For all the endless statistical data available on every aspect of our economic system, I have been unable to find any economist who can tell me how much of an average American’s annual income, let alone life income, ends up being appropriated by the financial industries in the form of interest payments, fees, penalties, and service charges. Still, given the fact that interest payments alone takes up between 15-17% of household income,[1] a figure that does not include student loans, and that penalty fees on bank and credit card accounts can often double the amount one would otherwise pay, it would not be at all surprising if at least one dollar out of every five an American earns over the course of her lifetime is now likely to end up in Wall Street’s coffers in one way or another. The percentage may well be approaching the amount the average American will pay in taxes. In fact, for the least affluent Americans, it has probably long since overtaken it.
This has very real implications for how we even think about what sort of economic system we are in. Back when I was in college, I learned that the difference between capitalism and feudalism—or what was sometimes called the “tributary mode of production”—is that a feudal aristocracy appropriates its wealth through “direct juro-political extraction.” They simply take other people’s things through legal means. Capitalism was supposed to be a bit more subtle.[2] Yet as soon as it achieved total world dominance, capitalism seems to have almost immediately begun shifting back into something that could well be described as feudalism.[3] In doing so, too, it made the alliance of money and government impossible to ignore. In the years since 2008, we’ve seen examples ranging from the comical—as when loan collection agencies in Massachusetts sent their employees out en masse to canvas on behalf of a senate candidate (Scott Brown) who they assumed would be in favor of harsher laws against debtors, to the downright outrageous—as when “too big to fail” institutions like Bank of America, bailed out by the taxpayers, secure in the knowledge they would not be allowed to collapse no matter what their behavior, paying no taxes, but delivering vast sums of culled from their even vaster profits to legislators who then allow their lobbyists to actually write the legislation that is supposed to “regulate” them. At this point, it’s not entirely clear why an institution like Bank of America should not, at this point, be considered part of the federal government, other than that it gets to keep its profits for itself.
