alt Hacker News"Inefficient" implies the money is being burned or something. It's flowing into the pockets of people who work in the financial services industry, who then spend it on other things. The economy isn't zero-sum.
And the industry itself greases the wheels of other industries. In other words without financial services like lending and payment processing there would be less spending and investment overall, so other industries would shrink along with it.
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dontlaugh • yesterday at 3:24 AM
That’s a lot of money for “greasing”. Nearly 10% on any kind of overhead is generally considered a lot.
Central planning is drastically more efficient, for example. It’s why large companies use it internally.
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You’re falling for the broken window fallacy, it’s inefficient as demonstrated by automation reducing the percentage of the economy devoted to financial services without any negative effects.
Banking used to really suck. Walk into an old bank building and it looks empty with spaces for a dozen tellers never actually used, this is a good thing as nobody actually wants to stand in line at a bank. People have largely stopped using cash because swiping a card is just more pleasant.
Meanwhile payment networks (Visa, Mastercard) have over a 50% profit margin, that’s a huge loss for the US economy. Financial services dropping to 1% of the overall economy would represent a vast improvement over the current system.