Capítulo II: Revisión de Literatura
2.3 Grupos de Interés
As of this writing, there is a general popular consensus that the American economy is booming because of low unemployment272 and the touted stimulus impact of the Tax Cuts and Jobs Act of 2017.273 In this regard, testifying before the House Financial Services Committee, Jerome Powell, the
2018-01-16/london-whale-s-minnow-is-last-hurdle-in-fca-identity-fights (“The regulator returned to court Tuesday to challenge a previous decision won by former JPMorgan trader Julien Grout, who said he was identifiable in the bank’s London Whale penalty notice, which accompanied a 138 million-pound ($189 million) settlement with the bank in 2013. JPMorgan was fined more than $1 billion by U.S. and U.K. regulators after Grout’s boss Bruno Iksil, nicknamed the London Whale for his large bets, incurred $6.2 billion in losses at the lender.”).
272But see Podkul et al., supra note 94 (“[While] employment has risen . .
. about a fifth of the U.S. jobs are in occupations where the median income is below the federal poverty line. And median household income is barely above its 2008 level adjusting for inflation.”).
273See, e.g., Ben Casselman, Up, Up, Up Goes the Economy. Here’s What
Could Knock It Down., N.Y. TIMES (Mar. 20, 2018), https:// www.nytimes.com/2018/03/20/business/economy/economy-recovery.html (“Unemployment is low, job creation is strong[,] and the overall economy seems to be gaining momentum, not losing it. Most economists expect the expansion to continue well into next year, which would make it the longest ever.”).
then new Chair of the Federal Reserve, stated: “The next couple of years look quite strong. I would expect the next two years to be good years for the economy.”274 On March 1, 2018, Powell again maintained that the country’s economic outlook remained positive in remarks submitted to the Committee on Banking, Housing, and Urban Affairs.275
However, despite Chairman Powell’s recent remarks and a favorable GDP growth in the first quarter of 2019,276 there are sophisticated assessments by respected observers that the present-day economy has many of the characteristics of the seemingly thriving economy prior to the 2008 meltdown, when economic optimism reigned.277 A March 274 Heather Long, New Fed Chair Jerome Powell Sees Little Risk of a
Recession, WASH. POST (Feb. 27, 2018), https://www.washingtonpost. com/news/wonk/wp/2018/02/27/fed-chairman-in-public-debut-vows-to- prevent-overheated-u-s-economy/?utm_term=.c3ba7f4c7ce8.
275 Semiannual Monetary Policy Report to the Congress: Hearing Before
S. Comm. On Banking, Housing, and Urban Affairs, 115th Cong. (2018)
(statement of Jerome H. Powell, Chairman of the Board of Governors of the Federal Reserve System).
276 Fred Imbert, US Economy Grows by 3.2% in the First Quarter, Topping
Expectations, CNBC (Apr. 26, 2019), https://www.cnbc.com/2019/04/26/
gdp-q1-2019-first-read.html.
277See Steven Pressman & Robert H. Scott, Recent Stock Market Sell-Off
Foreshadows a New Great Recession, SALON (Mar. 25, 2018, 1:30 PM), https://www.salon.com/2018/03/25/recent-stock-market-sell-off-foreshad ows-a-new-great-recession_partner/ (discussing parallels between the conditions that led to 2008’s recession and characteristics of the present- day economy). See also Pearlstein, supra note 61; Gillian Tett, The
Corporate Debt Problem Refuses to Recede; Non-financial Leverage is Higher Today than it was Before the Crisis, FIN. TIMES (Feb. 8, 2018), https://www.ft.com/content/ceb8d8ee-0b57-11e8-8eb7-42f857ea9f09; Heejm Kim, Jim Rogers Says Next Bear Market Will Be Worst in His Life, BLOOMBERG (Feb. 8, 2018), https://www.bloomberg.com/news/articles/ 2018-02-09/jim-rogers-says-next-bear-market-will-be-worst-in-his-
lifetime; John Authers, The Market Parallels With 2007, FIN. TIMES (Feb. 6, 2018, 4:13 AM), http://www.moneywatch.us/authers-note-the-market- parallels-with-2007/ (“I hate to admit this, but I think I have found a good
2018 widely-cited Wall Street Journal analysis commemorating the tenth anniversary of the Bear Sterns collapse convincingly shows that “the same problems that led to the biggest financial market meltdown since the Great Depression are alive and well today.”278 Specifically, that analysis demonstrates that the Trump-era “rosy-looking stats” of lower unemployment and an increase in median household income conceal the same serious issues that precipitated the 2008 recession, namely: “excessive consumer debt (relative to income) and unaffordable housing.”279 As one widely respected commentator recently demonstrated, “Americans net worth fell at the highest level since the financial crisis in the fourth quarter of 2018, [dropping] to 104.3 trillion as [2018] came to an end, a decrease of $3.73 trillion from the third quarter [amounting] to a drop of 3.4 percent.”280 Another well respected economic analyst’s review of the readily available data demonstrates that “U.S. private
historical parallel for what is happening in the markets [today]. And, it is with the spring and summer of 2007, on the eve of the [2008] credit crisis.”); Nishant Kumar & Suzy White, Greenlight’s Einhorn Says Issues
That Caused the Crisis Are Not Solved, BLOOMBERG (November 15, 2017), https://www.bloomberg.com/news/articles/2017-11-15/greenlight-s-
einhorn-says-issues-that-caused-crisis-not-solved-ja1cw3ws. Even Carl Icahn has said that today derivatives are “risky, often completely misunderstood” financial instruments. Cezary Podkul, Ten Years After
the Crisis, WALL ST. J. (Mar. 27, 2018), http://graphics.wsj.com/how-the- world-has-changed-since-2008-financial-crisis/.
278 Pressman & Scott, supra note 277. 279Id.; see also Podkul et al., supra note 94.
280 Jeff Cox, US Households See Biggest Decline in Net Worth Since the
Financial Crisis, CNBC (Mar. 7, 2019), https://www.cnbc.com/2019/03/
07/us-households-see-biggest-decline-in-net-worth-since-the-financial- crisis.html
debt to GDP ratio is now higher than it was at its 2007 peak before the Great Financial Crisis.”281
The troubling implications of this research have been repeatedly corroborated by the reports of other respected economic commentators. Fortune notes that outstanding non- mortgage consumer credit is currently nearing $4 trillion – a 45% increase from 2008.282 At over a trillion dollars, credit card debt in the U.S. “has reached a seven-year high . . . .” Internationally, “nonfinancial corporate debt increased to 96% of global GDP between 2011 and 2017, with some 37% of global companies now deemed to be “highly leveraged,” (meaning they have a debt-to-earnings ratio above five-to- one) up from 32% in 2007 . . . .”283 In the U.K., concern over the rapid growth of consumer debt has prompted the leading U.K. financial regulator to waive or reduce credit card fees and interest for certain consumers caught in persistent debt.284 Designed to help consumers, the rule will have the corresponding impact of limiting funds to lenders who are experiencing these worrisome defaults, including 281 FRANK VENEROSO, WHERE DOES OUR U.S. INDEBTEDNESS NOW STAND?
RECORD HIGH 1 (2019) (on file with author).
282 Daniel J. Arbess, The Economy Looks Good Today, But the Next Debt
Crisis is on the Horizon, FORTUNE (Feb. 28, 2018), http://www. fortune.com/2018/02/28/debt-crisis-jerome-powell-federal-reserve-testi mony/.
283Id.; see, e.g., Pearlstein, supra note 61. Pearlstein says there: “Now, 12
years [after the 2008 crisis], it’s happening again. This time, however, it’s not households using cheap debt to take cash out of overvalued homes. Rather, it is giant corporations using cheap debt—corporate debt—to record levels. . . . And, once again, they are diverting capital from productive long-term investment to further inflate a financial bubble— this one in corporate stocks and bonds—that, when it bursts, will send the
economy into another recession.” (emphasis added).
284 Caroline Binham, FCA Overhauls Rules on Credit Card Charges for
Struggling Debtors, FIN. TIMES (Feb. 27, 2018), https://www.ft.com/ content/f290ac8e-1baa-11e8-aaca-4574d7dabfb6.
demonstrated “negative repercussions for sub-prime . . . credit card securitizations.”285
Ultimately, the same financial architecture that surrounded the housing mortgage crisis (almost certainly including “naked” credit default swaps) has been replicated in the three key areas where debt is growing at a troubling rate: defaults in student loans, auto loans, and credit card debt. There are even recent reports that subprime mortgage backed securities “have roughly doubled in the first [2018] quarter from a year earlier, as investors lapped up assets blamed for bringing the global financial system to the brink of collapse a decade ago.”286 As was reported in the Wall
Street Journal on the tenth anniversary of Bear Stearns
crisis: “A decade after risks associated with financial engineering nearly brought the economy to its knees, sales of similar products are ticking higher.”287