who in his column this morning wrote, as quoted by bobswern,
…In short, we’re giving huge sums to the financial industry while receiving little or nothing — maybe less than nothing — in return. Mr. Philippon puts the waste at 2 percent of G.D.P. Yet even that figure, I’d argue, understates the true cost of our bloated financial industry. For there is a clear correlation between the rise of modern finance and America’s return to Gilded Age levels of inequality.The following was written as a comment to bobswern's diary, but is buried so far down the thread I thought I would offer it as a stand-alone, and perhaps flesh it out a bit more:
Krugman thinks the 2% of GDP is low
the estimates for our GDP as of January were 17.4 Trillion dollars.
each percent, therefore, is 174 Billion.
Two percent would be 348 Billion dollars.
if three percent, that would be 522 billion - more than half a trillion.
Now consider how much we need the following items, not getting funded by Wall Street:
- school buildings (over 150 billion for this alone)
long term unemployment
affordable health care for all
class size reduction in schools
and that list would go on
We have a system in which public money is spent primarily when it benefits those who already have it, and enables them to make more.
I said primarily.
Because I include tax expenditures
Those tax expenditures include the lower tax rates given to hedge fund operators, as well as the obscenely low rate of capital gains
Those tax expenditures also include our refusal to enact a financial transactions tax
We have the further refusal to extend the notion of using taxes to discourage behavior that is unhealthy to society, the way we have taxed cigarettes and alcohol.
Our financial system is not only immoral, it is rapidly sowing the seeds of destruction of our society, our democracy, and ultimately even itself.
The rest of this was not part of that comment.
We have many critical issues facing us. Certainly climate change is the most serious. Our inability to address that political in this country is largely because of the influence of the great wealth of the energy industry. But that wealth is only part of the problem. Because there is so much money made investing in fossil fuel energy, too often we see the power of the financial sector amplifying the efforts of the coal industry and the likes of the Brothers Koch.
Nevertheless, if we do not rein in our financial sector and soon, it will destroy what is left of our democracy even as it destroys our environment.
At some point that will lead to violence.
I cannot help but think of a stanza from Fitzgerald's Rubaiyat of Omar Khayyam:
The Moving Finger writes; and, having writ,The record is clear.
Moves on: nor all thy Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all thy Tears wash out a Word of it.
The path we are on is inexorable.
If we do not act, the inequity and gluttony of the Gilded Age will seem like a small mound of sand compared to the mighty Rockies, or even the Himalayas.
Or if you would prefer a more appropriate comparison, think of the Gilded Age as being on the scale of a child's sand castle, or a building made of legos or Lincoln Logs. Now consider two edifices the result of the Gilded Age-
The Breakers in Newport, RI
The Biltmore in Asheville, NC
and remember - both were built by the same family, the Vanderbilts.
A family that was willing to finance a coup to overthrow the New Deal - Smedley Butler testified to that before the United States Congress.
We know we have little time left to prevent the devastation of global climate change.
We may have even less to save our democracy from the predations of the financial sector.
And if we do not, then the violence of our current society will pale in comparison to what we will then experience, because desperate people have little to lose, and far more will be desperate than you can now imagine.