A
Wall Street executive phoned me this morning, complaining that the
video we just released (see previous post) -- calling for a resurrection
of Glass-Steagall and for the biggest Wall Street banks to be broken up
– is “rabble-rousing.”
I told him I hope it is.
We're heading for another "too-big-to-fail" financial meltdown, whose costs will be borne by the middle class and the poor, as they were in the financial crisis of 2008.
Last week, the International Monetary Fund released a report showing that the financial sector in several major countries, including the United States, is too large, and bad for the overall economy -- draining talented workers from the rest of the economy, creating damaging boom-and-bust cycles, raising debt levels, and funneling capital to risky speculative instruments rather than solid long-term investments. Much research backs this up. Professor Thomas Philippon of New York University, for example, shows that the United States financial industry has become less efficient over the last 130 years at channeling capital toward productive uses, which may also be a major contributor to rising inequality.
I told him I hope it is.
We're heading for another "too-big-to-fail" financial meltdown, whose costs will be borne by the middle class and the poor, as they were in the financial crisis of 2008.
Last week, the International Monetary Fund released a report showing that the financial sector in several major countries, including the United States, is too large, and bad for the overall economy -- draining talented workers from the rest of the economy, creating damaging boom-and-bust cycles, raising debt levels, and funneling capital to risky speculative instruments rather than solid long-term investments. Much research backs this up. Professor Thomas Philippon of New York University, for example, shows that the United States financial industry has become less efficient over the last 130 years at channeling capital toward productive uses, which may also be a major contributor to rising inequality.
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