A Smaller Financial Industry?

http://www.futureofcapitalism.com/2011/12/a-smaller-financial-industry

The Manhattan Institute's Nicole Gelinas, writing in the New York Post:

the bigger problem is that Wall Street grew too much — too large to serve the financial needs of the US or world economies. Like any business that outgrows its market, it must get smaller.

A smaller industry would be better for the city in the long run. Without finance dominating New York, people in other industries could afford to work here. The new jobs don't have to pay as much; a shrinking financial industry will drive down housing and other costs....

I respectfully disagree with Ms. Gelinas that a smaller financial industry would be better for New York City because it would make New York more affordable. First of all, people in other industries already can afford to work here; New York's great strength is that, unlike Washington or Los Angeles, it isn't a one-industry town, but that it's already a publishing, entertainment, health care, fashion, art, music, tourism, and education capital in addition to being a financial capital. Second, low housing costs and low-wage jobs don't necessarily guarantee a successful city. The housing costs in Detroit are pretty low, and that city is a disaster. Third, it's one thing to say that the financial industry should be a smaller share of a larger overall pie. What Ms. Gelinas seems to be arguing is that the financial industry should be a smaller share of the existing-sized pie. If that happens on its own, that's one thing, but to suggest it almost as a policy goal that ought to be pursued brings to mind the saying about be careful what you wish for, because you might get it.

by Editor  |  Dec 12, 2011 at 2:45 pm Related Topics:  New York, Non-Profits receive the latest by email: subscribe to the free futureofcapitalism.com mailing list