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Posted by Paul Palmer (72.93.220.55) on 12:09:01 12/06/07
In Reply to: comments on Kroszner speech posted by Warren Mosler
Warren, with someone with obvious talents in both areas (finance, engineering) I think you would be doing this country a lot of good if you would expound on this subject more.
Graduates of our engineering schools are heading off for finance jobs, while engineering jobs ae being exported to India and China. While great minds have always gone into finance, the societal "good" of a more effiecient financial system (especially at this point) pales in comparison to solving clean energy needs, curing cancer, etc. I cannot fathom how some guy running a hedge fund, who has to disclose absolultely nothing about what he is doing, can "earn" $1.6B in pay for one year. Clearly we have actually created "inefficient" financial markets if such can be done.
FOSTERED AN ARMY OF TRADERS WHO COULD HAVE BEEN
OUT CURING CANCER OR SOMETHING ELSE MORE USEFUL. LITTLE OR NONE OF
THE 'FINANCIAL INNOVATION' HAS LED TO MORE EFFICIENT ALLOCATIONS OF
REAL RESOURCES, BUT INSTEAD HAS ABSORBED THE BRIGHTEST AND BEST INTO
THE WORLD OF 'REARRANGING OF FINANCIAL ASSETS' ENCOURAGED UNDER
CURRENT INSTITUTIONAL STRUCTURE, INCLUDING TAX LAW AND TAX ADVANTAGE
SAVINGS PROGRAMS UNDER THE MISGUIDED NOTION THAT 'SAVINGS IS NEEDED TO
PROVIDE FUNDS FOR INVESTMENT' AS EVERY ECONOMIST IS (OR WAS AT ONE
TIME) WELL AWARE.
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