Why should anyone feel grateful for the financial sector? Now, these people earned their money, at least in the sense that they paid their dues and devoted their lives to finance. But is their reward of incredible wealth commensurate with the good they provide for society? Three years into this economic mess, it's hard to believe that they're worth the trouble.
This is somewhat the theme of Paul Krugman today. He says:
Not coincidentally, the era of an ever-growing financial industry was also an era of ever-growing inequality of income and wealth. Wall Street made a large direct contribution to economic polarization, because soaring incomes in finance accounted for a significant fraction of the rising share of the top 1 percent (and the top 0.1 percent, which accounts for most of the top 1 percent’s gains) in the nation’s income. [....]In short, they weren't heroes - they royally screwed the pooch. And they did so with a nice helping of government intervention. Now, if these guys were all doing really great things, maybe I could buy the "they work hard for their paycheck," but they tanked our economy and then got the government to foot the bill for their fuckup.
All of this was supposed to be justified by results: the paychecks of the wizards of Wall Street were appropriate, we were told, because of the wonderful things they did. Somehow, however, that wonderfulness failed to trickle down to the rest of the nation — and that was true even before the crisis. Median family income, adjusted for inflation, grew only about a fifth as much between 1980 and 2007 as it did in the generation following World War II, even though the postwar economy was marked both by strict financial regulation and by much higher tax rates on the wealthy than anything currently under political discussion.
Then came the crisis, which proved that all those claims about how modern finance had reduced risk and made the system more stable were utter nonsense. Government bailouts were all that saved us from a financial meltdown as bad as or worse than the one that caused the Great Depression.
You see, until a few weeks ago it seemed as if Wall Street had effectively bribed and bullied our political system into forgetting about that whole drawing lavish paychecks while destroying the world economy thing. Then, all of a sudden, some people insisted on bringing the subject up again.
Why anyone would defend such a practice is beyond me.