11 ms·

It's a problem because unlike other activities finance produces benefits to society only when it well, finances people doing things other than finance. Other a

It's a problem because unlike other activities finance produces benefits to society only when it well, finances people doing things other than finance. Other activities are valuable in themselves.

med555i 16y ago
You do realize companies that provide those valuable goods can grow faster, hire more people, and grow our economy's GDP much quicker, with more capital, correct?
- rbarooah 16y ago
  No. Not correct at all. There is no evidence whatever showing that the current size of the financial industry caused faster growth, more hiring or GDP growth other than the financial industry itself.
  - med555i 16y ago
    That is a complete straw man. Please stop using straw man arguments.
    - rbarooah 16y ago
      How is it a straw man? You claimed something, and I said there was no evidence for it. I guess you just don't have any evidence.
      - rbarooah 16y ago
        And since we're on the subject of evidence - what do you think of this: The private goods-producing sector value added fell 6.4 percent in 2009, after a 4.2 percent decline in 2008. The private services-producing sector declined by 2.1 percent, after a 0.4 percent increase in 2008. The finance and insurance industry grew 6.1 percent in 2009, partially offsetting the widespread economic decline. The increase was primarily driven by the strong recovery of the insurance carriers industry. From a December 2010 report from the government's bureau of economic analysis. http://www.bea.gov/newsreleases/industry/gdpindustry/gdpindnewsrelease.htm http://www.bea.gov/newsreleases/industry/gdpindustry/gdpindn...
Dove 16y ago
I still find it hard to parse that as a problem. I mean, power generation only provides a benefit to society when someone uses the electricity to do something. So what? Infrastructure isn't inherently parasitic. Lots and lots of infrastructure isn't even necessarily bad. I view finance as infrastructure. The machinery that hooks investors up with investees is fundamentally useful. The machinery that lets people and businesses manage risk, that lets them define very specifically what gains and losses apply to them in what events . . . that's really darn useful stuff. If it's complex sometimes--even incomprehensible--in order to achieve something, so what? So is software. So is engineering in general. Some people practice finance badly, I don't doubt; some engineers are snake oil salesmen, too, hiding behind the inherent complexity of problem and solution. The government bailed out finance and that's bad, but it bailed out auto, too. That doesn't make car manufacture generally parasitic. Those are historical specifics, justified complaints against individuals and events. But I don't see anything here justifies the demonization of the industry in general.
- rbarooah 16y ago
  If you see finance as infrastructure to help other businesses grow (as I do), then it's growth should result in the growth of other industries. Instead what we see is finance growing and other industries declining. To me that suggests a general dysfunction in the role of finance. It simply isn't doing the good it's supposed to. There may be many or even most individuals who are acting in good faith, but the sector as a whole appears to be broken. This isn't about demonization. It's about pointing out a serious threat to society's continued prosperity. And as for the auto industry - they shouldn't have been bailed out either - that doesn't somehow make it better that the financial industry was. Also the auto bailout was a rounding error compared to the financial bailout.
  - yummyfajitas 16y ago
    What industries are declining? As far as I know, virtually every sector of the economy has grown. Manufacturing, medicine, education and technology certainly have. What industries are declining, and why do you believe that finance has failed them?

It's a problem because unlike other activities finance produces benefits to society only when it well, finances people doing things other than finance. Other activities are valuable in themselves.

med555i 16y ago

You do realize companies that provide those valuable goods can grow faster, hire more people, and grow our economy's GDP much quicker, with more capital, correct?

rbarooah 16y ago
No. Not correct at all. There is no evidence whatever showing that the current size of the financial industry caused faster growth, more hiring or GDP growth other than the financial industry itself.
- med555i 16y ago
  That is a complete straw man. Please stop using straw man arguments.
  - rbarooah 16y ago
    How is it a straw man? You claimed something, and I said there was no evidence for it. I guess you just don't have any evidence.
    - rbarooah 16y ago
      And since we're on the subject of evidence - what do you think of this: The private goods-producing sector value added fell 6.4 percent in 2009, after a 4.2 percent decline in 2008. The private services-producing sector declined by 2.1 percent, after a 0.4 percent increase in 2008. The finance and insurance industry grew 6.1 percent in 2009, partially offsetting the widespread economic decline. The increase was primarily driven by the strong recovery of the insurance carriers industry. From a December 2010 report from the government's bureau of economic analysis. http://www.bea.gov/newsreleases/industry/gdpindustry/gdpindnewsrelease.htm http://www.bea.gov/newsreleases/industry/gdpindustry/gdpindn...

Dove 16y ago

I still find it hard to parse that as a problem. I mean, power generation only provides a benefit to society when someone uses the electricity to do something. So what? Infrastructure isn't inherently parasitic. Lots and lots of infrastructure isn't even necessarily bad. I view finance as infrastructure. The machinery that hooks investors up with investees is fundamentally useful. The machinery that lets people and businesses manage risk, that lets them define very specifically what gains and losses apply to them in what events . . . that's really darn useful stuff. If it's complex sometimes--even incomprehensible--in order to achieve something, so what? So is software. So is engineering in general. Some people practice finance badly, I don't doubt; some engineers are snake oil salesmen, too, hiding behind the inherent complexity of problem and solution. The government bailed out finance and that's bad, but it bailed out auto, too. That doesn't make car manufacture generally parasitic. Those are historical specifics, justified complaints against individuals and events. But I don't see anything here justifies the demonization of the industry in general.

rbarooah 16y ago
If you see finance as infrastructure to help other businesses grow (as I do), then it's growth should result in the growth of other industries. Instead what we see is finance growing and other industries declining. To me that suggests a general dysfunction in the role of finance. It simply isn't doing the good it's supposed to. There may be many or even most individuals who are acting in good faith, but the sector as a whole appears to be broken. This isn't about demonization. It's about pointing out a serious threat to society's continued prosperity. And as for the auto industry - they shouldn't have been bailed out either - that doesn't somehow make it better that the financial industry was. Also the auto bailout was a rounding error compared to the financial bailout.
- yummyfajitas 16y ago
  What industries are declining? As far as I know, virtually every sector of the economy has grown. Manufacturing, medicine, education and technology certainly have. What industries are declining, and why do you believe that finance has failed them?