During the early years of the 1980s, the financial institutions of the United States in effect became the chosen industry and corporate champion of the nation. The secretary of the treasury, Donald Regan, who was also the former president of Merrill Lynch, dreamed of the day when American banks would dominate the world. The American finance system had emerged from the 1970s in relatively good shape, and members of the Reagan administration wanted to un-leash the potential of the business. The hallmark of free market theory, the doctrine of comparative advantage, holds that in a global economy nations should specialize in doing what they do best. This would maximize the positive effects of competition, In the United States the theory provided a way to explain why heavy industry was doing so poorly while banks and computer industries were doing so well.
Support for the banking industry...
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