#81 Rana Foroohar: Wall Street's Giant Threat to the Economy
"The rise of finance has actually kind of eaten the rest of the economy," Rana tells this in this "Fix It" episode. "Finance controls the rest of industry. Finance has become the tail that wags the dog." At the same time, the financial industry remains at risk for another hugely destructive collapse.
In her book, "Makers and Takers: The Rise of Finance and the Fall of American Business", Rana says only 15% of all the money in financial markets ends up in the real economy in the form of loans to help grow business. The rest is traded and shuffled around the financial system.
"Finance is there to serve business. We need to simplify it," Rana says. That means deciding "what kinds of activities in our economy we want to incentivize and then creating the rules around finance to help capital flow to those areas."
Reform the tax code that “treats...