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Reader's view: ‘Financialism’ permitted greatest theft in history

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opinion Duluth, 55802
Duluth News Tribune
(218) 723-5295 customer support
Duluth Minnesota 424 W. First St. 55802

“Financialism,” begun in the 1970s, accelerated when President Ronald Reagan’s “regulatory changes” permitted savings and loans to increase profitability at the expense of homeowners and depositors. This created the greatest theft in history, costing taxpayers $250 billion (one- fourth of the national debt).

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Financial markets became an economy unto themselves, transferring income from the real sector to the financial sector, whose primary goals are maximizing short-term shareholder value (contributing to labor’s falling share), encouraging globalization, promoting the size and influence of financial markets and institutions, and believing capital markets should be their sole regulator.

“Financialites” concocted schemes — including leverage buyouts, merger acquisitions and corporate raiding — that equaled ruthless, predatory trading in companies and businesses for profit. They changed capitalism from industrial and competitive to financial and monopolistic, making money from money more important than providing goods and services. They greatly increased the risk of financial failure, weakened the economy, exported jobs and manufacturing, stifled growth and caused middle-class-income stagnation, giving the financial sector and elites greater power over economic policies and outcomes.

“Financialization” increased inequality, which did nothing to address society’s needs. It only created jobs for financial professionals who unleashed the greed of Wall Street and bankers who distributed national income toward capital owners and away from wage and salary earners.

“Financialism” is two wolves and a sheep voting on what’s for dinner.

Prudently regulated capitalism is a competitive, cooperative system based on self-interest, self-restraint, morality, equality and justice.

Developed democratic nations realized long ago that strong safety nets, domestic programs, and health care were human rights, and private interests must be curtailed. They tended to have strong unions affording living wages and salaries.

Republican priorities, policies and assaults on unions lead to recessions, regression and oppression. A democracy with both capitalism and “financialism” cannot survive.

Frank Abbott

Oliver

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