From 1950 to 1980, America’s economy was mainly focused on manufacturing. Manufacturing made up 40% of GDP, generated 40% of profits, and employed 30% of the workforce. If you were a factory worker between 1950 and 1980, life was good. You worked 40 hours a week, had health insurance, could buy a home, and your wife didn’t have to work. Families raised three to four kids, owned two cars, took vacations every year, dined out weekly, and retired with solid pensions.
» The US economy has shifted from production to speculation. «
After 1980 came the Reagan Revolution and the rise of neoliberalism, an economic philosophy centered on free markets and deregulation. Since then, the US economy has been financialized. Today, financial services account for 22% of GDP, while manufacturing has fallen from 40% to just 10%. Financial services now generate 40% of all corporate profits but employ only 5% of the workforce.
These numbers reflect a radical transformation of American society. From 1950 to 1980, workers had political power. As a confident middle class, they joined unions and participated in politics. Today, most of that power has shifted to Wall Street and to the professional-managerial elite—highly educated, coastal, Ivy-League graduates clustered in New York, Washington, Boston, and San Francisco. This elite, multicultural and financially dominant, has become the most powerful political bloc in America. As a result, government policy increasingly favors them at the expense of workers. That’s the first major shift: political influence moving from labor to finance.
Education reflects this change. In the 1950s and 1960s, graduates of top schools often aspired to be professors, scientists, entrepreneurs, or corporate executives. Today, nearly all want to go to one place: Wall Street. Why? Because that’s where the money is. The brightest PhDs in statistics and artificial intelligence—who might otherwise be developing breakthrough technologies at IBM—are instead running hedge-fund algorithms, speculating with other people’s money.
The US economy has shifted from production to speculation. Financial services don’t create goods; they move money around to make more money. It’s not productive—it’s speculative. And America’s smartest minds are devoted to it. This shift has made the economy far more unstable. In 2001 came the dot-com crash. In 2008, the subprime mortgage crisis. More recently, multiple banks collapsed in a single week.
Why? Bubbles. Housing, stocks, and other assets are all overpriced. People gamble on the assumption prices will always rise. When bubbles burst, the result is volatility, instability, and uncertainty. That’s bad for the economy. Inequality has also surged. The top 1% now capture a vastly greater share of wealth, and the gap keeps widening.
In short, financialization has been destructive. It has made politics more divisive, the economy more volatile, and redirected the nation’s best talent into speculation rather than innovation. Young people today struggle to own homes. Many rent indefinitely, with little hope of upward mobility. This is the rentier economy: when ownership is out of reach, people are locked out of building wealth. Instead of producing, many speculate—buying Bitcoin or chasing bubbles.
These numbers reflect a radical transformation of American society. From 1950 to 1980, workers had political power. As a confident middle class, they joined unions and participated in politics. Today, most of that power has shifted to Wall Street and to the professional-managerial elite—highly educated, coastal, Ivy-League graduates clustered in New York, Washington, Boston, and San Francisco. This elite, multicultural and financially dominant, has become the most powerful political bloc in America. As a result, government policy increasingly favors them at the expense of workers. That’s the first major shift: political influence moving from labor to finance.
Education reflects this change. In the 1950s and 1960s, graduates of top schools often aspired to be professors, scientists, entrepreneurs, or corporate executives. Today, nearly all want to go to one place: Wall Street. Why? Because that’s where the money is. The brightest PhDs in statistics and artificial intelligence—who might otherwise be developing breakthrough technologies at IBM—are instead running hedge-fund algorithms, speculating with other people’s money.
The US economy has shifted from production to speculation. Financial services don’t create goods; they move money around to make more money. It’s not productive—it’s speculative. And America’s smartest minds are devoted to it. This shift has made the economy far more unstable. In 2001 came the dot-com crash. In 2008, the subprime mortgage crisis. More recently, multiple banks collapsed in a single week.
Why? Bubbles. Housing, stocks, and other assets are all overpriced. People gamble on the assumption prices will always rise. When bubbles burst, the result is volatility, instability, and uncertainty. That’s bad for the economy. Inequality has also surged. The top 1% now capture a vastly greater share of wealth, and the gap keeps widening.
In short, financialization has been destructive. It has made politics more divisive, the economy more volatile, and redirected the nation’s best talent into speculation rather than innovation. Young people today struggle to own homes. Many rent indefinitely, with little hope of upward mobility. This is the rentier economy: when ownership is out of reach, people are locked out of building wealth. Instead of producing, many speculate—buying Bitcoin or chasing bubbles.
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