Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.

Via Paul Krugman, this comes from a recent paper by Thomas Philippon and Ariell Reshef.  Basically, they created a metric of financial regulation and graphed it against the relative pay of people in the finance industry.  Guess what?  When the market is lightly regulated, pay skyrockets!

Now, sure, a lot of other stuff was going on during this period too, so take this with a grain of salt.  But still: the amount of money being shoveled into the FIRE sector over the past 30 years has been pretty phenomenal, and it’s hardly a stretch to think that that’s pretty tightly correlated with loose regulation, massive leverage, and opaque rocket science derivatives.

What’s more, as Krugman points out, the amount of money going into finance has been so stratospheric lately that it actually has a significant impact on overall income inequality.  It’s only a part of the story, but it’s still a part.  One of the reasons there’s been less money for the middle class, thus spurring ever greater indebtedness in order to keep living standards on the rise, is because our financial titans kept so much of it for themselves.  It’s time for that to stop.  Finance should be the servant of industry, not its master.

A BETTER WAY TO DO THIS?

We have an ambitious $350,000 online fundraising goal this month and we can't afford to come up short. But when a reader recently asked how being a nonprofit makes Mother Jones different from other news organizations, we realized we needed to lay this out better: Because "in absolutely every way" is essentially the answer.

So we tried to explain why your year-end donations are so essential, and we'd like your help refining our pitch about what make Mother Jones valuable and worth reading to you.

We'd also like your support of our journalism with a year-end donation if you can right now—all online gifts will be doubled until we hit our $350,000 goal thanks to an incredibly generous donor's matching gift pledge.

payment methods

A BETTER WAY TO DO THIS?

We have an ambitious $350,000 online fundraising goal this month and we can't afford to come up short. But when a reader recently asked how being a nonprofit makes Mother Jones different from other news organizations, we realized we needed to lay this out better: Because "in absolutely every way" is essentially the answer.

So we tried to explain why your year-end donations are so essential, and we'd like your help refining our pitch about what make Mother Jones valuable and worth reading to you.

We'd also like your support of our journalism with a year-end donation if you can right now—all online gifts will be doubled until we hit our $350,000 goal thanks to an incredibly generous donor's matching gift pledge.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate