(Please welcome author Paul Krugman, who is with us today in the comments — jh)

Paul Krugman’s Conscience of a Liberal is required reading for progressives. heading into the 2008 election year. Here, in lucid prose and compelling logic, is a core narrative that every progressive should master.

Krugman, one of the most gifted economists of his generation, and now a prize-winning columnist at the New York Times, focuses on the return of Gilded Age inequality in America — the unimaginable wealth of a few and the stagnant wages and growing insecurity experienced by most of us. He shows that this is not an act of nature, the result of technological invention or of globalization. It is the result – the predictable and predicted result – of policy wrought by the movement conservatives who have dominated our politics for the last three decades.

Krugman begins by showing how middle class America was not a natural outgrowth of industrialization, but was constructed in a very short time by the policies of the Roosevelt era coming out of the Depression and World War II. Government raised taxes on the wealthy, created a public safety net for working families – Social Security, unemployment insurance – and fostered a private social contract – strong unions that exacted family wages, health care, pensions, paid vacations and more from corporations. This helped produce twenty-five years of prosperity in which America grew together (except for those who were locked out, like Blacks in the apartheid South)

That era ended, Krugman argues, not because of globalization or technology but because movement conservatives captured our politics and systematically succored the wealthy while skewering the rest of us. Tax burdens were shifted, corporations and capital deregulated, unions decimated, greed celebrated. By 2007, at a time of low unemployment and inflation, rising profits and productivity, most Americans thought the country was in or on the verge of a recession, even before the housing bubble burst.

How could a program designed to benefit the few win popular support? Krugman reviews the oft-told story of the rise of the right, the building of its infrastructure of politics and ideas, its use of national security, and social backlash to find a popular base.

But he cuts through much of the mystification to show how central racial prejudice — the white backlash to the civil rights movement – was to this project. It was Nixon’s southern strategy – race-bait politics that flipped the South – that enabled movement conservatives to capture and consolidate their hold on national power.

Now this conservative era is running on empty. The debacle in Iraq has stripped Bush of the security club he wielded against Democrats in 2002 and 2004. Race bait politics is turning Republicans into a white-only, reactionary regional party in a nation of increasing diversity and social liberalism. And as demonstrated in 2006, if Democrats stand up for working Americans, they have the opportunity to forge a new reform majority.

If they do, Krugman suggests their core agenda is clear. Start with universal, affordable health care, paid for by raising taxes on the wealthy. Raise the minimum wage, empower unions, particularly in the industries less exposed to global competition. Succeeding in these reforms will set the stage for more.

In this compelling narrative, much necessarily is left on the cutting room floor. I wish Krugman had placed more emphasis on how central the aggressive corporate political mobilization in the 1970s was to the rise of the right, as well as how business succeeded in buying Democrats as well as fueling the reaction. Conservatives would have had a harder time had not Democrats lost their voice. A Democratic Party in thrall to Goldman Sachs politics of corporate trade and fiscal austerity still sounds an uncertain trumpet to most Americans.

Similarly, Krugman doesn’t discuss how the US global economic strategy used by companies to bludgeon workers and unions. His argument would have been strengthened by detailing how that strategy – by, for and of the multinationals – was also the expression of policies and politics, not nature. Rebuilding an America of shared prosperity will require a very difficult struggle to forge a new national strategy.

But Krugman has told a strong, clear, powerful story of conservative failure and progressive promise, and arrayed facts and logic to support it. In the battle of ideas, this book provides live ammunition for progressives.