Financialization of America

Filed in archive Op-Ed on February 28, 2008

Interesting article here by Randolph T. Holhut, American Reporter Correspondent.

Excerpt from; On Native Ground-Financialization of America;

More money is made today by shifting money around than in making things. And the FIRE sector no longer represents a group of institutions designed to raise capital for investment in productive activities; it is wealth generated from activities that contribute little to the actual economy.

Conservative writer Kevin Phillips calls it "financialization," or the process by which the FIRE sector assumes the dominant economic, cultural and political role in a national economy.

For example, energy prices. Last summer, commodities traders bid up the price of oil to $78 per barrel last summer on fears of more unrest in the Middle East after the Israel/Hezbollah dustup and another season of severe hurricanes. Neither thing happened, and oil prices slid down to about $50 per barrel by the end of 2006. Fear-based speculation drove up oil prices, and reality drove them back down.