One of the best things about the holiday season is having time to catch up on reading…

This is a book that I both thoroughly enjoyed and one which I found made me think. We all are products of our upbringing and the arc of our lives. I grew up in the South in eastern North Carolina with parents who were public school educators, not manufacturing workers. My childhood was a solidly middle-class one, and like Krugman, I benefited from the “Great Compression” and its positive effect on my family. I entered the work force in 1979 (right as things were tilting toward the greater inequality Krugman writes of) after earning a business degree at UNCCH — the late 1970’s and early 1980’s were a challenging economic time, but I found a niche in information technology that has served me very well. My success in this field has shaped my views on work. Race in politics is a subject that Krugman mines in this book; I’m of an age (51) that while I don’t have vivid memories of the racial upheavals of the 1960’s, I remember snippets of conversations and TV news, and growing up in the south meant that it was obvious that there was extensive prejudice. This is an area that Krugman states has a powerful effect on the candidates for whom people vote.

I’ve always considered myself a liberal, believing in social freedom, and at least to some degree the welfare state and its inherent redistribution of income. However, a business degree (followed by a computer science degree) and a change-oriented technological mindset has focused me toward an economic worldview of embracing change and riding the wave of progress. As my wife and I have often said, we don’t have many blacksmiths now; they’ve had to retool and find other jobs. Generally, I believe in free trade, and (here’s where my roots living in a “right to work” state come in) have had a relatively dim view of unions, though my wife’s family were union members, primarily in the tobacco industry.

Reading Krugman’s book was interesting and challenging to my worldview. His thesis is that organized and intentional politics have driven economic changes over much of the last 100 years, rather than technological change and globalization. Starting with the progressive movement of the early 20th century and the imposition of the income tax and the beginning of wealth redistribution, powerful forces have been pushing and pulling America. Absent the ability of interest groups to rule by fiat, this has played out through the “democratic” process in ways that make me put that word in quotes. A major effort through time has been to convince the public to vote against their own economic advantage through disenfranchisement, deceit, trickery and occasionally outright fraud. Krugman writes of the period from the late 1940’s through the late 1970’s as a period of unprecedented equality as several things came together:

• The institutionalization of New Deal social policies and the positive impacts they had on society
• The social “norming” of compensation expectations coming out of wartime wage/price controls
• The growth of labor unions and their effect on wages and benefits
• The “right place/right time” to be expanding manufacturing

This created an environment where America birthed a burgeoning middle class and a political balance that reflected this “middle of the road” balance. We weren’t as polarized politically as we had been before, nor nearly as polarized as we’ve recently been. Krugman believes that it is important for long term stability to have more income equality than we have we have today; the differential between CEO and worker is much more skewed today than in the post-war boom, and is even more skewed than in the Gilded Age of unrestrained capitalism.

Krugman’s best material in this book is his argument for universal health care. Other reviewers have highlighted this as well. He sees this both as the “right thing to do” (echoing Lyndon Johnson’s statements about the rightness of passage of civil rights legislation, even though it handed power to the Republican party for a generation) and a template for showing that government can be a positive force, thus diminishing the efficacy of the message of Regan and his successors and setting the stage for other government actions.

Krugman spends a lot of time talking about race in politics and the way that race has been used to co-opt people into voting against their economic interests. I think that he’s right that this has been a powerful force. Reading this book after the election of 2008 is interesting. I know that I personally worked harder for Obama’s election that I’ve ever done in a political campaign; I felt that strongly that it was right. I am optimistic about Obama’s ability to bring forward real change in the way we approach our problems.

Clearly, things have been moving in directions that reinforce income inequality and put unprecedented challenges on the middle class. Are the demographic changes that our society is going through enough to sustain policies that will help us to reinfranchise this part of society and help to defuse political polarization? Maybe we can look at what our neighbors around the world are doing — we don’t have a corner on good ideas.

I recommend this book…it’s a real call to action and participation in our democracy, to make a difference in the way things work.