The Investment Banking "Revolving Door" and the Structural Financialization of Sovereign Household Savings: Subprime Risk Reproduction, Elite Behavioral Traps, and Systemic Fragility in State-Mandated Retail Asset Schemes

【Description / Abstract】Over the past three decades, modern democratic governance has been fundamentally reshaped by the institutional phenomenon known colloquially as the "revolving door"—the systematic transition of senior executives from tier-one global investment banks (exemplified by Goldman Sachs) into sovereign ministerial cabinets, central banking governorships, and parliamentary leadership. While celebrated in elite political discourse as the importation of technocratic financial expertise, this paper demonstrates that this migration embeds an acute, systemic distortion into national economic architecture: the forced financialization of sovereign household savings. Through a synthesis of institutional political economy and behavioral finance, we analyze the cognitive archetype of the investment banking policymaker. Driven frequently by early childhood scarcity traumas that reinforce an uncritical faith in speculative leverage and debt securitization, these technocrats systematically conflate abstract asset-market inflation with real economic prosperity. We prove that contemporary state-mandated retail investment campaigns—such as universal child accounts (e.g., the U.S. "Trump Accounts"), aggressive tax-sheltered equity initiatives (e.g., Japanese NISA expansions), and "asset-income doubling" doctrines—structurally replicate the exact predatory dynamics of the 2008 subprime mortgage-backed securities (MBS) crisis. Instead of addressing structural wage stagnation, physical manufacturing decay, and demographic decline, the state converts millions of passive, risk-averse working-class households into involuntary marginal buyers, functioning as synthetic exit liquidity for institutional capital. We formulate the mathematical micro-structure of this extractive cycle, demonstrating that financial intermediaries capture guaranteed non-contingent management fees while socialized downside ruin is exported entirely onto vulnerable retail balance sheets. We conclude by formalizing statutory and physical-layer firewalls to permanently decouple sovereign economic policy from investment banking capture, realigning state governance with physical-layer real-economy solvency.