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http://www.globalresearch.ca/index.p... icleId=13761
For all the horror the global economic crisis has caused for so many people, one progressive consequence has emerged: many of these people are becoming politically conscious — searching for information to better understand their political and economic system. They want to know how things got the way they did and what can be done about it. Unfortunately, much of the resulting analysis has focused too little on actual causes, and too much on abstract financial details and other consequences of deeper economic problems.
Therefore, the typical explanation of the economic crisis goes as follows: depression-era financial regulations were tossed aside, and banks were allowed to merge into new institutions that then invented ways to transform debts into assets, which were gambled away on the stock exchange to the tunes of trillions of dollars.
All of which is true.
What’s missing, however, is why. Why did successive governments allow the regulations to be destroyed? And more importantly, why did the entire political establishment agree that these regulations needed to go?
One important statistic can help provide some insight: Whereas manufacturing was twice as large as the financial sector of the U.S. GDP in 1970, these numbers have since been reversed — the financial sector is now 21 percent of U.S. GDP, while manufacturing is just 12 percent, and shrinking.
Why did the financial sector grow as manufacturing sank? And how are the two related?
Investors (capitalists) have become increasingly frustrated with actually producing things; the profits just aren’t what they used to be. This is because manufacturers — under capitalism — must compete with others on
