Why Do We Idolize Wall Street Hustlers but Hold People Who Actually Make Things in Contempt?
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Despite Wall Street's recklessness, we still seem more comfortable with the financial sector than with manufacturing. After all, manufacturing has a two hundred year history of occupational disease and environmental destruction. It produces poisons we don't want, consumer goods we don't need, and it uses more energy than we can afford to burn. For many, the industrial revolution looks like an unmitigated environmental disaster. So if manufacturing runs away to far off lands, few are likely to shed tears -- unless we work in these industries.
In contrast, financial products are relatively clean. Yes, its offices are too large and they use too much paper. And certainly the sector pays its executives far too much. But it's a lot cleaner than a steel mill and leaves a much smaller carbon footprint. Also, venture capitalists are moving money into renewable energy, green chemistry and a wide variety of green manufacturing that might actually help us develop a more sustainable economy.
A sizable portion of our financial leaders are conservationists. They donate to environmental groups to help preserve our watersheds and streams. They own large tracts of land near national parks and forests that help protect our land, water and wildlife. Many of the wealthiest Wall Street elites would claim to share our deepest concerns about global warming and sustainability.
Industrial workers, however, can get really nasty when environmental regulations threaten their livelihoods. Although they like to hunt and fish, workers who see their jobs threatened seem more than ready to chop down virgin trees, knock off the tops of mountains, and pump CO2 all over the globe.
Sure, we don't like the fact that Wall Street's fantasy finance casino crashed the economy, but even that has a positive environmental angle. The collapse has slowed down the world economy, slowed down production and transportation, and therefore has slowed down the output of carbon.
And besides, the manufacturing sector accounts for fewer and fewer jobs each year, so why should we give a damn about it?
Because no society can endure for long if it fails to create decent jobs for all its people. Right now, more than 29 million Americans are unemployed or forced into part-time work. They need jobs that are at harmony with nature. Creating that kind of work, I believe, will require a monumental commitment, just like the Manhattan Project, the Marshall Plan or the moon shot.
But first we need to understand how we got into this fix. Over the past thirty years we've engaged in a gigantic experiment with three major components -- the deregulation of financial markets, the globalization of production, and "tax reforms" which allowed wealth to accumulate in the top fraction of one percent. This was supposed to unleash entrepreneurial initiative and raise all boats. But it didn't work according to plan. Industry began relocating all over the world. The financial sector grew rapidly, and an enormous pot of wealth accumulated in the hands of a few. Meanwhile average wages (after adjusting for inflation) declined by 18 percent while our industrial core was shipped overseas.
The super-rich actually had so much capital that they ran out of real-world investments. That's when their money flowed into the newly deregulated fantasy finance casino. Bubbles inflated -- from the savings and loan fiasco to the dot.com crash to the housing hurricane. This grand experiment in deregulated capitalism failed miserably. We were moments away from the Great Depression II only one year ago. (For a full description see The Looting of America.)
To stop a full scale depression we poured trillions into Wall Street, but little has changed as our financial powerhouses, pumped up with taxpayer largess, are doing all they can to stop regulations on fantasy derivatives and caps on outrageous salaries. Nothing is preventing Wall Street from doing what it does best: seek out and over-inflate financial bubbles, skimming billions of dollars in fees all along the way. (See One Year After Lehman: Another Crash Coming?)