The Unraveler

The Great Unraveling: Losing Our Way in the New Century
By Paul Krugman, W.W. Norton & Company, 462 pages, $25.95

Paul Krugman, The New York Times columnist and Princeton University economist, is not quite the liberal most of his enemies and many of his admirers believe he is. Some might prefer him, for example, to allow a bit more room for developing nations to protect infant industries. They might like to see him challenge the conventional wisdom that "old Europe" needs to roll back its labor and social-welfare laws in order to revitalize itself. They might want him to show more enthusiasm for public investment at home and to be more critical of the Washington Consensus that led to the deregulation of capital markets around the world.

But what Krugman does do more than compensates for what he does not do. He is quite simply the journalistic phenomenon of the last few years. I should qualify this statement: He is the positive journalistic phenomenon. There is a negative one of greater weight.

The media, led by television, have never been more irresponsible in the past 30 years of my experience than they have been since September 11. With only a few exceptions, the news media acted not as impartial reporters but as advocates for the Afghanistan and Iraq wars. The press sustained the myth that while George W. Bush may not be analytical or knowledgeable about history, his sincere and true-blue American instincts make him a great leader.

As for business journalists, they have been performing especially poorly for a decade. In the early 1990s, they were enthusiastic boosters of the deregulation of Wall Street that led to corporate scandals; later, they gave credibility to speculative excesses and corporate bombast. Again, television, notably the cable news channels, led the way.

But then there was Krugman. No one tells it like it is as ably, intelligently and convincingly as he does in a time when too few tell it like it is at all. To his benefit, he has shorn some of the natural caution of his discipline. And he has shown an exceptional gift for fine writing, often clarifying a complex economic issue in only a single deft sentence.

This compilation of Krugman's New York Times columns, mixed with some earlier writings, gives us a perspective on the Krugman phenomenon. In his view, we are in the midst of a revolution of the right whose aims are to cut taxes no matter the economic validity, to reduce the size of government no matter the social price, to put religion back in Washington and in the schools, to undermine environmental progress, and to attack other nations preemptively regardless of international law and the dangers of unilateralism. The means to these ends, he argues, are lies.

Krugman's command of economics gives him the grit and credibility to take on the dragons. And so, of course, does the visibility and prestige of a place on the op-ed page of the Times. (I am a contributing economics columnist to the business section of the newspaper.)

A few issues stand out in Krugman's columns. He showed that, contrary to Bush's claims during his presidential campaign minimizing the cost of privatizing Social Security, the true cost would amount to a mere trillion dollars or so. He has been relentless in his criticism of the Bush tax cuts and of the administration economists who, he has concluded, have been willing to say just about anything to justify their policies.

For example, responding to criticism that the tax cut overwhelmingly benefits the rich, the Bush administration issued a less extreme estimate of how much of the tax cut would go to the very top. How did the administration do this? By simply leaving out the effects of the estate-tax repeal. "The strategy used to sell the Bush tax cut was simply to deny the facts," Krugman wrote in 2002, "and to lash out at anyone who tried to point them out."

And who but Krugman could have both addressed the legend of Alan Greenspan and disposed of it? Krugman didn't do this alone, but he was early and tough. He pointed out, in his uncompromising style, how Greenspan had fueled stock-market speculation by talking up the new economy, providing early support for the Bush tax cut and later continuing to support the tax cuts even in the face of huge budget deficits. Krugman's point was that Greenspan was playing politics when he was supposed to be above the fray.

Among the pieces that impressed me most were Krugman's analyses of the California energy crisis. He saw quickly though the shenanigans being played by the energy companies under the guise of market deregulation. He was also tough on the corporate scandals. No mere handful of bad apples here, he insisted -- this was a systemic matter.

But what truly earned Krugman his legions of supporters was not his economics but his willingness to say outright that the administration was using the fear generated by September 11 to pull the wool over the country's eyes. Here he stepped into the breach -- the one left by most of the establishment media. When the media cowered, Krugman stood up straight and tall.

As he claims, he was not tied to the Washington "commentariat," who socialized with the powerful and had to maintain their ties. He was not encumbered by "he said-she said" journalism: On the contrary, he had scorn for it. The right was saying too many outrageous things, and the media were reporting them with credulity in order to give both sides of the story. In the introduction of this book, Krugman offers journalists a lecture on how to do their job.

Finally, what he doesn't say is that he was simply courageous. When criticism of Bush policy was associated with near treason, Krugman was calling the administration out on its battle against terrorism, the Iraq War and a wide range of radical domestic policies.

The vision? It's a centrist one, fueled, however, by anger at the extreme policies of the Bush administration and its willingness to deceive. Krugman has taken on the battle of our time. He is right about the dangers of an administration that has raised dishonesty to dizzying heights. I would add "incompetence" to this administration's list of attributes.

The big battles may be ahead. The world is now a very dangerous place, and will probably become more so if Bush wins again in 2004. The American welfare state, already teetering, may be dealt critical blows by a second Bush administration. (Witness the current Medicare bill.) So Krugman may still have a lot to do. But if Bush loses, the talent -- and courage -- of Paul Krugman will be one of the main reasons.