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So in coming to this meeting of some of the very best in the field -- from Elizabeth Warren to George Soros -- I was keen to hear just what the strategy was to restore us to some sort of financial sanity. How could we avoid it again? Yet through the course of the morning, I was struck by two very different and very depressing points. The first is that things are actually much worse than anyone ever talks about. The pivot points of our financial system -- the infrastructure that lets free markets produce real wealth -- have become profoundly corrupted. Balance sheets are "fictions," as Professor Frank Partnoy put it. Trillions of dollars in liability hide behind these fictions. And as expert after expert demonstrated, practically every one of the design flaws that led to the collapse of the past few years remains essentially unchanged within our financial system still. That bubble burst, but we can already see the soaring profits of the same firms that sucked billions in taxpayer funds. The cycle has started again. But the second point was even worse. Expert after expert spoke as if the problems we faced were simple math errors. As if regulators had just miscalculated, like a pilot who accidentally overshoots the run way, or an engineer who mis-estimates the weight of cargo on a plane. And so, because these were mere errors, people spoke as if these errors could be corrected by a bunch of good ideas. The morning was filled with good ideas. An angry earnestness was the tone of the day.

There were exceptions. The increasingly prominent folk-hero for the middle class, Elizabeth Warren, tied the endless list of problems to the endless power of "the banking lobby." But that framing was rare. Again and again, we were led back to a frame of bad policies that smart souls could correct. At least if "the people" could be educated enough to demand that politicians do something sensible. This is a profound denial. The gambling on Wall Street was not caused by the equivalent of errors in arithmetic. It was caused by a corruption of the system by which we regulate those markets. No true theorist of free markets -- and certainly none of the heroes of even the libertarian right -- believe that infrastructure markets like financial systems can be left free of any regulation, including the regulation of rules against fraud. Yet that ignorant anarchy was the precise rule that governed a large part of our financial system. And not by accident: An enormous amount of political influence was brought to bear on the regulators of these core institutions of a free market to get them to turn a blind eye to Wall Street's "innovations." People who should have known better yielded to this political pressure. Smart people did stupid things because "the politics" of doing right was impossible. Why? Why was their no political return from sensible policy? The answer is so obvious that one feels stupid to even remark it. Politicians are addicts. Their dependency is campaign cash. And in their obsessive search for campaign funds, they let these funders convince them that for the first time in capitalism's history, markets didn't need the basic array of trust-producing regulation. They believed this insanity because it made it easier for them -- in good faith -- to accept the money and steer financial policy over the cliff. Not a single presentation the whole morning focused this part of the problem. There wasn't even speculation about how we could build an alternative to this campaign funding system of pathological dependency, so that policy makers could afford to hear sense rather than obsessively seek campaign dollars. The assembled experts were even willing to brainstorm about how to educate ordinary Americans about the intricacies of financial regulation. But the idea of changing the pathological economy of influence that governs how Washington governs wasn't even a hint. We need to admit our (democracy's) problem. We need to get beyond this stage of denial. We need to recognize that until we release our leaders from a system that forces them to ignore good sense when there is an opportunity for large campaign cash, we won't have policy that makes sense. Wall Street continues unchanged because the Congress that would change it is already shuttling to Wall Street fundraisers. Both parties are already pandering to this power, so they can find the fix to fund the next cycle of campaigns. Throughout the morning, expert after expert celebrated the brilliance in Franklin Roosevelt's response to the Nation's last truly great financial collapse. They yearned for a modern version of his system of regulation. But we won't get to Franklin Roosevelt's brilliance till we accept Teddy Roosevelt's insight -- that privately funded public elections tend inevitably towards this kind of corruption. And until we solve that (eminently solvable) problem, we won't make any progress in making America's finances safe again.

For most of the last 1,500 years, the river supported a sustainable salmon economy. Salmon were at the heart of all the Klamath’s tribal cultures, and Indians were careful not to over-harvest them. Each summer, the lower Klamath’s Yurok and Hoopa tribes blocked the upstream paths of spawning salmon with barriers; then, after ten days of fishing, they removed the barriers, allowing upstream tribes to take their share. As the salmon completed their lifecycle, dying in the waters where they’d been spawned, they enriched the watershed with nutrients ingested during years in the ocean. Among the beneficiaries were at least 22 species of mammals and birds that eat salmon. Even the salmon carcasses that bears left behind on the riverbanks fertilized trees that provided shade along the river’s banks, cooling its waters so that the next generation of vulnerable juvenile salmon could survive. “We tried to go to court, to go through the political process, but it didn’t work. …The big issues were still out there, and we still had to resolve them.” Salmon’s biological family may have started in the age of dinosaurs a hundred million years ago. They’ve survived through heat waves and droughts, in rivers of varying flow, temperature, and nutrient load – but they were as ill-prepared for Europeans’ arrival as the Indians themselves. Gold miners who showed up in the mid-nineteenth century washed entire hillsides into the river with high-pressure hoses and scoured the river’s bed with dredges. Loggers dragged trees down streambeds, causing massive erosion, and dumped sawdust into the river, smothering incubating salmon eggs. Cattle grazed at the river’s edge, causing soil erosion and destroying shade-giving vegetation. Farmers diverted water to feed their crops. The dams were the crowning blows. Between 1908 and 1962, six dams were built on the Klamath. The tallest, the 173-foot-high Iron Gate, is the farthest downstream, and definitively blocked salmon from the river’s upper quarter – after it was built, the river’s salmon population plummeted. In addition, the dams devastated water quality by promoting thick growths of toxic algae in the reservoirs. For Klamath basin farmers, however, the dams were deemed indispensable, as they generated hydropower that made pumping of their irrigation water possible.To the farmers, the potential loss of the dams’ hydropower was considered no less crippling than an end to Klamath-supplied irrigation.

For most of the last century, the farmers were oblivious to the damage that dams and water diversions caused downstream, while the tribes and commercial fishermen quietly seethed. The annual salmon run, once so abundant that people caught fish with their hands, was roughly pegged at more than a million fish at its peak; in recent years it has dropped to perhaps 200,000 in good years, and as low as 12,000 – below the minimum believed necessary to sustain the runs – in bad years. Spring Chinook, which once comprised the river’s dominant salmon run, entirely disappeared. Two fish species – the Lost River sucker and the shortnose sucker – that once supported a commercial fishery, were listed as endangered in 1988. Coho salmon were listed as threatened nine years later. All this has had a devastating impact on the tribes. Traditionally able to sustain themselves throughout the year on seasonal migrations of the river’s salmon, trout, and candlefish, tribal members suffered greatly as the runs declined or went extinct. For four decades beginning in 1933, the tribes were barred from fishing the river even as commercial fishermen went unrestricted. Members of the Karuk tribe once consumed an estimated average of 450 pounds of salmon a year; a 2004 survey found that the average had dropped to five pounds a year. The survey linked salmon’s absence to epidemics of diabetes and heart disease that now plague the Karuk. The 2001 cutoff left farmers without irrigated water for the first time in the Klamath Project’s history. Over the next four months, many farmers performed repeated acts of civil disobedience, most notably when a bucket brigade passed pails of banned water from its lake storage to an irrigation canal while thousands of onlookers cheered. The protests attracted Christian-fundamentalist, anti-government, and property rights advocates from throughout the West; former Idaho Congresswoman Helen Chenoweth-Hage likened the farmers’ struggle to the American Revolution.

Yet the increasingly outsize rewards accruing to the nation’s elite clutch of superstars threaten to gum up this incentive mechanism. If only a very lucky few can aspire to a big reward, most workers are likely to conclude that it is not worth the effort to try.

It is true that the nation grew quite fast as inequality soared over the last three decades. Since 1980, the country’s gross domestic product per person has increased about 69 percent, even as the share of income accruing to the richest 1 percent of the population jumped to 36 percent from 22 percent. But the economy grew even faster — 83 percent per capita — from 1951 to 1980, when inequality declined when measured as the share of national income going to the very top of the population.

The cost for this tonic seems to be a drastic decline in Americans’ economic mobility. Since 1980, the weekly wage of the average worker on the factory floor has increased little more than 3 percent, after inflation. The United States is the rich country with the most skewed income distribution. According to the Organization for Economic Cooperation and Development, the average earnings of the richest 10 percent of Americans are 16 times those for the 10 percent at the bottom of the pile. That compares with a multiple of 8 in Britain and 5 in Sweden.