I do like to read this kind of Op-Ed. It makes me feel optimistic that one day, I too can write an Op-Ed with a 2nd grader’s grasp of history, facts, or reality and have it published in the NY Times. If it is still around by then, of course.
These days on Wall Street, around 50 percent of every dollar of revenue generated is paid out to its employees in the form of compensation. What other business on earth does this? None.
That’s a strange point. The author makes it sound as if 50 cents per dollar of revenue is a LOT to pay out in salary costs, but it is actually a LOT LESS than what many other firms in the “knowledge” business pay. Certainly salaries consume more than 50% of the revenue in my part of the world – IT Consulting.
If the author is trying to say that 50 cents/dollar is LOW, then he is not helping his argument at all, nor is being clear about it.
His nostalgia (and tenure on Wall Street) for the good ole days of partnerships should have alerted him to the obvious fact that plenty of partnerships participated in bubbles and busts (see Depression, The Great). Salomon Brothers was a partnership in the 1980’s – did not stop them and more examples too numerous to recount (and research) come to mind.
I do not know why the author does not think people would simply move to Switzerland, or China to continue “being rewarded” or that the whole idea of “reasonable risk” is an oxymoron. I guess it is just too much to ask of a simple NYTimes Op-Ed.