bch132
Wouldn't testing whether politicians are psychopaths be a better use of resources? Or have we already realized they all are?
I also agree that "owners" are likely to try to influence politicians. However, "owners" intentions are probably relevant to the discussion. For instance, there may be existing owners who want to have zoning that prohibits new construction for multifamily units near their golf course. They would see a "developer" who wants to build multifamily units as "bad". Presumably, in this scenario many would support the "developer", ceteris paribus.
On the other hand, if the "owners" were in an area that was being gentrified and there were "developers" who wanted to construct luxury condos in the area (with similar density to the multifamily units discussed above), the "developers" would be "bad" and the "owners" would be the good guys to many.
Politics is inherently involved in both cases as you allude to in your response. The question is which politics is going to better resolve the "crisis" - it appears many will bet on politicians/government to resolve the "crisis". While most politicians can talk a great game, I haven't seen a lot of results from any of them from either party in any geography which tempers my confidence politicians have anything to do with a solution...
This is a classic "seen" versus "unseen" problem - the "wasteful fees" saved is obvious, but what is unseen here? A couple of options might be: 1. indexing makes uneconomic acquisitions easier - a CEO can make stupid acquisitions to get bigger simply because indexing will bail him/her out as being larger for the sake of being larger and representing a greater portion of the index leads to great investor inflows. 2. smaller companies are hurt because there are fewer active investors to bother to analyze them as they have been crowded out by indexing.
This may have "benefited ordinary and small investors the most" thus far, but what happens in the next market crash when indexing investors are rushing for the exits? What has happened to Main Street as a result of the trend towards indexing being firms gain investment simply by being "big"?
It is doubtful many will agree with "bigness for the sake of bigness" is a positive development...
"the rest of the worlds’ factories were destroyed, while ours were not. Globalization hadn’t taken off, so there was no competition between, say, auto workers in the U.S. and auto workers abroad." Not sure what factories being destroyed has to do with globalization, but OK...
"Digging into Chetty's data" - what a joke - those who did not live during the Great Depression earned more than those who lived in it - holy shit, what a conclusion - going to be tough for the Sveriges Riksbank Prize in Economic Sciences to ignore such astute work...
The fact that the author is a PhD candidate at NYU, will soon be an assistant professor at PSU, and is presumably a millennial isn't going to endear any Baby Boomer (or reasonable human of any generation) to the millennials with such a half-ass screed.