Guest Post by Henry Johnston
One of the curious features of the American landscape is the fact that these days the financialization of the economy is widely condemned as unhealthy, yet little is being done to reverse it. There was a time, back in the 1980s and ‘90s, when finance-driven capitalism was supposed to usher in a time of better capital allocation and a more dynamic economy. This is not a view one hears often anymore.
So, if such a phenomenon is overwhelmingly viewed negatively but isn’t being amended, then perhaps it’s not merely a failure of policymaking but rather something deeper – something more endemic to the very fabric of the capitalist economy. It is of course possible to lay the blame for this state of affairs at the feet of the current crop of cynical and power-hungry elites and to stop one’s analysis there. But an examination of history reveals recurrent instances of financialization that bear remarkable similarities, which invites the conclusion that perhaps the predicament in the American economy in recent decades is not unique and that the ever-rising power of Wall Street was in a sense preordained.
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