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Über dieses Buch

This work contains James K. Galbraith's most influential recent writings on current affairs along with new commentary, and explores both the descent to disaster in Iraq and the ongoing transformation of the American economy under the steerage of Alan Greenspan.

Inhaltsverzeichnis

Frontmatter

Introduction

Introduction

These columns span a minor writing career: from the stolen election of 2000, through September 11, 2001 and onward to the war in Iraq. They end with the consolidation of Republican power in the flawed — not to say rigged — election of 2004. Thus they chronicle the decline of American democracy in the first term of George W. Bush.

James K. Galbraith

About Bush

Frontmatter

Corporate Democracy; Civic Disrespect

With the events of late in the year 2000, the United States left behind constitutional republicanism, and turned to a different form of government. It is not, however, a new form. It is rather, a transplant, highly familiar from a different arena of advanced capitalism.

James K. Galbraith

Lies, Dumb Lies, and Sample Statistics

The press has welcomed George W. Bush and well they might. Bush has freed them, at last, from the immense frustration of dealing with that compulsive liar, Bill Clinton.

James K. Galbraith

Defending Democrats … and Democracy

Forgive me if I do not join the applause for Michael Moore and his they-all-do-it defense of George Bush, prominently excerpted on these pages on April 12.

James K. Galbraith

Tracking Down the Corporate Crooks

President George W. Bush has reassured us that ‘From the antitrust laws of the 19th century to the S&L reforms of recent times, America has tackled financial problems when they appeared.’ But the Savings & Loan reforms came seven years and 150 billion taxpayer dollars late. Nor did that problem merely ‘appear’ It was created, by a deregulation bill in 1982, overseen at that time by the Vice President, the elder George Bush.

Bill Black, James Galbraith

The Realities of Resistance

So George W. Bush has won a national election. He did it by an astounding mixture of war fever, money, and media manipulation. But that is beside the point. From now on, his presidency will carry weight that for many of us it did not carry before.

James K. Galbraith

Why Bush Likes a Bad Economy

Almost nine million people are unemployed. Many millions more are underemployed, and most of all, underpaid. Millions more lack health insurance. States are cutting basic public services everywhere, while the taxes — property and sales, mainly — to pay for those that remain are rising. And the gates of opportunity — for instance, to attend college — are closing on millions more.

James K. Galbraith

The No-Jobs President

The transcendent economic issue isn’t the growth rate. It isn’t the stock market. It isn’t the budget deficit. And it isn’t even the rate of unemployment. It’s number of people in this country who have decent work.

James K. Galbraith

Bush’s Hail Mary

George W. Bush has held office for 36 months. How is he doing politically, and what can we learn from a detached look at the record?

James K. Galbraith

The Plutocrats Go Wild

Next year’s economic difficulties are already on the horizon. Growth is slowing, as the housing market cools and consumers rein in their spending. Inflation is rising a bit, driven mainly by oil prices, health care costs, and corporate price increases fueling a spectacular recent profit surge. Job creation is weak and wages are flat. This is the New Stagflation — an unpleasant reminder of the economic cost of unilateral war.

James K. Galbraith

Dissecting Cheney

The final verdict of history may dismiss George W. Bush as a front man who was not quite up to his job. But nothing like that will be said of Dick Cheney. Cheney is undeniably intelligent, powerful, and shrewd — a force to be reckoned with, even though operating mainly in the shadows.

James K. Galbraith

Waiting to Vote

COLUMBUS, Ohio — The real scandal of this election became clear to me at 6.30 p.m. on election day as I drove a young African-American voter, a charming business student, seven months pregnant, to her polling place at Finland Elementary School in south Columbus. We arrived in a squalling rain to find voters lined up outside for about a hundred yards. Later the line moved indoors. We were told that the wait had averaged two hours for the entire day. By the time the doors closed at 7.30 p.m., it was considerably longer.

James K. Galbraith

Abolish Election Day

The Internet is alive with furious messages from my frustrated friends, fanning the flames of Florida 2000. Many have zeroed in on the discrepancy between the exit polls and the final results. How, they demand to know, could the leaks that so strongly favored John Kerry early in the evening have been so far wrong?

James K. Galbraith

Democracy Inaction

The election was stolen. That’s not in doubt. Secretary of State Colin Powell admitted it. The National Democratic Institute and the International Republican Institute both admitted it. Senator Richard Lugar of Indiana — a Republican — was emphatic: there had been ‘a concerted and forceful program of Election Day fraud and abuse’, he ‘had heard’ of employers telling their workers how to vote; yet he had also seen the fire of the resisting young, ‘not prepared to be intimidated’.

James K. Galbraith

The Floodgates Have Opened

Hurricane Katrina and the death of New Orleans have changed everything, exposing the rot in government and the failures of the free-market worldview that has dominated our politics and economic policy for more than 30 years. Once again, the country must take stock of a terrible failure; once again we must change direction.

James K. Galbraith, Michael D. Intriligator

About War

Frontmatter

National Defense

A few observations on the events of September 11 and their aftermath. First, the horror did not make the American people lose their minds.

James K. Galbraith

The Future Oil War

Let me state in passing my view that UT’s President Faulkner should not have attacked my colleague Bob Jensen in the early days following September 11, for Jensen’s hot objections to the use of US military force in Afghanistan (and elsewhere). True, Faulkner’s words didn’t bother Jensen much, and no concrete steps were taken against him. But, given Faulkner’s position, he may have sent a signal to others on campus, less secure in their jobs than Bob is, and this is something that a university president should always avoid.

James K. Galbraith

The Cheney Doctrine

Mr Cheney’s speech of August 26th provides us with the fullest statement we are likely to get in justification of an attack on Iraq. Whether it represents the final word in Bush Administration policy is anyone’s guess; press reports afterward suggested that the speech was neither fully cleared with the White House nor fact-checked with the CIA. Still, it seems unlikely that Mr Bush will be able to make a stronger case. Let us, therefore, work with what we’ve got, in the short time that apparently remains.

James K. Galbraith

The Unbearable Costs of Empire

Talk in Washington these days is of Rome. But George W. Bush is no Caesar, and France under Napoleon may be the better precedent. Like Bush, Napoleon came to power in a coup. Like Bush, he fought off a foreign threat, then took advantage to convert the Republic to Empire. Like Bush, he built an immense army. Like Bush, he could not resist the temptation to use it. But unlike Caesar’s, Napoleon’s imperial pretensions did not last.

James K. Galbraith

The Paramilitary Mind

In 1976 at the height of the Irish troubles I called on Conor Cruise O’Brien, then serving as Minister of Posts in the Irish Republic; his offices were in the Dublin Post Office of 1916 fame. I was on my way to Belfast, for no very good reason. In our brief meeting, O’Brien reflected bleakly on the fragility of peace efforts. It was so easy, he said, to bomb the negotiating table.

James K. Galbraith

What Economic Price This War?

Recently as we debated the war now underway in Iraq, seven Nobel laureates joined 150 other US economists (including myself) to call for careful consideration of the costs of war in Iraq. When economists talk about costs, what do we mean? First, we mean budget costs — for gasoline, equipment, and explosives — that begin at about $100 billion. This figure is based on an assumption that the war goes well. If the assumption is wrong, the numbers will go up fast. The history of warfare — from Europe in 1914 to Vietnam in the 1960s — is littered with gross underestimates of budget costs.

James K. Galbraith

Still Wrong: Why Liberals Should Keep Opposing the War

In a recent column, TAP online Editor Richard Just and tompaine.com Executive Editor Nick Penniman prescribed ‘the only moral and practical option’ for liberals quavering over the war. It is, they wrote, ‘to begin immediately campaigning for a more ambitious, comprehensive and compassionate reconstruction of Iraq … while supporting the war effort that will lay the groundwork for such plans to be enacted’.

James K. Galbraith

Don’t Blame Rumsfeld, Blame Bush

As the reality of this war sets in, the hunt for scapegoats is starting. Donald Rumsfeld finds himself described, by military and intelligence officers, as a ‘businessman’ whose ‘micromanagement’ has produced a ’stalemate’, with the possibility of ‘a political and military disaster’. For a war only ten days old, the back-biting is astounding. Still, Rumsfeld is the wrong man to blame.

James K. Galbraith

The Iraqi Quagmire

Sergio Vieira de Mello was the real thing. I met him in East Timor in 2001, at the US mission on the evening of July 4, 2001. He told my brother (his colleague in the transition cabinet) that he would not attend a dinner for the Australian foreign minister that night: ‘because I dislike him intensely’. Two days later I saw him again, as we joined the new East Timor self-defense forces for the last leg of a march to a new training ground. On that day, surrounded by guerrillas, their UN officers and the civilian staff, out on the road in the bright tropical sunshine, he was clearly having a good time.

James K. Galbraith

War and Economy Don’t Wear Well

On both jobs and Iraq, the good news Bush tells us is contradicted by the bad news that we feel in our bones.

James K. Galbraith

How You Will Pay for the War

Well, it may be that the laws of economics remain in force. And one of them says: war causes inflation.

James K. Galbraith

The Economics of the Oil War

Underlying the talk of weapons of mass destruction, democracy, human rights, and George W. Bush’s supposed quest for personal vengeance against Saddam Hussein (‘He tried to kill my Dad’). there has always lurked the suspicion that it was about oil. That maps of the Iraqi oil fields made their way to the Cheney energy task force back in 2001 doesn’t exactly ease this suspicion. Neither does Bush’s determination to stay in Iraq, now that vengeance is his — but the occupation is plainly failing to achieve any of its other objectives.

James K. Galbraith

Boom Times for War Inc.

On September 21, 2001, the American Stock Exchange created the Amex Defense Index, a measure of the stock prices of fifteen corporations who together account for about 80 percent of procurement and research contracting by the Department of Defense. The index of course includes the five largest contractors: Lockheed Martin, Boeing, Raytheon, Northrop Grumman and General Dynamics.

James K. Galbraith

The Gambler’s Fallacy

You can’t win and you can’t break even; you can’t get out of the game.

James K. Galbraith

Withdrawal Symptoms

In November 2004, Lt General Ricardo Sanchez came to a luncheon at my professional home, the LBJ School of Public Affairs. I attended and asked some inconvenient questions. It was an inconsequential exchange, but two weeks later I received a surprising invitation. Would I fly to Germany in February and speak to the leadership of the Army V Corps about the operational conditions of Iraq? I have no military experience, and have never been to Iraq, while many in my audience — mostly generals and colonels — had spent over a year there. But of course I went. My unstated assignment was to say some inconvenient things, which may have otherwise gone unsaid.

James K. Galbraith

About Greenspan

Frontmatter

Back to the Cross of Gold

One thing my old Yale classmate Jaime Serra Puche and I have in common, besides our names, is that we’re both entitled to be sore at Alan Greenspan.

James K. Galbraith

Greenspan’s Error

The Fed’s reduction of one set of interest rates on Friday marked the beginning of the end of Alan Greenspan’s war on inflation. The war began in February 1994 with the Fed’s quarter point increase in the rates that banks charge one another for overnight loans and led to a doubling of those rates, to 6 percent from 3 percent. The financial markets expect further cuts.

James K. Galbraith

The Free Ride of Mr Greenspan

President Clinton is coming up on the most important appointment of his second Presidential term. Sometime soon, the term of the Chairman of the Board of Governors of the Federal Reserve System will expire. And the President must choose, whether to reappoint Alan Greenspan for four more years, or else to name a replacement. Most observers assume that Greenspan will get it, and a strange public quiet has settled over this issue.

James K. Galbraith

There’s Some Good News That’s Bad News

Now why (I hear you ask) is good news for the economy bad news for the markets? Why, in particular, did the stock market drop a hundred points on March 9, the very day that unemployment was reported to have fallen to its lowest level in years?

James K. Galbraith

Greenspan’s Whim

Why did Alan Greenspan raise interest rates? Because he could. Because two of the more independent members of his Board, the pro-growth conservative Lawrence Lindsey and the moderate Janet Yellen, have departed. Because he has been under pressure from banks and bond traders for two years; why not throw them a bone? Because he knows the Clinton Administration will say and do nothing in protest. And, especially, because he can get away with it.

James K. Galbraith

Greenspan’s Glasnost

There they were, the high priests of the American Economics Association, a score of old men lined up at the head table like the Politburo atop Lenin’s tomb, with the same bad haircuts, black horn-rims and blank expressions. Speaking before this geriatric welcoming committee last week, Alan Greenspan managed to imitate the early Mikhail Gorbachev with surprising flair. I listened and was amazed.

James K. Galbraith

The Butterfly Effect

Small actions can have large consequences. The mathematics of chaos teaches that a butterfly, flapping its wings in Brazil, can set off a chain of events leading to a hurricane at Cape Fear. They call this the ‘butterfly effect’.

James K. Galbraith, George Purcell

The Credit, Where Credit is Due

Phil Gramm said it precisely, ‘If you were forced to narrow down the credit for the golden age that we find ourselves living in, I think there are many people who would be due credit, and many more who would claim credit.’

James K. Galbraith

Stop the Sabotage Coming from the Fed

The scene for November is nearly set. South Carolina did for George W. Bush what it did for Bob Dole: it sent him onwards, born again at Bob Jones University and wrapped in the Confederate flag. But the New Hampshire verdict, repeated at Michigan, will remain the authentic one. Like Dole, Bush is a weak candidate who will have to be rescued again and again from a popular insurgent by party leaders and the God squad.

James K. Galbraith

The Charge of the Fed Brigade

Where, oh where, is Alfred Lord Tennyson when we need him now?

NASDAQ to the right of them OPEC to the left of them. Volleyed and thundered …

James K. Galbraith

We Cannot Have Discipline So We Must Have Pain

I have at least two friends — divorced women in their fifties, intellectuals, with literary and cultural interests — who put their nest eggs into NASDAQ stocks earlier this year. Ouch! Neither of them was rich, nor ever destined to be. Now they will be somewhat less so.

James K. Galbraith

The Swiss Guard

Have you noticed all the establishment liberals defending the Fed? They have enlisted as Greenspan’s Swiss Guard, brass helmets shining, pikes at the ready. To bash those who would bash the Fed — this has become their holy task.

James K. Galbraith

Watching Greenspan Grow

For those seeking a personal portrait of America’s maximum economic policymaker, Justin Martin’s biography will be hard to improve on. Informed and sympathetic, Martin traces the webs of Alan Greenspan’s personal and professional lives: his early days in jazz and Objectivism, his roots as an economist in the Conference Board and old-style business cycle studies of Arthur Burns, his ties to five Presidents and his liaisons and enduring friendships with interesting, intelligent, attractive and loyal women.

James K. Galbraith

The Man Who Stayed Too Long

Alan Greenspan plays the role of economist, on TV especially, better than any public official who ever lived. But that doesn’t mean he is one.

James K. Galbraith

Bernankenstein’s Monster

From Alan Greenspan to Benjamin Bernanke. The transition at the Federal Reserve is from insider to academic, from man of action to man of ideas. Greenspan’s PhD was awarded by New York University in 1977 as a decoration; he didn’t do any work for it. Bernanke, on the other hand, has stellar credentials: summa cum laude from Harvard, PhD from MIT, professorship at Princeton. But apart from a few months at the Council of Economic Advisers, Bernanke has never run anything larger than an economics department. Greenspan ran the Fed for 19 years without ever losing a vote.

James K. Galbraith

About the Economy

Frontmatter

I Don’t Want To Talk About It

‘Americans Discuss Social Security’. That’s the name of a forum being held around the country and in Austin on April 18. Co-sponsored by the Pew Charitable Trusts and locally by my own LBJ School of Public Affairs, the event is part of a national campaign to air options for Social Security ‘reform’ before local opinion-makers and media markets. If you live and breathe in this country, you’ve seen the advertising. I won’t be in town, so here’s what I have to say.

James K. Galbraith

The Sorcerer’s Apprentices

Once upon a time two professors — we can call them Scholes and Merton — got bored with their jobs. They were economists, theorists of finance. Brilliant and accomplished, they were celebrated, even renowned; each would win a Nobel Prize. But it wasn’t enough. Scholes and Merton wanted to be very, very rich.

James K. Galbraith

Is the New Economy Rewriting the Rules?

Mr President, the question before this panel is, in effect, ‘Can Full Employment Without Inflation Endure?’ According to the ‘old rules’ and those who believe them, the expansion will not last. Growth is too rapid, unemployment too low, stocks too high. There are deep and mysterious reasons why wage inflation is sure to explode, someday soon. Even more mysteriously, some have even suggested that the rate of productivity growth is too fast.

James K. Galbraith

So Long, Wealth Effect

Friday’s crack in the NASDAQ, a 10 percent drop on top of 20 and no end in sight, should put an end to talk about an inflationary wealth effect. No wealth. No effect.

James K. Galbraith

Incurable Optimists

In the status hierarchy of my profession, the Wall Street economist holds a strangely prominent role. Typically, though not always, he lacks academic standing, analytical achievement, significant publication. Research is foreign to him; independent thought unknown. His job is mainly to get his name into the papers. At this he works exceptionally hard. And the financial pages, which in their turn exist mainly to celebrate the great financial houses, oblige. Hence the Wall Street economist has the luxury of seeing his thoughts in print, without the burden of actually … well, of actually thinking.

James K. Galbraith

Enron and the Next Revolution

Nowadays there are three classes in America: working people at the bottom, professionals above them, a tiny elite at the top. Democrats represent the professionals, Republicans represent the CEOs. No one, much, speaks for working people, who must rely on the occasional sympathy of leading Democrats for most of the little they get.

James K. Galbraith

Share Revenue, Save Jobs

To the economy, September 11 now appears as a transient shock. Sales, confidence and the stock market plunged, but then returned. The dead cat bounced; optimists declared recovery to be near. The so-called stimulus package died. And so we now face a classic test of the predominant economics. Either recovery will happen, or it won’t.

James K. Galbraith

Hangover in America?

It’s the new morning in America, you might say. The President has declared that the 1990s were ‘a binge’, from which we are suffering ‘a hangover’.

James K. Galbraith

The Big Fix: the Case for Public Spending

The economy is in trouble. Investment, far below what it was two years ago, shows little sign of revival. Consumer spending, having held up remarkably during the same time, is now more likely to tail off than to accelerate. And while the Federal Government could soon be spending an extra one or two hundred billion dollars on war, otherwise its spending is also in decline.

James K. Galbraith

Bush’s Tax Package and Economic Reality

This President gets good press. ‘Bush Offers a Cure’ was the banner on the Chicago Sun-Times on January 8 — to take just one example. Commentators everywhere are calling his ‘bold’ and ‘daring’ tax-cut proposals a ’stimulus package’ and a ‘recovery program’. Even the big number plays well. Six hundred and seventy-four billion! Imagine that.

James K. Galbraith

Cashing Out

This is a book written entirely in the first person singular voice of Robert Rubin, but to what extent by him remains unclear. Jacob Weisberg, editor of Slate, is the co-author. But he is not a player in the story; nor is he referenced in the dedication, author’s note, or except fleetingly in the acknowledgements.

James K. Galbraith

Bankers Versus Base

There may come a day, in January 2005, when the Democrats will come back to power. Can we perhaps divert ourselves from the campaign long enough to ask, what then? The Democrats have a problem. Their base wants jobs and security. Their financial leadership wants a return to the Clinton formula of deficit reduction, leaving low interest rates to generate economic growth and jobs. John Kerry’s emerging economic platform pays heavy homage to this formula, but it is unlikely to work out. A return to Bill Clinton’s policies will not reproduce Bill Clinton’s results. There are at least six reasons why this is so.

James K. Galbraith

Keeping It Real for the Voters

AUSTIN, Texas — Surprised though you may be to hear this, the Presidential campaign is just getting started.

James K. Galbraith

Dazzle Them with Demographics

Laurence Kotlikoff came to Texas in May, to speak to the new graduates in economics and to give a seminar at the department. After hearing him grimly forecast the impending bankruptcy of our government, I asked him why the financial markets hadn’t noticed. Uncle Sam is still able to borrow for 20 years at a bit less than 5 percent. How come? Kotlikoff replied that the markets were crazy.

James K. Galbraith

Social Security Scare Campaign

Will Bush this week once again put Social Security privatization — or something close to it — into the headlines? Maybe he will. Maybe he won’t. But one doesn’t have to read tea leaves to know it’s on his agenda.

James K. Galbraith

Apocalypse Not Yet

With the euro touching $1.33 and the pound so high I couldn’t bear to look at the rate, thought on a flight home from across the pond turned painfully to the decay of the once-almighty dollar, and to the cries of fear emanating these days from Wall Street. The current jitters are no surprise; the few Keynesians left in the economics profession have long thought them overdue.1 Here are the most important reasons why this is so: • We have over many years worn down our trade position in the world economy, from overpowering supremacy sixty years ago, to the point where high employment in the United States generates current account deficits well over half a trillion dollars per year. We have become dependent for our living standard on the willingness of the rest of the world to accept dollar assets - stocks, bonds, and cash - in return for real goods and services, the product of hard labor by people much poorer than ourselves in return for chits that require no effort to produce. For decades the Western world tolerated the ‘exorbitant privilege’ of a dollar-reserve economy because the United States was the indispensable power, providing reliable security against communism and insurrection without intolerable violence or oppression, conditions under which many countries on this side of the Iron Curtain grew and prospered. Those rationales evaporated fifteen years ago, and the ‘Global War on Terror’ is not a persuasive replacement. Thus, what was once a grudging bargain with the world’s stabilizing hegemon country is now widely seen as a lingering subsidy for a predator state.

James K. Galbraith

Taming Predatory Capitalism

In 1899 Thorstein Veblen described predation as a phase in the evolution of culture, ‘attained only when the predatory attitude has become the habitual and accredited spiritual attitude … when the fight has become the dominant note in the current theory of life’. After an entire century’s struggle to escape from this phase, we’ve suffered a relapse. The predators are everywhere unleashed; the institutions built to contain them, from the UN to the AFL-CIO to the SEC, are everywhere under siege. Predation has become again the defining feature of economic life; our first problem is to grasp this reality in full.

James K. Galbraith

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