I have been arguing for several years that the power of Wall Street is a danger due to a fundamental shift in the basic philosophy of investment. As a logical outcome of the Reagan revolution, the primary goal of the investor class has become quarterly profit-taking rather than a sensible expansion of markets.
“Good venture capitalists in the late 90s got so much money they become private-equity firms and nobody was doing real early-stage investing in innovative companies,” he told a Brookings Institution forum Thursday. And that produced what he calls “a lost decade” that clouds the economic horizon and contributed to the global financial crisis.
“All of us in politics say jobs are created by small business, but the jobs come from the gazelles, small innovative companies…not your dry cleaners.” But financing such enterprises took a beat seat to “fee generation and financial engineering,” he said. The result was “an economy propped up by overheated real estate and new financial instruments.”
No comments:
Post a Comment