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Finance is not parasitic. I'm very open to the idea that as a society we'd be better off if we found a way to subsidize very smart people into jobs with more high leverage externalities but finance as a field is actually quite positive sum. Having a bunch of smart people direct resource allocation to its most in demand use is actually hugely beneficial to the world. Imagine the vast amount of value lost if people with great ideas and potential weren't able to get capital allocated to their endeavors. The main people who think finance is some horrible negative sum industry in my experience are people who have never actually interfaced with it or worse, had front office sales roles.
Do we actually have a financial system that directs resource allocation to prosocial ends? Are people with great ideas and potential getting capital directed to their endeavours? To some extent, yes.
But safe returns can also be found in 'house prices up only!' lending, which directly undermines the demographic sustainability of civilization and transfers wealth from young to old. Or SEO/adtech/addictive mobile games.
What about the returns of offshoring industrial capacity? Or standard MBA-tier 'cut investment, cut R&D' wrecking? This kind of sabotage can be very lucrative for well-connected individuals but is corrosive to the national interest as a whole. Or cynically favouring mass immigration to lower wages and thus stalling automation and productivity growth. Privatized gains, socialized costs.
Just because there are smart people in finance, it doesn't mean the sector as a whole is doing a good job. Very smart people can do tremendous damage, more than any idiot robber or murderer.
Housing prices only go up thanks to government policy. You can't really blame the finance industry for that.
The Case-Shiller index went down (in nominal terms) from 2006-2012. It's roughly flat (again in nominal terms) now. Median sales price went down from 2006-2009, and is dropping now.
When I go and look at a graph of US house prices vs median income, that's not exactly the conclusion that comes first to mind!
https://www.longtermtrends.com/home-price-median-annual-income-ratio/
How about 'home price/median income is at its peak, higher even than the very top of the housing bubble' or 'the salary needed to buy a home doubled from 2017 to 2025'.
The claim was "housing prices only go up". They don't. That's different from the claim that housing prices are high now; they are. As for that graph, since the median household income series ends in 2024, data after that aren't accurate.
The claim was ''house prices up only!' lending' is bad, gesturing at the idea that bidding up the price of land is bad and a poor use of credit. Not that house prices only go up. House prices occasionally fall but have been rising as a general trend since financial deregulation. House prices are higher than ever before.
The facts straightforwardly support my conclusions, whereas your claim is misleading in the extreme.
"House prices up only!" lending implies that lending for houses is safe because house prices only go up. Since this is not in fact the case, it is your claim that is misleading.
A lot of things have been rising as a general trend (the S&P 500, for instance). That's different than monotonic increase.
As for "financial deregulation", I don't know which particular one you mean.
Repeal of the Glass-Steagall Act, likely.
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