Private Opulence and Public Squalor in the US

Banks collapsing, high inflation and countries moving away from the dollar spell big economic trouble for the United States. Economist and author James Galbraith joins Scheer Intelligence host Robert Scheer in discussing how the dwindling path of U.S. economic decision-making has led to the current state of affairs and the role of policy, including the actions of the Federal Reserve, politics and corporate takeover, in the state of the country.

Many of the problems defined by Galbraith and Scheer revolve around the shifting of power in the financial sector, particularly with an institution like the Federal Reserve. Rather than serving the people, “the Federal Reserve was always constructed to be responsive, to have the voices of the banking system strongly represented as the banking systems become more and more concentrated in the hands of the very largest banks. Their voices have gained evermore weight,” Galbraith said.

Internally, the rules have shifted towards the financially powerful, and Galbraith uses the Bush administration as a major example of this move. Whether it is the expansion of Medicare Part D, which included no control over the price of drugs, helping the pharmaceutical industry, or having a major corporate figure in Dick Cheney as vice president, the shift “uses the established state apparatus to support powerful clients, which is very far from being a free market approach to economics; it's really crony capitalism.” Democrats, Galbraith says, also contribute to this as “they pursued the same agenda of deregulation, which once was deeply embedded in the financial system, [and] was just a recipe for meltdown, for disaster. And we're seeing the consequences as well, of failure to maintain core infrastructure, which has been going on for a long time.”

The active moving away from the dollar, largely as a result of hegemonic US foreign policy, is also a major problem facing the nation. With Russia, China and India committing to trade cooperation with one another, the dollar dominance that once stood strong is wilting away. “We are seeing the emergence of a non-dollar and also non-Euro zone in world trade and commerce, which is the first time that's happened seriously in, well, quite a long time,” Galbraith said.