James K. Galbraith holds the Lloyd M. Bentsen, Jr. Chair of Government/Business Relations at the Lyndon B. Johnson School of Public Affairs, the University of Texas at Austin.
Is the proposal of the President to limit big banks heading in the right direction? What is your take on it?
Yes. It’s in the right direction, and it establishes some important points of principle. It does not go far enough, or make effective use of regulatory powers that the government already has.
How would you rate the chances of the new proposals for legislation by Congress?
I’m a poor judge but I would expect this legislation would have powerful popular backing.
What is the state of macro economic risk today? Does US-Economy need a second round of fiscal stimulus?
Yes, but it’s not so much a question of “stimulus” – a word with short-term connotations – as of taking necessary steps to stabilize incomes and state and local budgets, to restore employment, to resolve housing debts, and to set a new strategic direction for public and private investment. I see this as having medium-and long-term components not captured by the hit-and-run notion of “stimulus.”
Thank you very much.
James K. Galbraith holds the Lloyd M. Bentsen, Jr. Chair of Government/Business Relations at the Lyndon B. Johnson School of Public Affairs, the University of Texas at Austin. He is a Senior Scholar with the Levy Economic Institute, and Chair of the Board of Economist for Peace and Security, an international association of professional economist. Galbraith is the author of several books.