Resumen de The price of Wall Street's power
Over and over again, executives make decisions that aren't in their companies' best interests, in response to pressure from Wall Street. Though many believe this happens because firms have a "fiduciary duty" to maximize shareholder returns, U.S. executives do not, as a matter of law, have any such obligation. Yet it's hard for them to resist demands from a quarter that has amassed such a huge and disproportionate share of power. In the past few decades, as legislation that put controls on Wall Street was largely undone, the size and profits of the financial sector grew enormously. That increased its influence, particularly its ability to sway the government by spending billions of dollars on lobbyists and political contributions. Even after the financial crisis, Wall Street was able to slow down and weaken new regulations meant to rein in its risky practices. This "financialization" of the economy has serious downsides: It increases volatility, inhibits growth, and misallocates resources, such as talent and capital, away from wealth creation and toward wealth distribution. It distorts thinking. Restoring the balance of power is critical to the competitiveness and the health of the rest of the economy. Limits on the size and leverage of banks and changes to the tax code could promote better equilibrium--but courage will be needed to put such reforms in place. INSETS: Idea in Brief;WHAT DO I MEAN BY "WALL STREET"?
