Only rich people survive

The lesson of a financial crisis lesson
As presidential candidate Donald Trump, he said he would take a firm stand on Wall Street, but that did not happen.

The American economy has advanced from the dark days of 2008 when the collapse of Lehman brothers and big banks led to a global economic disaster. Most of the past decade, economies and stock markets have been rising. But this growth has prompted bankers, politicians and legislators to repeat the mistakes that led to the crisis and millions of people cost jobs, home and savings.

The financial system and the economy are obviously much more solid than ten years ago. Salaries hardly keep pace with inflation, but the unemployment rate, which jumped to 10 percent, has now fallen to 3.9 percent. The real estate market, once killed by forced bargains, has now returned to life and house prices in many parts of the country are again heading to dizzying heights. Banks that once depended on taxpayers’ money now make a profit.

To recover, thanks to a quick reaction, the Obama administration, the Federal Reserve and the Congress are the most deserving. Congressmen and President Barack Obama worked to stimulate the economy with nearly one billion dollars. The Federal Reserve revived the financial system by lowering interest rates, buying bonds and rescuing institutions such as the American International Group that was the insurance house for financially compromised banks.

The Congress passed the Dodd-Frank law, introduced more stringent regulations to financial institutions, and limited their freedom to risk a lot of money with borrowed money. The law helped restore confidence in banks that lost credibility by spending billions on suspicious engineering projects that few people understood and could explain. A Consumer Protection Bureau has been opened to protect consumers from predatory business. Both Congress and Obama have expanded health insurance to 20 million people.

However, the gross domestic product per capita in the United States is about $ 70,000 lower than what the economy would have remained in the direction it was before the crisis, according to an analysis published by the Federal Bank of San Francisco. The report’s authors concluded that the economy would be “hard to regain” lost, a shocking acknowledgment of the durable and significant costs of a financial crisis that could have been avoided.

Of course, the losses from the crisis were not equally distributed. Families of modest income have less or, in many cases, zero income, they may have lost their homes and savings. The average three-member family that earned less than $ 42,500 annually earned a net worth of $ 10,800 in 2016 from $ 18,500 in 2007, according to a study by the Pew Research Center. Rich families who earned between 42,500 and 127,600 lost a third of their assets and fell to $ 110,100. But the wealth of very wealthy families who earn more than 127,600 annually jumped nearly 10 percent to $ 810,800.

The crisis and the response to it have aggravated the trends that have led to the stagnation of stagnation for most families while the richest receive most of the economic cake. The Obama administration and the Congress made a big mistake at the beginning of the recession, focusing more on rescuing banks and less on helping families that were expelled from homes and others without jobs.

Later, the decision of the Republican leaders in the Congress to oppose every Obama idea prevented the government from helping people reimburse what they lost or to foment a shy rescue by spending on infrastructure and other stimulating measures.

Before the crisis, the share of economic output that went into the hands of workers fell from the beginning of 2001 when it was 64 percent. After the crisis, it fell to about 56 percent, the Bureau of Labor Statistics said, adding that it has begun to grow slowly over the past few years. The reason for this is that workers’ salaries stagnate, while corporate profit jumped, especially for a small number of those that experts call “superstar companies,” including tech giants such as Apple, the Alfabet who owns Google and Facebook.

While several large companies with a relatively small number of employees are gaining more and more market power and profits, less work remains for workers, according to a report by economists from MIT, Harvard and the University of Zurich, published in 2017.

As presidential candidate, Donald Trump said he would take a firm stand on Wall Street, how to fight corporate consolidation, and how to take care of “forgotten men and women”; but he and the Republicans in the Congress are gentle towards Wall Street, they have done very little in terms of consolidation, they have boosted profits and reduced the protection of those

forgotten men and women.

Last year, the inspection broke down the control of the American International Group (AIG), which applies to companies whose collapse caused a chain reaction of disaster. While the AIG is lower than in 2008, when it was almost collapsed by many large banks, it remains a major domino in the financial system.

The speed with which officials reject financial regulations is shocking for economists.

The last time we introduced such regulations in the 1930s, we needed 30 to 40 years to abolish them,

says Raghuram Ryan, an economist at Chicago University and former Governor of the Indian Bank.

This is what we do in 10 years.

Ryan, who warned of the past crisis, says it is not wise to abolish regulations now because companies and individuals have borrowed a lot of money around the world, which has led to a risk of financial problems.

With investors raising stock prices and pouring millions of dollars into start ups that lose money as if nothing bad can happen, it is even more annoying and angry that officials have so easily rejected the lessons learned in the past crisis. To make life even better for richest Americans, the government is endangering the economic future of all the others.