I’ve complained many times about government intervention in the financial sector.
The financial and housing crisis, for instance, was largely a consequence of the Federal Reserve’s easy-money policy, combined with the system of corrupt subsidies put in place by Fannie Mae and Freddie Mac.
But there’s another government-imposed cost that burdens the financial sector.
Writing for the Wall Street Journal, Paul Kupiec of the American Enterprise Institute reveals some very sobering – and disturbing – data on pay levels for both the financial industry and its regulators.
Most banks in this country are small businesses and pay employees modest salaries. The Bureau of Labor Statistics reports that the average annual salary of a bank employee was $49,540 in 2012, not much higher than the average annual across all occupations, $45,790.
In other words, there are some very well paid people working for big banks, but most employees in the financial sector earn modest incomes.
But notice that I wrote “most employees.” That’s because there is a big group that is very well paid.
But they aren’t in the business of making loans, allocating credit, and helping to finance future growth.
That’s because these highly compensated folks aren’t in the private sector. They are regulatory bureaucrats.
…one group in banking stands out as highly paid—federal bank regulators. Before the Dodd-Frank Act, the average employee of a federal bank regulatory agency received 2.3 times the average compensation of a private banker. By 2013 this ratio increased to more than 2.7—and in some cases considerably more.