J.K. Galbraith: A Bailout We Don’t Need

Posted by Kendall Harmon

So, let's use the next few years to plan, mapping out a program of energy conservation, reconstruction and renewable power. Let's get the public sector and the universities working on it. And let's prepare the private sector so that when the credit crunch finally ends, we'll have the firms, the labs, the standards and the talent in place, ready to go.

Some will ask if we can afford it. To see the answer, don't look at budget projections. Just look at interest rates. Last week, in the panic, the federal government could fund itself, short term, for free. It could have raised money for 30 years and paid less than 4 percent. That's far less than it cost back in 2000.

No country in this situation is broke, or insolvent, or even in much trouble. For once, Wall Street's own markets speak the truth. The financially challenged customer isn't Uncle Sam. He's up on Wall Street, where deregulation, greed and fraud ran wild.

Read it all.

Filed under: * Economics, PoliticsEconomyThe September 2008 Proposed Henry Paulson 700 Billion Bailout Package

Posted September 26, 2008 at 7:07 am [Printer Friendly] [Print w/ comments]

1. William P. Sulik wrote:

Reading the headline, I thought: “But J.K. Galbraith is dead!”  Yes, John Kenneth Galbraith is still dead, this is his son, James Galbraith.  Because of John Kenneth Galbraith’s prominence, I respectfully recommend this be retitled to read “James Galbraith: A Bailout…”

September 26, 11:49 am | [comment link]
2. Katherine wrote:

Matt, I am thrilled to agree with you!  I have a big stake in this; my husband is less than five years from retirement, and we are relying on our 401K.  Nonetheless, I can’t see the rush to spend $700b without considering seriously why and how.

September 26, 1:30 pm | [comment link]
3. Jeffersonian wrote:

Someone’s trying to start a stampede.

September 26, 2:04 pm | [comment link]
4. Irenaeus wrote:

Yes, Jamie Galbraith—-a leftward-leaning economist—-is John Kenneth Galbraith’s son.

September 26, 2:14 pm | [comment link]
5. Irenaeus wrote:

“Someone’s trying to start a stampede”

Well, he does teach at the University of Texas.

September 26, 2:15 pm | [comment link]
6. Sarah1 wrote:

RE: “Why the rush?”

I would like to announce that I agree with Matt Thompson.

I’m willing to go with the recession rather than the bailout.

September 26, 4:50 pm | [comment link]
7. Bob Lee wrote:

Sarah, it is not a recesssion they are trying to avoid. It is the “D” word. You need to wake up. This is a lot bigger than you realize. If the banks fail you will not have a recession. Or a car, home, 401k, and on and on.

September 26, 6:57 pm | [comment link]
8. Ouroboros wrote:

Bob Lee, stop trying to scare people.

The banks will not “fail.”  Deposit accounts are insured by the Federal government.  If this $700 billion bailout were to bail out *insured* bank accounts, I’d be all for it—after all, it’s what the Federal government pledged.  But it’s not.  It’s to buy assets that are not worth what the institutions that hold them thought they would be worth—i.e., bad loans.  This is my problem how?  This is government’s problem how?

September 27, 9:27 pm | [comment link]
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