Study finds bankers are a net economic drain, while hospital cleaners add positive value.

[Alby_da_Wolf]

Kasz216 said:

richardhutnik said:

[...]

Diversification of the economy is critical.  It is important to see long-term trends going on.  As it is now, the percentage of the GDP has been increasingly involving the financial sector.  This article has a graph in it that shows this trend:
http://techcrunch.com/2011/03/26/friends-don%E2%80%99t-let-friends-get-into-finance/ 

This is from the article:

 

An analysis of MIT’s graduate-employment data shows that the financial sector increased its hiring from 18 percent of its graduates in 2003 to 25 percent in 2006. So not only are the investment banks siphoning off hundreds of billions of dollars from our economy with financial gimmicks like CDOs; they are using our best engineering graduates to help them do it. This is the talent that our country has invested so much resource in producing.

When most sectors of the economy grow, new companies are created. The authors found, however, that the finance sector is not driving firm formation; it is cannibalizing entrepreneurship in the U.S. economy by offering wage and skill premiums to individuals who might otherwise have started companies. It is also causing far greater volatility among publicly traded firms and a reduction in the quality of businesses started.

 

 

 

End result is there is no free lunch.  When a sector of the economy diverts away from innovation, into games of playing with making money off financial instruments that have already been sold, and don't raise money for start ups, and also don't properly fund new ventures, or come up with new ventures to begin with, you will end up with the future growth being shortened, and you see a trend where the financial sector continues to consume more and more of GDP.

Your arguement is that grad students who have huge student loans aren't becoming entrepenuers risking all of their money to start up companies.

Weren't you just complaining on your wall about people "Falling down and having almost no chance of recovery."

Failing a startup company (most do) while you have a huge amount student loan debts is one of the few ways it's possible to do that.

This is why I keep saying your arguements are contradictory, you keep saying we have these vast completey opposing problems where one can't exist if the other exists... when the reality is.... it's neither. 

While I agree that fresh graduates, unless they are natural born business geniuses, would better start working for someone else before trying on their own, I'm still persuaded that currently, more than in the past, the biggest merchant banks have a huge conflict of interest with the rest of the economy they are supposed to provide services to. But I can't just blame them, I blame most governments too, starting from my country's new prime minister, Mario Monti, that second their plans and play into their hands.