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Cuomo: OK. I've enjoyed reading your book immensely, and frankly I think if we could get everybody to read it, especially potential voters, we would be more assured of an intelligent decision in 2008.

Let me be sure I have right what I think your basic premise was, or one of your basic premises, and that is that the shifting nature of the condition of the American peoples' lives isn't a function of some immutable laws of the market. It's a function more of politics and institutions, etc.

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Krugman: Yeah, very much so. I mean, you look at the - you know, you look at the evidence, the history. The middle-class society that I grew up in, being a baby boomer, was created. It didn't evolve through the invisible hand. It was created by FDR and the policies of the New Deal. The second Gilded Age we're living in now was created in large part by the policies of Ronald Reagan and other rightwing politicians.

Cuomo: As far as I noticed in the book, you talk about the middle class, you read Jefferson as the earliest authority of the middle class, and I think that some time ago I discovered it was Aristotle, who over 2000 years ago, had described the middle class almost precisely the way it's described today, but - and he noted that this would require the actions of people to change rules and regulations in order to achieve what he called the vital middle classes. So without it, you can't have a really good society.

Krugman: I'm going to have to look at that. That's amazing. Yeah, I mean, it - you know, Jefferson with the small holder, the small landholder, and it doesn't have to be of the soil. It can be a middle class family, but a society with enormous disparities of income and wealth is not going to be a democracy, even if it is one on paper.