Our Financial Stockholm Syndrome

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Felix Salmon writes today that the power of the financial industry goes beyond mere lobbying:

One of the themes running through Noam Scheiber’s new book is the idea that professional technocrats have a tendency to take at face value much of what they’re told by Wall Street. Bankers are very good at capturing/flattering mid-level political operatives.

Yep. But this goes beyond mere regulatory capture. Here’s a blast from the past: my take on regulatory capture in “Capital City,” two years ago:

[The story of the finance lobby is] about the way that lobby—with the eager support of a resurgent conservative movement and a handful of powerful backers—was able to fundamentally change the way we think about the world. Call it a virus. Call it a meme. Call it the power of a big idea. Whatever you call it, for three decades they had us convinced that the success of the financial sector should be measured not by how well it provides financial services to actual consumers and corporations, but by how effectively financial firms make money for themselves. It sounds crazy when you put it that way, but stripped to its bones, that’s what they pulled off.

….Their real power lies in the fact that they’ve so thoroughly changed our collective attitude toward financial regulation that sometimes they barely need to lobby in the traditional sense at all….Unlike most industries, which everyone recognizes are merely lobbying in their own self-interest, the finance industry successfully convinced everyone that deregulating finance was not only safe, but self-evidently good for the entire economy, Wall Street and Main Street alike. It’s what Simon Johnson, an MIT economics professor and former chief economist for the IMF, calls “intellectual capture.” Considering what’s happened over the past couple of years, we might better call it Stockholm syndrome.

More here from me and David Corn at about 5:00 mark. As near as I can tell, not a lot has changed since then.

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THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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