitted as valid by the central banks and formulated a modern theoretic explanation for it (instead and in addition to the old IS-LM).

In his punditry at the New York Times and elsewhere he has represented the mainstream/orthodoxy of economic opinion. The liquidity trap was controversial initially, but it is well accepted now - by central banks, policymakers in governments and economists in the private sector.

If you think he is outlandish, you have to check your assumptions to what other academic economists think, and although it might different in style and presentation it will be the same.

He is hated intensely for his politics (he has a book called a "The Conscience of a liberal" and hasn't held back criticising people like George W. Bush, Trump and Putin) and by followers of heterodox economic schools and crypto-enthusiasts. It is your loss to ignore his insights.

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throwaway34241Aug 2021

I think ideology plays a strong role in addition to interests. In my mind (from reading about this a lot) there are roughly four political factions at the elite level (there's probably more variation at the grassroots level).

The most interesting is probably the Republican party establishment. I recently read books by two partisans on either side [1] (both prolific authors and MIT PhDs) and they were in almost total agreement historically on the people and timeline. The Republican party starting with Barry Goldwater underwent an internal revolution, and an upstart and more hard-line faction won, driving out the Eisenhowers and Rockefellers. The second author is a member of this group, and he believes strongly in very small government (for example, he is against the post-1950s government and believes America was last America in the 1930s).

The other Republican faction is roughly the Tea Party, which this [2] book goes into more detail. It started being a more major force in politics starting in 2010 after financial crisis. I think Boehner who was the speaker of the house at the time has talked more candidly about this period after leaving office. They are angry at the status quo and lean more to the conspiracy side of things.

On the Democratic side there are the left (Sanders, AOC, etc) and the center-left establishment. They both generally support social-democratic policies so can work together, but the center-left is more market-oriented (maybe you could also say capitalistic or neoliberal) and they also differ in political style. I think people are pretty familiar with Sanders etc but here's [3] an article by a center-left economist talking a little bit about how the nature of this coalition affects what policies are possible.

[1] Krugman's Conscience of a Liberal and Murray's By the People

[2] https://www.amazon.com/When-Party-Came-Town-Representatives/...

[3] https://www.bradford-delong.com/2019/03/passing-the-baton-th...

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