Without offering any particularly useful remedies or further insights, Former Reagan and Bush-1 Treasury Secretary Nicholas Brady responds to the "Occupy Wall Street" sentiments and confirms what, increasingly, we already know - the powerful financial sector has become bloated, unproductive and increasingly irresponsible:
I understand the roots of this vocal resentment. When I came to Wall Street in 1954, investment banking was a profession, one that financed the building of this country’s industrial capacity and infrastructure.
We financed pipelines that brought cheap natural gas to the households of New England. We financed the development of new drugs, which are now the mainstay of today’s health care. We financed inexpensive restaurants that made eating out affordable for families and do-it-yourself home stores that enabled people to improve their quality of life. We financed the earliest personal computers, which ultimately led to the Internet Age. All of this fit within a framework of activities that didn’t threaten this country’s finances, much less the world’s.The link cited is to data from a recent Time magazine poll in which 54% of respondents registered positive views of the Occupy Wall Street movement, while only 23% reacted negative. The poll also showed that 65% have a negative view of the Tea Party, while only 27% are favorable.
But year by year the industry’s emphasis moved away from this purpose and toward financial innovation for financial profit’s sake. According to the Federal Reserve’s Flow of Funds data, from 1980 to 1982, the financial sector accounted for an average 12.8 percent of U.S. total corporate profits. By 2005 to 2007, the three-year average was 23.8 percent.
The money was addictive. It drove people on Wall Street into activities that had no redeeming social value, and it disoriented executive pay scales. This enormity couldn’t be contained, and at its height in 2008 it blew up our financial system.
Has Wall Street been off course? It’s not just the crowds in Zuccotti Park, Freedom Plaza and other public spaces who think so; it’s the majority of Americans.