Both Ends, Middle 0
For quite a while, Wall Street has been patting itself on the back for “creating wealth” by devising “new financial products.”
More accurately, they have been repainting the shells in the same old shell games and touting them as something new. Their motto has not been “innovation.” It has been, “There’s one born every minute.”
Paul Krugman on Goldman Sachs:
And Wall Streeters have every incentive to keep playing that kind of game.
The huge bonuses Goldman will soon hand out show that financial-industry highfliers are still operating under a system of heads they win, tails other people lose. If you’re a banker, and you generate big short-term profits, you get lavishly rewarded — and you don’t have to give the money back if and when those profits turn out to have been a mirage. You have every reason, then, to steer investors into taking risks they don’t understand.
