> The actual measurements of Wall Street productivity are that hedge fund managers, etc. add zero value at all;
There is of course a distinction between revenue and wealth. The folks at investment banks surely were bringing in a lot of revenue, on a consistent basis, over the last few decades. The traditional investment banking functions in M&A brought in consistent fees regardless of how well the new company ultimately did. Traders also brought in a lot of revenue without creating any wealth (trading is not quite zero sum, but the value-add case is much weaker than for traditional banking functions), by transferring wealth from people on the losing sides of bets. As someone notes in the article, the explosion of public (401k, pension) money in the system meant there were a lot of less-sophisticated people willing to take the other side on these bets.
There is of course a distinction between revenue and wealth. The folks at investment banks surely were bringing in a lot of revenue, on a consistent basis, over the last few decades. The traditional investment banking functions in M&A brought in consistent fees regardless of how well the new company ultimately did. Traders also brought in a lot of revenue without creating any wealth (trading is not quite zero sum, but the value-add case is much weaker than for traditional banking functions), by transferring wealth from people on the losing sides of bets. As someone notes in the article, the explosion of public (401k, pension) money in the system meant there were a lot of less-sophisticated people willing to take the other side on these bets.