Lehman Legacy and the Predator State The Real News Network go to original September 15, 2009
Galbraith: One year after crash, a new profit model has emerged for US banks, free public money
It has been 365 days since Lehman Brothers collapsed, triggering a global economic crisis whose effects are only now being truly felt. The events set off an unprecedented set of actions by the US government, but these actions have still yet to see any new regulations for Wall St. Reports indicate that banks are back to major profits, but economist James K. Galbraith points out that this is not the same kind of profits as banks were making before the crisis. With the collapse of the inflated home market, banks are now reaping profits through public money that is being offered to them at little to no interest through the Federal Reserve, money that they turn around and invest in government bonds, creating a public money machine for the banking sector. Despite all this public funding, says Galbraith, banks are continuing to avoid lending in the public's interest. Bio: James K. Galbraith teaches economics at the University of Texas where he is a Senior Scholar of the Levy Economics Institute and the Chair of the Board of Economists for Peace and Security. The son of renowned economist, the late, John Kenneth Galbraith, he writes a column called "Econoclast" for Mother Jones, and occasional commentary in many other publications, including The Texas Observer, The American Prospect, and The Nation. He is an occasional commentator for Public Radio International's Marketplace. He directs the University of Texas Inequality Project, an informal research group based at the LBJ School.
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Editorials | Opinions | September 2009 
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