EconomicsPhiladelphia, birthplace of American freedom, is home to the sparkling new National Constitution Centre. Its centrepiece is a multi-media presentation, "We the People", which tells the story of the American constitution.
It's a story of high ideals and the birth of "government of the people, by the people, for the people". This book is about the mutation and corruption of those high ideals by the current Bush administration.
Paul Krugman teaches economics at Princeton University and writes a column for the New York Times. The book is a collection of those columns over the last three years. They expose and attack the hard-right economic and social policies of the Bush administration - and, in his analysis, its capacity for double-think, its lies and deceit, its corrupt links with big business, its short term irresponsibility, its crony capitalism and, behind the homespun rhetoric, its sinister agenda.
Krugman quotes with approval a book called A World Restored, by a young Henry Kissinger. In it, Kissinger, writing about the reconstruction of Europe after the Battle of Waterloo, developed the concept of a "revolutionary power" - a power that doesn't accept the system's legitimacy and can successfully sweep aside normal politics and diplomacy. Krugman finds many ways in which the Bush administration, "which controls the administration, both houses of Congress, much of the judiciary, and a good slice of the media", fits this model. He sees in the Bush administration the rise of a revolutionary power that neither plays by the rules nor believes in many American or international - political and social institutions.
According to Krugman, the story goes like this. During his Presidential election campaign, George W. Bush promulgated a range of radical-right policies, partly to see off the challenge of Steve Forbes, but mainly to appeal to a conservative, right-wing electorate, some of whom had lavishly funded his campaign. The Bush policy is simple: "no enemies on the right". Bush's policies and actions moved the centre of gravity of American politics to the right - so that what used to be the centre, is now the left.
Many expected that once in office Bush would move back towards the centre, to occupy that broad middle ground which underpins the American political model. But it didn't happen. Instead, Bush and his advisors continued and intensified their right- wing economic and social policies, refusing to adapt and change in the face of changing circumstances and polarising the political landscape. And when it seemed these policies were about to be found out, 9/11 happened, followed by Afghanistan and Iraq. George W. wrapped the American flag tightly around him and has kept going to this day.
Krugman's charge sheet is a long one. The Bush tax cuts, originally sold as "returning the surplus to the people", are shown to benefit only corporations and the wealthy - some of whom are owed favours for campaign funding. As the economy slowed and surplus quickly turned to deficit, Bush persevered, changing the message to "economic stimulus", when what was needed was not tax cuts for the rich, but more spending, particularly directed at lower income groups. Bush's plan to reform Social Security and Medicare, diverting funds into private accounts, is shown as an irresponsible, populist initiative which will burn up reserves which are needed to fund the needs of America's baby-boomer generation - the demographic "pig in the python" - as they head for old age.
Krugman is particularly good on the corruption of corporate governance as evidenced by the scandals at Enron (which itself had poured money into supporting Bush), Worldcom and others. The world now knows that the absence of independent governance in large US corporations allowed powerful executives to write themselves lucrative compensation packages. They then manipulated financial results and engaged in insider dealing. As a result, the ratio of the average pay of CEOs at major US companies which was 45 times that of the average shop floor worker in 1980, reached 460 times by the year 2000.
Less well known are the questions which have been asked by the Securities and Exchange Commission - and others - about George W Bush's own finances. His role as a director of Harken Energy in the late 1980s and early 1990s prompted allegations of Enron-like market abuse and insider dealing. Dick Cheney also made his wealth through dubious accounting practices at Halliburton, at which he was CEO. Neither has had to answer for his actions. Krugman also gives details of the murky links between the Bush administration and the Texan energy industry - and how the government has packed regulatory bodies with cronies, which include former industry lobbyists.
Others too come in for harsh criticism. Alan Greenspan, seen during the Clinton years as the wise, independent and calming influence, has now, in Krugman's eyes, become a partisan supporter of the Bush agenda. Most of the American media are, according to Krugman, uncritical proponents of Bush's policies and are failing the American people, who are therefore unaware of what's happening to America - or are either unwilling or afraid to admit it.
Krugman's columns are short, tight, witty, lively. They display a powerful logic together with incisive and original economic analysis, drawn from information in the public domain, often via websites, rather than insider briefing by government sources. There's a long preamble and general introduction. Then the reprinted columns are grouped in sections around themes, each of which has an introduction, and chapters. The problem with reprinting more than one hundred columns and grouping them by themes is that the book is often repetitive and the reader is constantly moved backwards and forwards in time. A better approach would have been to write the book from the ground up, rather than taking the easy route of simply reprinting the columns.
Nevertheless, this is a powerful wake-up call for America - a dynamic country which changes and adapts when things go wrong. In Authentic Leadership, another recently published book, Bill George argues that America needs to rediscover business leaders who have an ethic of service, who put this before their personal interests and, above all, who have a moral compass.
Krugman's conclusion is that America is currently led by people with a hard-right agenda, who represent the modern version of a revolutionary power and who are without a moral compass. As he says himself, this is not a happy book.
Brian Patterson is Chairman of The Irish Times and of the Irish Financial Services Regulatory Authority. He is also an Eisenhower Fellow
The Great Unravelling: From Boom to Bust in Three Scandalous Years
By Paul Krugman
Allen Lane, 428pp. £18.99