James Galbraith

James K. Galbraith is the Lloyd M. Bentsen Jr. Chair in government-business relations at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin, a senior scholar of the Levy Economics Institute, and chair of the Board of Economists for Peace and Security. His most recent book is Unbearable Cost: Bush, Greenspan and the Economics of Empire.

Recent Articles

The Joys of Recession

E conomics as a subject matter and, in its more than slightly fragile way, as a science, has two notable features. There is a plausible characteristic of the economy, well supported by both analysis and experience, that gets relatively little mention. And there is a related aspect of the economic system that is wholly proscribed in all reputable thought and discourse. The little-mentioned feature is the possibility, even the probability, of an underemployment equilibrium--an enduring situation of poor performance. The wholly unmentioned fact is that, for a substantial and politically influential section of the population, this is wholly acceptable, even good, and certainly to be preferred to the relevant remedial actions. It is three years and some months since the United States economy slipped into recession, with other countries of the developed world similarly affected. But popular and professional economic attitudes have rejected the notion that this is how the economy should be...

Who's Bashing Tyson?

L aura D'Andrea Tyson's appointment to chair the Council of Economic Advisers received savage treatment from some of her professional colleagues. According to Peter Passell of the New York Times , "jaws dropped" in academe at the announcement. Passell went on to describe Tyson as "trendy" and a "polemicist." And the addition of Princeton's Alan Blinder to the Tyson council found MIT's Paul Krugman celebrating, in print and for attribution, that Blinder would bring to the CEA "necessary analytical skills that Laura Tyson lacks." Is there a serious issue behind these attacks? Trade policy, of course, or so they say. One trade economist suggested to the Times that the Council was now to be "captured by an interest group." William Cline of the Institute for International Economics complained of the exclusion of free traders: "There's a risk a voice will be absent from the table." And Passell summarized the views of others: "Many worry that her lack of ideological commitment to free trade...

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, or 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. This tribe, a year ago, was predicting up to three percent growth for 2001. They now concede that, yes, sorry to say, the economy has slowed. But, one reads, "no one saw this recession coming." And so, of course, none can blame the Wall Street economist for failing to warn of the trouble we are in. Moreover, these roosters crow in joyful chorus today. Recovery, everyone agrees, is on the...

Test the Limit

Two components of economic growth—productivity and the supply of labor—are growing faster than conventional economists acknowledge. The danger is that lowered expectations could become self-fulfilling. See " Why We Can Go Faster ," by Barry Bluestone and Bennett Harrison I t has been amusing to watch the natural rate of unemployment come down. Two years ago, the community of respectable economists held—though with exceptions including Robert Eisner of Northwestern, Ray Fair at Yale, Harvard's James Medoff, and myself—that 6 percent unemployment was as low as the economy could go without triggering inflation. This meant, in turn, that sustainable economic growth could proceed only at the long-term rate of labor force growth plus the average rate of improvement of the productivity of labor in the recent past, for a growth speed limit of, at the highest, 2.5 percent. Any at tempt to push gross domestic product (GDP) growth any higher would be inflationary, or so we were constantly told...

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