Over the past year, American politics has experienced something of a revolution. What else can explain the surprising success of Trump’s bombast and the remarkable tenacity of Sanders? Though to some their emergence may seem sudden, the causes of this populist revolt—mostly the fault of elite disregard for larger public opinion—stretch back at least a decade, before either of these men became serious contenders for political power. The collective arrogance of the financial sector, where I worked for many years, is responsible for much of the backlash.
The events surrounding the 2007-09 financial crisis in particular offer a vivid illustration of how the nation began to lose faith in the meritocracy that it once held in high esteem. In banking, industry, and government, all the presumed intelligence and superior education of this group seems to have conspired to bring the nation to a calamity. Legislation, without a thought to consequences, had for years pressured banks to issue mortgages to people who could not afford them. The elite in banking found ways to comply and still make money by packaging the questionable loans to sell off to small savers and less clever folk in pension funds, also without a thought to the consequences. The brilliant souls at the government-sponsored agencies, among them the Federal National Mortgage Association (Fannie Mae), facilitated the process by dealing heavily in these packages of bad debt, while the regulators found ways to look the other way. All the members of this elite got what they wanted as the nation’s financial structure become increasingly fragile.
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