Josh Marshall says ...

8 Words of Wisdom for Week Ending 3/20/2009 #8

First, to the greatest extent possible, those who took the risks and enjoyed the upside should suffer the downside -- a principle that seems straightforward but is far from the way we're running the current response to the crisis.

Second, the financial sector has become increasingly prone to excessive risk taking and spawned a climate of opacity that has bled into fraud. For both reasons, I believe we need a substantially expanded regulatory regime.

Third, I think the financial sector has become over-swollen. I concede at the outset that this is an assumption where I am most out of my depth in terms of specialized knowledge. But based on my own understanding and the opinions of more expert minds whose opinions I respect, I think we've developed a basic imbalance in the structure of the economy over the last couple decades in which the financial sector, the proper role of which is to efficiently allocate capital in (or in other words, service) the real economy, is dominating the economy and organizing the real economy in its own interests.

Source - Talking Points Memo

I think Josh has it exactly right. At what point do we have a serious discussion about the role of the financial industry in our economy? Their present role is not a role that is supportive of the American people. It is not a role that is in service to the broader economy. It is a role that is largely undemocratic. It is a role that has played an active part in destroying the financial stability of mush of the middle and lower classes. Our system of government was designed to represent people, not industry ... and certainly not the financial industry. To recover from this crisis, and to recover in a way that prevents this outcome in the future, we must deal with the financial industry.