President Obama says Wall Street will come to play a smaller role in the economy’s future.
“Wall Street will remain a big, important part of our economy, just as it was in the ’70s and the ’80s,” Obama tells The New York Times Magazine.
“It just won’t be half of our economy. And that means that more talent, more resources will be going to other sectors of the economy.”
He thinks that’s a positive development, because so many young people were entering the financial services sector at the expense of other industries.
“We don’t want every single college grad with mathematical aptitude to become a derivatives trader,” Obama says.
“We want some of them to go into engineering, and we want some of them to be going into computer design.”
A contraction on Wall Street doesn’t have to cause a contraction in credit markets, he says.
“So, in terms of just growing our economy, we’ve got to have enough credit out there to fund businesses, large and small, to allow consumers the flexibility to make long-term purchases like cars or homes,” Obama explains.
“That’s not going to change.”
Douglas McIntyre of 24/7 Wall Street disagrees with Obama on the shrinkage issue.
McIntyre points out that “the same kind of fate was predicted for Wall St. as The Great Depression ended.” Yet Goldman Sachs and Morgan Stanley both began their climbs to greatness in the 1930s.
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