Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWolves of Wall Street: Financialization and American Inequality
from Dissent magazine:
Wolves of Wall Street: Financialization and American Inequality
By Colin Gordon - April 17, 2014
This series is adapted from Growing Apart: A Political History of American Inequality, a resource developed for the Project on Inequality and the Common Good at the Institute for Policy Studies and inequality.org. It is presented in nine parts. The introduction laid out the basic dimensions of American inequality and examined some of the usual explanatory suspects. The political explanation for American inequality is developed through chapters looking in turn at labor relations, the minimum wage and labor standards, job-based benefits, social policy, taxes, financialization, executive pay, and macroeconomic policy. Previous installments in this series can be found here.
Its no secret by now that the recent spike in American inequality, and the gains rapidly accruing to those at the upper end of the income distribution ladder, are driven in large part by financializationthe growing scale and profitability of the financial sector relative to the rest of the economy, and the shrinking regulation of its rules and returns. The success or failure of the financial sector has a disproportionate impact on the rest of the economy, especially when the combination of too much speculation and too little regulation starts inflating and bursting bubbles. And its returns flow almost exclusively to high earners. An overcharged finance sector, in other words, breeds inequality when it succeeds and when it fails.
A Short History of American Finance
Across the modern era, key moments of economic growththe railroad and heavy industry development of the 1890s, the advent of electricity and automobiles in the 1920s and 1930s, and the IT boom of the 1980shave been accompanied by parallel innovations in financial services. Each of these eras, in turn, was punctuated by a crisis in which speculation in new financial instruments, over-exuberance about their prospects, or outright chicanery turned boom into bust. The railroad boom of the nineteenth century yielded a wildly unregulated market for railroad securities and a series of market collapses. The emergence of a consumer-goods economy in the early decades of the twentieth century transformed both corporate finance and consumer credit and spilled the country into the Great Depression.
.......(snip).......
American Finance and American Inequality
The rise of the financial sector has fed inequality in a number of ways. First, the disproportionate growth of finance diverts incomes from labor (wages and salaries) to capital. Indeed, recent work by the International Labor Office suggests that financialization accounts for about half of the decline in labors share of national income (in the United States and elsewhere) since 1970.
But even more important than the slow siphoning off of labors share is the widening inequality within that share, as top earners pull away from the rest of the pack. Increased employment in finance has been accompanied by accelerating rates of compensation in the sector, from about $20,000 per year per employee (including secretaries and clerks) in 1980 to nearly $100,000 today. This is of course exaggerated at the top of the income spectrum. In 2004, by one estimate, the combined income of the top twenty-five hedge fund managers exceeded the combined income of all of the Standard and Poor top 500 CEOs. The number of Wall Street investors earning more than $100 million a year was nine times higher than the public company executives earning that amount. About 14 percent of the 1 percent are employed in finance, a share that has doubled since 1979. ............................(more)
The complete piece is at: http://www.dissentmagazine.org/online_articles/wolves-of-wall-street-financialization-and-american-inequality
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
2 replies, 537 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (6)
ReplyReply to this post
2 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
Wolves of Wall Street: Financialization and American Inequality (Original Post)
marmar
Apr 2014
OP
The wolves don't really do anything to make life better for the nation anymore.
Octafish
Apr 2014
#1
Octafish
(55,745 posts)1. The wolves don't really do anything to make life better for the nation anymore.
They just use money to make money -- great for those with money! Nothing real for 99 percent without it.
Thank you, marmar, for the heads-up on this research. I will viddy well over the coming fortnight.
1StrongBlackMan
(31,849 posts)2. Posted to to find after "Honeydos."