What are the Democrats for?

There is an excellent review of Paul Krugman’s new book “The Conscience of a Liberal: Reclaiming America from the Right” by Eyal Press in the London Review of Books.

Krugman, a Princeton economist and bi-weekly contributor in the New York Times, has been one of George W Bush’s fiercest critics. In particular he has taken aim at he 43rd president for his policies, which have contributed to the widening gap between the rich and poor in the USA.

As Press points out Krugman has previously argued that there was nothing that could be done about widening inequality since this was a product of technological change. But Krugman now argues that all countries have undergone this process, yet only in America do CEOs earn 367 times the average worker.

So why has there never been a working class revolt?. Firstly, the Republican party have played on the American Dream. The idea that America was founded upon rugged individualism, and that competition is acceptable even if its net effect is that the rich get richer and buy ever bigger yachts whilst the poor are made homeless.

But it has also to do with the failure of the Democrats to articulate a message that promises a better life for its natural supporters. In 2004 when John Kerry ran for president, the poverty rate had increased for three successive years, 45 million Americans had no health insurance, and Bush had handed his wealthiest supporters two massive tax cuts. Yet the Democrat nominee made little of this during his campaign.

Krugman’s answer is to suggest that America returns to the regulated capitalism of the 1950s, where large employers such as General Motors offered health and retirement benefits in retune for healthy worker relations and high productivity. Krugman points out that inequality was much lower during that decade, and the top rate of tax was 91% versus the 35% it is currently.

For working class Americans, it surely sounds more attractive than the situation they have experienced since the 1980s. That is, bankruptcies on the increases, less job security, a loss in work related benefits, and a government that falls over itself to bail out Bear Sterns but does little to help those on low income who may lose their homes.

But Press is not taken by the strength of the message in Krugman’s book, arguing that it is far better at explaining what is wrong with the Republicans than articulating what’s right about the liberal vision. That said, I’ve already ordered my copy from Amazon (click here) and look forward to reading it during the summer break.