It’s a well-known story, possibly even true. The delegates emerged from the last session of the Constitutional Convention; a bystander asked Benjamin Franklin: “Well, Mr. Franklin, what have you given us?”; the reply: “A republic, if you can keep it.”

For a century or so, we didn’t do badly, at least in the North and Midwest. But in the late 19th century, as the economy and the state grew larger and more centralized, the power of money in politics, always considerable, became dominant. Successive challenges to plutocracy were beaten back (the Populist movement of the 1890s), coopted (the Progressive movement early in the 20th century), and eventually partly successful (the New Deal in the 1930s and the Great Society in the 1960s).

In the 1980s the plutocracy struck back. Its strategy, pursued by means of Ronald Reagan, was to transfer enormous amounts from the poor to the rich through regressive tax cuts, to stabilize the economy and subsidize the private sector through lavish military spending, to undermine health, safety, and environmental regulations and reverse modest steps toward openness in government, to make workers and the unemployed less secure by eroding collective bargaining rights and stigmatizing public assistance, and to distract attention from all of the above by manufacturing pseudo-crises in Grenada, Panama, Nicaragua, Libya, and elsewhere. It worked pretty well. By the end of the 80s, the rich had regained much lost ground.

Their progress was less spectacular in the 1990s, though still substantial. The decade’s vast increase in financial wealth, mainly through the steep rise in stock prices, went largely to the already affluent. By the century’s end, economic inequality in America was greater than at any time since the 1930s. And the first Republican Congress in forty years drew a bead on the remnants of the New Deal and rest of the American social compact. But they overreached and were temporarily stymied.

At this point, in 2000, the brilliant young economist Paul Krugman took a job as a columnist for the New York Times. He expected, as he tells us in “The Great Unraveling,” to write mainly about matters touching his professional interests: trade, globalization, fiscal and monetary policy, technological trends, the culture of business. But soon he was confronted with candidate George W. Bush’s tax-cut proposals. The assumptions on which the Bush campaign claimed to base these proposals, and the results promised if they were enacted, made him rub his eyes. The math wasn’t just a little fuzzy, it was completely cockeyed. And the media, by and large, let them get away with it.

After Bush took office, this pattern continued. Tax policy, trade policy, energy policy, defense policy, environmental policy – in each case the administration put forward proposals employing doubtful numbers and shaky reasoning, and always drastically biased in favor of corporations and the rich. The media reported it all with a straight face; editors and columnists gravely approved or disapproved; Democratic politicians ran for cover. But scarcely any respectable commentator objected that in a great many cases the administration was not merely spinning, it was lying; or that its program amounted not to conservatism but to class warfare.

Why? Perhaps it seemed snobbish to criticize the apparently dumb but likable Mr. Bush. Besides, everyone knew that a highly efficient right-wing smear machine was ready to question the good faith or even the patriotism of anyone rash enough to point out the obvious. And September 11 presented the already bamboozled and intimidated media with a perfect excuse for continuing to abdicate their critical responsibilities.

So it was left to Krugman to draw attention to the emperor’s dishabille. He pointed out that the justifications offered for the parade of regressive tax cuts kept changing and were in any case mutually inconsistent. He showed that the administration’s plan to privatize Social Security could only work if the Baby Boom generation obligingly disappeared, or at least accepted deep benefit cuts. He observed that the administration talked tough about tax fraud and corporate scandals while cutting funds for the IRS, SEC, and other regulatory agencies and appointing industry-connected hacks to oversee them. He remarked that the administration’s claim that budget deficits should be blamed on the war on terrorism rather than on its tax cuts exaggerated the cost of the former by a factor of ten or so. He noted that the California energy crisis was not the fault either of regulation or deregulation but was simply a swindle by the energy industry – the same people who wrote the administration’s energy policy – and that the President and Vice-President showed no inclination to discipline their former business colleagues. On and on Krugman went, cataloging the Bush administration’s irresponsibility and mendacity. Someone had to.

Collected in “The Great Unraveling,” Krugman’s columns trace a dramatic trajectory: from skepticism to outrage to alarm. At first he takes the Bush program at face value, arguing cogently that it cannot accomplish what the administration says it wants to accomplish: economic growth, streamlined government, fiscal solvency. Then it dawns on him that what the Bush administration wants to accomplish – bankrupting the government, eliminating all obstacles to the dominance of corporate and financial elites, entrenching the Republican Party permanently in power – bears no relation to what it says it wants to accomplish. Finally it dawns on him that, through the unscrupulousness of conservative politicians and media, the spinelessness of liberal politicians and media, and the passivity of the populace, they may very well succeed.

The drama is not yet over, but the heroine (our fair republic) is tied to the tracks and no hero is galloping to the rescue. Can Americans rise to Franklin’s challenge – can we “keep it”? Only if enough of us learn and act on the lessons taught in Paul Krugman’s rigorously argued, angrily eloquent, fiercely patriotic book.

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