richardhutnik said:
HappySqurriel said:
richardhutnik said:
HappySqurriel said:
The question of quality of life is subjective and up to each individual to decide for themselves. Unfortunately, the OWS group (and progressive individuals in general) tend to want these individuals to continue to make these personal sacrifices so that the individuals who are unwilling to can reap the rewards from them; and thisis horribly unfair by most standards.
As for the question of the value "bankers" provide, that really depends on the kind of banker ... Some bankers ensure that loans can be put in the hands of individuals ensuring these people can buy cars, homes, education and personal luxuries they may otherwise have difficulty affording. They help businesses get off the ground through loans and (in the case of investment banks) venture capital. They provide the financial products that enable insurance to exist, and they provide the financial mechanisms allowing companies to hedge against the risks they take. On top of that, they facilitate people investing (either directly or through pensions) allowing them to retire in comfort.
Certainly, there are some "evil" speculative behaviors that are promoted by a tiny minority of bankers and this should be discouraged or eliminated but this represents a very small part of what bankers do. A simple way to discourage it would be to classify investment gains on investments owned for less than a month as income rather than a capital gain.
|
Again, I get back to a banker. I didn't speak a venture captalist who ends up being part owner in the company, helps to direct it where it needs to go, and then gets out. What exactly does someone do who lends out money, demands interest, and makes a profit actually add to the economy? The person who merely puts money in is the equivalent of a gambler. The person doing the work to build the company does have value, and sold the banker who has the money, on the idea. What I speak about isn't good or evil, but exactly looking at what value a banker adds.
So I will ask again here, exactly what do they add, as far as goods and services go, that increase the amount of goods and services for people to buy and use? The entrepreneur who does the work, comes up with the business plan, sells the idea to investors, runs the company, hires and acquires needed capital to conduct business and increases the value in the market, is the one who does work and adds value. So do the people who work for the entrepreneur/owner. But what exactly does the banker add here, outside of their ability to take calculated risks?
And I get back to this, because what matters here more, FAR more than "oh he works long hours" is the nature of what the time is spent on. Someone could equally end up spending such long hours working out how to bet on horses to make money, or studying how to master poker, and going to places to play cards and make money. Just because they spend long hours, doesn't mean they are contributing much things of value to an economy.
|
A banker takes small sums of money provided by individuals who are looking for a safe investment, aggregates it into a much larger pool of money, uses their specialized knowledge to identify safe candidates for loans, and makes that capital available to those individuals at a small cost to cover the inevitable losses of other loans while providing an adequate return to the individual investors.
To understand what bankers provide for the profits they take all you have to do is examine the economy surrounding the few places people have no access to capital that is provided by banks. These are the third world slums where people have no upward mobility. Many charities and non-governmental organizations today are trying to find a way to provide bank-like loans to individuals who live in these areas because the only way these individuals can build wealth for themselves is to gain access to capital though an organization that operates like a bank.
|
And I will extend what I wrote earlier even further. Startups do NOT get money from banks. Start ups get money from venture capitalists. Once a start up gets going, and gets large enough, it will offer an IPO, which then gets it to go to the next level. A bank will provide a line of credit, sometimes, which can help. But beyond this, not much else. The job of a banker is exclusively involved with money. Money, in and of itself, is a means of facilitating the acquisition of goods and services. But, merely pumping more money into an economy doesn't fix things. Doing this will end up causing inflation if sufficient goods and services are not generated.
|
Except... that is where most startups get their money from.
Even the bigger risky ones... you usually need a loan just to make your "proof of concept" before venture capitalists will be willing to step in.
If your wondering why there haven't been as many IPO's as there were say... 10 years ago.
Your not going to like the answer... but it's regulations.
Venture capitalists want companies to go public ASAP because venture capitalists want to make their money back... and after the .com bust, a BUNCH of new regulations were put in place to prevent companies from going public.
http://www.ft.com/cms/s/0/e89c26ea-faa0-11e0-8fe7-00144feab49a.html#axzz1buiDJuOY
Most important takeaway of that article?
The industry members’ concern is the drop-off in the number of US IPOs, from more than 500 in the 1990s to less than 200 in the previous decade, arguing that it impacts job creation. The report says that more than 90 per cent of a company’s hiring occurs after its IPO.
Kinda explains why job growth hasn't been so stellar since the 90's.
