Feeding the Hand That Bites You
Some of New York’s biggest companies, including Wall Street giants Goldman Sachs and Citigroup, received doses of swine flu vaccine for at-risk employees, drawing criticism that the hard-to-find vaccine is going first to the privileged.
“Wall Street banks have already taken so much from us. They’ve taken trillions of our tax dollars. They’ve taken away people’s homes who are struggling to pay the bills,” union official John VanDeventer said. “But they should not be allowed to take away our health and well-being.”
–“Goldman Sachs, Citigroup got swine flu vaccine“; Yahoo! News (11/5/2009)
I get “not biting the hand that feeds you.”
What I find puzzling is “feeding the hand that bites you.”
Not Just Dibs on Vaccines
Getting dibs on a scarce vaccine is the least of the harm that Wall Street does.
Much worse is the gravitational pull that it exerts on our capital — and talent.
Jeremy Grantham puts it this way:
Every country needs a basic financial system to function effectively with letters of credit, deposits, and check writing facilities, etc. But as you move beyond that it is worth remembering that every valued job created by financial complexity is paid for by the rest of the real economy, and talent is displaced from real production, as symbolized by all of the nuclear physicists on prop trading desks. Viewed from the perspective of the long-term well-being of the whole economy, the drastic expansion of the U.S. financial system as a percentage of total GDP in the last 20 years has been a drain on the health and cost structure of the balance of the real economy.
–Jeremy Grantham, “Lesson Not Learned: On Redesigning Our Current Financial System”
FYI, “prop trading” refers to “proprietary trading,” or bets that Wall Street makes with its own money.