The title of renowned economist Paul Krugman’s new book, “The Consciense of a Liberal,” seems to suggest that the book is more about politics than economics.
Really, it is about both.
“Everything is political these days,” Krugman said.
Krugman, who will appear at Warwick’s Bookstore on Dec. 13 at 7:30 p.m., has written a book that chronicles what he considers the intersection of politics and economics, and asserts that one of those factors has clearly driven the other.
“It is my belief that politics has led the dance, that a lot of what’s happened in this country is the result of political changes for the worst.”
America enjoyed a prosperous time in the years following World War II, according to Krugman, marked by a strong middle class and unmatched levels of political bipartisanship and cooperation. In the decades since, Krugman argues, the rise of movement conservativism led to parallel increases in political polarization and economic inequality.
Krugman, an acclaimed columnist for the New York Times and a professor at Princeton University, believes movement conservativism is centered around a desire to roll back the legacies of FDR’s New Deal, such as Social Security and Medicare, and was driven politically largely by race issues and a backlash against the civil rights movement. The massive shift of Southern whites from Democratic to Republican voters from the mid-1960s until the 1980s was the main component of the movement, Krugman said.
“Once you take account of the shift of Southern whites, there’s hardly anything left to explain,” he said.
Krugman believes that the economic realities for everyday Americans have gotten worse as a result of that political change, and that the country is now ready for a new New Deal.
“A new New Deal is about saying we can make people’s lives more secure and make society more just with government intervention - not a government takeover, but with government programs like Social Security,” he said.
He advocates the creation of a universal health care system, which he says is achievable.
“Every other advanced country has it,” he said. “It would save us money if we did it right.”
As for Social Security, Krugman says it is currently in good enough shape - at least good enough that we should worry about other things first.
“It’s going to face rising costs as Baby Boomers retire, but it’s mostly prepared for that,” he said. “Using any rational calculus, it just doesn’t belong on the front burner.”
Illegal immigration is another issue that Krugman believes is burning hotter than it should be. He said there is some downward impact of illegal immigration on the wages of U.S. workers with less than a high school education, and that illegal immigrants from Mexico probably do not pay enough in taxes to cover the government services they receive. He said there is some benefit to having additional workers, but that all of these concerns don’t add up to a large economic impact.
“All of this stuff is small change,” he said. “Economically, it’s a mixed bag, but it certainly doesn’t justify any apocalyptic rhetoric.”
The explosive growth of China’s economy does cause Krugman some concern, he said.
“The impact of Chinese growth on U.S. wages is significant enough to get worried about for lower-skilled U.S. workers,” he said. “The impact of China on environmental issues is just terrifying.”
But Krugman’s book focuses more on what we can do here in the U.S. A changing American society is ready for a new New Deal, he said, one that would benefit the huge majority of Americans largely by placing a larger burden on the very richest Americans. The 2008 elections will go a long way toward determining whether such plans become reality. The major Democratic candidates are all offering “surprisingly progressive proposals,” Krugman said, rating John Edwards’ proposals the most progressive, followed by Hilary Clinton and then Barack Obama.
“If there’s a Democratic president and 245 Democratic Representatives, and 56 Democratic Senators, will that be enough?” Krugman said. “It depends on the leadership and the ability to hold the party together. It’s not by any means a done deal, but there’s more possibility for a dramatic revival of the New Deal idea than at any point in my lifetime.”