Quote: (07-22-2013 03:47 PM)Nacirema Wrote:
Quote: (07-22-2013 01:01 PM)Tuthmosis Wrote:
As long as society continues to reward non-producers, people like bankers--who conspire all day to parasitically suck value out of society while giving back nothing of actual value--will continue to exist.
This is a generalization about some bankers that doesn't talk about the reason we have banks in the first place.
Do some of them suck value out of society? Yes.
Do some of them add value to society? Yes.
People find it super easy to say bankers are terrible people, they suck off society, they only care about ripping people off etc.
In order to expand and operate, most businesses (and most other organizations) need some sort financing; they need to borrow money.
In order to store wealth, most individuals are best served by some sort of financial institution (i.e. bank). There is the option of securing gold bricks in your basement, and there are other ways to store wealth as well, but many people don't have the resources to safeguard gold in their basement, and banks are very good at this.
The people who work at financial institutions are experts on making sure that stored wealth is used in a way which will create more wealth, through loans and investments.
Banks facilitate the transfer of funds from Surplus Spending Units (SSU's) to Deficit Spending Units (DSU's).
This is another way of saying banks hold savers (SSU's) money for them, and then invest it into organizations of creators (DSU's) so that they can go create!
In return for this service, banks then make some money off the creator in the form of interest on the loan, and give some of it back to the saver in the form of interest payments; they hold some of the surplus in order to pay for overhead costs, and the rest of what they don't give back is profit.
The reason they are entitled to this profit, the reason people continue to use banks, is because this transaction never would happened in the first place if the bank didn't exist! The saver wouldn't have been able to save, and the creator wouldn't have been able to create. Value was created for both sides, the SSU and the DSU, value that didn't exist before.
Without these finance experts doing their jobs, business would grind to a halt, and people would not have a reason to work and save money because they wouldn't have anywhere to save it.
In other words, without a healthy financial system, we would not have most of the luxuries that we have today.
What these bankers do sometimes requires enormous amounts of expertise and man hours, shouldn't they get paid for what they do?
The internet, and other technology, does eliminate the need for some of these people to work in banking; this new technology does help facilitate easy transfers from from savers to creators. But that doesn't change the fact that bankers do in fact provide a valuable service to our economy and society.
Typical Economist speak.
Bankers aren't your low level HSBC socket full of CDs. Banks make most of their doing speculation and mob casino tricks like what the OP posted. Before 1970s savings dictated the path of capital not debt. The Banks as they should handled mostly just the savings and it was not them holding the balance of credit at their will.