The Daily Parker

Politics, Weather, Photography, and the Dog

Policy, not providence

Paul Krugman once again points out the obvious and straight line between policy choices and the economy today:

[T]he financialization of America wasn’t dictated by the invisible hand of the market. What caused the financial industry to grow much faster than the rest of the economy starting around 1980 was a series of deliberate policy choices, in particular a process of deregulation that continued right up to the eve of the 2008 crisis.

Not coincidentally, the era of an ever-growing financial industry was also an era of ever-growing inequality of income and wealth. Wall Street made a large direct contribution to economic polarization, because soaring incomes in finance accounted for a significant fraction of the rising share of the top 1 percent (and the top 0.1 percent, which accounts for most of the top 1 percent’s gains) in the nation’s income. More broadly, the same political forces that promoted financial deregulation fostered overall inequality in a variety of ways, undermining organized labor, doing away with the “outrage constraint” that used to limit executive paychecks, and more.

Other commentators have noted that the Occupy Wall Street demonstrations seem to lack coherence or an intellectual center. Krugman disagrees, pointing out that they all share a common target: plutocrats.

Gnawing away at the middle classes leads, eventually, to the destruction of democracy. Today is the anniversary of just such an occurrence.

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