John Kenneth Galbraith died on April 29, 2006 at the age of 97, having led a life filled with honor and accomplishment. Unfortunately, his ideas are largely ignored by today’s economics profession. His death marks an occasion for spotlighting the continuing relevance of those ideas and the ideological narrowness of a profession that makes no space for them.
Jeff Faux and Gene Sperling are two titans of Democratic economic policy. Last week, at a forum sponsored by the Campaign for America’s Future, they debated the core economic policy differences that define and divide old Democrats from new Democrats.
Jeff Faux is the founder and former president of the progressive Washington think tank the Economic Policy Institute. Gene Sperling was the head of President Clinton’s National Economic Council from 1996 to 2000. Both have just published new books. Faux’s book is titled The Global Class War: How America’s Bipartisan Elite Lost Our Future—and What It Will Take to Win It Back. Sperling’s book is titled The Pro-Growth Progressive: An Economic Strategy for Shared Prosperity.
We condemn the illegal proclamation of a state of national emergency, which has led to the violent dispersal of peaceful assemblies, the arbitrary arrests, and the curtailment of press freedom. We expect Gloria Arroyo’s unconstitutional responses to even intensify, but by doing so, she is accelerating the destruction of her unwelcome rule.
The people’s defiance expressed in the huge demonstration of February 24 crystallizes the imperative of facing head-on Arroyo’s repressive response. As each day passes, many people are becoming more receptive to the idea that it is alright to use any means necessary to oust Mrs. Arroyo. More and more people now believe that extra-constitutional means is an acceptable way to remove an incorrigible, unrepentant Arroyo, who has increasingly relied on crypto-dictatorial rule to preserve her power.
The government has been putting a lot of positive spin on the appreciation of the peso and the surge of investments in the stock market. For the past weeks, the financial sector has indeed been showing positive signs. With the peso strengthening against the US dollar, even breaching the P53/$1 level coupled with the decline in the 91-day treasury bill rates and the surge of investments in the stock market, one can be tricked into thinking that all is well with the Philippine economy, as the Arroyo administration would like to put it.
Thirty years ago the economic debate between Democrats and Republicans was framed in terms of the case for bigger versus smaller government. Democrats emphasized market proclivities toward monopoly and inequality, failure of markets to efficiently provide public goods, market incentives to pollute, and above all the tendency of markets to produce less than full employment. Republicans countered that such market failures were over-stated. More importantly, using government to solve market failures could lead to even worse problems of government failure associated with bureaucratic inefficiency, policy misjudgments, and private capture of regulatory agencies. In an imperfect world, Republicans argued that it is better to live with the problem of market failure and opt for small government, than try and solve it by resort to big government.
Financing for development is evidently a key issue in the global response to the challenge of meeting the Millennium Development Goals (MDGs). It is a tough challenge to raise additional revenues to fight global poverty and foster all-sided development. Notwithstanding recent initiatives for significant debt relief for the poorest heavily indebted countries and some trade concessions to developing countries, much still has to be done to generate enough resources for development and anti-poverty spending.