Monday, December 28, 2009

What do the banksters really cost?

Calling the financial community Predators may seem excessive harsh at times.  But the truth is, they are very costly to the wider society.  The following addresses the question of how much damage they do.

Note to “Salary Czar” Feinberg: Bankers Yield Negative Returns
By: Cynthia Kouril
The New Economics Foundation has done an analysis of executive pay based upon an approach called social return on investment. They have produced a rather scholarly looking report [PDF] entitled A Bit Rich, which with the authors being Brits and all, is also a double-entendre.
The study looked at six different jobs and compared what the worker got paid vs. the value of that work to society, among them bankers. The report concluded that City bankers to destroy £7 of social value for every pound in value they generate. In other terms, this is a net negative £6 (roughly $10 in U.S. currency) for every unit of production.
Hospital cleaners on the other hand were estimated to produce £10 of social value for every £1 they are paid; mostly because their work helps to stop the spread of disease and provide for better (less expensive) outcomes for hospital patients. Waste Recycling workers were estimated at 12-to-1.

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