It now seems clear enough to me – and to Bruce Bartlett – that the sheer size and lucrative bounty in the financial sector is now a real drag on growth, jobs and a core enemy of less inequality. They’re a rentier class, increasingly able to buy special protection in Washington, and wasting so many brains on so much emptiness and greed. This is a trend that has to be checked politically. Tax reform might help:
Compensation in the financial services industry was comparable to that in other industries until 1980. But since then, it has increased sharply and those working in financial services now make 70 percent more on average.