The rising power of the U.S. financial sector was part of a wider change in America. Since the 1980s, the United States has become a more unequal society, and its economic dominance has declined. The core companies of the U.S. economy like General Motors, Chrysler, and U.S. Steel were poorly managed, and falling behind their foreign competitors. As countries like China opened their economies, American companies sent jobs overseas to save money.
American factory workers were laid off by the tens of thousands. As manufacturing declined, other industries rose. The United States leads the world in information technology, where high-paying jobs are easy to find. But those jobs require an education. And for average Americans, college is increasingly out of reach. While top private universities like Harvard have billions of dollars in their endowments, funding for public universities is shrinking, and tuition is rising. Tuition for California's public universities rose from 650 dollars in the 1970s to over 10,000 dollars in 2010. Increasingly, the most important determinant of whether Americans go to college is whether they can find the money to pay for it.
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American families responded to these changes in two ways: by working longer hours, and by going into debt.
As the middle class falls further and further behind, there is a political urge to respond by making it easier to get credit. American families borrowed to finance their homes, their cars, their healthcare, and their children's educations. People in the bottom 90 percent lost ground between 1980 and 2007. It all went to the top 1 percent. For the first time in history, average Americans have less education and are less prosperous than their