[quote=CA renter] Middlemen, dealmakers, and “capitalists”…these are the people who have benefitted most in the past few decades. They are hardly productive.[/quote]
I wouldn’t say they are “hardly productive.” I think even you would acknowledge that there is *some* value added by the “middleman” to most transactions, otherwise they wouldn’t get paid at all. The issue is whether they are overpaid given their contribution. And that very well may be the case (I would argue that it is the case). But it does beg the question… why do they continue to get paid so much? Whether through ignorance or because they actually believe value is being added, folks continue to pay the middlemen. I’m curious as to the answer myself.
At a prior firm I did a fair amount of investment banking (at the small level – transactions generally under $100 million) and always thought everyone involved, including myself, was overpaid to some degree. And I’m still in the industry although I don’t do as much transaction-oriented work anymore, but I still look at a lot of deals and everyone’s still making a pile of money. And yet the firms involved still pay the fees. If you ask them why, the typical answer is, “It was expensive but it was worth it.” And while I don’t fully understand it, it’s hard to argue with that logic. They’re the ones paying, after all (or, more specifically, the investors are paying – but they’re fully aware of the fees as well).
