We\’ve heard endlessly from the Guardianistas that the boom in financial services didn\’t do much for anyone outside that gilded circle.
The risks are particularly acute in Britain, where the financial sector accounts for a bigger share of the economy\’s output than in any comparable western country, and where the cull of employees in the City will have massive ripple effects throughout London and the south-east. The casualties will not just be the highly paid bankers, for whom there will be little sympathy, but also the car dealers, the shop assistants, the restaurant staff, the cleaners and all the other people whose employment has relied on the wealth generated in the markets.
It\’s difficult to see how these people can be affected on the way down if they weren\’t affected on the way up.
This is thus an admission that trickle down (in the perjorative sense that Guardianistas use it) does in fact work. You know, employment relying upon wealth generated in the markets?
This is similarly amusing.
….with its emphasis on exploding credit, an array of incomprehensible derivative products and the alleged spreading of risk.
Whatever else we might say about the system, it did indeed do as advertised: it spread risk. That an investment bank has just gone bust over mortgage derivatives, rather than a series of S&Ls, does show that risk was spread. It may or may not have been wisely done, or necessary, or desired, but there\’s no "alleged" about it at all.