[quote=briansd1]
As a society, we greatly benefited from Wall Street. Without Wall Street and the lending they created, our economy would have been a fraction of what it is now.
Without credit cards, retailers would suffer, restaurants would close and the economy wouldn’t be as vibrant.
Without Wall Street, America would not be the capitalist society it is today.
BTW, CA renter complains about the 7%-9% annual returns that Wall Street did not deliver, but she forgot that relying on those returns allowed the compensation largesse to begin with.
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Brian: I’m as much of a money-grubbing capitalist as the next guy, but I’d also be the first to say that Wall Street has fundamentally failed in its primary mission: The proper allocation of capital to profit-making ventures.
While we don’t have the space to get into all of the details, I think its safe to say that Wall Street’s mission and priorities became tied to short-term bonuses and compensation and thus we saw the explosion of investment products, like CDOs, MBS, etc, that produced the largest bonuses for groups like Lehman, Bear and Goldman Sachs. Combined with the insane amount of leverage that was present and the inherently poor quality of the products themselves, the meltdown became inevitable.
I think if you go back in time and look at groups like Goldman, Merrill and Bear Stearns when they were partnerships and not publicly floated corporations and back when leverage was reasonable and controllable, I think they did a much better job of allocating capital. Of course, this was also back when America actually produced things of value and didn’t really on a wage-stagnant service economy papered over with commercial credit that masked the true ills.
