Mind the (Income) Gap
In "The Conscience of a Liberal," economist and New York Times columnist Paul Krugman investigates why income inequality has risen so sharply over the last 30 years, and he points to a culprit: "movement conserva tives," a cadre of anti tax, small-govern ment activists who dominate Republican politics, defending policies that serve the wealthy at the ex pense of the middle class. He spoke with newsweek's Daniel Gross.
What do you mean when you say we're in a new Gilded Age?
Income inequality in 2005 was exactly the same as it was in the 1920s. And a lot of behav ior is the same. The giant pri vate philanthropies, the exhi bitionist display of wealth, and the malefactors of great wealth insisting that they're doing great things for us all.
You look back fondly on the 1950s, when economic gains were more broadly shared. But we also had segregation, and women were excluded from many professions.
If I had to choose between the America of 1955 and the America of 2007, I'd choose the America of 2007. But the progress we've made on racism and sexism is marred by the fact that, along the way, we lost the middle-class society.
If Al Gore had been elected in 2000, would the income gap be as great?
I'm kind of a fatalist. Gore would not have had enough political clout to really change the direction.
Why did President Bush veto a bill to expand SCHIP, a children's insurance program that would have been a boon for the working class?
The trouble with SCHIP from Bush's point of view is that it works too well. In providing necessary health care for kids, it would lead people to say, "Why not more?" You can see where that line goes. So he's chosen to fight it out over 12-year-old kids.
Bush has been good to you—providing endless material for you to write about. Would you rather have the material, or your pre-Bush peace of mind?
Bush-bashing draws less adu lation than it did a few years ago, because he's on the ropes. I'll take it, but I'll be relieved when this guy is no longer sitting in the White House.
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Daniel Gross is one of the most widely read financial and economic writers working today. He is a senior editor at Newsweek, where he writes the "Contrary Indicator" column. He writes the twice-weekly "Moneybox" column for Slate, which also appears on Newsweek.com.
Before joining Newsweek in the spring of 2007, Mr. Gross wrote the "Economic View" column in the New York Times, was a contributing writer to New York, and contributed regularly to magazines such as Fortune and Wired. From 1998-2007, Gross served as the editor of STERNBusiness, a semi-annual academic magazine on economics and management published by the New York University Stern School of Business.
A native of East Lansing, Michigan, Mr. Gross graduated from Cornell University in 1989, with degrees in government and history, and holds an A.M. in American history from Harvard University (1991). He worked as a reporter at The New Republic and Bloomberg News, and has contributed hundreds of features, news articles, book reviews and opinion pieces to over 60 magazines and newspapers. Areas of expertise include: economic and tax policy, the links between business and politics, the rise of the investor class, the culture of Wall Street, and business history.
He is the author of four books: "Forbes Greatest Business Stories of All Time" (Wiley, 1996), which was a New York Times Business bestseller and a finalist for the Financial Times "Lex" award, given to the best business history book of 1996. Translations have been published in Spanish, German, Czech, Polish, Portuguese, Bulgarian, Chinese, Turkish, and Japanese; "Bull Run: Wall Street, the Democrats, and the New Politics of Personal Finance" (PublicAffairs, 2000); "The Generations of Corning: The Life and Times of an American Company," co-authored with Davis Dyer, (Oxford University Press, 20010; and "Pop! Why Bubbles Are Great for the Economy," (HarperCollins, May 2007).
Mr. Gross appears frequently in the media. A regular guest on CNBC, MSNBC, and National Public Radio, he has also appeared on CNN, Fox News Channel, The Newshour with Jim Lehrer, Bloomberg Television, C-SPAN, BBC, and Reuters TV, and on more than 50 radio programs and talk shows.
Mr. Gross lives in Westport, Conn., with his wife and two children.
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