Everyone hates Wall Street these days.
But everyone also wants to work on Wall Street.
And you can’t blame them!
Wall Street is so important to our country that even after Wall Street helped nearly destroy the economy a few years ago, the country felt compelled to bail Wall Street out. (Car companies were allowed to go bankrupt. With the exception of Lehman Brothers, banks weren’t.)
And Wall Street remains so important to our country that even now, four years after the financial crisis, the country is still subsidizing Wall Street–even though Wall Street is again making money hand over fist.
In fact, there was only a brief period in which Wall Street wasn’t making money hand over fist. That was 2009, when Wall Street basically went bankrupt, nearly taking the economy down with it. But the country made sure that Wall Street didn’t go bankrupt, and now, with zero-per cent interest rates, interest-on-excess-reserves, and a host of other government subsidy tools, the country is making certain that Wall Street keeps making money hand over fist.
And while this perpetual taxpayer-funded profit infusion may be annoying to the other 90% of the economy (where’s our subsidy?), it helps explain why millions of rational people are still desperate to work on Wall Street.
Now, one might justifiably argue that, given how much money Wall Street is making, the government should stop subsidizing it. But if one argued that, one would presumably be met with blank, incredulous stares by the likes of Ben Bernanke and Tim Geithner, whose mission in life appears to be to subsidise Wall Street.
So making the argument that we should stop subsidizing Wall Street would basically be like talking to yourself in a closet.
But in case you still don’t quite appreciate just how much money Wall Street makes, here are some charts.
First, a reminder about how few Americans are fortunate enough to work on Wall Street.
The blue line in the chart below is the total number of employees in private industry in the U.S. (i.e., not government employees). The red line is the number of employees in the “financial services” industry, which includes Wall Street. The green line is the number of employees in the securities industry (e.g., Wall Street).
And now let’s look at how much profit those employees produce.
Here’s a chart of profits-per-employee in the overall financial services industry. (Yes, the financial services industry encompasses a lot more than Wall Street. But it’s not bank tellers and clerks who produce–or get paid for–that profit. And people don’t flock to Wall Street because they want to be clerks).
How does that profit per employee compare to the profit per employee in other industries?
Let’s take a look!
Here’s the profit-per-employee in the financial services industry (red) compared to the profit-per-employee in all other US industries (blue):
See why everyone wants to work on Wall Street?
In fact, Wall Street is so fantastically profitable that financial-services industry profits now account for a staggering 45% of all the profits in our economy. 45%! And that’s after the financial collapse.
So, now you know why everyone wants to work on Wall Street.
And now you also know how positively outrageous it is that our government is still subsidizing Wall Street.
When is enough enough?
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