Summary

This chapter is dedicated to the faults within the U.S. government’s regulatory apparatus, as Chomsky begins with the history of regulation; in each sector, regulatory legislation has been controlled by “the economic concentrations that are being regulated,” in a conscious effort to “take over the regulators and essentially run what they do” (79). In simpler terms, “the banks and bank lobbyists are actually writing the laws of financial regulations” (79). Chomsky begins this chapter by providing an example of this so-called regulatory capture through the Glass-Steagall Act and its dissolve under the Clinton administration in the 1990s. The act separated investment banks from federally-backed commercial banks; its dissolve granted the risky acts of investment banks safeguard under the federal government and ultimately, the taxpayer.

The Glass-Steagall Act was actively undermined by those within the financial industry- the industry the act sought to...