According to Time magazine journalist Rana Foroohar’s new book, the "financialization" of banking, and of business in general, has hampered real growth and innovation while exacerbating inequality. The result is an “upside-down” economy where finance, instead of serving as a catalyst, has become a headwind. And in the wake of a devastating financial crisis fueled by excessive debt and credit, we are seeing a smoke-and-mirrors recovery driven largely by more of the same.
Wednesday’s Democratic debate was far more informative than previous debates. What we learned, in particular, was that as a presidential candidate, Michael Bloomberg is a great businessman — and that Elizabeth Warren remains a force to be reckoned with.
Both lessons ran very much counter to the narrative that the news media has been telling in recent weeks. On one side, there has been a palpable eagerness on the part of some news organizations and many pundits to elevate Bloomberg; on the other side, complaints by Warren supporters about her “erasure” from news coverage and polling aren’t wrong.
What does all this mean for the nomination? I have no idea. But maybe the Warren-Bloomberg confrontation will help refocus discussion away from so-called Medicare for all — which isn’t going to be enacted, no matter who wins — to an issue where it matters a lot which Democrat prevails. Namely, are we going to do anything to rein in the financialization of the U.S. economy?
During the U.S. economy’s greatest generation — the era of rapid, broadly shared growth that followed World War II — Wall Street was a fairly peripheral part of the picture. When people thought about business leaders, they thought about people running companies that actually made things, not people who got rich through wheeling and dealing (emphasis added).
Krugman doesn't weigh in on that topic, but I'm not shy!