Sid Shniad wrote: > THE VANCOUVER SUN TUESDAY, JUNE 29, 1999 > > GALBRAITH WARNS OF U.S. BUBBLE > > Legendary economist cites 'another exercise in speculative optimism.' > > Ashley Seager, Reuters > > LONDON — Legendary "people's economist" John Kenneth Galbraith > warned Monday that the United States is facing a speculative bubble and > that the age of slump and depression is not past. > The author of the definitive work on the Great Crash of 1929 told an > audience at the London School of Economics that the U.S. is having > "another exercise in speculative optimism following the partial reversal > last year." > "When you hear it being said that we've entered a new era of > permanent prosperity with prices of financial instruments reflecting that > happy fact, you should take cover," he said. > The 90-year-old Harvard professor, who advised Democratic > presidents starting with Franklin Roosevelt and his "New Deal" in the > 1930s through to John Kennedy and Lyndon Johnson in the 1960s, > warned that the bubble could be followed by a painful recession. > "Let us not assume that the age of slump, recession, depression is > past. Let us have both the needed warnings against speculative excess and > awareness that the ensuing slump can be painful," said Galbraith, who has > written more than 40 books including the classic The Affluent Society. > He said the writings of the economist John Maynard Keynes will > come back into fashion with the inevitable slowdown, as governments seek > ways to alleviate its effects. Galbraith worked with Keynes in the late > 1930s. > He said that in spite of great increases in economic growth this > century and the release of many people from back-breaking toil in > agriculture, there are a great many poor even in the richest countries, and > notably in the United States. > "Urban poverty is the most evident and painful of the economic and > social legacies from the centuries past. The answer ... is rather clear: > everybody should be guaranteed a decent basic income. A rich country > such as the U.S. can well afford to keep everybody out of poverty. > "Some, it will be said, will seize upon the income and won't work. Let > us accept some resort to leisure by the poor as well as the rich." > Galbraith, a former U.S. ambassador to India in the 1960s, said one > of the major unfinished tasks of the present century and millennium is the > alleviation of global poverty. > He said that while the end of colonialism had been one of the great > achievements of this century, its collapse has often been following by > corrupt or inept government. > "Economic aid is important but without honest, competent > government, it is of little consequence." > He said there must be a mechanism to suspend a country's sovereignty > when necessary to protect against human suffering and disaster. > For Galbraith, the "greatest unfinished business" of the century is the > need to eliminate nuclear weapons. "The most urgent task now and of the > new century is to bring to an end the threat of Armageddon." -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
THE VANCOUVER SUN TUESDAY, JUNE 29, 1999 GALBRAITH WARNS OF U.S. BUBBLE Legendary economist cites 'another exercise in speculative optimism.' Ashley Seager, Reuters LONDON — Legendary "people's economist" John Kenneth Galbraith warned Monday that the United States is facing a speculative bubble and that the age of slump and depression is not past. The author of the definitive work on the Great Crash of 1929 told an audience at the London School of Economics that the U.S. is having "another exercise in speculative optimism following the partial reversal last year." "When you hear it being said that we've entered a new era of permanent prosperity with prices of financial instruments reflecting that happy fact, you should take cover," he said. The 90-year-old Harvard professor, who advised Democratic presidents starting with Franklin Roosevelt and his "New Deal" in the 1930s through to John Kennedy and Lyndon Johnson in the 1960s, warned that the bubble could be followed by a painful recession. "Let us not assume that the age of slump, recession, depression is past. Let us have both the needed warnings against speculative excess and awareness that the ensuing slump can be painful," said Galbraith, who has written more than 40 books including the classic The Affluent Society. He said the writings of the economist John Maynard Keynes will come back into fashion with the inevitable slowdown, as governments seek ways to alleviate its effects. Galbraith worked with Keynes in the late 1930s. He said that in spite of great increases in economic growth this century and the release of many people from back-breaking toil in agriculture, there are a great many poor even in the richest countries, and notably in the United States. "Urban poverty is the most evident and painful of the economic and social legacies from the centuries past. The answer ... is rather clear: everybody should be guaranteed a decent basic income. A rich country such as the U.S. can well afford to keep everybody out of poverty. "Some, it will be said, will seize upon the income and won't work. Let us accept some resort to leisure by the poor as well as the rich." Galbraith, a former U.S. ambassador to India in the 1960s, said one of the major unfinished tasks of the present century and millennium is the alleviation of global poverty. He said that while the end of colonialism had been one of the great achievements of this century, its collapse has often been following by corrupt or inept government. "Economic aid is important but without honest, competent government, it is of little consequence." He said there must be a mechanism to suspend a country's sovereignty when necessary to protect against human suffering and disaster. For Galbraith, the "greatest unfinished business" of the century is the need to eliminate nuclear weapons. "The most urgent task now and of the new century is to bring to an end the threat of Armageddon."
