Wall Street’s Scam
The Racket: Monopoly, Corruption, Collapse, Reform, Repeat
The definition of insanity is doing the same thing over and over, and expecting different results. Wall Street has been privatizing financial booms and socializing the crashes for 100+ years. America keeps living through the same economic scam on loop that goes like this:
Industries consolidate. A few giants choke out competition. Profits surge.
The giants rig the rules. Lobbyists flood Washington. Risk piles up in the dark.
The bubble pops. Workers lose jobs, savings, homes. The public pays the cleanup bill.
Legislative reforms. To “make sure this never happens again.” Time passes.
Rules are weakened, gutted, or repealed by Wall Street, Big Tech, Big Banks, Big Oil, Big Whatever as they pressure, sue, and lobby. Go back to step 1. This isn’t an accident, it’s a cycle older than any of us.
The Gilded Age and Birth of Monopoly
In the late 1800s and early 1900s, America was run by industrial cartels. Railroads, oil, steel, finance - each sector was dominated by a handful of men who set prices, crushed unions, bribed legislators, and bought judges like they were cufflinks. This was the original corporate-state merger. By the 1920s, the methods were being perfected: holding companies and trusts to skirt competition. Cartels and price-fixing to tax the public in everything but name.
Stock pools and insider syndicates to manufacture bull markets. Political capture through donations, friendly regulators, and revolving doors - any of that sound familiar? The playbook was simple, consolidate horizontally to eliminate rivals. Then integrate vertically to strangle suppliers and distributors and use finance to launder monopoly power as efficiency. Long before the Great Depression exposed the rot, these barons had already built a private regime above the law, an American oligarchy in everything but title.
The Great Depression
The roaring twenties were a party for bankers and speculators. No such thing as federal deposit insurance, an arena where banks were gambling customer deposits in markets. Insiders pumping stocks with no disclosure rules. Then the market crashed in 1929, setting off bank panics, mass unemployment, and total economic collapse. Think of the market collapse like a huge Jenga tower built on borrowed blocks. Big investors secretly teamed up “stock pools” to push prices up, and banks lent tons of easy money so regular people could buy stocks on margin - pay a little now, borrow the rest. At the same time, powerful companies faced little real competition and their stock prices soared far beyond what their actual profits could support. When money got tighter and loans were called back, investors had to sell fast to repay debt. Those rushed sales knocked out the tower’s lower blocks, prices tumbled, more margin calls hit, and the whole market came down in a chain reaction.
How Congress responded: The New Deal era gave us some of the strongest financial guardrails in U.S. history:
Sherman Antitrust Act 1890. Made it illegal to restrain trade or monopolize a market.
Clayton Antitrust Act 1914. Closed loopholes, banned certain kinds of anti-competitive mergers.
Federal Trade Commission Act 1914. Created to investigate and stop “unfair methods of competition.”
Glass–Steagall Act | Banking Act of 1933. Separated normal banking (deposits, savings, checking) from speculative investment banking (securities underwriting and trading). The message: You can be a casino OR you can be a utility. You cannot gamble with grandma’s deposits.
FDIC insurance 1933. Guaranteed deposits up to a certain amount, stopping bank runs.
Securities Act of 1933 / Securities Exchange Act of 1934. Forced companies to tell the truth about their finances. Created the SEC to police securities markets.
These weren’t academic reforms. They were weapons aimed directly at corporate oligarchs like John D. Rockefeller and J.P. Morgan. The government used them to break up Standard Oil and later to smash other combinations. The public message was clear - the economy exists to serve the people, not the other way around. The result? Banking stabilized and ordinary savers weren’t wiped out every time bankers got reckless. The financial system became boring and boring was good. Boring is what allows people to build a life.
But if you know America, there’s not only a short-term memory problem but also a long-term inability to learn from the past. Starting in the 1980s and accelerating in the 1990s, regulators and courts chipped holes in Glass–Steagall. In 1999, Congress passed the Gramm–Leach–Bliley Act, which effectively repealed core parts of Glass–Steagall. Commercial banks, investment banks, and insurance companies could now merge into giant financial superpowers. “Too big to fail” stopped being a nightmare scenario and became a business model. As decades passed without economic collapse, Congress allowed these and other protections to be weakened, gutted, or undone. By the end of the 20th century, federal antitrust enforcement had been reinterpreted around one narrow question: “Does it raise consumer prices right now?”
Is this all just a game for Wall Street?
If a merger didn’t instantly spike the price of a widget at Walmart, courts and regulators often let it go. Bigness itself stopped being considered a threat to democracy, wages, or supply chain resilience. Dominance, vertical lock-in, vendor bullying, labor monopoly all got the thumbs up as “efficiency.” This reinterpretation let wave after wave of mergers sail through in airlines, banking, telecom, media, meatpacking, defense contractors, pharmacy benefit managers, health insurance, agriculture, cloud computing, app stores, logistics, you name it. Fewer players. More leverage. Less bargaining power for workers and suppliers. More systemic fragility. So we are right back where it began: concentration. We were told this would modernize finance. Nine years later, we got 2008.
2008 Financial Crisis
After Glass–Steagall was gutted and derivatives were left largely unregulated (see also the Commodity Futures Modernization Act of 2000, which helped keep credit default swaps in the shadows), Wall Street levered itself to the moon on mortgage-backed securities, junk paper, ratings fraud, and straight-up fantasy balance sheets. When housing cracked, the system almost went with it. Millions of Americans lost homes, pensions, jobs. Trillions in household wealth vanished. Meanwhile, the biggest institutions and the ones whose size, complexity, and political clout created the danger were rescued because “if they go down, everyone goes down.”
How Congress responded: Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010.
Required big banks to hold more capital as a thicker shock absorber.
Created the Consumer Financial Protection Bureau (CFPB) to stop predatory lending.
Gave regulators “Orderly Liquidation Authority” to wind down failing giants instead of panicking.
Forced some derivatives onto clearinghouses so they couldn’t hide off-books.
Dodd–Frank was supposed to put the gun back in the holster. Yet under heavy bank lobbying, parts of Dodd–Frank were watered down during rulemaking. The industry fought higher capital requirements, fought stress tests, fought derivatives transparency. In 2018, Congress rolled back pieces of Dodd–Frank for “smaller” but still very large banks thereby raising the asset threshold at which strict oversight kicks in. Those mid-size regionals got more room to take interest rate and liquidity risk without the same scrutiny. Not long after, several of those “mid-size” banks faceplanted in interest-rate shock, triggering emergency interventions to protect uninsured deposits. Taxpayers were told again this wasn’t a bailout, just “systemic risk management.”
Is this a Democracy and an Economics Problem?
When a handful of firms control your food, your medicine, your banks, your news, your transportation, your information feeds, your weapons, and your jobs, you don’t live in a competitive market economy. You live in an administered hierarchy where price, wage, and policy are quietly negotiated between corporate boardrooms and political offices and then sold to you as “the free market.”
That’s why the founders of this nation, even back then, were suspicious of concentrated economic power welded to political power. That’s why Progressive Era trust-busters tried to smash monopolies. That’s why New Dealers split banks. That’s why we created post-crisis firewalls over and over again. Because concentrated private power becomes public danger and because every time we let it concentrate, we pay for it the same way. Lost jobs | Lost homes | Lost savings | Lost bargaining power | Lost dignity.
Notice any patterns?
1. Panic of 1873: Over-speculation in the railroad industry, bank failures, and the collapse of a major investment bank.
2. Panic of 1893: Overbuilding of railroads, falling agricultural prices, and the failure of major banks and railroads.
3. Panic of 1907: Market speculation, particularly in the copper industry, and the failure of a major brokerage firm.
4. Crash of 1929 (The Great Depression): Excessive speculation in the stock market during the 1920s, with no regulation.
5. Black Monday (1987): A sudden and dramatic crash on October 19, 1987, dropping by 22.6% in a single day.
6. Dot-Com Bubble Burst (2000-2002): Overvaluation of tech companies during the late 1990s as the internet grew rapidly.
7. Global Financial Crisis (2007-2008): Collapse of the housing bubble, driven by high-risk practices.
How to Finally Break the Cycle
We do not have to continue living through “unpredictable downturns.” As I see it, we are living through a maintained schedule of looting. Every time, we are told this version is different. Every time, we are told the grown-ups are in charge now. Every time, we are told we can trust the markets to discipline themselves. But markets don’t discipline monopolies. Monopolies discipline markets and unless Congress stops pretending not to notice, we already know how the next chapter ends. Wall Street gets the profits. Society gets the bill. It is far past time to reset the rules of the game.
1. Treat bigness itself as a threat again. Stop pretending monopoly is “efficient.” Restore antitrust to what it used to be: preventing dangerous concentration of power, not just policing whether a price at Walmart went up by 12 cents. That means blocking mega-mergers, unwinding abusive vertical lock-ins, and yes, breaking up firms when they sit on entire markets like feudal lords.
2. Reinstate hard financial firewalls. We need modern Glass–Steagall logic: you can be a federally backstopped utility serving the public, or you can be a private casino swinging for the fences but you don’t get both. If you’re too big to fail, you’re too big to gamble. Also: automatic failure resolution. Not bailout theater, actual wipeouts for executives and shareholders when they blow up the bank.
3. Make regulation self-executing, not optional. Right now, a lot of our “safeguards” depend on having heroic regulators willing to fight industries that outgun them 100 to 1 in money and lawyers. That’s not a system. That’s a fantasy. You want to stop banks from levering 40:1? Cap it in statute. You want to stop defense contractors from eating each other? Ban further consolidation in critical sectors unless there are at least X viable, independent competitors left. You want to stop tech platforms from self-dealing? Mandate interoperability, data portability, and a structural firewall between running the platform and competing on it. Do not trust “voluntary commitments.” Write the line in law.
4. Cut off the revolving door. You should not be allowed to leave Congress on Friday and sign a seven-figure advisory contract helping a merger through DOJ on Monday. You should not regulate an industry you plan to lobby for next year. Everyone in D.C. knows this is legalized bribery with nicer suits.
5. Tie corporate rescue to worker rescue. If the public steps in during a crisis, workers should come out better off, not worse. That means strict conditions like no buybacks, no dividends, no executive bonuses, mandatory wage floors, union neutrality, worker seats on the board, and automatic equity upside for the public. If taxpayers are the backstop, taxpayers are also the investor.
We actually know how to stop the loop because we’ve done it before. The problem is not brains, it’s political willpower.