Financial Totalitarianism: The Economic, Political, Social and Cultural Rule.....

At the end of May, it was revealed that a new bill for the regulation of the banking and financial sector was, for all intents and purposes, drafted by Citigroup. This is only the latest in a long list of what can only be called legalized corruption at the highest levels of American power, which has ultimately led to no meaningful policy or legal change in the wake of the 2008 financial crisis. Avid readers of intrepid Rolling Stone journalist Matt Taibbi and others cannot help but be sickened and struck by the impunity and hubris of America’s financial elites, even as astute students of history will point out the previous moments when the power and influence of financiers has overshadowed economics and politics.

Totalitarianism is not an inappropriate term, not simply because the financial realm holds such a great deal of wealth and power. The term was coined by the Italian Fascist dictator Benito Mussolini to praise the system he created where the ruling ideology dominated every aspect of citizens’ lives. Not only did the fascist state ruthlessly and autocratically dominate the economy and politics, it also sought to transform social life and the culture of the nation to become a total way of life. While there is no pompous fascist figurehead, we can see the tremendous power of the financial sector as a form of disorganized or ad-hoc totalitarianism where financial power and modes of thinking increasingly stain the social fabric. And like the totalitarianisms of old, the “financialization” of life is ultimately directed by and benefits a tiny minority, at the expense of everyone else.

“Financialization” generally refers to two overlapping economic processes. First, it speaks to the way an increasing portion of a nation’s wealth is bound up with or represented by the financial sector (generally referred to as the FIRE sector for Finance, Insurance and Real Estate), and, consequently, the tremendous influence of the financial sector over corporations, governments and individuals. American financial earnings represent around 8.4% of the national income, rendering the financial sector one of America’s largest “industries.” The wealthiest 10% of the population owns 88% of financial assets, which has helped contribute to the present situation where roughly 40% of the nation’s wealth is controlled by the top 1%, and where the average net worth of the poorest 40% of Americans is almost negative $10,000 (roughly negative $15,000 if home equity is factored out). Financialization means the increased power of banks, hedge funds, private equity firms and other financial actors, and the increasing wealth and power of the top percentile of Americans.

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