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James Galbraith in the LA Times: Stimulus Alone Can’t Fix What’s Broken

15 Aug

We’ve been pointing people in the direction of James Galbraith for a long time to try to get thinking people to face the truth that massive fraud in the banking system cannot be fixed with stimulous and austerity measures. When the house is on fire, it’s not time to break out the marshmallows…

But it seems no one can hear him. Perhaps this latest piece of his in the LA Times will help change that… But it is hard to imagine, as the people with the power are all beholden to the thieves and the rest of us seem to have no power to cause any sort of change in the political sphere. Washington goes along doing the same old same old cowtowing to the bankers, big oil, big pharma, big ag, and big military and the US population seems to have crawled into a hole and gone to sleep.

Perhaps when the foodstamps get cut off and the military hit the streets, someone will wake up… but by then it will probably be too late.

Meantime, Galbraith lays it out over and over like a broken record, and we just keep pointing the lens in his direction.  Thanks James, for keeping it up in spite of everything. We’re glad you do it.

 

Fixing the economy: We got it wrong

 

While Galbraith takes the time to go through the analysis from front to back in terms of the Obama economists and the road taken and roads missed, his bulls-eye comes later in the article, here:

In fact, stimulus alone was never going to bring recovery. This crisis was caused by financial collapse, rooted in massive banking fraud. The financial system is our economic motor and when it fails it cannot be revived simply by pouring money on it, any more than a wrecked reactor can be restarted just by adding fuel. Team Obama faced a situation not seen since the 1930s — a worldwide banking meltdown.

The financial system needed to be rebuilt — and it still does. But Team Obama chose to overlook this. The result was debt-deflation. Falling asset prices tipped more and more households into insolvency, business stagnated, tax revenues dropped, states and localities cut their budgets and deficits widened. The situation is similar in Europe, with countries rather than households in the deepest trouble, and wild rumors attacking the shares of even the biggest banks.

Read the entire piece here

 

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