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URL:  http://boards.fool.com/or-do-banks-and-mutual-funds-pss-it-into-the-27429380.aspx

Subject:  Re: OT: Man in the White Suit Date:  2/10/2009  8:48 PM
Author:  Lokicious Number:  25933 of 35663

Or do banks and mutual funds p#ss it into the wind?

Pretty much. Don't forget, mutual bonds don't actually provide working capital, anyway.

As far as I see, starting with Wall Street's con games and blithering idiocy that led to the dot.com bust (dot.coms make money by advertising other dot.coms, etc.) followed by the money laundering of mortgages, etc. very little of those record profits, including from lower production costs due to increased productivity, was put to good use as working capital, especially not in this country.

But the bigger concern is that this isn't just because Wall Street is a bunch of greedy buggers looking for a short term jump with no interest in deploying working capital to some further gain (which is, of course, true). My question (and implicitly that of the movie) is where working capital could be usefully deployed to create new and better jobs—I don't accept that this is a "law" of economics or that there is historical evidence this happens, without a host of intervening variables that render any cause and effect claims moot.

Let's take a real world example. 15 years ago, it took considerable clerical staff work to put together a university course syllabus, process book orders for courses, etc. Now most faculty do this themselves and post the syllabus on line. So (ignoring the union), the need for clerical staff has been reduced by about 75%. Now, it does turn out that there is a need for IT support, which is new (but as computing has become more self-sufficient, we need fewer IT staff than a few years ago). So for every 3 cl