In the wake of the 2008 financial crisis, many people assumed the worst was over after the government stepped in to stabilise the economy. But what if that crisis wasn’t the end of the story, but the beginning of something more insidious? The truth is that, over the past few decades, the American financial system has quietly taken control of the government, driving policies that prioritise big banks over ordinary citizens. The result? A rigged system that benefits the financial elite while leaving everyone else to pick up the tab.
Welcome to what some are calling the “Financial Coup”—a term used to describe how Wall Street has captured the government, manipulated policies, and ultimately put the American economy on a dangerous path toward more crises.
The Seeds of the Coup: How It All Began
To understand how we got here, we need to go back to the years before the 2008 financial crash. Historically, the financial sector wasn’t the dominant force it is today. Between 1973 and 1985, America’s financial sector made up around 16% of the domestic corporate product. By the early 2000s, that number had ballooned to 41%.
So, what changed?
One of the most significant shifts came when big banks and financial institutions started to use their enormous profits to influence government policy. Lobbyists worked relentlessly to repeal regulations that had been put in place after the Great Depression to protect the economy from risky financial practices. These changes allowed banks to take bigger risks with taxpayer-backed funds, essentially gambling with the economy. And when their bets went wrong, as they did in 2008, they knew they’d be bailed out.
Risk Without Consequence
The financial system operates on one fundamental principle: risk pays off. But what happens when those taking the risks don’t have to deal with the consequences? This is where the problem lies. Financial institutions have become so large and influential that they know the government can’t afford to let them fail. The infamous phrase “too big to fail” has become the cornerstone of their strategy.
Banks now operate under the assumption that they can make risky loans, over-leverage themselves, and if it all goes south, they’ll be rescued by the taxpayer. This lack of accountability creates a vicious cycle: banks take more risks, secure more bailouts, and the economy suffers the consequences. Meanwhile, the financial elite walk away with huge profits while the middle and working classes bear the brunt of job losses, inflation, and stagnant wages.
The 2008 Financial Crisis: A Missed Opportunity
The 2008 financial crash should have been a wake-up call. It exposed the weaknesses and dangers of a deregulated financial system. But instead of taking the opportunity to restructure the system, politicians were swayed by the same financial interests that caused the problem in the first place. Lobbyists descended on Washington, securing massive bailouts for the banks while everyday Americans lost their homes, savings, and jobs.
The numbers are staggering: banks made trillions of dollars in risky loans to people with no income or credit, knowing full well that when the loans went bad, they could rely on government bailouts. In the aftermath, the financial sector emerged not weaker, but stronger, with even more influence over policy decisions.
The Washington-Wall Street Revolving Door
Part of what makes this financial coup so difficult to dismantle is the cosy relationship between Wall Street and Washington. Many politicians and high-ranking officials have deep ties to the financial sector, which creates a dangerous conflict of interest. For example, Ben Bernanke, the former Federal Reserve chairman, earned $250,000 for a single speech at a financial conference. Janet Yellen, the former chair of the Federal Reserve and current Secretary of the Treasury, received $7 million in speaking fees from Wall Street banks, including Goldman Sachs.
These connections make it nearly impossible to regulate the financial sector effectively. After all, why would politicians crack down on the same institutions that line their pockets? This revolving door between government and finance ensures that the system remains tilted in favour of the financial elite.
What Does This Mean for You?
For the average person, the financial coup means higher risks and fewer rewards. When the government prioritises bailouts for banks over policies that support the middle class, we all suffer. The national debt continues to soar, with estimates predicting it could reach $50 trillion in the coming years. Meanwhile, inflation eats away at our savings, and wages remain stagnant.
The real cost of this system is borne by ordinary citizens. As banks continue to gamble with the economy, the risk of another financial crisis looms large. And when that crisis hits, it’s the taxpayers who will once again be asked to foot the bill.
Is There a Way Out?
So, what’s the solution? Some economists argue that the only way to stop this cycle of financial crises is to force banks to recognise their losses and sell them off to new management. This would mean breaking up the “too big to fail” institutions and ending their reliance on government bailouts.
But given the immense lobbying power of the financial sector, this is easier said than done. The chances of Washington reigning in Wall Street seem slim, at least in the short term. More likely, we’ll see more bailouts, more national debt, and more financial instability until the system reaches a breaking point.
The financial coup that has seized America won’t be easy to reverse. But the first step is recognising the problem and demanding accountability from the institutions that have profited at our expense.
Original Article: Brownstone
