He was saying that on one of the Sunday pundit shows. He is half right. Half of Wall St activity is raising money for economic growth, the other half, futures and derivatives and mortgage backed securities and short term security lending, is pure gambling. When the bets go bad, it crashes the world economy, like back in 2007.
Economic growth means building factories, airliners, pipelines, office buildings, residential housing, and new product development. All of these activities require financing, you have to pay the workers and the suppliers, but the project doesn't bring in any money until it's finished. So the project borrows the money to get up and running, and pays it back out of earnings from the finished project. No money for investment, no economic growth.
The working part of Wall St raises the money and lends it out to worthwhile projects. The tricky part of finance is deciding which projects will succeed and pay off their loans, and which ones are flaky and will go bust, taking all the money down the drain with them.
The gambling part of Wall St does deals that lack any clear economic purpose, and are usually short term. Real economic growth requires long term patient money, you cannot build anything worthwhile over night, worthwhile projects take months and usually years to pay off. There are Wall Street operations that do overnight loans of both money and securities. I submit that nothing worthwhile can be accomplished overnight, and that kind of short term lending is really gambling.
We need to identify gambling, and drive it off of Wall St, probably by taxing it heavily.
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