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Wall Street's Growth: Like a Big Tumor

This chart from Princeton's Hyun Shin is the best illustration I've seen of the unsustainability of the boom in the securities sector:

In absolute terms, most sectors grew by a factor of 80 between since 1954. But, at its peak, the non-commercial-bank financial sector had grown by a factor of 800. From Shin:

The greater detail afforded by the chart in log scale reveals that the securities sector kept pace with the rest of the economy until around 1980, but then started a growth spurt that outstripped the other sectors. On the eve of the crisis, the securities sector had grown to around ten times its size relative to the other sectors in the economy. Clearly, such a pace of growth could not go on forever. Even on an optimstic scenario, the growth of the securities sector would have tapered off to a more sustainable pace to keep in step with the rest of the economy.