Looking Forward, Looking Back

Cambridge Crocus by .mushi_king

Perhaps I am imagining it, but I have been wondering whether we investment bankers have turned a corner, and perhaps everyone suddenly doesn't hate us any more. Or at least: not quite so much. Either way, I don't seem to have spent so many dinner parties pressed against the back of my chair, and I was cheered to read this week that:

One can’t explain an unusual cluster of errors by citing greed, which is always around, just as one can’t explain a cluster of airplane crashes by citing gravity. Anyway, the greedy aim at profits, not losses.
Lawrence White, writing in Cato Unbound

A sentence with a clarity of thought that made me remember why twenty-five years ago I enjoyed being an economist. Probably, now I think about it, more than nowadays I enjoy working in an investment bank.

In those days I went to lectures, read books, wrote essays and in the exam room attempted to invent clever little economic models on the fly.  Nowadays I go to Town-Halls, read policies, write powerpoint and late at night when I get home I attempt to amuse mysterious people I am never likely to meet with silly little blog-posts written on the fly.

Not that I am complaining - for banks pay more money than universities and as an ex-economist and current investment banker I certainly understand the power of incentives. Great big medium-sized yearly incentives. In return we're willing to work for them when we need to and, this being January, we need to very much indeed for we are reorganising which is quite the most exciting project that anyone who works in a large organisation can engage in. (We're breaking down our horizontal silos with the some front-to-back verticals)

I studied my economics at Cambridge (the one in England) but if I was nineteen now I'd be strongly tempted to study at GMU which is in. .... well, it's in America somewhere... choosing the economics faculty solely on the quality of their blogging. Does that sound silly? To me it's a lot more sensible than the criteria I chose when I selected my old alma mater (the density and colours of its spring crocuses). For a taster of GMU, and the way economists think you can do worse that listen to this conversation with an earnest Russ Roberts and a laconic Robin Hanson in conversation - eventually - about whether economists actually know anything useful at all. Answer? They do.

Mind you, economists are pretty unpopular as well, but in the long run I hope it's going to be hard for the public to maintain a serious dislike of either economists or bankers - patly because there simply aren't very many of them and partly because I think they're going to be maintaining a rather lower profile.

But I worry that, before too long it might be turn of another group to bear the brunt of the public's displeasure: I found this in the FT rather chilling

So why should industrious Asians earn a tiny fraction of what citizens in the west earn? Especially when they have so much of the cash and productive resources, while we have deficits, high costs and poor demographics.
Prepare for a wrenching, unstoppable redistribution of wealth – and I am not talking about domestic taxes. For too long it has been more profitable in the west to finance consumption rather than production. That cannot continue. I am afraid that the west’s credibility – and luck – has run out.
This vast reordering of our economic system has only just begun. We shall have to cancel all the self-indulgence of endless welfare spending and cultivate rather more of a work ethic and a sense of self-sufficiency  
Luke Johnson - The West's Luck has run out   

It may not be a comfortable time to be out of a job in the next few years.