Chart of the Day – 4.7.2009

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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.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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