Sunday, February 16, 2014

The problem with reducing Wall Street compensation to decrease inequality

It is certainly true that there has been a dramatic increase in the number of highly paid people in finance over the last generation. Recent studies reveal that most of the increase has resulted from an increase in the value of assets under management. (The percentage of assets that financiers take in fees has remained roughly constant.) Perhaps some policy could be found that would reduce these fees but the beneficiaries would be the owners of financial assets – a group that consists mainly of very wealthy people.
--Lawrence Summers, Financial Times, on Robin Hood returning money to the rich. HT: Marginal Revolution