I laughed, I cried, I gnashed my teeth. The best book on our current financial crisis was written in the 1960s. Galbraith is a Keynesian, but more pertinently an "institutional" economist in the great American tradition of Veblen. As such, his work is abhorred by market fundamentalists, and, alas, largely dismissed on technical grounds by modern day liberals like Krugman. Yet his reading of the Crash and Great Depression stands up today as few economics texts could. To paraphrase: Higher worker productivity and flat wages mean huge gains for the capitalist class. This produces overinvestment and overproduction unmatched by rising general consumption (so much for Say's Law), along with huge accumulations of global capital and a consequent orgy of speculation. The rich simply have too much money to deal with it rationally. Soon the rich and everybody else are riding fantastic stock bubbles that serve to disguise the wage disparity. Sound familiar? But it is the telling that is really worth the price. A wise and sardonic observer of human frailty, Galbraith is a pleasure to read, as when he describes one head of the stock market as "such a spectacularly unsuccessful businessman that his outright thefts were almost incidental." It is likewise hilarious to hear again and again in 1929 the refrain that "the fundamentals are sound," taking the words right out of Bush's mouth. More than ever this is an illuminating book. And essential reading now that the hardcore Reaganites are trying furiously to rewrite the history of the Depression, as well as the history of the last 20 years. Galbraith wrote this long before our current crisis, while the Chicago School and supply side conservatives were still touting the perfection of free markets and mastery of the business cycle.
The more people who read Galbraith, the less likely we will be to heed CNBC market thugs or elect the useful idiots of market fundamentalism.
Sorry, but I must take issue with the positive reviews. First, I would rather see the original "Empire of Debt" offered in audio. This is a scenario taken from the documentary. It is a worthy topic and all involved are to be praised for their efforts. But it adds up to sketchy primer on our abysmal debt problems. Worse, the audio makes every effort to be bipartisan by seeking a midpoint between extremes. This is like inviting Bin Laden to help with our security planning.
The audio makes no mention of the "Starve the Beast" doctrine administered by Reagan, Bush, Cheney, and the Norquist radical libertarians. It is now indisputable that running up deficits in an effort to break the U.S. entitlement programs has been one of the GOP-right's only ideologically consistent policies.
Since the days of FDR a radical contingent in the U.S. has regarded Social Security and Medicare as an outright theft of private capital. This cadre favors massive debt, which has the long-term effect of collapsing and privatizing government functions. This political wing of the GOP is personally and financially unaffected by such a collapse. Indeed, they may benefit from it by shorting the dollar, etc. Nor do they personally rely on most government services, apart from the military, law enforcement, and international trade contracts.
It is a tragic error for well-meaning pundits today to make the mistake of assuming "we" are a "nation" with a unified set of interests. Americans must begin to view fiscal policy in terms of economic class instead of nationality if we want a clear view of the choices.
We are not "all in this together." The honorable attempt to remain bipartisan had been outmoded by those powerful interests who benefit by running the nation into default. I am accordingly forced to withhold a positive rating.
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