• Latest News
  • Pitch a Story
  • Work with a Journalist
  • Join the Blog Squad
  • Afghanistan
  • Africa
  • Asia
  • Baltimore
  • Canada
  • Egypt
  • Europe
  • Latin America
  • Middle East
  • Russia
  • Economy
  • Environment
  • Health Care
  • Military
  • Occupy
  • Organize This
  • Reality Asserts Itself
  • US Politics
  • Galbraith and Panitch: What Would Real Economic Reform Look Like?

    In Pt.3 James K. Galbraith and Leo Panitch imagine what a genuinely reform minded US government might do about the economy -   April 10, 13
    Members don't see ads. If you are a member, and you're seeing this appeal, click here


    Share to Facebook Share to Twitter

    Thank you, The Real News does an excellent job - FedupwithR
    Log in and tell us why you support TRNN


    James K. Galbraith teaches at the LBJ School of Public Affairs, The University of Texas at Austin. He is a Senior Scholar of the Levy Economics Institute and the Chair of the Board of Economists for Peace and Security. The son of a renowned economist, the late John Kenneth Galbraith, he writes occasional commentary for many publications, including Mother Jones, The Texas Observer, The American Prospect, and The Nation. He directs the University of Texas Inequality Project, an informal research group based at the LBJ School, and is President this year of the Association for Evolutionary Economics.

    Leo Panitch is the Canada Research Chair in Comparative Political Economy and a distinguished research professor of political science at York University in Toronto. He is the author of many books, the most recent of which include UK Deutscher Memorial Prize winner The Making of Global Capitalism: The Political Economy of American Empire and In and Out of Crisis: The Global Financial Meltdown and Left Alternatives. He is also a co-editor of the Socialist Register, whose 2013 volume is entitled The Question of Strategy.


    Galbraith and Panitch: What Would Real Economic Reform Look Like?PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I'm Paul Jay in Baltimore. And we're continuing our discussion in light of the 80th anniversary of the inauguration of Franklin Delano Roosevelt and what does the New Deal mean for today.

    Now joining us again, first of all: Leo Panitch is the Canada Research Chair in Comparative Political Economy and a distinguished research professor of political science at York University in Toronto. He's the author of Global Capitalism and the American Empire and The Making of Global Capitalism.

    And also joining us again, James Galbraith. James K. Galbraith is the Lloyd M. Bentsen Chair in Government and Business Relations 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 Crisis.

    Thank you both for joining us.

    So, James, let me start with you. Let's imagine that, I don't know, the conditions for the New Deal, as we talked about in the previous segment, to some extent do get--re-create themselves. At the very least, there is a mass mobilization, there is a radicalization of workers and general population. People are ready to vote for and embrace, at least a majority of people--maybe it's 52 or 53 percent, but enough to elect control of both houses, elect a president that's willing to create this kind of new New Deal or even further than that. But what would it look like? So, in other words, what would you do if you ran Washington, James?

    JAMES K. GALBRAITH, LBJ SCHOOL OF PUBLIC AFFAIRS, UT AUSTIN: Well, let me start with some fairly modest propositions. What you've proposed is a very all-embracing question, and I would like to approach it in small stages.

    I think to begin with, compared to where we are now, we need to fundamentally reframe the way we think about core social insurance programs. Right now there is a dialog of assault on those programs. That is to say, they are referred to in a disparaging way as entitlements, and they're treated as part of a financial problem for the government, none of which is in fact the case.

    The reality is that socially provided insurance--and I'm talking about Social Security, Medicare, Medicaid, unemployment insurance, the core programs that stabilize people's incomes when they're in trouble--are very efficiently provided by the public sector, much more efficiently than by the private sector, because the private sector is in the business of cherry-picking--getting the best cases and screening out the rest, and the public sector doesn't do that. So its costs are much lower, and it can run those programs efficiently and effectively and keep a lot of--keep practically the whole working population from the worst-case outcomes.

    There's extraordinary actual success, and it needs to be treated as such and preserved, not rolling back those programs, but actually taking opportunities to increase their span as appropriate. That's something, it seems to me, that we ought all to consolidate, to agree on, and to make a core part of a reformed program.

    Secondly, I think we need to talk about wages. And in particular, the big, lagging piece of the old New Deal framework right now is the minimum wage. Minimum wage was enacted in 1935, and it reached a peak in value in the late 1960s and has largely fallen since then.

    And I know the president--and there's a debate over this now--the president has offered $9 an hour, his proposal. That's a step in the right direction, but it's much too low. We ought to be talking about a minimum wage on the order of $12 an hour. And this would very greatly change the conditions of work at the low end of the labor force. It would boost people's incomes who work for a living and improve the purchasing power of that population, which would be very good for the small business community that serves them in many ways. So while businesses would lose something in some cases on their payrolls, they would make it back on their revenues.

    This has actually been tried in other countries, in the U.K. most recently, and it's basically become noncontroversial where it's applied. But it still engages an enormous amount of conservative resistance, and that's something that we ought to tackle, because in fact increasing the minimum wage is a very popular idea, and it's a very popular idea because it's a very sensible idea.

    Okay, third area where we need to change our thinking has to do with the notion of the role of regulation of the economy. The basic reality of our economy is that very little of it would exist without an underpinning of federal regulation. And we are going to see the effects of cutting back on that as the sequestration process now underway unfolds. We're going to see--for example, we're going to realize that every meat plant in the country has a federal inspector, and if the meat is not inspected, it will not be delivered and it will not be on the shelves. And that kind of thing is going to percolate through into people's consciousness.

    And it seems to me that a progressive program can take advantage of this moment to teach the importance of having effective autonomous regulation in a whole spectrum, from the mechanical equipment, transportation, air traffic control, and finance. And that strikes me as being a kind of comprehensive learning opportunity that we now have.

    Okay. So you do those things, and you have, I think, done a great deal to change the climate in the country about how people think about the role of the public sector in relation to the private sector.

    And then I would say you have to then tackle the strategic problems that you face. In 1933, when Roosevelt became president, we were at the beginning of a period of extraordinary potential because of the arrival of a very cheap, very efficient fuel, namely oil, which was American in origin. It was largely--it was being developed in Texas, for the most part.

    That period in the world's history has now ended--ended, actually, 40 years ago. We're now having to face firmly the consequences of not being at--having a thoroughly reliable, low-cost energy supply. And we need to disillusion ourself of the--disabuse ourself of the idea that we're necessarily going to get this from natural gas. So we need to cope with that change in our circumstances, and that requires thinking through how we live our lives and building institutions that enables us to live them well within that constraint.

    And also, I say again, that is closely related to the problem of climate change, which we obviously need to deal with, not for our own sakes. I think both Leo and I--and perhaps even you, Paul, although you're very young, will be gone before this becomes a catastrophe, but our children and our grandchildren will be around. And we need to act so as to ensure that they don't face, you know, truly grim scenarios that are out there and that are truly probably the most frightening and, let's say, daunting challenges that we face.

    So we need to pick up on the problems that we have. And these include unemployment and foreclosures and the debt structure of American households, and in Europe the completely dysfunctional system of European finance and governance--a great many things.

    But we need to [incompr.] continue with the institutions that the New Deal gave us that continue to function well for us, and then think about the problems that we actually face, rather than allowing ourselves to be detoured and distracted by people raising all kinds of phony issues, including this whole question of the public deficit and the national debt, which is essentially, from an economic point of view, a bit of propaganda inconsequential in the real world.

    JAY: Right. Okay. A long time since I've been called very young.

    Anyway, Leo, your vision. So you've got--you just got elected president of the United States. You at least have 52, 53 percent public support. You control both houses. But you're in today's world, more or less. What would you do?

    LEO PANITCH, PROF. POLITICAL SCIENCE, YORK UNIVERSITY: I think that what is needed by way of policy in the short-run--I don't disagree with anything that James said. But what is needed immediately is to take Obama at his word in the State of the Union address in terms of the absolute necessity of direct government expenditure on infrastructure building, and not to then address it with the pittance that he put towards that--really can't contribute at all, much, his $50 billion towards this.

    A good way to begin would be to guarantee the bonds of municipal governments, which is where most infrastructure spending is located. This has been proposed by not very radical Stanford lawyers at the Stanford Law School. It would involve some twigging of the Federal Reserve's responsibilities and legislation. But if you were able to carry things through Congress, you would have to have a massive public employment and public infrastructure program. And the way to do that, given the constitutional division of powers in the United States, would be indeed for the federal state to guarantee municipal bonds.

    Now, let's face it. If Roosevelt had to try to pack the Supreme Court in the face of what he was trying to do, imagine what a president would have to do in the face of the Supreme Court today, in the face of the balance of power inside the American state.

    So again I want to stress that while these policies are important--and one could offer many more. I mean, for instance, I'd like to see policies that would actually encourage the growth of trade unionism, and in that way would do what the most effective thing that happened after 1945, which was the ability of unions to push up workers' incomes, which was the main way demand was sustained in the boom period after '45, much more than direct government expenditure, although these social service programs were important.

    I'd like to see all of that, but I don't think we're going to see that--I think one needs to be realistic about this--without changes throughout the American state. And that needs to be put on the agenda.

    The reason we have the deficit propaganda--and I entirely agree with James that that's what it is--is related to the powerful forces that are behind that propaganda. And, you know, it is related, again, back to the confidence in the banking system, the demand by bondholders that if there's going to be any question of who's going to get paid, it's the bondholders who are going to get paid first. And one needs to remember--and that's why this is also about changing the nature of trade unionism in the Western countries and elsewhere--that some of those bondholders are trade union pension funds, including university teachers' pension funds.

    So the kinds of changes we need need to begin at the bottom. They need to be directed certainly at policy, but they--as was the case in the New Deal, they need to be directed at changing state institutions. And the current state institutions are not in the game of doing what either James would like or what I would like.

    JAY: Alright. Well, thank you both for joining us. This is just the beginning of this discussion, not the end, and we will invite both of these gentlemen back soon to carry on this conversation. So, James, Leo, thanks for joining us.

    GALBRAITH: Thank you.

    PANITCH: Good to be with you, Paul.

    JAY: And thank you for joining us on The Real News Network.


    DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


    Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at


    Latest Stories

    The Resegregation of American Schools
    The Modern History of Venezuela, Why Still So Much Crime? - Edgardo Lander on Reality Asserts Itself (7/9)
    What Role Has Russia Played in Eastern Ukraine?
    Can Johns Hopkins Afford to Pay A Living Wage? (2/2)
    University Sit-In Targets World's Largest Private Coal Company
    The Modern History of Venezuela and the Need for a Post-Oil Economy - Edgardo Lander on RAI (6/9)
    Can Johns Hopkins Afford to Pay A Living Wage? (1/2)
    One Percent of Environmentalists Killings Lead to Convictions
    Investigation Finds Former Ukraine President Not Responsible For Sniper Attack on Protestors
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Ukraine Transitional Gov't Moves Militarily To Reclaim Seized Buildings
    IPCC Report Flawed By Narrow Focus on Carbon Emissions
    The Modern History of Venezuela: The Bolivarian Revolution - Edgardo Lander on Reality Asserts Itself (5/9)
    Obama Signs Directives to Reduce the Gender Wage Gap
    Eastern Ukraine Lacks Political Representation in Kiev
    Demystifying the Role of Mitigation in the Most Recent IPCC Report
    Hypersurveillance State Won't Prevent Another Boston Marathon Bombing
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Univ. of Maine Faculty Reinstated After Students Protest Against Cuts
    The Modern History of Venezuela from 1908 to 1973 - Edgardo Lander on Reality Asserts Itself (2/9)
    IMF Will Address Global Inequality, Says Managing Director Christine Lagarde
    Raising Big Banks' Leverage Ratio Good, But Not Nearly Enough
    TRNN Replay: Austerity Road to 19th Century
    Has Palestinian Maneuvering Revived Peace Talks?
    Late Jackson Mayor Lumumba's Son Wins Primary to Replace His Father, Runoff Election Ahead
    Quebecers Reject PQ and Elect a Liberal Government Representing Big Business
    TRNN Debate: Decriminalization vs. Legalization
    The Beginning of the Chavez Era - Edgardo Lander on Reality Asserts Itself (4/9)
    "Off With His Head": Court Upholds Obama's Power to Kill
    Workers at Nation's Top Hospital Strike For Fair Wages
    From Exile to Radicalization in Venezuela - Edgardo Lander on Reality Asserts Itself (1/9)
    Rwanda 20 Years Later: Genocide, Western Plunder of Congo, and President Kagame
    Ukrainian Protesters in the East Demand More Autonomy From Kiev Government
    Hunger Strikers Demand President Obama Halt His Record 2 Million Deportations
    Indian Parliamentary Elections - A Primer With Vijay Prashad
    West Looks to Carve Up Ukraine & Privatize Industries Held by Kleptocrats
    Where Are Israeli-Palestinian Peace Negotiations Headed?
    The Multiple Kingdoms of Saudi Arabia (5/5)
    Do the Afghan Presidential Elections Signify Progress?
    Republican Presidential Hopefuls Pay Homage to Billionaire Casino Tycoon Sheldon Adelson
    Will Extremist Lieberman Become Israel's Next Prime Minister?
    Why do the Saudis Want the US to Attack Iran? (4/5)
    Immigrant Advocates and Families Tell President Obama 'Not One More'
    Elections, Pipelines, and Protests - The Canada Panel
    Chris Hedges on "Israel's War on American Universities"
    Baltimore Residents Decry Lack of Affordable Housing
    Yellen Talks the Talk But Will She Walk the Walk?
    Hopkins Hospital Workers Speak Out against "Poverty Wages"
    Will Venezuela's New Floating Exchange Rate Curb Inflation?
    The European Central Bank's War on Wages is Pushing Europe's Economy to the Brink
    Supreme Court Decision Opens Floodgates for More Campaign Cash
    Charles Keating, the Financier Behind the Savings and Loan Scandal, Dies at 90
    Saudi Arabia and the al-Qaeda Monster (3/5)
    Maryland Residents Voice Opposition to Natural Gas Fracking Export Facility
    Supreme Court Ruling Gives Wealthy Individuals More Influence Over Elections
    What are the Saudis Afraid Of? - Madawi Al-Rasheed (2/5)
    Baltimore's MICA Adjunct Professors Set to Vote on Unionization
    Boycott of Israel Moving to Next Level?
    Hypocrisy Dressed Up as "Realism" Justifies American Alliance with Saudi Dictatorship
    Immigration Reform in the Shadows of Cesar Chavez's Legacy
    Leaked Senate Report Shows Use of Torture As "Ineffective"
    UN Report Says Climate Change Will Threaten Food Production Worldwide
    The Hypocrisy of US Calling for Enforcement of International Law
    How the Ecuadorian Economy Grew in a Global Recession
    'Shadows of Liberty' Trailer
    Kristina Borjesson on Why CBS Shut Down Her investigation into Flight 800 (2/8)
    Glen Ford on Racism in the American Media (3/8)
    Paul Jay on What Drives Corporate Media and What Drive The Real News (4/8)
    Creating a New Media Paradigm After Citizens United (5/8)
    Should The Left Engage with the Mainstream Media? (6/8)
    What Is the Financial Backing For The Real News? (7/8)
    Standing up to Character Assassination (8/8)
    Oligarchs, Fascists and the People's Protest in Ukraine
    TRNN Debate: Is Obamacare In the Interest of Workers?
    Too-Big-To-Fail Advantage Remains Intact For Big Banks
    Obama and the Saudi Agenda
    TRNN Replay: Investigating the Saudi Government's 9/11 Connection and the Path to Disilliusionment - Sen. Graham on Reality Asserts Itself pt 1
    The Iraq War's Real Legacy
    Petitions with 100,000+ Signatures Call for Snowden's Passport to be Reinstated
    We Need to Harness People Power - Andy Shallal on Reality Asserts Itself (4/4)
    BC Pipeline Fight and Quebec Elections - The Canada Panel
    Jonathan Schell - 1943-2014: Board Member of TRNN on Why We Need The Real News
    Teachers on Strike from the UK to Argentina
    Connecticut Poised to Become First State with $10.10 Minimum Wage
    Oil Spill Threatens Wildlife and Local Economy
    DC School Test Scores Up, But Poor Black Kids Are Doing Worse - Andy Shallal on RAI (3/4)
    Obama's Proposal To End NSA Bulk Data Collection Won't Protect Privacy
    How Google, Apple & The Biggest Tech Companies Colluded to Fix Workers' Wages
    An American Should be One that Questions Their Government - Andy Shallal on RAI (2/4)
    What's Driving Putin & Obama's Posturing on Ukraine?
    Hundreds of Students & Faculty Occupy College Campus to Fight Cuts to Public Higher Ed
    Due Process 'Impossible' In Harsh Death Sentencing Of Over 500 Muslim Brotherhood Members
    Has Anglo-American Capitalism Run Out of Steam?
    Being the "Other" in America - Andy Shallal on Reality Asserts Itself (1/4)
    TRNN Debate: Should Baltimore 'Ban The Box'?
    How Fallujah Became the Iraqi Government's New Battleground
    Why I Decided to Blow the Whistle on the NSA
    NASA Climate Predictions Show Serious Threat To Humanity
    Professor Who Teaches Israel-Palestine Conflict Accuses College of Violating His Academic Freedom
    CIA and NSA Wrongdoing Requires Independent Investigation, Says Former Church Committee Staff
    Are Tuition Breaks Enough To Combat High Student Debt And Low Graduation Rates?
    Industries Across the U.S. Are Stealing Wages From Their Lowest Paid Workers
    Who In Ukraine Will Benefit From An IMF Bailout?
    NSA Recording All International Calls From U.S.
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (2/2)
    BP Gets Green Light to Drill in Gulf, But Has Safety Improved?
    Residents Still Not Drinking Tap Water Two Months After West Virginia Spill (1/2)
    Libya's Descent Into Turmoil Three Years After NATO Intervention
    From Pipelines to Peladeau - Canadian Report
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (1/2)
    Congressional Progressive Caucus Budget Strikes Back Against Austerity
    Libya Three Years Later - Chaos and Partition
    Why Was Gaddafi Overthrown?
    Should Ukraine and West Accept De Facto Crimea Joining Russia? (2/2)
    Tony Benn Saw Socialism as the Culmination of Democratization
    Why Didn't Bush/Cheney Attack Iran and Can Obama Make and Sell a Deal? - Gareth Porter on Reality Asserts Itself (3/3)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi? (2/2)
    Crimea Referendum: Self Determination or Big Power Manipulation? (1/2)
    Sen. Graham: President Must Side with Openness About CIA and 9/11
    Manufacturing a Narrative for War - Gareth Porter on Reality Asserts Itself (2/3)
    Protesters Hit the Streets of Brooklyn to Demand $15 Minimum Wage
    Hammer: 'Moral Bankruptcy' Behind Massive GM Recall
    White House Withholds Thousands of Documents from Senate CIA Probe
    I Grew Up Believing in Time Magazine's Version of America - Gareth Porter on RAI (1/3)
    Western European Banks Vulnerable to Ukrainian Sovereign Debt Crisis
    TRNN Debate: What's Driving Inflation in Venezuela? (2/2)
    CIA vs. Senate: Who Is Obama Protecting?
    Will Tipped Workers Get Excluded Again From Minimum Wage Hike?
    TRNN Debate: What's Driving Inflation in Venezuela? (1/2)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi?(1/2)
    TRNN Replay: A Look at Who's Poised to Become No.2 at the Fed
    How Right-Wing Nationalism Rose to Influence in Ukraine (2/2)
    Netanyahu Attacks Boycott As Campaign Enters New Phase
    Moving Towards a Police State - Michael Ratner on Reality Asserts Itself (7/7)
    Fighting Reagan's Secret, Illegal Wars - Michael Ratner on Reality Asserts Itself (6/7)
    Puerto Rican Independence Movement and Cuba Further Radicalized Me - Michael Ratner on RAI (5/7)
    The Butcher of Attica - Michael Ratner on Reality Asserts Itself (4/7)
    MLK and a Radicalizing Moment in American History - Michael Ratner on Reality Asserts Itself (3/7), Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

    All original content on this site is copyright of The Real News Network.  Click here for more

    Problems with this site? Please let us know

    Linux VPS Hosting by Star Dot Hosting