“What should change? What lessons should we be learning? The first is, obviously, that finance is something to be carefully regulated. We went from a banking system that served our needs and did so while consuming about four percent of the gross domestic product, and paying average wages… to a financial system that did a lot of fancy things, consumed eight percent of the gross domestic product, started paying about twice on average as much as the rest of the economy — and of course [paid] vast sums to a handful of individuals — and at its peak accounted for 40 percent of the profits in this economy. Isn’t that crazy? Finance is a utility, it’s the lubrication for the rest of economy, it doesn’t produce stuff, it just helps other stuff get done. There’s no reason for it to account for 40 percent of profits, but there it was for a while.
“We need to shrink it back down again. If we don’t do that, this is just going to be the first round of an ongoing [financial] crisis.”
— from Paul Krugman’s keynote speech to the 32nd Annual Labor Awards Dinner, presented last night by the Labor Research Association, at which Retail, Wholesale and Department Store Union President Stuart Appelbaum and Director of Labor Education Research, Cornell ILR Kate Bronfenbrenner were honored. Photo (cc) Alan Cordova.