From the hedge fund and private equity industries, more than 82% of the donations went to Romney, $5.7 million. From commercial banks, roughly $4.2 million, or 75% of donations, went to the Republican candidate. By comparison, in 2008 hedge funds and private equity sent nearly 60% of their donations to Obama. And just shy of 58% of donations from individuals tied to commercial banks went to the then-Democratic candidate in 2008.
The decline in partnerships underscores how Goldman and other investment banks have been shrinking worldwide as a result of tougher market conditions and regulations. UBS just unveiled plans to axe roughly one-sixth of its workforce and essentially wind down its bond-trading operation. In London’s financial center—the City—employment is expected to drop 100,000 from its peak of 354,000 back in 2007, by the end of this year. On Wall Street, official estimates suggest New York lost roughly 20,000 securities industries jobs since 2007.
What the opponents of primacy for electronic money fail to realize is that making electronic money the economic yardstick is the key to eliminating inflation and finally having honest money.The European Central Bank, the Fed, and even the Bank of Japan increasingly talk about an inflation rate like 2% as their long-run target. Why have a 2% long-run target for inflation rather than zero—no inflation at all? Most things are better with inflation at zero than at 2%. The most important benefit of zero inflation is that anything but zero inflation is inherently confusing and deceptive for anyone but the handful of true masters at mentally correcting for inflation. Eliminating inflation is first and foremost a victory for understanding, and a victory for truth. There are only two important things that economists talk about that are worse at zero inflation than at 2% inflation. One that has attracted some interest is that a little inflation makes it easier to cut the real buying power of workers who are performing badly. But by far the biggest reason major central banks set their long-run inflation targets at 2% is so that they have room to push interest rates at least 2% below the level of inflation. With electronic dollars or euros or yen as the units of account, there is no limit to how low short-term interest rates can go regardless of how low inflation is. So inflation at zero would be no barrier at all to effective monetary policy. It might be that we would still choose inflation a bit above zero to help make it easier to cut the real (inflation-adjusted) wage of poor performers at work, but I doubt it. So I predict that making electronic dollars the unit of account would pave the way for true price stability with long-run inflation at zero instead of 2%. The main benefit of making electronic currency the centerpiece of the price system would be that central banks would never again seem powerless in the face of a long slump. But even setting that gargantuan benefit aside, the benefits of true price stability alone would easily make up for any inconvenience from the abdication of paper currency in favor of the new rulers of the monetary realm: electronic dollars, euros and yen.