In This Review

The End of Normal: The Great Crisis and the Future of Growth
The End of Normal: The Great Crisis and the Future of Growth
By James K. Galbraith
Simon & Schuster, 2014, 304 pp

In explaining the financial crisis of 2008 and its effects, Galbraith positions himself outside the conventional conservative-liberal spectrum. In his view, technological change in recent years has significantly reduced the need for some forms of labor, lowering employment levels as some jobs have become obsolete and shifting the distribution of income away from labor and toward capital and wealthy superstars. That shift has not produced levels of demand sufficient to create significant numbers of jobs. This is a more nuanced version of the suggestion that the U.S. economy (and perhaps others) has moved into a period of so-called secular stagnation. Galbraith urges Americans to adjust their country’s institutional structures—and their personal expectations—to accommodate a lower rate of growth than the one that prevailed during the past half century. He argues that U.S. economic policy should aim to provide greater income stability through increased social insurance, a higher minimum wage (which would reduce the demand for low-wage immigrant workers), and a higher estate tax. He also takes reasoned but forceful swipes at big banks, whose contributions to the well-being of the U.S. economy are highly doubtful, and criticizes the outdated and oversize national security sector.