American politics = Absolute shipwreck

[Ash55]

This is insane i really enjoyed leo talking politics but roy dug down to the root historical causes of why American politics is a mayhem now
republican really are willing to destroy the whole system at the cost of cutting tax for the rich, its so backward how they thing oh gosh

a whole conspiracy theory was created about the moon landing but apparently backward politics pushed back the space exploration to the point where Saturn rocket now is considered a lost technology 

[Rigel]

Humans = grotesque shipwreck

[sholomar]

 

Socialism isn't the answer, but financialization is the problem.  Neither the left nor the right get their terminology right either. Democrats are not really socialists, and Trump is not a dictator. Try moving to a nation with a real autocracy, few of them turn out well. That said nations like Norway/Sweden are not really socialist either, they are capitalist lite, the proper form. 

Financialization—the shift where the financial sector, its metrics, and its elites gain dominant influence over the broader economy—did not happen by accident. Over the last 50 years, it was systematically built through a series of legal, regulatory, and monetary shifts.

Starting in the late 1970s, a bipartisan push toward deregulation dismantled the guardrails erected after the Great Depression. This fundamentally transformed how corporations operate, how banks make money, and how everyday Americans interact with the financial system.

The core policies and legal pivots that drove this transition are outlined below.

1. Dismantling the Separation of Banking Activities

For decades, the Glass-Steagall Act of 1933 kept a strict wall between boring, safe commercial banking (checking and savings accounts) and risky investment banking (underwriting and trading securities).

The Pivot: Throughout the 1980s and 90s, regulators steadily chipped away at these rules. The final blow came via the Gramm-Leach-Bliley Act of 1999, which completely repealed the core provisions of Glass-Steagall.

The Impact: This legal change allowed for the creation of "too big to fail" financial mega-conglomerates (like Citigroup). It permitted Wall Street firms to use stable consumer deposits to back highly complex, speculative trading operations.

2. Leaving Complex Derivatives Unregulated

As mathematical engineering took over Wall Street in the 1990s, financial institutions invented complex new products like credit default swaps and exotic derivatives (contracts betting on the future value of assets).

The Pivot: When the Commodity Futures Trading Commission (CFTC) attempted to regulate these opaque instruments in the late 90s, Congress stepped in to stop them. They passed the Commodity Futures Modernization Act (CFMA) of 2000.

The Impact: The CFMA explicitly exempted over-the-counter derivatives from federal oversight. This created a massive, multi-trillion-dollar "shadow banking" system that operated entirely in the dark, laying the direct groundwork for the 2008 financial crisis.

3. Legalizing Corporate Stock Buybacks

Prior to 1982, if a company bought back massive amounts of its own stock to artificially inflate its share price, the Securities and Exchange Commission (SEC) could investigate it for illegal market manipulation.

The Pivot: In 1982, under the Reagan administration, the SEC adopted Rule 10b-18. This rule established a "safe harbor" that allowed corporations to buy back their own stock with virtually no threat of legal liability.

The Impact: This shifted corporate behavior away from long-term productive investments (like research and development or workforce raises) and toward short-term financial engineering. It institutionalized the concept of Shareholder Primacy—the idea that a company's only true purpose is to maximize short-term stock value.

4. Abolishing Usury Laws and Caps on Interest

Historically, individual states had "usury laws" that legally capped the maximum amount of interest a lender could charge a consumer.

The Pivot: In 1978, the Supreme Court ruled in Marquette National Bank v. First of Omaha Corp. that a national bank could charge credit card interest rates based on the state where the bank was incorporated, not where the customer lived. Seeking to attract banking business, states like South Dakota and Delaware immediately abolished their interest rate caps. Shortly after, the Depository Institutions Deregulation and Monetary Control Act of 1980 phased out federal caps on interest rates that banks could pay depositors.

The Impact: Consumer lending exploded into a hyper-profitable industry. Credit card companies could now charge sky-high interest rates and late fees, transferring immense wealth from working-class Main Street to Wall Street.

5. Shifting Retirement Responsibility to the Stock Market

Fifty years ago, most private-sector workers relied on defined-benefit pensions—a guaranteed monthly check managed and funded entirely by their employer upon retirement.

The Pivot: The passage of the Employee Retirement Income Security Act (ERISA) of 1974 included a minor tax provision known as Section 401(k). While not originally intended to replace pensions, employers quickly realized they could shift retirement funding and market risk entirely onto the workers.

The Impact: This created a massive, structural influx of consumer capital into mutual funds and asset management firms. Everyday Americans became directly tied to the daily fluctuations of the stock market, aligning public anxiety with the fortunes of Wall Street.

 

Edited 3 hours ago by sholomar