Sure, Wall Street serves a purpose in allocating capital. So do personal injury lawyers. That's not why people are mad at them. Read the New York Times. The outrage is largely directed at activities that don't pass the "smell test." Traders losing billion dollar bets with pension fund money, private equity firms loading up healthy companies with debt than cashing out, the insidious relationship between Wall Street and the Treasury/Fed. If Wall Street stuck to underwriting IPOs and providing business loans and other unobjectionable activities, it wouldn't raise peoples' ire. But if they stuck to unobjectionable activities, their revenues would also be cut by more than half and profits by even more than that.

An interesting statistic is that Google's is more profitable than Goldman Sachs by almost every metric. They have higher revenues per employee, higher profits per employee, higher profits per unit of equity, etc. Nobody is demonstrating in Amphitheatre Parkway about how Google is ruining the country. Because people are smarter than you give them credit for.

Yes, absolutely. It's not just that they are making high risk bets for clients who are advised of the risk. It's that they are taking "investments" that have zero percent chance of payout, such as selling million dollar McMansions to unemployed high school drop outs, and scheming the system to package them as AAA securities by creating bogus insurance schemes that have no chance of being paid out, then ensuring their profit by investing the money in "donations" to political candidates. The idea that this is investing in productive economic activity or that these are investments at all is a fallacy. It's fraud.

I think the issue here is not that Wall St. should be closed down but rather that it should be better regulated, and when in doubt, regulations should air on the cautious side. No one has a problem with success, even if they don't make a dime from it. The issue here is when people who never shared in the profit, not even in the form of taxes, pick up the bill for all the losses ( http://en.wikipedia.org/wiki/Privatizing_profits_and_sociali... ).

Absolutely a fair point - and another big part of why they "occupy wall street" movement doesn't speak with one voice.

Did you check out the new yorker article I mentioned about ("what good is wall street"). Even an article like this, which takes a very dim view of wall street, notes the vital role that banking (and, yes, wall street itself) plays in a modern economy. "Moving money from where it is to where it is needed", is unbelievably important and good work, even if it is transactional in nature. A system that can get money from savings accounts and turn it into capital for businesses is spectacular.

The problem (well, according to the article) is that this core, economically useful activity is not the main function of walk street anymore (one academic cited in the article estimates that if the financial sector were limited to the useful activities, it would be one-third to one-half of its current size).

I don't think anyone is saying banks shouldn't loan money to new and growing businesses, it'd just be nice if they didn't crash the entire economy at the same time.

I would point you to this post by James Kwak: http://baselinescenario.com/2011/10/09/wall-street-and-silic...

Venture capital has been around for centuries, and in its modern form, since about the 1950s. Very little of it comes from Wall Street.