Friday, July 17, 2009

The Quiet Coup

From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent.

In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent, and finance became the United States' largest industry.

Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

Banks won't be healthy until they write down bad assets, recognize their insolvency and become nationalized. They would start making loans again, and after stabilizing, they'd be broken up into regional entities and spun back into the private sector.

That's what the IMF would have them do, but none of that is happening. Because what's good for Goldman Sachs is good for the country.


Kentucky Rain said...

Interesting post here!

Bee said...

Nationalization of banks should have happened, rather than bailouts. It will never happen now, and like we are seeing with Goldman, they will be just that much more brazen.

Anonymous said...

I had high hopes that once Bush & Co was gone regulations would prevent the greedy wall streeters from raiding the U.S. treasury. Not yet. And I doubt Obama will nationalize anything including the desparate health care system. Middle class screwed again.