Financialization Era - how banking welfare captured our economy

Financialization Era – how banking welfare captured our economy and ravaged the wealth of the working and middle class. Building profits through financial debt leverage.

The American banking system has transformed the economy into one enormous speculative casino with bells and whistles and free cocktails for those that participate. The problem of course is that most don’t have excess income to drop into the financial slot machines. Now banking in better times should be seen as the lubricant of the economy. It allocates capital to areas in the economy where actual real growth was occurring. Today the financial sector operates as an incestuous industry funding growth in its own industry. A snake swallowing its own tail but when the inevitable end comes, it is society that is forced to pick up the tab. Ultimately profits have to come from something real and not just skimming imaginary profits from interest. This banking welfare is largely a reason why our economy is faltering on the vine and Wall Street banking profits are soaring. It is no coincidence that as debt pilfered the economy that financial profits soared. We are living in era that can be dubbed the financialization of the American economy.



The above chart really highlights the destruction of our economy in a rising debt era. In a low debt era financial profits were held in check from the 1950s to the early 1980s. Financial profits as a share of GDP hovered around one percent. That all changed in the 1980s and finally reached an apex in our Great Recession. The financial sector grew its profit margins at a time where more Americans were borrowing and going into debt to finance a lifestyle that was setup for a solid middle class. Yet the middle class was not there and many used debt to play a game of pretend for a few decades. All this was playing out during a time when the top 1 percent that were heavily vested in the banking sector were usurping wealth from the real economy.



http://www.mybudget360.com/financialization-era-banking-welfare-captured-our-economy-wealth-financial-debt-leverage/

part 1 + 3 should be required. part 3 is all about this and written in 2006!

Just look how getting rid of unions has helped the U.S. retain manufacturing jobs. It's paradise I tells ya!