James Galbraith and I have only one degree of separation. J.K. (Ken) Galbraith was, over the years, one of my favorite authors and I have read most of his works and his major books like The Affluent Society, The Age of Reason, and The New Industrial State several times. Ken Galbraith is James K's father. Not surprisingly, we agree on a LOT.
Thoughts on a Plan B
By James K. Galbraith, University of Texas at Austin
September 6, 2010 | New America Foundation
In July 2008, in a memorandum for the Obama campaign team and later published in Challenge, I wrote as follows:
If the above analysis is correct, the political capital of the new presidency risks being depleted, quite quickly, in a series of short-term stimulus efforts that will do little more than buoy the economy for a few months each. Since they will not lead to a revival of private credit, every one of those efforts will ultimately be seen as “too little, too late” and therefore as ending in failure.
Painful though it is to repeat those words, the question remains: what can be done now?
(The rest can be found here because I wish to highlight our main points of agreement.)
7. Jobs Programs. Taking a leaf from the New Deal, let the federal government establish a new Conservation Corps, a Neighborhood Corps to protect, maintain and revitalize (or as necessary demolish) distressed housing, and a Home Care corps to provide services to the elderly in their own homes. Other suggestions welcome.
8. Strategic Investments: Energy and Climate Change. The illusion of stimulus was that the economy would “return to normal” with a little “fiscal boost.” The reality is that having exhausted (however imperfectly) the 1940s agenda of middle-class housing, the 1950s highways agenda, the 1960s health-care agenda and the 1990s information-technology bubble, the economy needs a new strategic direction. The clear and pressing priorities are energy and climate change. To address these challenges is a grand task, requiring decades of research, careful planning and many investments, if we are to pass on a livable planet and a decent living standard. Institutionally it will require new lending agencies to assure that the funds needed are available over the long term. And the work can provide jobs for millions, for many years.On January 5 1993, I gave a speech to the American Economic Association convention in Anaheim on the subject of my then new book, Elegant Technology. The whole text can be found here but here's the money quote:
Elegant Technology is not a pipe dream--at least not in a technological sense. Unfortunately, any plans to accelerate a conversion to a sustainable future is met with the howls of "Where is the money coming from to pay for all this wonderful new technology?"
So this is what we have come to: We know we are killing ourselves and our planet; we know there is a possible solution because we can see other humans perfecting one; and, we have millions of highly skilled unemployed whose lives would become infinitely better with useful work. Why can we not go to work to solve our dilemmas? We are told that there is no money. In fact, all the nations on earth are in debt! We are told there is no money for useful purposes now, and there will be even less in the future as governments are forced by the lords of international finance to devote more of their tax revenue to debt service.
And why are we all in debt? Because we decided that money was a video game, programmed it with the banking assumptions and economic ideas of the middle ages, and let irresponsible children play with the futures of whole regions of the planet. Of course, there is still plenty of money to play with. According to the "Manchester Guardian," in the chaos before the vote on the Maastricht Treaty in France, speculators each day were moving around $1.5 trillion (doesn't the figure look quaint these days) in various currencies--an interesting figure since there is not that much total real trade in goods and services between all the nations on earth in a year. Money may be plentiful, but it is in the wrong hands.
The owners of money are playing by screwy rules--the ideas of dead economists with no more relevance to today's problems than a smoke signal is to a fax machine. We are almost to the twenty-first century, yet we just suffered through 45 years of nuclear terrorism over mostly irrelevant arguments between the followers of Marx and Smith--neither of whom lived in the twentieth century.
The time has come to coldly assess the ideas of the worldly philosophers in light of the economic thinking necessary to affect a conversion to an elegantly sustainable industrial infrastructure. The old thinking has resulted in the twin catastrophes of global economic chaos and environmental collapse.See! We do agree on quite a bit. And the idea that Progressives have no plan is just silly. We have been figuring out how to get to a sustainable future in some cases for decades. But until there is a collapse of the powers of the banksters, a real solution is impossible. And the forces of ignorance and greed, I have learned, are powerful indeed.