Inequality and Instability by James K. Galbraith
A Study of the World Economy Just Before the Great Crisis

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Synopsis

As Wall Street rose to dominate the U.S. economy, income and pay inequalities in America came to dance to the tune of the credit cycle. As the reach of financial markets extended across the globe, interest rates, debt, and debt crises became the dominant forces driving the rise of economic inequality almost everywhere. Thus the "super-bubble" that investor George Soros identified in rich countries for the two decades after 1980 was a super-crisis for the 99 percent-not just in the U.S. but the entire world.
Inequality and Instability demonstrates that finance is the driveshaft that links inequality to economic instability. The book challenges those, mainly on the right, who see mysterious forces of technology behind rising inequality. And it also challenges those, mainly on the left, who have placed the blame narrowly on trade and outsourcing. Inequality and Instability presents straightforward evidence that the rise of inequality mirrors the stock market in the U.S. and the rise of finance and of free-market policies elsewhere. Starting from the premise that fresh argument requires fresh evidence, James K. Galbraith brings new data to bear as never before, presenting information built up over fifteen years in easily understood charts and tables. By measuring inequality at the right geographic scale, Galbraith shows that more equal societies systematically enjoy lower unemployment. He shows how this plays out inside Europe, between Europe and the United States, and in modern China. He explains that the dramatic rise of inequality in the U.S. in the 1990s reflected a finance-driven technology boom that concentrated incomes in just five counties, very remote from the experience of most Americans-which helps explain why the political reaction was so slow to come. That the reaction is occurring now, however, is beyond doubt. In the aftermath of the Great Financial Crisis, inequality has become, in America and the world over, the central issue.
A landmark work of research and original insight, Inequality and Instability will change forever the way we understand this pivotal topic.
 

About James K. Galbraith

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James K. Galbraith is professor at the Lyndon B. Johnson School of Public Affairs, the University of Texas at Austin, where he holds the Lloyd M. Bentsen Jr. Chair in Government/Business Relations. He is a leading economist whose books include The Predator State, Inequality and Industrial Change, and Created Unequal.
 
Published February 29, 2012 by Oxford University Press, USA. 344 pages
Genres: Business & Economics. Non-fiction

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His team members cross-checked both domestic and international data on earnings, employment and population, and they processed the data using a modern refinement of older econometrics methods, which allowed them to compare global, regional, national and subnational aggregations.

May 15 2012 | Read Full Review of Inequality and Instability: A...

Business Week

The U.S. is an exception since our “prosperity is associated with rising income inequality.” But even this exception Galbraith dismisses because in America, inequality didn’t broadly rise through society;

Apr 05 2012 | Read Full Review of Inequality and Instability: A...

London School of Economics

Case in point, despite employees anxieties in wealthy nations there is little evidence for the view that rising international trade and competition from low-wage countries have played a role in inequality, because wage inequality has not been the subject of dramatic expansion in inequality in the...

Dec 09 2012 | Read Full Review of Inequality and Instability: A...

New Economist

By 2001, most Kansans had become enraged at Abrams’ war on science and elected a strong new majority to the Kansas School Board dedicated to teaching science in Kansas science classes.

Jan 10 2014 | Read Full Review of Inequality and Instability: A...

New Economist

For if “the history of commercial banking belongs to the Italians and of central banking to the British,” writes John Kenneth Galbraith , “that of paper money issued by a government belongs indubitably to Americans “ (John Kenneth Galbraith, Money, Whence it Came, Where it Went ).

Oct 07 2013 | Read Full Review of Inequality and Instability: A...

New Economist

Given that premise, the obvious question is the one I raised above – why do those same CEOs create the perverse incentives that corrupt the loan officers and create their overwhelming incentive to extort appraisers to commit appraisal fraud if the CEO is dedicated to preventing appraisal fraud?

Dec 02 2014 | Read Full Review of Inequality and Instability: A...

New Economist

The Fed had the advantage of our regulatory experience, the history of severe bank losses on such loans, the Krystofiak/MARI study, and copious testimony about the endemic abuses/frauds of liar’s loans and multiple Fed hearings – plus the fact that the industry called the loans “liar’s loans.” Ne...

May 21 2014 | Read Full Review of Inequality and Instability: A...

New Economist

Lowenstein declares (1) that Blankfein was right – Goldman really was doing “God’s work,” (2) virtually no financial elites committed crimes, (3) any crimes they may have committed were trivial and played no material role in causing the crisis, (4) those that wish to hold fraudulent elites accoun...

May 27 2011 | Read Full Review of Inequality and Instability: A...

New Economist

My reading on the subject is that all money issued by Treasury directly is issued under the terms of the 1862 legal tender act that enabled the issuing of “Greenbacks” under Lincoln and that act specifically forbids the money from being used as reserves and is identified as an “inelastic” money i...

Dec 11 2013 | Read Full Review of Inequality and Instability: A...

New Economist

Congress must “combat” their effort to achieve equality by denying equality because DOMA’s proponents oppose “the notion of same-sex ‘marriage.’” The four reasons the proponents claim provide a legitimate government interest for DOMA reprise the three I have discussed above and add “preserving s...

Jun 27 2013 | Read Full Review of Inequality and Instability: A...

New Economist

There is something wondrous about the audacity of purporting to use one leading form of loan origination fraud to “compensate” for the other leading form of loan origination fraud in order to aid the third epidemic of fraud – the fraudulent sale of fraudulently originated mortgages to the seconda...

Feb 28 2014 | Read Full Review of Inequality and Instability: A...

New Economist

That reduction has been the result of millions of unemployed leaving the labor force altogether over the past year, and from jobs ‘churning’ from declined in full time jobs to increases in part time and temporary jobs.

Jan 09 2014 | Read Full Review of Inequality and Instability: A...

New Economist

So, maybe we are still in good shape in arguing that the Fed redeems the original debt of the United States to the banks incurred for deficit spending, and does so with new government money which increases the money supply when added to the reserves of the banks.

Jun 06 2011 | Read Full Review of Inequality and Instability: A...

New Economist

The SEC allowed Lehman’s securities frauds to continue for many years when it was not only reviewing Lehman’s securities filings but also serving as Lehman’s “consolidated supervision” authority.

Sep 11 2013 | Read Full Review of Inequality and Instability: A...

New Economist

As the Vice President said, reinvention begins with a ban on the use of dollar goals to evaluate IRS employee performance — goals that can give some IRS agents the wrong incentives — just as parking ticket quotas can give police officers the wrong incentives.

Aug 29 2013 | Read Full Review of Inequality and Instability: A...

New Economist

Jeff Connaughton has just authored a major insider account revealing and explaining the failure of the politicians and regulators to hold the banksters who drove the financial crisis accountable and to remove the most obvious risks of future crises.

Oct 21 2012 | Read Full Review of Inequality and Instability: A...

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