« Violent Capitalism »*
From the bankruptcy of Lehman Brothers in the fall of 2008 to the G20 Summit in Toronto in June 2010, the crisis of financial capitalism has deepened and become even more complicated. In two years we’ve gone from state bail outs of banks, insurance companies, financial institutions and entire industrial sectors to the so-called “crisis of sovereign debt.” The latter is the result of states taking responsibility for salvaging banks, the massive defiscalization of capital and of the high incomes of the last 15 years, the reduction of fiscal revenue typical of recessions, the increase in costs tied to social welfare and in the interest on debt paid to Treasury bond holders.
In the same period, we’ve seen a process of economic and political concentration and reinforcement of the banks bailed-out by the state who have exploited low interest rates to increase profits by directly and almost exclusively investing in the stock market and in state bonds. This has allowed banks to pay back the aid received in the heat of the crisis, thus freeing them from any political interference and putting them back into a position of dictating the conditions for recovery. Three years from the subprime bust, the political power of banking institutions has grown to such a point as to mitigate and slowdown the application of the most urgent legislative reforms in the sector, in particular the separation of commercial and investment banks (following in the footsteps of the Glass-Steagall Act of 1933) found in the “Dodd- Frank US Financial Regulation” voted on in June 2010, with the result that the financial-banking system will continue to be “too interconnected to let it fail” for a long time to come.
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