How America Turned Into a Country of Makers and Takers
Back in 2012, Mitt Romney and his running mate Paul Ryan divided America into two classes: makers and takers. In that more genteel era of Republican politics, the GOP candidates for the White House argued that a growing portion of America had become dependent on the hard work of others through government assistance. Romney pegged the number at 47 percent while Ryan said the mooching class was much bigger. If this kept up, they intoned, the American economy would go to shit.
Rana Foroohar has flipped this argument on its head. The Time magazine business columnist and CNN global economic analyst contends in her new book Makers and Takers: The Rise of Finance and the Fall of American Business that the “Takers” in the U.S. economy are actually the ones who believe they are the “Makers”. These Americans have amassed their wealth through financial tricks and short-term thinking at the expense of investment in sustainable growth. Instead of creating new wealth, they are skimming off the top of the rest of the economy, which does, in fact, make things. Wall Street culture has swallowed up Main Street.
To what extent has finance come to dominate our economy? Foroohar cites two statistics. The first is, “Only about 15 percent of all the money in our market system actually ends up in the real economy—the rest stays within the closed loop of finance itself.” And the second is that “The financial sector takes a quarter of all corporate profits in this country while creating only 4 percent of American jobs.” But this isn’t just JP Morgan or Goldman Sachs hoovering up the country’s economic gains that hurts the U.S.; companies like Apple are focused increasingly on making money by moving money around instead of focusing on research and development that can make them viable for years to come.
We sat down with Foroohar to discuss her book, how our economic system came to be so broken, the unrest it has caused—and if she sees any hope for fixing the problem.
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