The “FIRE Sector” (also often referred to as the “FIRE Economy”) is an acronym that denotes the industries of Finance, Insurance, and Real Estate. FIRE economies are able to generate huge profits without exhausting productive resources, since they rely almost exclusively on labor to conduct their most important work, which is making deals and securing agreements.
What is the significance?
The FIRE Sector has been at the heart of President Obama’s economic agenda. From the government bailout of Fannie Mae and Freddie Mac to caps on executive compensation at major banks, and of course health insurance reform, the FIRE sector has been a stalwart recipient of government funds as well as government regulation following the start of the recession.
Who’s talking about it?
On New Deal 2.0, Michael Hudson referred to the Democrats’ failure to properly regulate or stabilize the FIRE sector as an issue in the mid-term elections in 2010. Writing for Think Progress, Matthew Yglesias examines how we might make sense of the financial collapse of 2008 by focusing on the pragmatics and nuances of the American economy such as reforming the FIRE sector and having a plan for financial institutions–even those “too big”–that will inevitably fail.