Quite simply, the grotesque excesses (in many cases, criminality) of the American financial services industry has brought us, and the entire world, kicking and screaming into major change; the dawn of the 'new normalcy' as I have been calling it. We are currently nowhere near the 'light at the end of the tunnel' part of the story, but we simply must do the hard work of interpreting and defining the new normalcy in an ongoing manner. In short, the financial services industry is not going to be the solution - they were and are a big part of the problem. I firmly believe that financial survivors going forward will be the ones who have decided to do the work themselves in a comprehensive manner, with open minds and a distrust of the conventions that have been embedded from the beginning of the Reagan era right on to today.
There is currently a lot of noise about socialism, but nationalization has been forced upon us by the dying system and its criminal elite. The 'taxpayer' has no choice and nor does the money printing Fed. A big problem here is that Ben Bernanke is one of the discredited policy makers, just like Alan Greenspan before him. To call the previous treasury secretary, former head of Goldman Sachs Paulson, tainted would be a gross understatement. Geithner, Summers, Rubin... we have seen this movie before, and it sucks.
The Quiet Coup
The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services...