In the U.S., the financial sector contributes to GDP at a ratio of eleven (11!) times the size of production, according to a presidential advisor I spoke with, in 2008. In simple terms, that means we are betting more on (stacked) valuations than actually producing value — a dangerous predicament.
Short term that does not look all too bad on the GDP leaderboard, until you realize that betting on finance is evolutionarily non-renewable without production, and thus merely a self-fulfilling prophecy of sorts and a severe threat to our economic wherewithal of long.
What this also means is that the assignment of merit is increasing oligarchically controlled by those who arbitrate production. Indicating, production will not see the light of day until it produces returns to feed the increasing bite-size of such a rat-race for finance, yielding an ever-narrowing standard deviation of merit, induced by subpriming, and ignoring the renewal from a Long Tail of merit, in total addressable opportunity much larger than the Torso.
You can witness this kind of subpriming all around us. In the food business, the innovation business, real estate, etc. Everything swallowed up by superstores, with mass production to yield larger returns, its products more similar rather than diverse in composition. Quite the antithesis to the growing need for diversity of humanity.
We must build new and smarter operating-systems of humanity to for the first time deploy systems in sync with the strength of our economic diversity and renewability, for the role of finance to begin to play a constructive role in the dynamic renewal of merit aligned with our evolutionary goalposts to strengthen, inspire, and enrich us all.
We shall not blame the people in finance for we, the people, have failed to establish the proper thesis that determines what can be discovered (Einstein). Do not hate the players, hate, or better yet, adjust the name of the game.