In the 1950s the financial sector amounted to around 2.5% of GDP. It now amounts to more than 8%, and more than 30% of corporate profits. Anyone who is an apolo

In the 1950s the financial sector amounted to around 2.5% of GDP. It now amounts to more than 8%, and more than 30% of corporate profits. Anyone who is an apologist for such an increase needs to be able to convincingly argue that this increase has been instrumental in increasing the U.S. standard of living in spite of labor's receiving a decreasing share of gains. I for one think it's rather easy to imagine finance and the American standard of living getting along just fine with finance capturing a mere 2.5%. The question is whether this shift is a symptom or a cause: perhaps it's a symptom of a property of progress, whereby labor is becoming decreasingly remunerative, thereby forcing the best and the brightest into finance. The more cynical (and thus, to my mind at least, more likely) explanation is the pervasive, and plainly visible, influence that the financial sector has exercised on policy makers for the past half century, eventually leading to Wall Street's pull turning into an ever strengthening positive feedback loop, whereby savvy Ivy League-ers feel decreasingly adequate if they're not taking in seven figures within a decade of graduation. And so instead of inspiring and setting wonderful examples for everyone else, America's most charismatic are busy cutting deals with each other and exploiting private information asymmetries.