David Neiwert explains that as financial services rose, manufacturing declined [emphasis below is mine]:
[...] this shift came about because both political parties in Washington — well fed with Wall Street money — decided America’s economic future lay in the financial sector, not in manufacturing.
[...] In the process, both of America’s political parties have largely been subsumed by the financial-services sector. The most recent manifestation of this is the work of the supposedly bipartisan Catfood Commission, whose recommendations, if followed, would produce “a major transfer of income upward, from the middle class to a small minority of wealthy Americans,” according to Paul Krugman.
What’s particularly striking about its work is that it quite patently intends to place all the burden for solving the deficit on the backs of working people (mainly through serious Social Security cutbacks) while steadfastly refusing to consider new ways of improving its revenues, as Matt Yglesias has observed.
And atop that list of ignored potential revenue sources: The financial sector.
The deficit report put out by the commission’s co-chairs, Alan Simpson and Erskine Bowles, had one striking omission. It does not includes plans for a Wall Street speculation tax or any other tax on the financial industry.
This omission is striking because the co-chairs made a big point of saying that they looked everywhere to save money and/or raise revenue. As Senator Simpson said: “We have harpooned every whale in the ocean – and some minnows.” Wall Street is one whale that appears to have dodged the harpoon.
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