Why We'll All Benefit from Meltdown '08

  • It's not all bad news.The Find: What good could come from the carnage on Wall Street? A more productive spreading of brain power amongst a variety of industries argues one prominent economist.
  • The Source: Freakonomics co-author Stephen Dubner writing on the NYT Freakonomics blog .
The Takeaway: With Lehman Brothers bust and banks across the world posting some pretty dismal results, some 200,000 or so Wall Street workers are set to lose their jobs. That's obviously rough news for the economy and even rougher news for the families involved, but there is a silver lining argues Dubner. He starts with the premise that for the past few decades Wall Street has attracted our nation's best and brightest:
Like them or not, the men and women who've gone into finance in the past 10 or 20 years... are super-well-educated and work incredibly hard, with intense focus. In economic terms, these people represent a huge stockpile of human capital.
Now, with the detonation of the financial markets, this talent pool is set to disperse to a variety of industries. In addition, "perhaps millions, of college undergrads and graduate students who had planned to work in finance" will be seeking alternate career paths. Where are they headed? Some will move to smaller, healthier financial markets in the US or overseas. Some will open barbershops and bakeries. But many will end up in industries in which they can put their educations and numerical talents to use for, perhaps, a greater good than financial manipulation. Dubner writes:
I can think of a lot of other fields that stand to benefit from all the human capital that is currently sloshing out of finance and into other realms: technology in general, energy in particular, and alternative energy in super-particular; health care; research science; and, yes, education..... I can also see a small subset of this human capital gravitating toward government work.
Twenty years from now, when cancer has been eradicated, when the threat from global warming is a distant memory, when poverty is a hoary old cliche, I'd love to think that we could thank the Great '08 Meltdown for providing the human capital that helped solve these problems
The Question: OK, so eradicating poverty and curing cancer might be a little too optimistic, but do you agree that we'll see benefits from the dispersal of Wall Street quants?

(Image of bad financial news by artemuestra, CC 2.0)