JG here is James Galbraith, who is, believe it or not, a bit too conservative/capitalistic for me. He is, however, still way, way, way over in the proper direction relative to anyone who has Barack Obama's ear. I would be remiss were I not openly to say that I've learned a great deal by listening to, and reading, him. I highly recommend that everyone contemplate the following highlights:
JG ...regulation of the debt issue, a transformation and restructuring of the banking sector, new institutions to provide employment to those who need it, and a strengthened system of comprehensive social insurance. All of those things were part of the New Deal formula, and they are all, I think, palpably essential, not to restore growth and full employment, but to face the much more urgent task of preventing any imminent disaster.
JG: I think that ultimately the decision on the future of Europe will be made in Germany, and Germany has to decide, does it want it or not? If it wants it, it has to take minimal steps to stabilize it on the same principles on which they stabilized the East, and on which they built the Federal Republic in the first place. And if they don't want it, well, it will go away.
RS: I think even if they want it, they're not going to stabilize it.
JG: In which case they'll lose it, and then we can see what is left. But when it's lost, Germany's going to have the problem it had before of an appreciating currency, and an industry that quickly loses competitiveness, and there'll be higher unemployment. And its markets will have collapsed and its debts won't get paid.
JG: It's fair to characterize how the media represent things, but an underlying fact is that the German Federal Republic was built in the postwar years on social democratic principles, and I imagine a large part of the German population still shares those principles.
...one needs to recognize that you have a project which has built up a standard of living of the European continent, and that's a project of integration. Integration has a lot of efficiencies associated with it. In any event it creates a world in which there are cross-border interdependencies. And if you want to break them up, you can, but the price is enormous. In the experience that we've had recently, it's on the order of 40%.
... the dominant European narrative of the United States now as then is utterly misleading. It's the notion that we have somehow in the thirty years since Ronald Reagan transformed ourselves into a free-market, deregulated, privatized, flexible labor market, weak-welfare-state country, which, if you just cast your memory back to the 60"²s and 70"²s, a totally unrecognizable view of the country, a country that was built by Roosevelt and Kennedy and Johnson, especially Roosevelt and Johnson, and which had extended even into the Nixon administration, which had and has a very substantial social insurance, public investment and regulatory framework. Many things about this have been under assault, some of them have failed entirely, including the regulation of finance, but this is not a Hayekian vision that has triumphed, but rather the one I described in my book, The Predator State. The real politics of the country controls these apparatuses and how much of the benefits are diverted to cronies and oligarchs and political constituents, which captures what happened in the Clinton and the Bush years – and ongoing, of course.
Read the whole interview: Source: James Galbraith on Europe, Greece (and Syriza), Germany and America | Yanis Varoufakis.