The broken US economy breeds inequality and insecurity. Here’s how to fix it | James K Galbraith

On one side, oceans of wealth and power. On the other, precarity and powerlessness. But we have the tools for reform

Rising interest rates, a falling stock market, a seesaw in the price of gas, a high dollar and chaos in world finance - we see in all this, once again, the folly of trying to run the world's largest economy through a central bank. It's time to rethink the basics: what has happened in America? And what should be done?

Adam Smith wrote: Wealth, as Mr Hobbes says, is power." Today in the United States we find islands of wealth and power on one side and an ocean of precarity and powerlessness, alongside poverty, on the other. This is a structural development over 50 years, the effect of politics and policies, but also of industrial change, globalization and new technologies, with intense regional, social, demographic and political implications.

James K Galbraith holds the Lloyd M Bentsen Jr chair in government/business relations at the Lyndon B Johnson School of Public Affairs at the University of Texas at Austin. In the 1970s, he drafted the monetary policy oversight provisions of the original version of the Humphrey-Hawkins Full Employment and Balanced Growth Act