Wall Street as a Servant of the Economy
By Pamela Haines, Quaker social justice educator with a concern for economics and the environment
The chair of the Federal Deposit Insurance Corporation, Sheila Bair, had this to say shortly before she stepped down last year:
“In policy terms, the success of the financial sector is not an end in itself, but a means to an end—which is to support the vitality of the real economy and the livelihood of the American people. What really matters to the life of our nation is enabling entrepreneurs to build new businesses that create more well-paying jobs, and enabling families to put a roof over their heads and educate their children.”
Thus, according to economist David Korten, “The proper purpose of the financial services sector is to serve the real economy on which everyone depends for their daily needs, their quality of life, and their opportunity to be creative, contributing members of their communities.
“Because financial services are a means, not an end, they are properly treated as an overhead cost to be minimized. By this reckoning, growth in the size of the financial sector as a percent of GDP represents growth in Wall Street’s overhead burden on the real economy from a highly efficient one percent in 1850 to a grossly inefficient 8.5 percent in 2010.”
For more, go to David Korten’s article, “Beyond the Bubble Economy”: http://www.yesmagazine.org/blogs/david-korten/beyond-the-bubble-economy