In the period 1950-1980 U.S. companies built an infrastructure to provide the consumer lifestyle we all know and appreciate. With the advent of computers and globalization, in the period 1981-2010 financiers de-constructed the infrastructure through leveraged buyouts, arbitrage, derivatives and specialized finance to realize vast amounts of untapped or dormant value. As the opportunities became more scarce, leverage was used to improve returns.
A poster child for this second period of "financial engineering" was GE Capital, who dominated many financial services for businesses. Not only did they provide financing at better terms than commercial banks to finance purchases from other GE divisions, but they also pioneered "new" products such as private label credit cards for large retailers.
The NY Times reported today that GE Capital is completing the tasks to basically wind down this division of GE. Many blame the financial crisis of 2007-2008 for the demise of GE Capital. Others would point the finger at increased regulation post crisis. I think GE Capital got swept up in the craziness of the ten years preceding the crisis and lacked the financial controls to properly manage the business. Of course, this is the same reason AIG, Lehman Brothers, Merrill Lynch....all failed in one way or another. Financial controls for financial operations appears to be an area where we still have much to learn. To just write the errors off to greed is to miss the opportunity to learn.