John Cassidy's piece for the New Yorker, "What Good is Wall Street?" is a fascinating look at the current state of investment banking in the US. It shows the power of the financial sector and hints at the issues around reform with the thoughts of academics and the perspective of those inside the business that they already do good and should be commended for the good they do.
The startling rise of finance as a massive contributor to US corporate profits was highlighted in this piece...
"Since 1980, according to the Bureau of Labor Statistics, the number of people employed in finance, broadly defined, has shot up from roughly five million to more than seven and a half million. During the same period, the profitability of the financial sector has increased greatly relative to other industries. Think of all the profits produced by businesses operating in the U.S. as a cake. Twenty-five years ago, the slice taken by financial firms was about a seventh of the whole. Last year, it was more than a quarter. (In 2006, at the peak of the boom, it was about a third.) In other words, during a period in which American companies have created iPhones, Home Depot, and Lipitor, the best place to work has been in an industry that doesn’t design, build, or sell a single tangible thing.
While the industry hasn't made anything tangible, it can be argued that its been dangerously creative in its attempts to develop new forms of assets.
