PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.There's been a lot of discussion and debate about President Obama's inauguration speech. Many people are saying it rings a new, more, you could say, militant liberal tone than in his first term. Others are saying perhaps this is just rhetoric.Now joining us to discuss the inauguration speech and what we might expect from the second term of President Obama is Professor James K. Galbraith. He teaches at the LBJ School of Public Affairs at the University of Texas at Austin. He's the author of The Predator State and Inequality and Instability: A Study of the World Economy Just Before the Great Crisis. And he joins us from Austin. Thanks for joining us again, James.JAMES K. GALBRAITH, LBJ SCHOOL OF PUBLIC AFFAIRS, UT AUSTIN: My pleasure, as always.JAY: So what do you make of the inauguration speech? Rhetoric? Or a promise of something more?GALBRAITH: This was a president who spoke with great clarity on the compelling ongoing civil and human rights issue of our time, which is the rights of the gay community. He said that with enormous clarity, essentially settled that issue, I think, and reflecting the change in mood of the American public on that one. He spoke with great clarity about the priority that needed to be given to climate change. Now, we're a long way from having a realization of effective action in that area, but to have the president use this speech to put that front and center indicates a certain, let's say, determination to bring the country into line with the reality of that challenge.If you takeâcome back into my particular little bailiwick, which is economic policy, and in particular these awful, dreary, tedious, repetitive debates that we've been having about the deficit and the debt, a subject whose importance is vastly blown up by a community of Washington insiders, press people, and lobbyists, frankly, it's very interesting to ask: how did the president treat that topic in his second inaugural? And the answer to that is he gave the word deficit a passing mention in a sentence which properly placed the emphasis on the control of costs in health care, a problem which is unquestionably something that has to be dealt with.And then he went on to say very clearly that Social Security, Medicare, and Medicaid, which have been in the crosshairs of this deficit debate for a long time, are programs which in fact strengthen our economy rather than weaken it, that theyâhe very correctly and accurately said that what they do is to enable people who are not direct beneficiaries but expect to be recipients of the security that Social Security and Medicare and Medicaid provide at some point later in their lives, that this permits them to be more risk-taking, to be more economically independent than they otherwise would be in the public discourse.JAY: If youâlet's dig in both issues, the issue of health care and cutting costs and deficit issues, and then let's talk a bit about the climate-change thing. In that sentence that heâin one sentence where he said, we have to control health-care costs and we have to make hard choices in relation to the deficit cutting, does he not still buy into the underlying logic that there has to be some cuts in social programs to deal with the deficit? And he's made many promises over the last four years, to from right-wing pundits on, that he's going to go after the quote-unquote "entitlement programs". I mean, I understand he says yes, we need some of this, but is he not trying to have it both ways?GALBRAITH: Well, you know, of course, it'sâthere may be a little bit of that. But I think that if he were planning to make the signature achievement of, say, the next year of his presidency a massive victory for the budget hawks, for the deficit cutters, for the people who have been going after Social Security, Medicare, and Medicaid, he would not have phrased this speech in that way. Yes, he gives them a little bit of a concession in that one sentence, but the sentence is very clear that the deficit is almost an afterthought to the deficit issue, the deficit projections are almost an afterthought to the larger problem of managing the cost of health care, for which there are many potential solutions that do not involve reducing the health-care coverage available, let's say, to the over-65 population or to the population that's eligible for Medicaid.JAY: But what can he do now in terms of reducing health-care costs other thanâI mean, the legislation's been passed, and a lot of people are debating how much it really controls health-care costs, and he made the deal with pharma not to go after the costs of prescription drugs and not allowing Canadian drugs in.GALBRAITH: Well, there is the cost of prescription drugs. There's the cost of insurance. There's the cost ofâ.JAY: But hasn't he promised pharma that he's not going to go after them?GALBRAITH: Well, I didn't see that in this speech.JAY: No. But in the deal for the health-care reformâ.GALBRAITH: I understand, but policy moves on. You do what you have to do at each given timeâat each given moment of time. So I'm just focusing on the tone set by this inaugural. Yes, one of the important things about this inaugural address is that it was in contrast to a lot of the discussion that went on before and to many things that this president has said in the past. But let's not hold him to those things. Those things were things that I would have preferred he didn't say. If he's now preparing in this signature address a different tone for his second administration, I cannot see why in the world I should be objecting to that. It's exactly what I would have wanted him to do. So I say let's applaud and get behind him on that, so long as he's consistent with the tone that he's now declared.JAY: And, now, on the issue of climate change, I guess what I'm saying is we've got to see some meat on the bones to know there's a difference, because on climate change, if the policies of climate change are like kind of cap-and-trade that isâyou know, essentially creates a speculative market for carbon trading, if it's really more sort of financialization, in terms of dealing with climate change, you know, is that really progress?GALBRAITH: Well, I agree with you that it's possible that the approach actually taken will not be an effective one. And that's something we have to be vigilant about and to guard against. But let me come back to the basic point. Would you rather the president not have made a clear statement about climate change? The fact that he did and that he gave it this level of significance in that speech is by itself an important fact. So, again, I'm saying, yes, of course oneâto me this is not about, by the way, whether one is going to come to a favorable or unfavorable judgment on balance about the presidency of Barack Obama. That's a decision that historians are going to take well down the road. This is about the direction that policy discussion takes in this country in the immediate future and about the priority that should be given to certain issues. And it's clear from the president's speech that this issue, which is a real question, a serious challenge, should take very much greater priority than it has and well above the priority that he assigned in this speech to the phony question of deficits and public debt. The word public debt, incidentally, wasn't even mentioned in the inaugural address, so far as I can recallâand I looked for it.JAY: Okay. Just quickly, one or two concrete things you'd like to see in the next few months that suggest this is more than just rhetoric and that there is a new agenda or refreshed agenda, if you will.GALBRAITH: Well, I was encouraged by the fact that he has ridden over the Republicans on the question of the debt ceiling. And, you know, there was a lot of discussion about ways he might finesse that question. I was part of that discussion. But in the end what the president said was the way to deal with this is to not negotiate and to put the onus on the Republicans and see if they really have a firm determination to drive the country to the wall over this issue. And he correctly calculated that they didn't.So now they have made a tactical retreat for another three months. That is a good step, in my view. And when we get to that three-month deadline, they need to be pushed to make another tactical retreat, until it becomes clear that that's all they're willing to do on that question from then on, at which point the debt ceiling ceases to be a point of leverage. Next issue: the sequesters and the continuing resolution which are going to be coming up. Once again there will be demands that they negotiate away Social Security, Medicare, and Medicaid in order to defer the damage that the Republicans and others are in position to inflict on domestic discretionary spending.Well, if you're not going to negotiate the, let's say, harmful and unnecessary changes in order to get an increase in the debt ceiling, why should you negotiate them in order to satisfy the equally arbitrary and capricious sequestration bills? I say the right thing to do with the sequestration is to repeal it, at least on the domestic discretionary side. On the defense side, defense budgets are coming down anyway, and it would be a very useful thing to get a real reorganization of our defense capabilities so that they are actually structured to meet our national security needs.But the most important thing on the domestic discretionary side is not to do unnecessary and damaging things. And that should be the position that the administration takes at this point.JAY: Okay. Well, we'll come back to you when those things are announced, 'cause they're going to have to take a position on these issues relatively soon.GALBRAITH: That's right. And there's no guarantee, of course, at any given time that this administration is going to do the right thing. But as I say, when they place themselves in a position where they can do the right thing, then I'm all in favor of encouraging them.JAY: Okay. Thanks very much for joining us, James.GALBRAITH: Okay. You're welcome. Always a pleasure.JAY: And thank you for joining us on The Real News Network.
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