TIME magazine assistant managing editor Rana Foroohar’s book Makers and Takers sounds an important note of warning on the dangers of financialization of the U.S. economy. She reveals that the financial system no longer funds new ideas and projects — only about 15 percent of the money coming out of financial institutions goes into business investment; the rest is spent buying and selling existing financial instruments. That’s why $4 trillion worth of monetary stimulus that followed the 2008 financial meltdown has failed to produce anything more than anemic growth. In this video, she discusses her book, and its implications for the economic policy challenges facing America’s decision-makers, with Institute president Robert Johnson.
The financial system no longer funds new ideas and projects — only about 15 percent of the money coming out of financial institutions goes into business investment; the rest is spent buying and selling existing financial instruments.
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