There’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive.The inside job, a film directed by Charles Fergusson, does a great job at describing the rise of the financial leviathan, depicting the "Wall Street - Washington corridor" that Johnson wrote about. It has become a ideology battle that involves government and their regulatory agencies, investment banks and investors and academic. For the Universities - Wall Street corridor, see J. Fox.
Wednesday, April 13, 2011
Hostages of Wall Street ?
The political weight of Wall Street - that increased over the past decades - could be viewed as a stage of a financialization process. Proponents of this concept have advanced the idea that the financial sector is increasing in size and taking a life of its own. The phenomenon can express itself in terms of the increasing level of debt as percentage of GDP. For example the total debt in the U.S. rose from 140 percent to 328.6 percent from 1973 to 2005. Pay increased dramatically, so did the financial-industry profits as a share of U.S. business profits.
The U.S. financial sector gained so much power that S. Johnson, former chief economist at the International Monetary Fund and a professor at the MIT, actually argues that it has become a kind of oligarchy: