Krugman had always believed— even "when I began working on this book"—that this was how things unfolded. "Yet," he writes of our era:
I've become increasingly convinced that much of the causation runs the other way—that political change in the form of rising polarization has been a major cause of rising inequality. That is, I'd suggest an alternative story for the last thirty years that runs like this: Over the course of the 1970s, radicals of the right determined to roll back the achievements of the New Deal took over the Republican Party, opening a partisan gap with the Democrats.... The empowerment of the hard right emboldened business to launch an all-out attack on the union movement, drastically reducing workers' bargaining power; freed business executives from the political and social constraints that had previously placed limits on runaway executive paychecks; sharply reduced tax rates on high incomes; and in a variety of other ways promoted rising inequality.