The purported work of Wall Street.

October 15, 2011 | By | Reply More

What do all of those people in the Wall Street towers actually do? You won’t find them doing much of what most people think about when they hear the term “banking.” The following description of the business of Wall Street is from Christopher Ketcham’s “The Reign of One Percenters” at Orion Magazine:

At one time, the financial sector could be relied upon to allocate capital for the building of things that society needed—projects that also invariably created jobs. But productivity is no longer its purview. . . . Structured investment vehicles, credit default swaps, futures exchanges, hedge funds, complex securitization and derivative pools, the tranching of mortgages—these were shown to have “little or no long-term value,” according to [John Cassidy, a staff writer for The New Yorker]. The purpose was to “merely shift money around” without designing, building, or selling “a single tangible thing.” The One Percenter seeks only exchange value, as opposed to real value. Thus foreign exchange currency gambling has skyrocketed to seventy-three times the actual goods and services of the planet, up from eleven times in 1980. Thus the “value” of oil futures has risen from 20 percent of actual physical production in 1980 to 1,000 percent today. Thus interest rate derivatives have gone from nil in 1980 to $390 trillion in 2009. The trading schemes float disembodied above the real economy, related to it only because without the real economy there would be nothing to exploit.

Behold, then, the One Percenter in his Wall Street tower. He creates “value” by tapping on keyboards and punching in algorithms. He makes money playing with money, manipulating abstractions. He manufactures and chases after financial bubbles and then pricks them. . . . A study from the New Economics Foundation in England found that for every pound made in financial services in the city of London, roughly seven pounds of social wealth is lost—meaning the wealth of those in society who do productive work.

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Category: Corporatocracy, Corruption, Politics, populism

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

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