Economic Bait-and-Switch
From community prosperity to shareholder supremacy.
The Great Depression exposed the failures of unregulated capitalism which had failed spectacularly, leading to widespread poverty and unemployment. This led to American’s rethinking capitalism, which strengthened unions and increased government responsibility for social welfare. Post-World War II, corporations embraced a social contract: they paid fair wages, supported communities, and offered stability in exchange for employee loyalty. This era fostered a sense of shared prosperity and purpose.
However, in 1970, economist Milton Friedman published a doctrine that shifted corporate priorities dramatically. He argued that a company's sole responsibility was to its shareholders, not the communities they serve or society at large. This perspective gained traction, leading to a focus on short-term profits over long-term societal well-being. Corporations began outsourcing jobs, weakening unions, and prioritizing stock buybacks to inflate executive bonuses. Workers were increasingly classified as "contractors," stripping them of benefits and job security.
Over the next few decades, with the rise of NeoLiberalism, corporations next logical move was clear: protect those profits at all costs. As wealth concentrated, so did power. Corporate America didn’t just lobby for favorable policy, it found ways to buy influence outright. Campaign donations surged. Think tanks were funded. Former CEOs became Cabinet members. Regulatory agencies meant to oversee industry were slowly captured by the very industries they were supposed to regulate.
Wall Street Consolidates, Main Street Pays the Bill
As corporate influence ballooned, Wall Street didn’t just grow, it devoured everything it could. Through mergers, acquisitions, and private equity rollups, a handful of firms came to control massive chunks of the American economy. What was once a landscape of small businesses and local employers turned into a web of conglomerates headquartered thousands of miles away from the communities they serve.
And when Wall Street buckles under its own weight, Main Street is left holding the bag.
The 2008 financial crisis wasn’t just a market correction. It was a collapse caused by reckless bets, deregulated derivatives, and a culture of profit-without-consequences. The very banks that helped crash the global economy were bailed out with trillions in public funds, borrowed on behalf of the tax payer, to rescue private institutions. And while Wall Street rebounded with bonuses and record profits, Main Street saw foreclosures, layoffs, and gutted retirement accounts.
Fast forward to 2020 when the pandemic hit and once again, Wall Street got a parachute while everyday Americans got a Band-Aid. The Fed pumped trillions into financial markets to keep investors calm, while small businesses drowned in paperwork trying to access lifelines. BlackRock, the largest asset manager in the world, was hired to manage parts of the recovery. The fox was not just guarding the henhouse, it was writing the menu.
Today, three asset management firms control over $20 trillion in assets, more than the GDP of the U.S. economy. They own pieces of everything: homes, hospitals, farmland, even water rights. And yet, they’re virtually unaccountable to the people whose lives they impact. While CEOs amass wealth, the average American faces higher rents, rising debt, and a cost of living crisis that wages can’t touch.
Wall Street isn’t just gambling with our economy, they’re stacking the deck, cashing out, and ghosting on the bill.
Working towards an Economic Realignment
Today, the consequences of this shift are stark. In 2024, the average (S&P 500) CEO makes $17.1 million, which is 350x the average worker. Meanwhile, over 66% of Americans live paycheck to paycheck, with nearly half feeling broke, according to recent surveys. This disparity highlights a system where the rewards of economic growth are not equitably shared among those who input their time and energy.
It doesn’t have to be this way.
We’re at another inflection point in society. The wealth gap is unsustainable. Corporate power is unchecked. The American Dream is more marketing than material. What’s needed now isn’t tweaks around the edges, it’s a deliberative conversation about realignment. We need to reimagine corporate capitalism in a way that markets can be made to serve society, not the other way around. The New Deal, postwar industrial policy, the Great Society, all prove that when government centers legislation around people, not profit, broad-based prosperity can follow.
Capitalism isn’t inherently the problem, it’s capitalism without guardrails or accountability that is the problem. If we want a system that works for all Americans, not just shareholders, we need to steer the ship. Reclaim public power. Rein in private excess. And write the next chapter of American economic life, one built not on extraction, but sustainability.
Tax justice. Antitrust enforcement. Labor power. We need a new social contract that doesn’t just ask workers to invest, but guarantees them a return on that investment. Social investments into housing, education, infrastructure, not just to stimulate the economy, but to rebalance it.
The choice isn’t whether change happens, the question is who is going to influence change and who is that change going to serve.
As inequality deepens, we must ask:
Who is the economy for; shareholders or society?
Should corporations have obligations to their workers and communities?
Can we rebalance capitalism to include stakeholders, not just shareholders?
What role should unions, labor laws, and worker ownership play in the 21st-century economy?
