The book is a history of wealth and income gaps in the US in the 20th century. The book documents that the gap between rich and poor declined greatly in mid-century—he refers to this as the "Great Compression"—then widened in the last two decades to levels higher than those in the 1920s. Most economists—including Krugman himself—have regarded the late 20th century divergence as resulting largely from changes in technology and trade, but now Krugman writes—particularly in Chapters 1, 3, and 4—that government policies—particularly the establishment of, and subsequent attacks on, the social safety net or "welfare state"—has played a much greater role both in reducing the gap in the 1930s through 1970s, and in widening it in the 1980s through the present.
He talks about the history of American conservatism, both, in Chapter 2, pre-New Deal conservatism—dominating the period between the American Civil War and the Great Depression (which he calls the "Long Gilded Age")—and, in Chapter 6, modern-day "movement conservatism"—he argues—particularly in Chapters 5, 6, and 9—that the subtle exploitation by movement conservatives of racial and cultural resentments through small-government rhetoric (see "dog-whistle politics") and of national-security fears were key in the movement's ability to win national elections—even though its policies concentrating wealth at the top should be deeply unpopular. He talks extensively, in Chapter 6, about William F. Buckley, Jr.'s, Irving Kristol's and Ronald Reagan's role in building the movement—and, in Chapters 7 and 8, about the role of "institutions and norms "—vis-à-vis government policy—in increasing or decreasing economic inequality. He rebukes the George W. Bush administration for policies that were currently widening the gap between the rich and poor.
Nevertheless, Krugman expresses optimism in Chapter 10 that demographic trends—particularly on race and culture—and what he sees as conservative overreach during the Bush years—are creating a new center-left political environment and are slowly undermining the conservative movement. (He references John Judis and Ruy Texeira's book, The Emerging Democratic Majority.) Krugman proposes, in Chapters 11 and 12, that Democrats propose a "new New Deal", which includes placing more emphasis on social and medical programs—particularly universal health care—and less on national defense.
Finally, in Chapter 13, he talks about what it means to be a "liberal", about the rise in new progressive organizations—which, unlike conservative think tanks, publications and other organizations, are actually more de-centralized and independent-thinking—and how many more people appear to support "liberal" policies than are prepared to use that word to describe themselves.
Read more about this topic: The Conscience Of A Liberal