Economic Strings Attached?

" Boost today from preliminary signs of economic recovery in the second half of this year but. Will this recovery come with strings attached. Liberal economist James Galbraith says there are four essential points to make about the expansion that come. One he says they will surely be very slow to restore employment. We've been talking about that a lot to we will emerge from the slump with an unchanged unpunished. Financials sector. And three he says there early easy buck off your back especially for speculators will be in commodities especially oil. Higher gas prices anybody. And a turnaround he worries will give the deficit -- the upper hand on tax hikes. And spending cuts well the man behind those bald spots is professor James -- and he joins us now for happy hour professor thank you very much for joining us. -- Is there anything. Anything -- weakened due to ensure the job creation higher green. Are indeed part of this economic recovery our average Americans going to be the last to benefit in all of this once again."

" The way things are going average Americans are certainly going to be the last but I would the extension package will help and on top of that what I would do. Does make out. Basically aid to states and localities open ended so they simply stop cutting services and laying off staff. And expand their -- infrastructure capital investment projects as rapidly as they reasonably can. I'm not about as much as I think we're prepared to do right now beyond at this sort of I'm actually going out and and offering jobs and creating jobs directly. The federal government which has so far not on the agenda."

" Doctor government having the and then when you look through this and you start to group. -- that's what I keep going back to the chicken an -- economy the catch 22 economy I don't know what we want to call it. But I can't figure out how private sector starts getting active until the government quits crowding the south."

" The government isn't crowding out the private sector right now it's not taking much in taxes is putting out more in spending. That's helping the private sector both in prison -- income and it's saving. The private sector problem is that there's no profit opportunities that and you -- I -- alive but still basically wants to say."

" And one that is staying away from the car show runs hot and from the housing market where there's a terrific oversupply. And does this is going to take some time to work out I think almost no matter what happens."

" Professor I have to agree with audio on this one look I didn't think early on strategy room talking about the first hundred days the Obama administration and frankly I've I've put it this way. Here is he's the CEO of government that's his company he's growing his company like you good CEO should give the guy is an eight for expanding government. Isn't that all of this is is Obama's seeing -- opening in making his government bigger and bigger and bigger."

" Well if you look at what happened did -- good total output millennium. The first quarter. It was business investment that simply collapse that was the major thing that drove it down inventory liquidation. But also actually government's weak relative to the fourth quarter of last year. Government was down by 4%. So we really haven't seen the beginning yet abject object. A fact of the stimulus package on government activity. -- yeah military overwhelmed in the first quarter."

" While in the in the states to their big fights and all the states across the country about had a suspended and who's going to get did -- you know the school districts all the there and Massachusetts are fighting about you know once school this is getting a lot of stimulus money the other one is it. Yeah this is the case about you know we did we -- obviously to get the private sector as strong have the government of smaller role in all of this. -- we get back. Back you know how I had a weekend is -- consumer confidence is it consumer spending is -- business confidence is it banks lending."

" The most important single thing is -- a financial position of the household sector and that's -- huge part of that is the housing problem. Until you deal with a foreclosure crisis the overhang of houses on the market. -- people are not going to be able to borrow because they're collateral is not going to be worth what they already know on their houses. That's the problem that could last -- long time if it's not dealt with very aggressively in the next phase of -- of this administration."

" Doctor -- I just got about ten seconds left I want to address this though it -- can the government ever spent barely. That someone's always on the wrong side of the government spend."

" Well -- the political issue now but I would I if you. Made -- resource situation for state and local governments a lot easier than some of these conflicts and a slowing things down would go away and that would be that would be helped."

" You move faster doctor James Galbraith I hope we don't end up and anarchy what all of these economists tell us how to run my money thank you."