Paul Krugman - The Conscience of a Liberal

Just finished reading Paul Krugman's excellent book, The Conscience of a Liberal, published 2007. I highly recommend it to anyone who has a relatively open mind and can think, and that unfortunately will exclude many conservatives. The Guardian has a good review of the book, and here is a snip:

His latest book-length polemic, The Conscience of a Liberal, lacks something of the bite one gets in the columns; but it remains a valuable and thoughtful study that puts a good deal of political and economic history into perspective. It offers considerable hope to those who, like myself, would like to see changes occur in the US, including a reduction in drastic income disparities, the implementation of a national healthcare system, an end to racial divisions and a foreign policy that moves beyond "shoot now, pay later".

That review is here.

To quote from Salon's review, Paul gives "a history of the political economy of the United States from the beginning of the 20th century to the present."

Another quote from Salon, "If one sentence could sum up "Conscience" it might be: "Republicans increase economic inequality, Democrats decrease it, and so, politics matter."

The entire Salon review is here.

A few interesting snips from the book that I found:

"So the difference between the parties is not an illusion. Republicans cut taxes on the rich and try to shrink government benefits and undermine the welfare state. Democrats raise taxes on the rich while trying to expand government benefits and strengthen the welfare state."

snip

"...the right-wing takeover of the GOP is the underlying cause of today's bitter partisanship."

snip

"Bitter partisanship has become the rule because the Republicans have moved right, and the GOP has moved right because it was taken over my movement conservatives." "...public opinion, unlike the Republican Party, hasn't shifted sharply to the right."

snip

"But with the coming of the New Deal, the rich started to face taxes that were not only vastly higher than those of the twenties, but high by today's standards. The top income tax rate (currently only 35 %) rose to 63% during the first FDR term, and 79% by the second. By the mid-fifties, as the United States faced the expenses of the Cold War, it had risen to 91%."

Now, even for me, a 91% top tax rate is a bit too high. And 35% is too low. Seems we could easily have middle ground of 40%? Maybe 45%? Maybe even 50%. I hear people saying that we need a "new" New Deal these days, but I hope they don't mean tax rates upwards of 91% again. That's just far too high.

snip

"But as so often happens when we look closely at the real political history of this country, it's far from clear that what everyone knows is true."

Which is another way of saying that you cannot believe everything you learn in textbooks, and that history has undergone many revisions over time, in addition to a whole lot of it just simply being left out of our history books.

"What made the New Deal's influence so enduring was the fact that FDR provided answers to inequality and economic insecurity." "If everyone is entitled to health insurance, there's no need to screen people to eliminate high-risk clients. If a government agency provides insurance, there's no need to fight over who pays for a medical procedure: If it's a covered procedure the government pays. As a result government health insurance programs are much less bureaucratic and spend much less on administration than do private insurers. For example, Medicare spends only about 2 percent of its funds on administration; for private insurers the figure is about 15 percent.

Among Krugman's rather simple prescriptions to reduce income inequality and put a little fairness back in society are:

"higher taxes on the well off."

"undoing many of the tax cuts for the wealthy that movement conservatives have pushed through since 1980."

"closing some of the obvious loopholes in the U.S. system. These include eliminating the rule that allows hedge fund managers to classify their earnings as capital gains, taxed at a 15 percent rate rather than as income, at 35 percent. Also, closing loopholes that let corporations, drug companies in particular, shift recorded profits to low-tax jurisdictions overseas, costing billions."

"taxing capital gains as ordinary income."

"an end to the thirty-year tilt of government policy against unions."

As Salon said in their review, there might not be a whole lot of groundbreaking material in this book that liberals do not already know, but he writes in a very clear way that helps to reinforce what you do know. And we know that repetition is a key to learning.