This appears in the biggest way in the financial sector. The US financial sector is now about 12% of employment.
The US used to have a much simpler financial sector, due to strict regulation.
* Banks could not do brokerage, and brokers could not do banking. (Glass-Stegall)
* Banks could only do boring stuff - transactions and loans.
* Utilities were mostly rate of return regulated, paid dividends, and had stable stock prices.
* Utility ownership was simple - there was a limit of 3 on ownership tree depth. (Utility Holding Company Act)
* Stocks traded much more slowly. There were no hedge funds, leveraged buyouts, private equity (which is leveraged buyouts under another name), or high frequency trading.
* Major companies could have only one class of voting stock, a NYSE rule. (Ford Motor was grandfathered in, being older than the NYSE).
* Home loans came mostly from savings and loan companies, which could pay higher interest rates than banks.
All that held from 1940-1980, arguably one of the greatest periods for the US. Then came financial deregulation.
The big effect was that if you wanted to make money, you didn't go into finance. You went into manufacturing.
The US used to have a much simpler financial sector, due to strict regulation.
* Banks could not do brokerage, and brokers could not do banking. (Glass-Stegall)
* Banks could only do boring stuff - transactions and loans.
* Utilities were mostly rate of return regulated, paid dividends, and had stable stock prices.
* Utility ownership was simple - there was a limit of 3 on ownership tree depth. (Utility Holding Company Act)
* Stocks traded much more slowly. There were no hedge funds, leveraged buyouts, private equity (which is leveraged buyouts under another name), or high frequency trading.
* Major companies could have only one class of voting stock, a NYSE rule. (Ford Motor was grandfathered in, being older than the NYSE).
* Home loans came mostly from savings and loan companies, which could pay higher interest rates than banks.
All that held from 1940-1980, arguably one of the greatest periods for the US. Then came financial deregulation.
The big effect was that if you wanted to make money, you didn't go into finance. You went into manufacturing.