“We’re doing God’s work.” This was how former Goldman Sachs CEO Lloyd Blankfein once tried to justify the record high bonuses he and his fellow investment bankers earn by working hard to relentlessly reorganize companies listed on public stock markets. Not surprisingly, a scoff was heard around the world.
And for good reason. There can be no question that investment bankers, private-equity firms and other stock-market insiders do extremely well by way of stock-market capitalism. Nevertheless, the primary function of public capital markets must be to serve the general public, not just a few insiders.
Here lies, in my view, Prime Minister Sanae Takaichi’s fundamental economic challenge: Her mentor’s Abenomics have beaten deflation; but now that an inflation up-cycle is well entrenched, the Japanese people are suffering from “bad inflation” but not benefiting from “good inflation.”
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