An economy ground in finance won't work!

According to Business Week at least.

Fueled by headlines about top managers such as Home Depot (HD ) CEO Robert Nardelli, who received stratospheric pay even as his company's stock price stalled, shareholder activists this year took aim at executive compensation. Unfortunately, they should not expect much from those efforts, even if every corporation in the U.S. adopts "say on pay"measures that allow shareholders to vote on pay deals. That's because such proposals treat only a symptom, not a cause, of a more dangerous trend within American capitalism.
The real culprit is the growing preeminence of finance over operations. It causes stock market considerations to trump those that improve the actual workings of a business. And the quicker the stock payoff can be engineered, the better. Until that changes, don't expect CEOs to stop gaming the system.
The real culprit is the growing preeminence of finance over operations. It causes stock market considerations to trump those that improve the actual workings of a business. And the quicker the stock payoff can be engineered, the better. Until that changes, don't expect CEOs to stop gaming the system.

This reward bias toward finance has been with us since the creation of the giant public corporation in the late 19th century. Today you see the consequence of this financial dominance. Ask the 400 CFOs who in a 2005 survey revealed a consensus opinion that they would mutilate their own companies to keep stock prices high. Ask the derivatives traders and hedge fund managers who control the direction of the market by trading in instruments that have nothing to do with financing the production of goods and services and everything to do with stock price movements. Ask the stock-trading public who in 2006 turned over share ownership on the New York Stock Exchange (NYX ) by 118% (almost 30% more than in 2000). Meanwhile, CEOs figure that if their job is to make shareholders as rich as possible as quickly as possible--as opposed to managing companies to generate long-term profits--they should be paid like the investment bankers, money managers, and hedge fund czars who do the same.

Read the full article here. Though the author doesn't explicitly say so, he adds his voice to the chorus against private equity since the key to their operations is really leverage and not, um, operations.