Great article dissecting how the economy became so financialized -- leaving our real, people-based economy in the lurch. Love this positive ending to the article: How can the economy be rebalanced? Many solutions are well known to bank reformers and well-informed voters: Reinstate Glass-Steagall, or something very much like it. Insist on strong regulatory oversight of the banking sector, and give regulators the authority to do their jobs. End “too big to fail” banks, instead of encouraging their consolidation (as the government has done in recent years). Prosecute criminal bankers. Other solutions are equally important. The interbank database and shell company called MERS must be ended, so that financial institutions can’t collude against consumers and the states. The Federal Reserve must demand that banks perform their central economic function – responsible lending to consumers and job-creating businesses – rather than reward them for speculation and other forms of non-productive profiteering. (That’s why the choice of Federal Reserve head is so important.) Genuine shareholder reform is also needed, so bankers don’t overpay themselves at shareholder expense or use the bank’s coffers as a “get out of jail” card for massive settlements caused by their own misdeeds. Lastly, no comprehensive solution can be found until banks and other corporations are once again taxed at reasonable levels and the revenues are used to create well-paying jobs for the American middle class. A healthy economy needs banks that lend, and consumers with the money to buy. Until that happens we’ll be living in a highly financialized “Bankistan” that excludes most of its citizens from sharing in the American dream.
Posted on: Sun, 18 Aug 2013 06:18:34 +0000
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