For what is ‘normal’? Were the decades of the 1990’s and 2000’s, which witnessed unprecedented prosperity in the financial sector, normal? Logic dictates that the answer is no. There was “too much finance”. So much so that the financial system was a farce.
The financial sector became far too large in relation to the real economy. The compensation of those who worked in the financial sector became increasingly disproportionate, and abhorrently so, relative to the wages being earned in the real economy making real things. Too many financial instruments were being derived on other financial instruments, becoming too far removed from anything that even remotely resembled real assets or real economic activity.
These were abnormal times, and were therefore unsustainable times. The heyday of finance was nothing more than a pyramid scheme, only viable until it was unable to reel in the last sucker.
The world has finally come to the realization that pushing paper to other paper pushers for the sake of paper pushing doesn’t, in fact, constitute real value-added economic activity. The myth of the financial system as an unbridled source of wealth has been exposed.
