For three and a half decades financial executives have ruled like sultans, increasing their share of the economy’s profits from a sliver to a majority of the pie. Greed was the fuel; corruption and entitlement were both major by-products. So successful have the industry’s attorneys and lobbyists been at emasculating regulators that interest rates once outlawed as usurious have become the norm.
The masses have mostly suffered in silence. Byzantine phone trees and tiny print and fees for talking to unhelpful call-center representatives wore down the resolve of the masses to resist what they suspected were unfair charges and excessive interest. Oblivious to their anger, the financial system rotted from within as banks’ balance sheets became untethered from the well-being of the vast majority of their customers. The cash machine erupted in the headlines of The Wall Street Journal. Financial CEOs were celebrated by young, tanned heralds on CNBC.
Less discussed was the concurrent explosion of bankruptcies, foreclosures and defaults. A business model that swallowed its own customers should have been seen for what it was: ill-advised and untenable. Instead, it was branded “innovation” and defended by bank lobbyists with a zeal that might make Moammar Gadhafi blush. Suggestions that the financial industry’s excesses be restrained were ridiculed as anti-market, anti-freedom and anti-capitalism. What was good for Citibank was good for America.
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