“This,” writes Davidson, “could be the most hated book of the year.”
(In a blog posted Wednesday after the NYT piece was published, Conard said he felt misrepresented by the Times story, but acknowledged it was the price one pays to land the cover of the NYT Magazine.)
Crucial to Conard’s argument is the proposition that we, the 99 percent, benefit proportionally from the vast wealth of others. “Most citizens are consumers, not investors,” he told the Times. “They don’t recognize the benefits to consumers that come from investment.” In other words, the vast majority of Americans spend their money on survival and entertainment; the superrich spend only a fraction of their money on personal comforts, the rest “is invested in productive businesses that make life better for everyone,” as Davidson writes in the Times.
Case in point: computers. A few innovators and wealthy investors earned billions improving personal computing and giving rise to the IT industry. Their work, in turn, has helped billions work more effectively and efficiently, making life more productive and growing the economy.
More payoff, says Conard, motivates more people to take risks, a handful of which could have huge payoffs for society and the economy.
But Conard doesn’t stop there. He argues investment banks make the economy more efficient, too, and argues in his book that the financial crisis was not due to greedy bankers selling sketchy financial products. (“It was a simple, old-fashioned run on the banks, which, he says, were just doing their job,” Davidson writes in the Times piece.) Collateralized debt obligations, credit-default swaps, mortgage-backed securities, and other dubious financial products (now deemed toxic) were sound tools that served the needs of sophisticated investors, according to Conard.
He goes even further, arguing for more – not less – government support of banks, even advocating the creation of a new government program that guarantees to bail out banks if they face another run.