Thursday, March 12, 2009

They Say It Like It's a Bad Thing

According to the Wall Street Journal, "the exodus" out of finance is in full force. As politicians have tried to attach more strings to bailout packages to appease angry voters, and anemic (if that) earnings have drastically cut into Wall Street bonuses, more and more bankers are leaving the business. What a shock - investment bankers were only it for the money. But the Wall Street Journal says this as if it were bad. It is not. Just as there was massive misallocation of capital into bubbles over the last decade and a half, there has been massive misallocation of human capital into banking. If our best and brightest physicists and MBAs turn their attention to solving real problems rather than inventing new ways to pile leverage on top of itself, I think our society will manage to keep going. We might even prosper again, as opposed to merely creating an illusion of wealth. Indeed, the sooner we can turn our top minds towards developing green tech or making healthcare more efficient, and away from mastering market manipulation, as Jim Cramer explains below, the better we will be.

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