Goldman Sachs takes huge risks, gets compensated, fails, gets bailed out by the working class citizens, goes on to pay an average salary of $700,000[1]. Is that what these people are worth? Yes, if the market says so? Do the tax-payers have a say? They should, if they're the ones "insuring" them.
While I don't disagree that this is disturbing... it's not really a failure of markets so much as it's a failure of government.
I'm not one to bash on 'big business' and I understand the need to bail out the banking system to prevent cascading failures, but you have to admit things like this show a remarkable level of regulatory and legislative 'capture' on the part of certain business interests.
But back to the essay... when I read it, my overall take was that he was trying to point out that wealth is not a zero sum game. (Sometimes money can be a zero sum game, but wealth is not merely money.) I'd have to agree that too many people see everything as zero sum.
As an example, look at a hot button issue like immigration in the US. Many people see that in zero sum terms... the more immigrants that come, the more jobs they take from the natives. But that fails to see the other side of the equation. Immigrant labor is why you can buy cheap vegetables from California, it's why you can build a house cheaply and in only a couple months. Yes, this is detrimental to the former producers of those goods/services, but it's also beneficial to the consumers of those goods and services.
Anyway, I'm not advocating unrestricted immigration or even trying to make that the topic of this discussion. I was just trying to point out how a zero sum viewpoint doesn't tell the whole story.
While I don't disagree that this is disturbing... it's not really a failure of markets so much as it's a failure of government.
I'm not one to bash on 'big business' and I understand the need to bail out the banking system to prevent cascading failures, but you have to admit things like this show a remarkable level of regulatory and legislative 'capture' on the part of certain business interests.
But back to the essay... when I read it, my overall take was that he was trying to point out that wealth is not a zero sum game. (Sometimes money can be a zero sum game, but wealth is not merely money.) I'd have to agree that too many people see everything as zero sum.
As an example, look at a hot button issue like immigration in the US. Many people see that in zero sum terms... the more immigrants that come, the more jobs they take from the natives. But that fails to see the other side of the equation. Immigrant labor is why you can buy cheap vegetables from California, it's why you can build a house cheaply and in only a couple months. Yes, this is detrimental to the former producers of those goods/services, but it's also beneficial to the consumers of those goods and services.
Anyway, I'm not advocating unrestricted immigration or even trying to make that the topic of this discussion. I was just trying to point out how a zero sum viewpoint doesn't tell the whole story.