Goodbye, middle class

Paul Krugman speaks at Alverno's Pittman Theater at 7 p.m. Wednesday, an event sponsored by Harry W. Schwartz Bookshops.

From the Milwaukee Journal Sentinel:

Middle class is eroding, author says

Columnist Krugman will speak tonight at Alverno

By JOHN SCHMID
[email protected]

Posted: Nov. 6, 2007

The latest book by economist and columnist Paul Krugman begins with a wistful look at life in post-World War II middle-class America.

"Like the rest of my generation, I took the America I grew up in for granted," Krugman writes in "The Conscience of a Liberal," (W. W. Norton) published last month.

Krugman, whose book tour brings him tonight to Alverno College, is hardly the first writer to lament the erosion of middle-class stability - or, as Krugman calls it, "a paradise lost, an exceptional period in our nation's history."

What's most striking is that Krugman downplays the role of global forces in reshaping American society. Instead of looking to China and India or even the Internet for causes of economic change, Krugman analyzes broad shifts in American politics. In particular, he traces the rise of "movement conservatives," which began in the 1960s and culminated with the presidency of George W. Bush.

He argues that the policies of the movement are conservative, as typified by Bush's second-term attempts to privatize Social Security and undo the centerpiece of the New Deal, and have widened American social inequalities to an extent not seen since the first half of the last century.

"Every advanced country is facing the same global economy," Krugman said in a telephone interview. "The French, the Canadians. But they haven't seen the same erosion of the middle class that we have. They haven't seen the emergence of the super elite."

In that sense, Krugman's latest book contrasts with the 2005 bestseller, "The World is Flat" (Farrar, Straus and Giroux), by fellow New York Times columnist Thomas Friedman. Friedman dwells on "flatteners" - the forces that drive globalization, which emanate just as often from China and India as they do from Silicon Valley.

Some of Krugman's findings are counterintuitive in a nation that prides itself on social mobility and self-made entrepreneurs like the heroes of Horatio Alger stories. Citing figures from the National Center for Education Statistics, Krugman notes that high-scoring students from low-income families are less likely to finish college than low-scoring students from high-income families.

The reasons, Krugman said, include income inequalities and the nation's lack of health coverage. Mobility is highest in the Scandinavian countries, and lower in the U.S. than in France and Canada, he finds.

"It's clear that Horatio Alger has moved to Finland," Krugman said.

Economic democracy

The use of the word "liberal" in the title adds to the book's partisan and provocative tone at a time when the 2008 presidential race is well under way.

Asked if he feels that the book will prompt a backlash from conservatives, Krugman said that the rise and fall of the middle class puts him squarely in the mainstream.

"Look at where public opinion is on issues," Krugman said. "The things I'm talking about in this book address the concerns of most Americans. It's really the small and dwindling minority that takes the other side."

Asked to define a "liberal," he said: "It means believing that democracy requires a bit of economic democracy, in a society without great extremes, and with a safety net that protects everybody from the worst."

Krugman was born in 1953 and grew up on Long Island. Unlike many columnists, he's an academic, at Princeton University, and an economist who won the John Bates Clark Medal, awarded to an outstanding economist under 40.

Like most who lead the nation's economic-policy debate, Krugman concedes that he's not an expert on the industrial Midwest - even though the issues in the Midwest differ from the East and West Coasts.

But the squeeze on the middle class, he said, is essential to the churn and displacement in an industrial economy like the Midwest. And one of the most telling signs of middle-class erosion, he argues, is health coverage. Much of his book deals with health policies.

"You can safely say that if you don't have health insurance, you're not middle class." He ticks of a catalog of statistics: 15% are totally uninsured; another 25% are severely underinsured. And those numbers are increasing, not decreasing.

"There's a slow motion race to the bottom on employer-based coverage," he said. "We are heading for a large part of the population that will not be middle class by any reasonable definition."

Paul Krugman speaks at Alverno's Pittman Theater at 7 p.m. Wednesday. The event is sponsored by Harry W. Schwartz Bookshops.

Comments

[Terrence Berres]

To a comment of mine in an earlier post, you wrote "Nor will the straw man ('Pollyanna'? 'Golden Age'?) be invited to stay for dinner, so to speak."

Okay, how about "a paradise lost"?

[John]

Certainly more than enough fallen angels to choose from...

[David Kendall]

Cry me a river of spilt milk. Screw the freakin' "middle-class". And while you're at it -- blow me. Krugman (whoever he is) clearly defines the problem when he says, "Like the rest of my generation, I took the America I grew up in for granted". Me, and millions of "Americans" like me, are the debt legacy imposed by such arrogant neglegance.

The "next generation" is no longer the future, Mr. Krugman. Rather, it has come to roost here and now the present, resting squarely upon the shoulders of your descendants.

Welcome home, "America". We've returned, full-circle, to the British Enclosures from whence we came. How many generations are required to repay such monstrous incompetence with an average annual income of $30,000 or less? Some analysts consider financial default on such unauthorized debt the most "patriotic" response to this preposterous mess, and I happen to concur.

But cooperative participation in building alternative models of "economic democracy" is a mandatory prerequisite for successful abandonment and abolishment of the irrational status-quo.

We don't need a new "President". We don't need a new "Messiah". We don't need a new "Leader". We need a new blueprint. We need a new plan. The time to scrap the old plan and implement a new one is now.

[Susan Ashcroft]

I have been impressed by Krugman's writings always, esp on health issues. Also, by his writings about the gross inequality that exists the world over, but esp in US. I remember reading the preposterous figures in one of his coulmns, about how the top 1% of the population in US benefits and profits, from the govt policies and esp thro' tax breaks, and even preposterous, the top 0.01% of the top 1% surging ahead by 1000 times or more as compared to the remaining 99.9%!!! Well, where are we going? So, it is imperative evryone ought to read what Krugman has got to say in the book.

It would be a relief to read him after the 'level playing field' and '10 flatteners' and other stuff that Friedman writes about in his book ,"The World is Flat". Globalization of the kind that exists today, is that of coporate globalization, not one that benefits common people, poor people, disenfracnhised people. It is globalization of the rich nd corporates. So, I'm glad that Krugman wrote a book, pointing to the disapperance of the US middle class. Now in the 21 st century the inequalities in the society are similar to those of 1920's! Are we going forward or backward?

There is also another small, good book I read, which offers a counter perspective to Thomas Friedman's book. Following are the links to the interesting and concise book which shows up Thomas Friedman's postulates on gloabalization to be anecdotal, nice, long stories of his rich and corporate acquaintances. Also, it throws light on issues that Friedman doesn't touch upon, or only deals with in a light manner.

Pankaj Ghemawat of Harvard Businees School also wrote a book on how Friedman is wrong about world being flattened.

"The world isn't flat as a result of globalization," say Ronald Aronica and Mtetwa Ramdoo, business analysts and authors of a critical analysis of Friedman's book.
"Globalization is the greatest reorganization of the world since the Industrial Revolution," says Aronica. But by what Friedman's book ignores or glosses over, it misinforms people and policy makers alike.

To create a fair and balanced exploration of globalization, the authors cite the work of experts that Friedman fails to incorporate, including Nobel laureate and former Chief Economist at the World Bank, Dr. Joseph Stiglitz.

And what I also like is that the authors provide a wealth of interesting information at the book's Web site:
www.mkpress.com/Flat

Also a thought-provoking 13 minute Overview on the Web:
www.mkpress.com/FlatOverview.html

And the recent interview: "Aronica and Ramdoo pummel Friedman's flat world back into a sphere,"
http://www.mkpress.com/AronicaRamdooInterview.html

Also a really interesting 6 min wake-up call: Shift Happens! www.mkpress.com/ShiftExtreme.html

There is also a companion book listed: Extreme Competition: Innovation and the Great 21st Century Business Reformation
www.mkpress.com/extreme
http://www.mkpress.com/Extreme11minWMV.html

So, if you want to know much more about globalization than what Friedman provides you, check out
www.mkpress.com/flat for concise and very interesting information.

Best wishes,
--Susan

[John]

Susan - an excellent line I picked up from the link you provided:

Albert Einstein once wrote, “Everything should be made as simple as possible, but not simpler.” Friedman’s simplistic treatise on globalization fails that test.