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Originally Posted by Chris is me
Mainly, because it's the most common, and I've read it many times. I understand the argument enough that I wanted a fresh challenge of my personal beliefs.  |
Can you expand on why it is a comically flawed assumption?
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Originally Posted by JesseK
For example, investment bankers create no organic economic growth (they shift money around ... that's all they do ...), therefore aren't 'skilled' at anything but generating their own (or clients') wealth. They are paid magnitudes more than teachers, who plant the seeds of future organic economic growth. What an oxymoron.
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I don't think this is true. It takes capital to run a business and invest in R&D, and businesses don't have that kind of capital sitting around. In December 2006, the Ford Motor Company was hemorrhaging cash with no clear turnaround. They went to investment banks and mortgaged the entire company for some $23.6 billion. Ford is now profitable, and was the only one of the Big Three that didn't go to Uncle Sam to get bailed out. While they cut back big then, their recovery is remarkable, recently reaching an agreement with the UAW to bring on some additional 12,000 workers by 2012. Obviously, they need to hire engineers to design the new cars too.
When the airplanes are sold to the airlines, the airlines purchases are all financed. Airlines have notoriously slim margins, they don't keep bales of cash in the back room.
Good investment bankers move money... but they move it to places where they can make the most off of it. Banks don't like to see defaults, they like to see those interest payments.
How do you create wealth without generating economic growth? People certainly get overenthusiastic and cause bubbles, but during the dot-com bubble and the housing bubble there were plenty of people making real money from others overly-enthusiastic viewpoints.