Time to take control of markets
John McCain has a new ad out that tries to distance him from big industries. Commentator and economist James Galbraith says he's been seeing a lot of this kind of repositioning among conservatives lately.
James Galbraith, professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas. (University of Texas)
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TEXT OF STORY
Kai Ryssdal: John McCain rolled out a new television ad this week, one that makes it look like the Republican candidate's trying to put a little bit of distance between his campaign and more traditional GOP constituencies.
[McCain Ad]: Only McCain has taken on big tobacco, drug companies, fought corruption in both parties...
Commentator and economist James Galbraith says he's seen a lot of of repositioning among conservatives lately.
James Galbraith: Years ago, I realized that the free-market, supply-side crowd, true conservatives who'd ridden high with Reagan, dislike Bush as much as I do. I speak of the hard money, low-tax, Wall Street Journal, deregulate-and-privatize team, the nemeses of my youth, people like Bruce Bartlett, Paul Craig Roberts, the late Jude Wanniski. Suddenly, we were on the same side. Had I gone crazy or had they gone sane?
Whether it was right or wrong, "Reaganomics" had a logic. Each policy would aim at one problem. Tight money would cure inflation. Low taxes would stimulate saving and work effort. Small government would "crowd in" investment. Free trade would make us efficient. Smart people believed this and they had the authority of respected economists like Milton Friedman and Friedrich von Hayek to back them up.
But now those ideas are dead, buried, abandoned. Deregulation brought us miseries in finance, transport, energy and the climate. Free trade agreements dole out favors to big farmers and big pharma. The financial crisis finished off what was left of monetarism, the idea that the Fed should only worry about inflation. And everyone has given up on waiting for low taxes to unleash the creativity of the ultra rich.
Under Bush, oil and gas, drug companies and defense contractors, insurers and usurers control the government of the United States and it does what they want. This is the predator state. The wisdom of free markets? The President gave his own verdict in Houston the other day: "Wall Street got drunk." True enough, but where were the grownups when the party went wild?
For many years, liberals have lived in fear and thrall of the market mantra. It's time to get over it, for if true conservatives realize that our problem is a predator state, shouldn't liberals be out there doing something about it?
Suddenly planning, standards, regulation and progressive taxes don't seem so bad.
Ryssdal: James Galbraith teaches at the Lyndon B. Johnson School of Public Affairs at the University of Texas. His new book is called "The Predator State."
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08/08/2008
There is an old joke about a man who claims that his fiancée is never late. The moment she is late, she is no longer his fiancée. The same has been said (by a certain Slovenian) for Market Solutions. The moment they fail, they cease to be market based.
From Lexington, KY, 08/08/2008
The current miseries Galbraith outlines have not been caused by free market policies, but by a lack of them. Far from being dead and buried, unilateral free trade, deregulation, and low taxes combined with low government spending is the path forward to becoming a more prosperous nation.
From Hvalsø/Denmark, 08/08/2008
It might be useful to measure James' accomplishments with the yardsticks proposed by his father, as he himself does. With the 'Predator State' he does, what John K.Galbraith hoped for in his 1987 history of economics (last para): unite economics and political science into political economy. It must be taken seriously to improve both strains of thought.
From Houston, TX, 08/07/2008
Galbraith's blame is misplaced. Reagonomics, flawed if it may have been, is not the culprit. Blame plain economic irresponsibility. Taxes were lowered and government spending has gone crazy. Markets were deregulated, but the government steps in to save big institutions from failing. This gives companies license to behave in potentially irresponsible ways. Let some big institutions fail and market forces will certainly reel in the excessive behavior. That would be Reaganomics.
From san marino, CA, 08/07/2008
James K. Galbraith's new book THE PREDATOR STATE
will elevate him into the heady company of his father, Nilton Friedman, and other giants of 20th-century
economics. It is an ambitious and successful case for the return of Keynsianism. Bravo!
From Hillside, NJ, 08/07/2008
A bulls-eye perfect 10.0 except maybe lose a tenth of a point for "those ideas are dead, buried, abandoned." Should be, yes but almost certainly will not be buried until the planet itself is buried. We still hear "markets" where the term should probably be "so-called markets".
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