Financialization expanded by selling financial products directly to households

Evidence

One area that has received less attention is the role of households in financialization. As the financial economy has expanded, it has done so in large part by selling more products to households, such as mortgages, second mortgages, mutual funds, stock trading accounts, student loans, car loans and various forms of retirement products (Aalbers, 2008; Greenwood and Scharfstein, 2012). This has been particularly true in the USA, where increasing consumption of financial products and services has deepened households’ involvement in financial markets dramatically during the past two decades. In credit markets, real median household debt levels increased 179% from 1989 to 2007 as consumers took on an ever-wider array of loans (Wolff, 2010). This trend is also apparent in the widespread acquisition and trading of investment assets. The percentage of households with direct holdings of stock equities or mutual funds increased from 20% to over 30% during the 1990s, and the median frequency of financial transactions more than tripled over this period (Kremp, 2010). — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 10

Categorization

• ADDENDUM: Directly supports the everyday-life dimension of financialization — households as the site where financial logic penetrates daily living, the through-line of this reading.
• XREF: Connects to discussions of household debt (‘financialization of everyday life’) in the broader financialization literature, e.g. Randy Martin’s work. — connects to: The erosion of pensions and benefits pushed households toward commercial financial products. — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 55; Financial firms expanded account and credit card holdings across all income groups — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 92; Financial markets reshaped households, corporations, and states over the past 30 years. — Gerald F. Davis & Suntae Kim, Financialization of the Economy, 10 (+1 more)

Related

• The erosion of pensions and benefits pushed households toward commercial financial products. (similarity 0.88)
• Households are pushed into financial markets that promise lifestyle advancement. (similarity 0.85)
• Research on household financialization remains fragmented across separate markets (similarity 0.85)
• Financialization forced households to adopt a proactive finance culture beyond just consuming more debt. (similarity 0.84)
• Households signal financialization through risk-taking, relaxed debt attitudes, and speculative strategies (similarity 0.83)
• Financial firms expanded account and credit card holdings across all income groups (similarity 0.83)
• Household financialization involves adopting new entrepreneurial mindsets, not just buying more financial products. (similarity 0.83)
• Households borrowed heavily to preserve their lifestyles amid economic insecurity. (similarity 0.82)
• Financial markets reshaped households, corporations, and states over the past 30 years. (similarity 0.81)
• The shift to 401(k) plans converted households into stock market participants. (similarity 0.81)
• Financialization also operates as a cultural shift toward entrepreneurial self-management of household finances. (similarity 0.80)
• Financialized cultural attitudes may result from, not drive, expanded financial services. (similarity 0.80)
• Households adopted active financial management under either necessity, opportunity, or both. (similarity 0.80)
• Financialization of households is stratified by class, not uniform (similarity 0.79)

Broader Connections

• The erosion of pensions and benefits pushed households toward commercial financial products. #corroborates (0.90) — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 55