excerpts from the book

The Conscience of a Liberal

by Paul Krugman

WW Norton, 2009, paperback

p9
The story of how George W. Bush and Dick Cheney ended up running the country goes back half a century, to the years when the National Review, edited by a young William F. Buckley, was defending the right of the South to prevent blacks from voting - "the White community is so entitled because it is, for the time being, the advanced race" - and praising Generalissimo Francisco Franco, who overthrew a democratically elected government in the name of church and property, as "an authentic national hero." The small movement then known as the "new conservatism" was, in large part, a backlash' against the decision of Dwight Eisenhower and other Republican leaders to make their peace with FDR's legacy.

Over the years this small movement grew into a powerful political force, which both supporters and opponents call 'movement conservatism.' It's a network of people and institutions that extends far beyond what is normally considered political life: In addition to the Republican Party and Republican politicians, movement conservatism includes media organizations, think tanks, publishing houses and more. People can and do make entire careers within this network, secure in the knowledge that political loyalty will be rewarded no matter what happens. A liberal who botched a war and then violated ethics rules to reward his lover might be worried about his employment prospects; Paul Wolfowitz had a chair waiting for him at the American Enterprise Institute.

There once were a significant number of Republican politicians who weren't movement conservatives, but there are only a few left, largely because life becomes very difficult for those who aren't considered politically reliable.

p10
Money is the glue of movement conservatism, which is largely financed by a handful of extremely wealthy individuals and a number of major corporations, all of whom stand to gain from increased inequality, an end to progressive taxation, and a rollback of the welfare state - in short, from a reversal of the New Deal. And turning the clock back on economic policies that limit inequality is, at its core, what movement conservatism is all about.

p11
Movement conservatism is ultimately about rolling back policies that hurt a narrow, wealthy elite, it's fundamentally antidemocratic.

p11
Movement conservatism has gone from fringe status to a central role in American politics because it has proved itself able to win elections.

Ronald Reagan, more than anyone else, showed the way.

p11
[Ronald Reagan's] early political successes were based on appeals to cultural and sexual anxieties, playing on the fear of communism, and, above all, tacit exploitation of white backlash against the civil rights movement and its consequences.

p11
The legacy of slavery, America's original sin, is the reason we're the only advanced economy that doesn't guarantee health care to our citizens. White backlash against the civil rights movement is the reason America is the only advanced country where a major political party wants to roll back the welfare state.

p12
When Bush moved into the White House, movement conservatism finally found itself in control of all the levers of power - and quickly proved itself unable to govern. The movement's politicization of everything, the way it values political loyalty above all else, creates a culture of cronyism and corruption that has pervaded everything the Bush administration does, from the failed reconstruction of Iraq to the hapless response to Hurricane Katrina. The multiple failures of the Bush administration are what happens when the government is run by a movement that is dedicated to policies that are against most Americans' interests, and must try to compensate for that inherent weakness through deception, distraction, and the distribution of largesse to its supporters.

p22
in 1910 almost 14 percent of adult males were non-naturalized immigrants, unable to vote. Meanwhile Southern blacks were effectively disenfranchised by Jim Crow. Between the immigrants and the blacks, about a quarter of the population - and by and large, the poorest quarter-were simply denied any role in the political process.

p41
By the mid-fifties the real after-tax incomes of the richest 1 percent of Americans were probably 20 or 30 percent lower than they had been a generation earlier. And the real incomes of the really rich-say, those in the top tenth of one percent-were less than half what they had been in the twenties.

p42
Working Americans were far better off in the fifties than they had been in the twenties, while the economic elite was worse off. And even among working Americans economic differences had narrowed. The available data show that by the 1950s unskilled and semiskilled workers, like the people manning assembly lines, had closed much of the pay gap with more skilled workers, like machinists. And employees with formal education, like lawyers and engineers, were paid much less of a premium over manual laborers than they had received in the twenties-or than they receive today.

p43
On the other side F. Scott Fitzgerald's remark that the rich "are different from you and me" has never, before or since, been less true than it was in the generation that followed World War II. By the fifties, very few Americans were able to afford a lifestyle that put them in a different material universe from that occupied by the middle class. The rich might have had bigger houses than most people, but they could no longer afford to live in vast mansions-in particular, they couldn't afford the servants necessary to maintain those mansions. The traditional differences in dress between the rich and everyone else had largely vanished, partly because ordinary workers could now afford to wear (and clean) good clothes, partly because the rich could no longer afford to dress in a style that required legions of servants to help them get into and out of their wardrobes. Even the traditional rich man's advantage in mobility - to this day high-end stores are said to cater to the "cartrade" - had vanished now that most people had cars.

p47
In the [nineteen-]twenties, taxes had been a minor factor for the rich. The top income tax rate was only 24 percent, and because the inheritance tax on even the largest estates was only 20 percent, wealthy dynasties had little difficulty maintaining themselves. 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 percent) rose to 63 percent during the first Roosevelt administration, and 79 percent in the second. By the mid-fifties, as the United States faced the expenses of the Cold War, it had risen to 91 percent.

Moreover, these higher personal taxes came on capital income that had been significantly reduced not by a fall in the profits corporations earned but in the profits they were allowed to keep: The average federal tax on corporate profits rose from less than 14 percent in 1929 to more than 45 percent in 1955.

And one more thing: Not only did those who depended on income from capital find much of that income taxed away, they found it increasingly difficult to pass their wealth on to their children. The top estate tax rate rose from 20 percent to 45, then 60, then 70, and finally 77 percent. Partly as a result the ownership of wealth became significantly less concentrated: The richest 0.1 percent of Americans owned more than 20 percent of the nation's wealth in 1929, but only around 10 percent in the mid.-1950s.

So what happened to the rich? Basically the New Deal taxed away much, perhaps most, of their income. No wonder FDR was viewed as a traitor to his class.

p49
If there's a single reason blue-collar workers did so much better in the fifties than they had in the twenties, it was the rise of unions.

At the end of the twenties, the American union movement was in retreat. Major organizing attempts failed, partly because employers successfully broke strikes, partly because the government consistently came down on the side of employers, arresting union organizers and deporting them if, as was often the case, they were foreign born. Union membership, which had surged during World War I, fell sharply thereafter. By 1930 only a bit more than 10 percent of nonagricultural workers were unionized, a number roughly comparable to the unionized share of private-sector workers today. Union membership continued to decline for the first few years of the depression, reaching a low point in 1933.

But under the New Deal unions surged in both membership and power. Union membership tripled from 1933 to 1938, then nearly doubled again by 1947. At the end of World War II more than a third of nonfarm workers were members of unions-and many others were paid wages that, explicitly or implicitly, were set either to match union wages or to keep workers happy enough to forestall union organizers.

p59
Franklin Delano Roosevelt's Madison Square Garden speech on the eve of the 1936 election

We had to struggle with the old enemies of peace-business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me - and I welcome their hatred.

p61
In the 1920s status-quo conservatism helped block liberal reforms. Any proposal for higher taxes on the rich and increased benefits for workers and the poor, any suggestion of changing labor law in a way that would make unionization easier, was attacked on the grounds that the would-be reformers were irresponsible people who just didn't understand how the world worked-that their proposals, if adopted, would destroy the economy.

p61
FDR's second inaugural address

We have always known that heedless self-interest was bad morals; now we know that it is bad economics.

p62
Although the U.S. entry into World War II wasn't planned as a gigantic demonstration of government effectiveness, it nonetheless had that effect. It became very difficult for conservatives to claim that government can't do anything well after the U.S. government demonstrated its ability not just to fight a global war but also to oversee a vast mobilization of national resources.

p67
In 1946 Truman proposed a system of national health insurance that would have created a single-payer system comparable to the Canadian system today. His chances of pushing the plan through initially looked good. Indeed, it would have been much easier to establish national health insurance in the 1940s than it would be today. Total spending on health care in 1946 was only 4.1 percent of GDP, compared with more than 16 percent of GDP now. Also, since private health insurance was still a relatively undeveloped industry in the forties, insurance companies weren't the powerful interest group they are now. The pharmaceutical lobby wouldn't become a major force until the 1980s. Meanwhile public opinion in 1946 was strongly in favor of guaranteed health insurance.

But Truman's effort failed. Much of the responsibility for that failure lies with the American Medical Association, which spent $5 million opposing Truman's plan; adjusting for the size of the economy, that's equivalent to $200 million today. In a blatant abuse of the doctor-patient relationship, the AMA enlisted family doctors to speak to their patients in its effort to block national insurance. It ostracized doctors who supported Truman's plan, even to the extent of urging that they be denied hospital privileges. It's shocking even now to read how doctors were told to lecture their patients on the evils of 'socialized medicine,"

But the AMA didn't defeat Truman's plan alone. There was also crucial opposition to national health insurance from Southern Democrats, despite the fact that the impoverished South, where many people couldn't afford adequate medical care, would have gained a financial windfall. But Southern politicians believed that a national health insurance system would force the region to racially integrate its hospitals. (They were probably right. Medicare, a program for seniors equivalent in many ways to the system Truman wanted for everyone, was introduced in 1966-and one result was the desegregation of hospitals across the United States.) Keeping black people out of white hospitals was more important to Southern politicians than providing poor whites with the means to get medical treatment.

p69
Between 1935 and 1945 the percentage of American workers in unions rose from 12 to 35 percent; as late as 1970, 27 percent of workers were union members.

p80
By 1966, 80 percent of the population had health insurance, up from only 30 percent at the end of World War II, and by 1970 the fraction of the population with health insurance surpassed today's 85 percent level.

p83
President Lyndon Johnson, March 1965

As a man whose roots go deeply into Southern soil, I know how agonizing racial feelings are. I know how difficult it is to reshape the attitudes and the structure of our society. But a century has passed-more than 100 years-since the Negro was freed. And he is not fully free tonight. It was more than 100 years ago that Abraham Lincoln-a great President of another party-signed the Emancipation Proclamation. But emancipation is a proclamation and not a fact.

A century has passed-more than 100 years-since equality was promised, and yet the Negro is not equal. A century has passed since the day of promise, and the promise is unkept. The time of justice has now come.

p99
President Lyndon Johnson to presidential aide Bill Moyers, after the passage of the Civil Rights Act

I think we've just delivered the South to the Republican Party for the rest of my life, and yours.

p111
Time [magazine] readers were probably a bit puzzled in 1998, when the magazine named Walter Reuther, who was president of the United Automobile Workers from 1946 until his death in 1970, one of the one hundred most influential people of the twentieth century. By the century's end, American unionism was a shadow of its former self, and Reuther had been all but forgotten. But once upon a time Reuther was a towering-and, to some people, terrifying-figure. In 1958 Barry Goldwater declared Reuther a "more dangerous menace than the Sputnik or anything Soviet Russia might do to America."

p113
Time magazine, 1998

[Walter] Reuther kept pressing for new and better benefits, and over time, the union won the things that employees today take for granted. Year by year, workers gained, among others, comprehensive health-care programs, tuition-refund programs, life insurance, profit sharing, severance pay, prepaid legal-service plans, bereavement pay, jury-duty pay-plus improvements in vacations, holidays and rest time.

p115
The origins of neoconservatism can be traced largely to two groups: Chicago economists led by Milton Friedman, who led the pushback against Keynesian economics, and sociologists led by Irving Kristol and associated with the magazine The Public Interest, who rebelled against the Great Society.

... In the early years after World War II, with the memory of the depression still fresh, most economists believed that keeping the economy on track required an extensive role for the government. Mainstream economics rejected calls for a planned economy, but it did accept the need for government intervention to fight recessions, as well as a generally increased role of government in the economy as a whole.

Once the crisis had passed, however, it was inevitable that some economists would return to the old faith. By the late 1940s Friedman and his colleague George Stigler were already inveighing (with considerable justification) against the evils of rent control. Over the course of the 1950s this expanded into a broad attack on government intervention and regulation in general. By the early 1960s Friedman had made almost a complete return to free-market fundamentalism, arguing that even the Great Depression was caused not by market failure but by government failure. His argument was slippery and, I'd argue, bordered on intellectual dishonesty" But the fact that a great economist felt compelled to engage in intellectual sleight of hand is, itself, an indication of the powerful allure of free-market fundamentalism. Free-market economists began rejecting not just the New Deal, but the reforms of the Progressive Era, suggesting that even such government actions as policing food and drug safety were unjustified ...

The revolt of the sociologists came later than the return of free-market fundamentalism, and had a darker tone. Where Friedman and his associates radiated Panglossian optimism, the group that coalesced around Kristol and The Public Interest, founded in 1965, were skeptics, even cynics. They were rebelling against Lyndon Johnson's Great Society...

... The Friedmanites and the neoconservatives saw themselves as outsiders, alienated from the liberal establishment. To a remarkable extent the heirs of these movements still manage to feel this way. Yet, by the 1970s the intelligentsia of movement conservatism had an establishment of its own, with financial backing on a scale beyond the wildest dreams of its liberal opponents. To put it bluntly, becoming a conservative intellectual became a good career move.

p118
in the late 1960s and early 1970s members of the new conservative intelligentsia persuaded both wealthy individuals and some corporate leaders to funnel cash into a conservative intellectual infrastructure. To a large extent this infrastructure consists of think tanks that are set up to resemble academic institutions, but only publish studies that play into a preconceived point of view. The American Enterprise Institute, although it was founded in 1943, expanded dramatically beginning in 1971, when it began receiving substantial amounts of corporate money and grants from conservative family foundations. The Heritage Foundation was created in 1973 with cash from Joseph Coors and Richard Mellon Scaife. The libertarian Cato Institute relied heavily on funds from the Koch family foundations.

Media organizations are also part of the infrastructure. The same set of foundations that have funded conservative think tanks also gave substantial support to The Public Interest, as well as publications like The American Spectator.

... The Public Interest, along with the editorial page of the Wall Street Journal, became the principal advocate of supply-side economics.

p151
The collapse of the U.S. union movement that took place beginning in the 1970s has no counterpart in any other Western nation... By the end of the 1990s, U.S. unions had been all but driven out of the private sector, while Canada's union movement was essentially intact. The difference, of course, was politics: America's political climate turned favorable to union busting, while Canada's didn't.

Once Ronald Reagan took office the campaign against unions was aided and abetted by political support at the highest levels. In particular, Reagan's suppression of the air traffic controllers' union was the signal for a broad assault on unions throughout the economy. The rollback of unions, which were once a powerful constraint on inequality, was political in the broadest sense. It was an exercise in the use of power, both within the government and in our society at large.

p160
The character of the Republican Party changed rapidly in the post-Nixon years. In 1984 Thomas Edsall of the Washington Post published 'The New Politics of Inequality' a remarkably insightful and prescient analysis of the changes already taking place in American politics. At the core of his analysis was the renewal and radicalization of the Republican Party that, in his view, took place in the mid-to-late 1970s:

Such previously hostile and mutually suspicious groups as the corporate lobbying community; ideological right-wing organizations committed to a conservative set of social and cultural values; sunbelt entrepreneurial interests, particularly independent oil; a number of so-called neo-conservative or cold war intellectuals with hard-line views on defense and foreign policy who, although sometimes nominally Democratic, provide support for the politics and policies of the GOP; economists advocating radical alteration of the tax system, with tax preferences skewed toward corporations and the affluent-all of these groups found that the Republican Party offered enough common ground for the formation of an alliance.

In other words, movement conservatism had taken over the GOP.

Ronald Reagan was the first movement conservative president. Within Ronald Reagan's inner circle, views that had once been confined to what Eisenhower described as a "tiny splinter group" reigned: David Stockman, Reagan's budget director, considered Social Security an example of "closet socialism," while fervent supply-siders, who believed that cutting taxes would increase revenue, were given key positions in the Treasury Department and elsewhere in the government. Reagan also did his best to reverse Nixon's environmental achievements, slashing the budget of the Environmental Protection Agency and gutting its enforcement activities. His first secretary of the interior, James Watt, was a fervent antienvironmentalist with strong ties to the religious right who I quintupled the amount of public land open to coal mining.

p161
After Reagan, the GOP became thoroughly radicalized. Consider the 2004 platform of the Texas Republican Party, which gives an idea of what the party faithful really think: national platforms have to present at least an appearance of moderation, but in Texas Republicans can be Republicans. It calls for the elimination of federal agencies "including, but not limited to, the Bureau of Alcohol, Tobacco, and Firearms; the position of Surgeon General; the Environmental Protection Agency; the Departments of Energy, Housing and Urban Development, Health and Human Services, Education, Commerce, and Labor." The platform also calls for the privatization of Social Security and the abolition of the minimum wage. In effect Texas Republicans want to repeal the New Deal completely.

p162
In the late 1990s, before the Bush tax cuts, a mere 2 percent of decedents had estates large enough to face any tax at all. In terms of income, the richest 1 percent of the population paid almost two-thirds of the estate tax, and the richest 10 percent paid 96 percent of the taxes.

p162
In the 1990s the Republican Party once again began making estate tax repeal a priority. And the 2001 Bush tax cuts included a phaseout of the estate tax, with rates going down and exemptions going up, concluding with total elimination of the tax in 2010, In other words today's Republican party is willing to go further than the Republican Party of the 1920s, the last, golden ears of the Long Gilded Age, in cutting taxes on the wealthy.

p162
Grover Norquist, movement conservative and anti-tax advocate

My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.

p163
The modern Republican Party has been taken over by radicals, people who want to undo the twentieth century.

p163
There is an interlocking set of institutions ultimately answering to a small group of people that collectively reward loyalists and punish dissenters. These institutions provide obedient politicians with the resources to win elections, safe havens in the event of defeat, and lucrative career opportunities after they leave office. They guarantee favorable news coverage to politicians who follow the party line, while harassing and undermining opponents. And they support a large standing army of party intellectuals and activists.

p164
There's nothing on the left comparable to the right-wing think tank universe. The Washington Post has a regular feature called "Think Tank Town," which "publishes columns submitted by 11 prominent think tanks," Of the eleven institutions so honored, five are movement conservative organizations: the American Enterprise Institute, the Cato Institute, the Heritage Foundation, the Manhattan Institute, and the Hudson Institute. Only one, the Center for American Progress, can really be considered an arm of the progressive movement-and it wasn't founded until 2003. Other think tanks, like the Brookings Institution, although often described as "liberal," are in reality vaguely centrist organizations without a fixed policy line. There are a few progressive think tanks other than CAP that play a significant role in policy debate, such as the Center on Budget and Policy Priorities and the Economic Policy Institute. In terms of funding and manpower, however, these organizations are minnows compared with the movement conservative whales.

The proliferation of movement conservative think tanks since the 1970s means that it's possible for a movement intellectual to make quite a good living by espousing certain positions. There's a price to be paid-as Bruce Bartlett discovered) you're expected to be an apparatchik, not an independent thinker-but many consider it a good deal.

To a very large extent these think tanks were conjured into existence by a handful of foundations created by wealthy families. The bigger think tanks, Heritage and AEI in particular, also receive large amounts of corporate money

The network of conservative think tanks has its counterpart in the world of journalism. Publications such as the National Journal, the Public Interest, and the American Spectator were, like the movement conservative think tanks, created with a lot of help from right-wing foundations-more or less the same foundations that helped create the think tanks. There are also a number of movement conservative newspapers: The editorial page of the Wall Street Journal has long played a key role, while the Washington limes, controlled by Sun Myung Moon's Unification Church, has become the de facto house organ of the Bush administration. And there is, of course, Fox News, with its Orwellian slogan, Fair and Balanced.

Last but certainly not least, there's the nexus among lobbyists and politicians. The apparent diversity of corporate lobbying groups, like the apparent diversity of conservative think tanks, groups, the movement's true centralization.

p166
The "K Street Strategy" [is] the name Grover Norquist and former House majority leader Tom DeLay gave to their plan to drive Democrats out of lobbying organizations, and give the jobs to loyal Republicans. Part of the purpose of this strategy was to ensure that Republicans received the lion's share of corporate contributions, while Democratic finances were starved-a goal also served by direct pressure. In 1995 DeLay compiled a list of the four-hundred largest political action committees along with the amounts and percentages of money they gave to each party, then called "unfriendly" lobbyists into his office to lay down the law. "If you want to play in our revolution, you have to live by our rules," he told the Washington Post. Equally important, however, the takeover of the lobbies helped enforce loyalty within the Republican Party, by providing a huge pool of patronage jobs-very, very well-paid patronage jobs-that could be used to reward those who toe the party line.

The various institutions of movement conservatism create strong incentives for Republican politicians to take positions well to the right of center. It's not just a matter of getting campaign contributions, it's a matter of personal financial prospects. The public strongly believes that Medicare should use its bargaining power to extract lower drug prices-but Rep. Billy Tauzin, a Democrat-turned-Republican who was the chairman of the House Energy and Commerce Committee from 2001 to 2004, pushed through a Medicare bill that specifically prohibited negotiations over prices, then moved on to a reported seven-figure salary as head of the pharmaceutical industry's main lobbying group. Rick Santorum was clearly too far right for Pennsylvania, but he had no trouble finding a nice think tank job after his defeat.

p168
Younger Republican politicians have, by and large, grown up inside a party defined by movement conservatism. The hard right had already taken over the College Republicans by 1972... Movement conservatives run the Republican National Committee, which means that they are responsible for recruiting congressional candidates; inevitably they choose men and women in their own image. The few remaining Republican moderates in Congress were, with rare exceptions, first elected pre-Reagan or, at the latest, before the 1994 election that sealed the dominance of the Gingrich wing of the Party.

p169
Bitter partisanship has become the rule because the Republicans have moved right, and the GOP has moved right because it was taken over by movement conservatives.

p169
Wealthy families who hate taxes, corporate interests that hate regulation, and intellectuals who believe that the welfare state is illegitimate have always been with us.

p171
In the late 1950s and early 1960s, the "new conservatives," the narrow, elitist group centered around the National Review, grew into a serious movement by merging with other factions unhappy with the moderate, middle-class America of the postwar years. Fervent anticommunists found in movement conservatism kindred spirits who shared their fears. People outraged by the idea of other people receiving welfare found a movement that could make their resentment politically respectable. Businessmen furious at having to deal with unions found a movement that could turn their anger into effective political action.

p171
[Ronald] Reagan taught the [conservative] movement how to clothe elitist economic ideas in populist rhetoric.

p179
Every advanced country except the United States has a universal health care system; how did we miss out? Perhaps the best opportunity to create such a system came in the late 1940s, when Harry Truman attempted to create a system that would have looked essentially like Medicare for the whole population...Truman's bid failed in the face of opposition from two crucial groups: the American Medical Association and Southern whites, who would have gained from the program because of their low incomes but who opposed it out of fear that it would lead to racially integrated hospitals.

p181
The marriage between Southern whites and the rest of the Democratic Party broke down over irreconcilable differences. The process began with Barry Goldwater, who took a strong states' rights position and came out against the Civil Rights Act of 1964. Aside from Arizona, all the states Goldwater won in the 1964 election were in the South. In 1968 much of the South went for George Wallace, but Nixon picked up several border states. By 1980 Reagan could win Southern states with thinly disguised appeals to segregationist sentiment, while Democrats were ever more firmly linked to civil rights and affirmative action. In fact the real mystery is why it took so long for the South's congressional delegation to flip.

What share of the political rise of movement conservatism can be attributed to the Southern switch? What the numbers suggest is that the switch accounts for all of the conservative triumph - and then some.

p183
Race was essential to the ability of conservatives to win elections in spite of economic policies that favored a minority over the majority.

p201
The current disconnect between overall economic growth and the fortunes of typical Americans is ... unprecedented in modern U.S. history. Inequality was high during the Long Gilded Age, but because inequality was stable, most workers saw their standard of living improve steadily as the economy grew.

Growth in the great postwar boom that ended in 1973 was broadly shared. Even after inequality began rising at the end of the 1970s, a growing economy continued to translate into gains for almost everyone. Thus inequality was rising in the 1980s, but the expansion of the economy from 1982 onward was still strong enough to let Reagan declare "Morning in America" in 1984, and to get the first George Bush elected in 1988, Inequality continued to rise during the 1990s, but there was still a dramatic improvement in public sentiment as the economy recovered from the 1990-92 slump.

Now, however, the stagnation of wages and median income in the face of overall economic expansion has become so clear that public perceptions of how the economy is doing no longer seem linked to standard measures of economic performance... corporate profits have soared - they're now at their highest level, as a percentage of GDP, since 1929 - and so have incomes at the top of the scale. But the wages of most workers have barely kept up with inflation. Add in a growing sense of insecurity, especially because of the crumbling health insurance system pf which much more in chapter ii), and it's perfectly reasonable for most people to feel pessimistic about the economic situation.

Polls also suggest that the public both understands the role of growing inequality and supports government action to do something about it. A massive Pew survey of trends in public opinion found that the fractions of the public agreeing that the rich are getting richer while the poor get poorer, that the government has a responsibility to help those in need, that everyone should be guaranteed enough to eat and a place to live, have all risen to levels not seen since the early 1990s.

p204
Governments always get an initial boost in public support when they go to war, no matter how incompetent and corrupt the government and no matter how foolish the war.

p214
The United States uniquely among wealthy nations, does not guarantee basic health care to its citizens.

p217
Everywhere else [other than the U.S.] most health insurance is in effect provided by the government, and ultimately by taxpayers (although the details can be complex). Even in the United States, a taxpayer-funded insurance program-Medicare-covers everyone sixty-five and older, and another government program, Medicaid, covers some but not all of those too poor to afford private insurance. But the great majority of Americans who have health insurance get it from the private sector. That reliance on private insurance also makes the United States the only advanced country in which a large fraction of the population - about 15 percent - has no insurance at all.

p218
The World Health Organization rates [the United States] as number 37 [in the world in quality of heath care]... Cross-cultural surveys say that even the British have better overall access to health care than Americans do: they wait longer for discretionary surgery than we do, but they find it easier to see a doctor on short notice, especially after hours or on weekends. And the Germans and French have no significant delays of any kind.

p219
Although America spends much more on health care than anyone else, this doesn't seem to buy significantly more care. By measures such as the number of doctors per 100,000 people, the average number of doctors' visits, the number of days spent in the hospital, the quantity of prescription drugs we consume, and so on, American health care does not stand out from health care in other rich countries. We're off the charts in terms of what we pay for care, but only in the middle of the pack in terms of what we actually get for our money.

p222
Medicare spends only about 2 percent of its funds on administration; for private insurers the figure is about 15 percent... One widely cited comparison of the U.S. and Canadian systems ... concluded that in the United States total administrative cost - including both the costs of insurers and those of health care providers - accounts for 31 percent of health spending, compared with less than 17 percent in Canada.

p223
U.S. physicians are paid more than their counterparts in other countries... a study comparing U.S. and Canadian administrative costs estimate that higher U.S. physicians' salaries account for only about 2 percent of the difference in overall costs.

p223
Insurers have little incentive to pay for preventive car even when it would save large amounts in future medical costs. The most notorious example is diabetes, where insurers often won't pay for treatment that might control the disease in its early stages but will pay for the foot amputations that are all too often a consequence of diabetes that gets out of control. This may seem perverse, but consider the incentives to the insurer: The insurer bears the cost when it pays for preventive care, but it's unlikely to reap the benefits since people often switch insurers, or go from private insurance to Medicare when they reach sixty-five, So medical care that costs money now but saves money in the future may not be worth it from an individual insurance company's perspective. By contrast, universal systems, which cover everyone for life, have a strong incentive to pay for preventive care.

p223
In 2005, 80 million Americans were covered by government programs, mostly Medicare and Medicaid plus other programs such as veterans' health care. This was less than the 198 million covered by private health insurance, but because both programs are largely devoted to the elderly, who have much higher medical costs than younger people, the government actually pays for more medical care than do private insurers. In 2004, government programs paid for 44 percent of health care in America, while private insurance paid for only 36 percent.

p225
The slow-motion health care crisis began in the 1980s, went into brief remission for part of the nineties, and is now back with a vengeance. The core of the crisis is the decline in employment-based insurance. As recently as 2001, 65 percent of American workers had employment-based coverage. By 2006 that was down to 59 percent, with no sign that the downward trend was coming to an end. What's driving the decline in employment-based coverage is, in turn, the rising cost of insurance: The average annual premium for family coverage was more than eleven thousand dollars in 2006, more than a quarter of the median worker's annual earnings." For lower-paid workers that's just too much-in fact, it's close to the total annual earnings of a full-time worker paid the minimum wage. One, study found that even among "moderate income" Americans, which it defined as members of families with incomes between twenty and thirty-five thousand dollars a year, more than 40 percent were uninsured at some point over a two-year period.

p228
The most fundamental obstacle [to health care reform] is the implacable opposition of movement conservatives, William Kristol, in the first of a famous series of strategy memos circulated to Republicans in Congress, declared that Republicans should seek to "kill" the Clinton plan. He explained why in the Wall Street Journal: "Passage of the Clinton health care plan in any form would be disastrous. It would guarantee an unprecedented federal intrusion into the American economy. Its success would signal the rebirth of centralized welfare-state policy." He went on to argue that the plan would lead to bad results, but his main concern, clearly, was that universal health care might actually work-that it would be popular, and that it would make the case for government intervention." It's the same logic that led to George W. Bush's attempt to privatize Social Security: The most dangerous government programs, from a movement conservative's point of view, are the ones that work the best and thereby legitimize the welfare state.

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The fact is that no health care reform can succeed unless it reduces the excess administrative costs now imposed by the insurance industry - and that means forcing the industry to shrink, even if the insurers retain a role in the system. There's really no way to buy their cooperation.

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Like the opposition of insurers, drug industry opposition is essentially unavoidable, because drug companies are part of the problem - U.S. health care is costly partly because we pay much more than other countries for prescription drugs, and sooner or later a universal health care system would try to bargain those prices down.

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Consider the French [health care] system, which the World Health Organization ranked number one in the world. France maintains a basic insurance system that covers everyone, paid for out of tax receipts. This is comparable to Medicare. People are also encouraged to buy additional insurance that covers more medical expenses-comparable to the supplemental health insurance that many older Americans have on top of Medicare-and the poor receive subsidies to help them buy additional coverage, comparable to the way Medicare helps out millions of older Americans.

... the French health care system, which covers everyone and is considered the best in the world, actually looks a lot like an expanded and improved version of Medicare, a familiar and popular program, extended to the whole population. An American version of the French system would cost more than the French system for a variety of reasons, including the facts that our doctors are paid more and that we're fatter and hence more prone to some costly conditions. Overall, however, Medicare for everyone would end the problem of the uninsured, and it would almost certainly cost less than our current system, which leaves 45 million Americans without coverage.

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Proposals to institute a single-payer system, aka Medicare for all, face several major political roadblocks. The roadblock one hears about most often is the implacable opposition of the insurance and drug industries to a single-payer system. Reformers should realize, however, that these interest groups will go all out against any serious health care reform. There's no way to buy them off.

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In purely economic terms, single-payer is clearly the way to go. A single-payer system, with its low administrative costs and strong ability to bargain over prices, would deliver more health care, at lower cost, than the alternatives. The perfect can, however, be the enemy of the good. It's much better to go with a reform plan that's politically feasible and achieves some of the advantages of single-payer than to hold out for the ideal solution.

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The principal reason to reform American health care is simply that it would improve the quality of life for most Americans. Under our current system tens of millions lack adequate health care, millions more have had their lives destroyed by the financial burden of medical costs, and many more who haven't yet gone without insurance or been bankrupted by health costs live in fear that they may be next. And it's all unnecessary: Every other wealthy country has universal coverage. Reducing the risks Americans face would be worth it even if it had a substantial cost-but in this case there would be no cost at all. Universal health care would be cheaper and better than our current fragmented system.

There is, however, another important reason for health care reform. It's the same reason movement conservatives were so anxious to kill Clinton's plan. That plan's success, said Kristol, 'would signal the rebirth of centralized welfare-state policy-by which he really meant that universal health care would give new life to the New Deal idea that society should help its less fortunate members. Indeed it would-and that's a big argument in its favor.

Universal health care could, in short, be to a new New Deal what Social Security was to the original-both a crucially important program in its own right, and a reaffirmation of the principle that we are our brothers' keepers. Getting universal care should be the key domestic priority for modern liberals. Once they succeed there, they can turn to the broader, more difficult task of reining in American inequality.

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Robert Frank in his book "Richistan"

Today's rich had formed their own virtual country... [T]hey had built a self-contained world unto themselves, complete with their own health-care system (concierge doctors), travel network (Net jets, destination clubs), separate economy... The rich weren't just getting richer; they were becoming financial foreigners, creating their own country within a country, their own society within a society, and their economy within an economy.

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Liberals want to restore the middle-class society I grew up in; those who call themselves conservative want to take us back to the Gilded Age, undoing a century of history. Liberals defend longstanding institutions like Social Security and Medicare; those who call themselves conservative want to privatize or undermine those institutions. Liberals want to honor our democratic principles and the rule of law; those who call themselves conservative want the president to have dictatorial powers.

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Adlai Stevenson, 1952

The strange alchemy of time has somehow converted the Democrats into the truly conservative party in the country - the party dedicated to conserving all that is best and building solidly and safely on these foundations. The Republicans, by contrast, are behaving like the radical party-the party of the reckless and embittered, bent on dismantling institutions which have been built solidly into our social fabric.

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Movement conservatism has been antidemocratic, with an attraction to authoritarianism, from the beginning, when the National Review praised Francisco Franco and defended the right of white Southerners to disenfranchise blacks. That antidemocratic, authoritarian attitude has never gone away. When liberals and conservatives clash over voter rights in America today, liberals are always trying to enfranchise citizens, while conservatives are always trying to block some citizens from voting. When they clash over government prerogatives, liberals are always the defenders of due process, while conservatives insist that those in power have the right to do as they please. After 9/11 the Bush administration tried to foster a deeply un-American political climate in which any criticism of the president was considered unpatriotic - and with few exceptions, American conservatives cheered.

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The central fact of modem American political life is the control of the Republican Party by movement conservatives, whose vision of what America should be is completely antithetical to that of the progressive movement. Because of that control, the notion, beloved of political pundits, that we can make progress through bipartisan consensus is simply foolish. On health care reform, which is the first domestic priority for progressives, there's no way to achieve a bipartisan compromise between Republicans who want to strangle Medicare and Democrats who want guaranteed health insurance for all. When a health care reform plan is actually presented to Congress, the leaders of movement conservatism will do what they did in 1993 - urge Republicans to oppose the plan in any form, lest successful health reform undermine the movement conservative agenda. And most Republicans will probably go along.

To be a progressive, then, means being a partisan - at least for now. The only way a progressive agenda can be enacted is if Democrats have both the presidency and a large enough majority in Congress to overcome Republican opposition. And achieving that kind of political preponderance will require leadership that makes opponents of the progressive agenda pay a political price for their obstructionism-leadership that, like FDR, welcomes the hatred of the interest groups trying to prevent us from making our society better.

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