(2001) characterizes the recent past as a period of instant speculation and says that we are now thought to be facing a recession and possibly even a depression (though he does not necessarily believe that there is a truly meaningful distinction between the two). However, the Bush administration
does, according to Galbraith (2001) perceive the United States as poised on the recessionary precipice and has consequently given support for two measures that are purported to have the capacity to strengthen the economy. One of these measures is reliance on the Federal Reserve, or a manipulation of monetary policy. The second is a manipulation of fiscal policy through tax reduction.
The most significant portion of Galbraith's (2001) article in the context of the present report is his description of the total inadequacy of Federal Reserve monetary policy to stave off
a recession or a depression. Galbraith (2001) believes that ever since 1913, when the Fed was founded, there have been great hopes that its actions will be economically stabilizing, but that these hopes have never truly materialized. Galbraith (2001) sees the period from 1913 to the present as one in which a succession of boom and bust, or inflation and recession, has continued regardless of how the Fed has deployed its monetary tools. The Fed did not, in Galbraith's (2001) opinion, do much at all to influence the economy during the Great Depression. More significantly, Galbraith (2001, p. A15) states "during World War II, when inflation was a serious menace and we took life seriously, Federal Reserve action was simply set aside."
Galbraith (2001) questions the notion that bankers have some peculiar and powerful effect on the economy. He further contends that the Fed and its actions represent little more than a convenience of having a remedy to economic ills that can simply be announced without involving legislators and without much in the way of regard for...