Two years after the economic meltdown, most Americans now recognize that that money has inexorably institutionalized a caste system where everyone remains (at best) mired in economic stasis except the very wealthiest sliver.
The Great Depression ended the last comparable Gilded Age, of the 1920s, and brought about major reforms in American government and business. Not so the Great Recession. Last week, as the Fed’s new growth projections downsized hope for significant decline in the unemployment rate, the Commerce Department reported that corporate profits hit a record high.
Those profits aren’t trickling down into new jobs or into higher salaries for those not in the executive suites. And the prospect of serious regulation of those at the top of the top — the financial sector — is even more of a fantasy in the new Congress than it was in its predecessor.
Wall Street is already celebrating the approach of bonus season by partying like it’s 2007. In The Times’s account of this return to conspicuous consumption, we learned of a Morgan Stanley trader, since fired for unspecified reasons, who went to costly ends to try to hire a dwarf for a Miami bachelor party prank that would require the dwarf to be handcuffed to the bachelor. If this were a metaphor — if only! — Wall Street would be the bachelor, and America the dwarf, involuntarily chained to its master’s hedonistic revels and fiscal recklessness with no prospect for escape.
As John Cassidy underscored in a definitive article titled “Who Needs Wall Street?” in The New Yorker last week, the financial sector has paid little for bringing the world to near-collapse or for receiving the taxpayers’ bailout that was denied to most small-enough-to-fail Americans. The sector still rakes in more than a fourth of American business profits, up from a seventh 25 years ago. And what is its contribution to America in exchange for this quarter-century of ever-more over-the-top rewards? “During a period in which American companies have created iPhones, Home Depot and Lipitor,” Cassidy writes, the industry reaping the highest profits and compensation is one that “doesn’t design, build or sell a tangible thing.”
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