THE GREAT UNRAVELING

Krugman, P.(2003) The great unraveling, W.W. Norton, New York, NY.

Paul Krugman is a professor at a nearby New York university and an Op-Ed writer for the

NEW YORK TIMES. This account is the first 2 years of Bush 43's presidency. It was published in 2003, but covers 2000 to 2002. We were not at war and the economy was heading south in terms of the  debt. A couple of significant tax cuts had already occurred. 9/ll had happened but Iraq was not yet on the screen. The spring of 2003 would be the beginning of the Iraq war.

Krugman is a free trader and a Democrat, writing for a Democratic newspaper in a Democratic town. Bush's popularity was still above 50% if not higher. This book is a collection of his editorials in the TIMES and so there is some disconnect throughout the book which is cemented together by various summaries throughout.

During this time, perhaps a million and a half jobs were outsourced. They were good jobs replaced by low paying service jobs. Since writing this book, Krugman has revisited capitalist David Ricardo and has suggested some temporary protectionist legislation and wage insurance for those who have lost their jobs to outsourcing.

The main theme throughout the book is that supply side economics on the whole does not work. However, it works for the rich and they control the media and other sources. The economy can look great, but it may mean that you will lose your job in the next few years. Your job may require years and years of education and experience, but that does not matter in globalization. You are out and supply side is a way to redistribute wealth to the top.

He is also critical of privatization. Private social security accounts once thought the darling of

Chile is not working there and it probably won't work here. The beauty of a designed pension is the security that it brings along with a COLA to hedge against inflation.

Nearly all the privatization schemes may come about but we will be poorer for it. Profits will rocket but the majority of us will get dumped just after our prime. The political and economic revolution is one that started in 64' with the loss of the Goldwater presidential campaign. It came to explode in victory after victory from 1980 on until today.

Krugman likes the Swedish model as it is today. It was great until about the 80's then developed some of the problems of Western Europe and began to collapse. The Christian Democrats, the party of the Right trimmed things down and yet kept the model. At the time of this writing, Sweden is now # 2 in productivity and the USA is further down.

Krugman suggests that even though we look profitable, our economy is becoming a paper

tiger with debts to Japan and China. We may be losing our way into the 21st century.