Thursday, July 29, 2010

A bloated financial sector

I heard a discussion over CNBC. A guest commentator remarked that 25% of the US economy is in the financial sector that does not produce anything. This explains why the economic situation is so bad in the USA.

My view
Actually, the situation is bad in many countries, including Singapore. The finance sector is too big, and is distorting the rest of the economy. Who wants to do the real work, when it is easy to make money by inflating the price of shares and properties? This is similar to operating a bad casino - easy to make money by pandering to the greed and gambling habits of the people. The biggest winners are the operators of the casino - i.e. the big tycoons in the financial sector.

1 comment:

Unknown said...

Gambling industry is highly regulated and casino has to pay high sin tax and people know they have little chance to win.

On the other hand, casino in financial sector is not regulated. They are allowed to market "toxic products" with camouflage. Relationship managers are allowed to roam the street to do their customers in.

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