Pop quiz: What’s so bad about the financialization of the U.S. economy over recent decades?
If you’re like most people who are uneasy with the outsized power of finance, chances are you can’t boil down your concerns to a pithy sound bite. So why is there such ridicule of the protesters “occupying” Wall Street for lacking a coherent message?
Three years after the 2008 financial crisis, it is still hard to neatly encapsulate the problem with letting bankers and traders dominate American economic life. Once Congress passed the Dodd-Frank reform law last year, most political leaders and commentators moved on to other issues, leaving behind an unfinished debate about Wall Street’s influence.
Now, thanks to protests in New York and a growing list of other cities, this debate is percolating once more. And guess what: the supposedly incoherent protesters actually have a pretty strong critique of what is wrong with America’s financialized economy.
Angus Johnson, one of the most astute bloggers following the protests, wrote recently that if you think that the protesters have “no message, you’re not paying attention.” They clearly believe that there is “something seriously broken” in America’s economy and politics and that “an accelerating concentration of wealth and power in the hands of a small minority” is to blame.
That reading jives with my own visits to Zuccotti Park – aka, “Liberty Square” – just blocks from the New York Stock Exchange. The clear thread linking a mish-mash of grievances – on everything from education to healthcare to corporate campaign cash – is that the wealthy are running America at the expense of ordinary people.
If this sounds radical, the hyperbolic blathering of dreadlocked twentysomethings, consider that a slew of top political scientists have been saying the same thing for nearly a decade. For example, one of the most authoritative recent studies of democracy and inequality, by the Princeton political scientist Larry Bartels, found that “the preferences of people at the bottom third of the income distribution appear to have no apparent impact on the behavior of their elected officials.”
The protesters are not just on the right track with their sweeping critique of inequality, they are also in the right place. The financialization of the U.S. economy is closely linked to America’s drift toward plutocracy.