May 22, 2013
We Told You So
Posted on May 18, 2012
By James K. Galbraith, The Baffler
And the same is true for other countries. China, for example, has long made energy choices favoring coal partly because the resulting power plants are diffuse and militarily expendable. In a secure world, that country would be far more willing to develop its vast hydroelectric potential, as the then-invulnerable United States did in the 1930s. Hydropower is carbon-clean, but militarily exposed. A stable reduction of military fears is a key step toward opening up markets that can potentially permit resolution of collective problems on the grand scale.
In short conclusion: from the beginning, the Obama presidency will face acute situations requiring immediate action, especially in oil and housing. It should aim for early victories in these areas as the foundation stone for intermediate- and long-term programs. For the medium term, institution building and the restoration of competent and effective regulatory power over the financial system—both national and international—will be key.
For the long term, the goal should be nothing less than the transformation of our energy base and the solution of our environmental challenges—the rebuilding of America. And that can be done only in an international financial climate made possible by a return to multilateral decision-making and a commitment to collective security. The American people are ready for this. President Obama should be prepared to explain that leadership in a world community—leadership of collective action on the grand scale—is America’s true destiny. It is not in futile warfare, but in great endeavors, that a great nation finds its future, its purpose, its place in history, and prosperity, as well as security, for its people.
James K. Galbraith is an economics professor at the University of Texas at Austin, where he holds the Lloyd M. Bentsen Jr. Chair in Government/Business Relations. He writes about economics for numerous publications. His latest book, “Inequality and Instability: A Study of the World Economy Just Before the Great Crisis” (Oxford University Press, 2012), is available here.
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