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Economists for the People, Father and Son, the Galbraiths

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From the 1950s through the 1970s, John Kenneth Galbraith was one of the most widely read economists in the United States. In these times, Bill Moyers interviews economist James K. Galbraith, a son, about the tragic impact of the recession on ordinary people and steps we must take to avoid future meltdowns.

For most of my life I considered John Kenneth Galbraith one of the outstanding brains in FDR's Brain Trust. Besides that, the man had a sense of humanity as he wrote all those books. Like everyone else I was touched by the "Affluent Society." Thorstein Veblen's "conspicuous consumption" explanation was always high on my list. For a touch of Galbraith's own identity I remember the book he wrote while he was John Kennedy's Ambassador to India. An extra assignment included squiring Jackie around in India while still having time to write a significant memo back to the President concerning what might happen in Vietnam.

John Kenneth Galbraith was a Canadian who later adopted American citizenship. He began undergraduate work studying economics of agriculture and later took a Ph.D. at Berkeley. From 1908 until his death in 2006 he wrote books as well as participated in American governmental affairs. Price control was his field during World War II. In explaining the need for corporations to remain small enough to manage, he recognized the inevitability of merger and acquisition phenomena. But, to counteract the problem, he noted that the power of large firms was offset by the countervailing power of large unions, so that consumers were protected by competing centers of power.

Of his four children, the youngest ended up being the economist.

His son James K. Galbraith's new book is "The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too." He holds the Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the LBJ School of Public Affairs, University of Texas at Austin, and is senior scholar with the Levy Economics Institute. He (born January 29, 1952) is an American economist who writes frequently for mainstream and liberal publications on economic topics. WIki has this to say about his career:

"From 1981 to 1982, Galbraith served on the staff of the Congress of the United States, eventually as Executive Director of the Joint Economic Committee. In 1985, he was a guest scholar at the Brookings Institution. Galbraith is the Chair of Economists for Peace and Security, formerly known as Economists Against the Arms Race and later Economists Allied for Arms Reduction (ECAAR), an international association of professional economists concerned with peace and security issues. He is also a Senior Scholar with the Levy Economics Institute of Bard College .Galbraith heads up the University of Texas Inequality Project (UTIP), which has been described by economic historian Lord Skidelsky as 'pioneering inequality measurement.'
"In March 2008 Galbraith used the 25th Annual Milton Friedman Distinguished Lecture to launch a sweeping attack on the free market consensus, especially the monetarist version. He argued strongly that Keynesian economics offered a solution to the Financial crisis of 2007-2008 whereas monetarist policies would deepen the recession. Towards the end of 2008 policy makers around the world began acting in line with Galbraith's recommendations, in what the Financial Times described as a "a stunning reversal of the orthodoxy of the past several decades."

When Bill Moyers interviewed James Galbraith on his Journal last November I was very impressed with the professor's ideas. A reprint by alternet on January 12, 2010 is what I'll be citing here:

Comparing the current crisis to what happened in the 30s:
The public certainly wanted a Rooseveltian moment. The Congress, the Washington press corps, wanted a return to their familiar patterns of activity. And I'm not saying-- the Congress did, in fact, respond quickly on the stimulus package, but in general, they're always more comfortable dealing with the issues they know, than framing ideas, with respect to new challenges. And so, Obama's objective situation is much more like Herbert Hoover's than it is like Roosevelt's.

How the Fed under Greenspan failed to foresee the bubble and its bursting:
The priorities of the Fed are always going to be with the larger problem of economic growth, monetary policy. The culture is dominated by its economists. The regulators are down in the hierarchy. So it may have the authority, but as in 1929 it will, in the crunch, choose not to use it.

Are we out of the woods yet?
No, not by any means. I think we're in an extremely dangerous period. And which, as I said, everybody can see that a few, very small number of people have come out of this. And they cannot see how this is bringing any benefit to their own lives. It's not saving their houses. It's not providing them with jobs.

How to eliminate poverty over a span of years:
If I had one thing I could add to the health care debate, I would lower the age of eligibility of Medicare, say, to 55.
And the reason for that is that it would help workers who are only hanging onto their jobs because they don't want to lose their medical benefits, to move out of the labor force. And there are a fair number of those, and it's a fairly heavy burden on the business sector. So what you want to do, you want to create jobs.

Is the recession over?
....we're at the bottom. But from the standpoint of the population, the bottom is going to go on for a long time.

Thinking long term:
Where do we want to be in 30 years time? How do we get there? It's not a question of how do we return to full employment prosperity in five years. But how we solve the fundamental problems that we face, in a way which gives us a generation of steady progress.

And finally Moyers quoting Franklin Roosevelt:
In our day certain economic truths have become accepted as self-evident. A second Bill of Rights under which a new basis of security and prosperity can be established for all regardless of station, or race, or creed. Among these are: The right to a useful and remunerative job in the industries or shops or farms or mines throughout the nation. The right to earn enough to provide adequate food and clothing and recreation. The right of every farmer to raise and sell his products at a return which will give him and his family a decent living. The right of every businessman, large and small, to trade in an atmosphere of freedom, freedom from unfair competition and domination by monopolies at home or abroad.

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Margaret Bassett passed away August 21, 2011. She was a treasured member of the editorial team for four years.

Margaret Bassett--OEN editor--is an 89-year old, currently living in senior housing, with a lifelong interest in political philosophy. Bachelors from State University of Iowa (1944) and Masters from Roosevelt University (1975) help to unravel important requirements for modern communication. Early introduction to computer science (1966) trumps them. It's payback time. She's been "entitled" so long she hopes to find some good coming off the keyboard into the lives of those who come after her.
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