1/7/2013 10:22 PM
Even though the brain’s burning all day, I write late at
night, because if I sat down at the start of the day, and wrote as I thought
about stuff, I’d blow through the day without getting anything else done. No
exercise, no meals, no laundry…believe me, I’ve seen it in others. The personal
hygiene issues alone put me off the idea. But I need to write. So I’m trying to
keep it to one thing, once a day. We’ll see how this goes.
So I took the weekend off. Time to get back to it.
I was listening to an interview of Joseph Stiglitz on Fresh
Air's podcast. It’s from a little while back, but you can listen to it, it’s only about
20 minutes. Near the end, he says something I’ve heard in other contexts, maybe
even from him (on a Daily Show interview?) As a professor at Columbia (in
addition to being the 2001 Nobel winner for Economics) he sees the financial industry
suck up a huge percentage of the brightest students, looking for the big
payday. Others have wondered what progress in how many fields might have
already been made, or might be made in the future, if these minds were applied
to the classic fields, or even the new internet industries, instead of working to
create the next great credit card fee, the next version of mark-to-market
pricing (remember Enron?), the next algorithm to anticipate currency differences and create
arbitrage transactions at the rate of, not millions, but billions of times a second.
A fair thought, I thought.
But then I thought a little more. While the average CEO in
the US is now making well over 400 times what the line worker is making at his
company, the average financial services CEO’s income is outstripping that of
CEOs in other industries, and the starting level salary for the positions those
bright Columbia graduates get in Finance is far above those of their student
cohort entering any other fields.
Why? Why so much more? It’s not that they are so much
brighter than the other ‘A’ students that turn the industry down. And it’s not
the quality of work they do. Have you noticed the complete collapse of the American
Banking, Finance and Reinsurance industries, after doing this for a couple of
decades? No? That’s only because the lowly public-service cohort from Columbia
and all us other left-behinds had to bail out those industries, for well
north of three trillion dollars in public funds (I said “Trillion”, because I’m
including the free loans from the Fed.)
I wonder if it’s not precisely to prevent progress in other
industries.
Because they want to keep the game the way it is. Not just
legislatively, by lobbying to prevent any oversight or reinstatement of
effective regulations like Glass-Steagal, but also competitively, by
preventing innovations that would threaten their current investments. By
sucking up as many technical field prospects and converting them to the
uselessness of fine-tuning customer fleecing methods, there are fewer high-end
scientists and engineers to develop the battery that stores energy forever, or
the actually-safe fusion reactor. And while the inspired will still be out
there, not chasing the dollar but driven by their vision, there will be fewer
engineers, fewer researchers, fewer scientists to do the support work that
every dream needs to become reality. Which means fewer variables for the predictive algorithms they're using in the Financial Industry.
“A few years at GoldmanSachs, and then I’ll get back to that
spray-on solar paneling with the money I make there” soon becomes “But I need
this year’s Maserati” and a spouse’s “Can we go to somewhere in Spain this
weekend?” and the kids have to go to…well, wherever they breed those horrible products
like the Rom-nauts and Meg Whitman’s bully boy of a son. Plan B becomes the
only plan, burying a great idea, a dream, a different future for America, or at least forestalling it for a few more years while the Exxon
dividends and the Eli Lilly stock splits keep on coming.
I grieve a bit. Not just for the success with which the
Financial Industry has become 40% of the profit-making in America, without a
single idea useful to anyone but the industry. But also for all the ideas that have
died, because of all the bright minds, all the creativity, all the dreams, that
have been diverted or shut down by money, nothing more than money, dangled
in front of the students that are the future of
America.
Maybe that's why America is working so hard to get students into debt....but that's for another screed on another day.
1/7/2013 11:10 PM
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