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A lot of the financial industry though today works so many layers above actual loans it's hard to see how they contribute and even harder to see why they make s
by mousa 16y ago
A lot of the financial industry though today works so many layers above actual loans it's hard to see how they contribute and even harder to see why they make so much more money than everyone else. I'm not an expert, I'm sure there is some justification, but it's not obvious to most people and that's why, sometimes, we the laypeople wonder.
- asanwal 16y agoI agree with you to some degree. There is a lot that happens well out of public (and sometimes regulatory) purview. I just think views that "finance is bad" or "startups are the best" are myopic, don't advance the discussion and ultimately fail to realize the inter-related'ness of all these different forces. Ultimately, we live in a pretty free agent society and if Wall St can pay more (no matter the reason), the rational engineer whose primary motivation is money should take that job. There is nothing wrong with that. The engineer who is motivated by money and other factors (building something valuable, being his/her own boss, etc) also has avenues a la doing a startup.
- rbarooah 16y agoThis would be true if the losses from the last crash hadn't been socialized. If the financial industry had actually had to bear the consequences of the risks they take in the same way that entrepreneurs do, the decisions would be rational. As it is, the finance sector is protected by the government whereas startups are not.
- asanwal 16y agoWhen the collapse of Facebook presents systemic risk (or the illusion of system risk depending on your perspective) to the US, I'm sure it will get a "bail out" as well.
- rbarooah 16y agoSeriously? You're saying that it's fine for the financial industry to hold the country hostage when they fail because there's equal opportunity for other industries to do that too if they too can become large enough?
- asanwal 16y agoNot justifying it, but when people think the whole system could break down, crazya$$ isht happens. The rightness or wrongness of what was done is not what I was getting into. Merely commenting on your point as to why the "finance sector is protected by the government whereas startups are not".
- rbarooah 16y agoRight - but the finance sector wasn't chosen at random to receive a bailout because of 'craziness'. It was bailed out because it's dysfunctional. And now, people in the financial industry expect it to get bailed out when it screws up, since that's what's happened time after time. Whereas people joining startups have no such expectation. If you don't seriously expect Facebook to get bailed out it's not a particularly meaningful thing to bring up.
- asanwal 16y agoI am guessing (and apologies if I'm wrong) that you've not worked in finance else I don't think you wouldn't paint the entire industry with such a broad brush. I don't disagree with you that a lot of stupid, ignorant and misguided things happen in the industry, but in general, I find that the "Wall St is bad" rhetoric is easy to get wrapped up into because it is fashionable and easy to do. But nevertheless, I'll go back to my original point. If the gov't thought that Facebook (or any startup) presented systemic risk, it'd likely get bailed out. I'll leave it at that.
- rbarooah 16y agoEqually relevant: if the government thought that Facebook had weapons of mass destruction, they'd topple Zuckerberg.
- mdda 16y agoAnd GM is blameless because they make SUVs?
- rbarooah 16y agoWhat relevance has that comment?
- chopsueyar 16y agoExcellent point.