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Doug Krizner: The rise and fall of the middle class in America is the subject of a new book from New York Times columnist Paul Krugman. It's titled "The Conscience of a Liberal," playing off the title of the book from 1960, "The Conscience of a Conservative," by one-time Republican presidential candidate Barry Goldwater. Mr. Krugman, welcome to the program. What's the narrative here?
Paul Krugman: The story is that a very large part of what's happened in America, in these part few years but going a long time back, is that a group of people determined to undo what Franklin Delano Roosevelt accomplished in The New Deal took over the Republican party, and to a large extent, took over American politics by exploiting various kinds of divisions. But the ultimate source of a lot of what we're seeing is really a kind of counter-revolution against the things that made the middle-class society that I grew up in.
Krizner: What are the psychological underpinings of this movement?
Krugman: The movement itself is largely about money. Getting rid of high taxes on rich people. The things that make it able to succeed electorally are the use of other, more emotional issues. But the point of the matter is that the programs that created the middle-class society that I grew up in were and are extremely popular. But there is a movement that really, really wants to get rid of them to the extent that they can.
Krizner: One of the themes of your book also focuses on incomes. So let's look at the gap between high and low incomes today. How would you characterized it right now?
Krugman: "Gilded Age" is the quick summary. We are, by the numbers, right back to the levels of income inequality that we had in the 1920's.
Krizner: How do you argue that higher taxes are ultimately good for those that pay them?
Krugman: For middle-class people, the combination of a perhaps slightly higher tax rate and a much stronger social welfare system is a clear win. Wouldn't you rather be assured that health care would be there, whatever happens, and in return have to pay perhaps some extra tax -- which would be less for most people than the premiums they now pay on health care -- than have our current system, where the U.S. has a level of risk for the individual that no other advanced country has? At the very high end, you know if you're making a million dollars a year or more, I'm not claiming that this will make you better off -- at least in any financial sense. But even some people in that income class would rather live in a more decent society.
Krizner: Paul Krugman is our special guest. He is op ed columnist for The New York Times and professor of economics and international affairs at Princeton. Mr. Krugman's new book is "The Conscience of a Liberal." Thanks so much for speaking with us.
Krugman: Thank you.