Financialization of the Economy, Business, and Household Inequality in the United States

1The financialization of the American economy

DOI: 10.4324/9781003223320-2

Introduction

It has become common for economists to assert that a golden age of capitalism existed from the 1930s (or 1945) to the 1970s (Temin, 2002). This begs fundamental questions about politics and skews the evidence toward two recoveries; either from the 1929 crash in the US, or from the devastation caused by World War II abroad. Both imply low baselines that overstate the pace of economic growth before 1980. The evidence from the US is also inconsistent with almost every claim about the perverse macroeconomic effects of financialization, except inequality and unused industrial capacity (Hein et al., 2016, 2015). Many structural changes appear in the historical ...