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Krugman: Income Inequality Pricks 'Conscience'

In his new book, The Conscience of a Liberal, economist and New York Times columnist Paul Krugman examines two trends of recent years: the rise in economic inequality in the United States and the number of wealthy Americans, as well as the growth in political polarization.

Krugman argues that the political development drove and enabled the economic change. Movement conservatives took over the Republican Party, won elections, and began rolling back the power of unions, federal welfare programs and, above all, taxes.

The result, Paul Krugman tells Robert Siegel, is a class of very rich Americans, whose size is unprecedented and whose good fortune is not shared by the vast majority of their countrymen.

Of course, the United States is a much richer country than it was 35 years ago, and most Americans possess things such as homes and consumer goods unimaginable in the past. But they are more likely to be without health insurance, Krugman notes.

"So in some crucial ways, things have not made progress. Above all, we haven't had the kind of progress we should have had," he says. "People aren't nearly as much better off as they would be if the gains from economic growth had been broadly distributed."

Krugman says that the economic inequality in the United States is the direct, intended result of programs Republicans brought to government, starting with the election of Ronald Reagan in 1980.

"Since the 1970s, the conservative movement that took over the Republican Party has systematically set out ... to dismantle all of the institutions created by Franklin D. Roosevelt and the New Deal to make this a more equal society," such as unions, progressive taxation and the minimum wage, Krugman says.

He also discusses the role race has played in influencing Americans to vote against their own economic self-interest, as well as how the shortcomings of the Clinton administration helped develop today's progressive political movement.

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