For a while there it seemed to make sense: Saving the financial system was a matter of restoring bank profits to their pre-crisis levels. So, in the summer of 2010, it seemed like good news when US bank profits began to rise, returning to their pre-crisis levels. Now, however, this policy assumption has begun to be viewed in a different and more critical light. Now, Wall Street’s profits are being linked to the rise in US income inequality, and the regulatory and fiscal capture of the US government by the top 1%, as the Occupy Wall Street movement has christened today’s power elite. Do bank profits need to be high? How did they get so high anyway? And what do high bank profits do to our overall economy?
More than a decade ago I was asked to organize an “Author Meets Critics” session dealing with Richard Sennett’s Corrosion of Character. Given the author’s prominence, it was no surprise when 200 people showed up for the session, and heard a set of probing comments from a distinguished panel. I reserved a few minutes for my own humble comments, and took that opportunity to lament how rarely our works succeed (as Sennett’s often do) in resonating with lay audiences. An old lament, I know. But it’s true. As a former colleague once put it, it’s as if many of us aren’t entirely comfortable allowing perfect strangers to buy our books.