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Do these bankers create so much more value than, say, entrepreneurs, that merits paying them so much? Or is there some other reason banks need to pay such high
by lsemel 17y ago
Do these bankers create so much more value than, say, entrepreneurs, that merits paying them so much? Or is there some other reason banks need to pay such high amounts compared to other types of businesses?
- jacoblyles 17y agohttp://en.wikipedia.org/wiki/Supply_and_demand http://en.wikipedia.org/wiki/Supply_and_demand
- christofd 17y agoNo, it's NOT the usual supply and demand that's at work here. Government has deregulated finance to a point where financial leverage went haywire. Further, you have information asymmetry going on here, where the guys causing all the ruckus leave the boat before it sinks. And further, being so close to large amounts of capital wealth brings with it great problems of moral hazard (we lack tools to deal with this). Those should be enough reasons to point out, that all is normal and supply an demand on the market is working is NOT the reason for these income spikes: the more fundamental (systemic) reasons win out here.
- lsemel 17y agoIf it's supply and demand then people should be rushing into banking and leaving other fields to take advantage of the high pay, which would bring it into equilibrium with other fields as the supply of workers increases. That apparently is not happening, because the pay is still vastly higher.