Galbraith: Recovery Reports Premature

 

Meet James Galbraith, a Professor of Government in the LBJ School of Public Affairs at the University of Texas. Listed among his notable positions on his faculty Web page is Executive Director of the Joint Economic Committee, and the list of articles quoting him is a mile long. Perhaps those of you who have kept a close eye on news about the economy know of him as the “different” voice in the crowd of economic analysts, and that is what he seems to present.

Today’s article is a case in point: “A Truly Extraordinary Slump” Reports of Robust Recovery Premature, James Galbraith Says.” He says it’s going to take a very long time for the country to recover.

Galbraith points his finger at banks who, because of the housing bust, are unwilling to lend. Because of this credit contraction, the economy won’t be able to recover as it had done in the past. Right now, the only ones benefitting from the current stabilization are those on Wall Street.

Galbraith predicts the unemployment rate will continue to rise into 2010 and decline "very slowly" thereafter. The U.S. economy needs "substantially greater policy intervention."

He calls for greater government intervention to prevent housing foreclosures, create “smart jobs” that not only put people to work but that work toward a sustainable future in the form of renewable energy, and add aid to help Baby Boomers transition into retirement.

Galbraith’s bottom line: We need another stimulus package.

The only analysis of this find for me contains a lot of cussing and cursing, and that’s not lady-like at all. So, I’ll leave it up to you to decide what Galbraith’s voice means in the grand scheme of things.

A penny for your thoughts?