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@notcapnamerica The problem, as I see it, is Wall Street is incentivized to take greater and greater risks with other people’s money for better ROI to shareholders. And they are incentivized to lobby for less regulation, which is a self reinforcing strategy. 1
@notcapnamerica At some point, the actual businesses that shareholders own parts of become disembodied from the products and stakeholders of those businesses and trading of equities becomes more and more like the Tulip Trade. 2
@notcapnamerica Add to that the growth of the 401k which was intended to incentivize executives but became a quick and dirty way to unburden owners and shareholders of pension plans. More money into the system and greater pressure for more profit means greater risks. 3
@notcapnamerica Add to that the fact that newly minted WS analysts work extraordinary hours for moderate pay. They expect to be compensated with hefty bonuses which means greater risk taking. 4
@notcapnamerica An example of the consequences: the decimation of the small molecule R&D industry through M&A, inconsistent and short sighted portfolio decisions, halt of research while political players divided the spoils etc. Research made little progress in last 25 years. 5
@notcapnamerica The MBAs blamed the scientists and decided to cut them loose to increase shareholder value. Hundreds of thousands of careers were ruined and research on many diseases were sharply curtailed or cut altogether while financiers traded shares like baseball cards. 6
@notcapnamerica What was that saying about the banality of evil? Evil being the result of good men doing nothing? You’ll never know until you get a disease that could have been cured during the Biological revolution and was cut short for shareholder value. Fin.
