The Financial Power Elite

The last few decades, since the 1970s, and particularly since the 1980s, have seen the rapid financialization of the U.S. economy and of global capitalism in general, as the system’s center of gravity has shifted from production to finance...the state has intervened in each crisis as the lender of last resort, and sought to support the financial system. The result over decades has been the massive growth of a financial system in which a debt squeeze-out never quite occurs, leading to bigger financial crises and more aggressive state interventions.

One indication of this failure to wipe out debts forcefully despite repeated credit crunches, and of the resulting growth of the financial pyramid, is the historically unprecedented increase in the share of financial profits (i.e., the profits of financial corporations), rising from 17 percent of total domestic corporate profits in 1960, to a peak of 44 percent in 2002. Although the share of financial profits fell to 27 percent by 2007, on the brink of the Great Financial Crisis of 2007-2009 (it)...rebounded in the first three quarters of 2009 to 31 percent, well above its pre-crisis level—thanks to the federal bailout (and due to the fact that industrial profits remained mired in recession).



Nowadays it is common for economists to present the Great Financial Crisis as just another, if more severe, instance of financial crisis, part of a recurring financial cycle under capitalism.14 However, while there have been many other periods of financial mania and panic in the last century—the most famous being the proverbial “roaring twenties,” which led to the Stock Market Crash of 1929—today’s massive secular shift toward increased financial profits, lasting over decades, is historically unprecedented.

This represents an inversion of the capitalist economy—what Paul Sweezy referred to in 1997 as “the financialization of the capital accumulation process.” In previous periods of capitalist development, financial bubbles occurred at the peak of the business cycle, reflecting what Marx called the “plethora of money capital” at the height of speculation just preceding a crash. Today, however, financial bubbles are better seen as manifestations of a secular process of financialization, feeding on stagnation rather than prosperity. Speculative expansions serve to stimulate the underlying economy for a time, but lead inevitably to increased financial instability. The financial system was thus historically transformed into a casino economy, beginning in the 1970s in response to the reappearance of stagnation tendencies within production—and accelerating every decade thereafter...

http://monthlyreview.org/100501foster-holleman.php

By 2007, at the onset of the Great Financial Crisis, the percentage of the Forbes 400 deriving its main source of wealth from finance had soared to 27.3 percent, while finance and real estate together came to 34 percent, with over a third of the richest 400 Americans now deriving their wealth principally from FIRE.

The nearest competitor at this time—technology—accounted for about 10.8 percent of Forbes 400 wealth. Manufacturing had sunk to 9.5 percent, although it now slightly exceeded media/entertainment/communications (9.3 percent).

The shift over the quarter-century had been massive. In 1982 manufacturing had exceeded finance as a source of wealth by 6 percentage points. In 2007, the positions had been reversed, with finance exceeding manufacturing by 18 percentage points; while finance plus real estate exceeded manufacturing by 25 points.


Purely non-productive, claiming over 30% of economic profits -- = rentier economy.

And it's these people our politicians answer to.

..of investors, disaster capitalists, and other crony corporate slime.