The Financialization of American Business
Outside Reading Evaluation Assignment
Book: Makers and Takers: The Rise of Finance and the Fall of American Business, by Rana Faroohar
The Premise of this Profound Book:
The core premise of this book is that as finance has nearly quadrupled in size as a percentage of the U.S. economy over the last several decades, business has suffered and economic growth has slowed. Since the financial sector began to ascend in the 1980's, the number of financial crises (the biggest destroyer of prosperity after war and natural disasters) has increased and overall trend growth has slowed. Deep academic research shows that the growth in size and power of the financial sector in America has coincided with a decline in many metrics of business health, from R&D spending as a percentage of revenue, to the number of new startups being created.
Our financial system today enriches mainly itself, creating only 4% of all jobs but taking 25% of corporate profits. As finance has gotten bigger over the last 40 years, financial fees have roughly doubled, another measure of the industry's inefficiency. The book argues that what we need isn't a financial system that's bigger, but one whose primary function is to support real main street business, but that's not at all what we have now.
Assignment Specifics:
1. Learn the author's ten present problems, which leaves our economy vulnerable to yet another "great recession" which we cannot afford to experience.
2. Following are a number of statements. Before your responses to them, re-state each numbered statement referenced to the chapter where it appears.
3. Then prepare one to two paragraph summaries of the ten problems that the author explains -chapter by chapter on the other side of this paper .