Don’t Just Limit Executive Compensation. Limit Financial Industry Compensation


Gao Xiqing, president of the China Investment Corporation, speaking to James Fallows:

I have to say it: you have to do something about pay in the financial system. People in this field have way too much money…. It distorts the talents of the country. The best and brightest minds go to lawyering, go to M.B.A.s. And that affects our country, too! Many of the brightest youngsters come to me and say, “Okay, I want to go to the U.S. and get into business school, or law school.” I say, “Why? Why not science and engineering?” They say, “Look at some of my primary-school classmates. Their IQ is half of mine, but they’re in finance and now they’re making all this money.” So you have all these clever people going into financial engineering, where they come up with all these complicated products to sell to people.

Another benefit of working in finance, other than the spectacular paychecks? Job security. You create the economic crisis, and people in manufacturing and construction lose their jobs.

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