One inevitable consequence of the financial elite's capture of America's political machinery is an increase in corruption. It is easier for observers outside the American political system to notice this trend. Transparency International has released its Corruption Perceptions Index for 2010. The U.S. has slipped from 19th least corrupt in 2009 to 22nd this year.
Implications for U.S. investors are worrisome. Securities investors who seek to redress fraud through regulatory relief can expect little responsiveness from regulators preoccupied with placating their future employers on Wall Street. Litigation is still a viable option, provided plaintiffs can fight lawfare from deep-pocketed big banks. The best option for investors with an axe to grind is to have extensive contacts within a captured system. Knowing which favors to call in and which levers to push is very valuable in a hollow state.