Simon Wren-Lewis, the Oxford economist, asks the right questions in a post on his blog defending the teaching of macroeconomics after the crisis. He says this about the use of financial economics in the finance sector:
A simplistic take on economic theory (mostly micro theory rather than macro) became an excuse for rent seeking. The really big question of the day is not what is wrong with macro, but why has the financial sector grown so rapidly over the last decade or so. Did innovation and deregulation in that sector add to social welfare, or make it easier for that sector to extract surplus from the rest of the economy? And why are there so few economists trying to answer that question?
Since he is talking about the power of the finance sector even in the economics profession, I think his last question is rhetorical. All the same I would like to know, can we quantify how much rent did the bankers extract from the productive economy. And can we have it back, please?
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