Financial Sector Shrinkage Good?
RobGR: I agree with this hypothesis.  Furthermore, advances in computers and communication and electronic record keeping should have allowed fewer people to be employed in the industry, shuffling much larger amounts of money.I think much of the current economic "crisis" is actually a necessary shift or adjustment from certain industries to others.  It was the veiw of many that the "panics" that occurred at the end of the 1800s railroad building boom were simply a necessary adjustment, society had employed many in building railroads, which were done now, so period of unemployment might be necessary as lots of people shifted to doing other things.I think the collapse of the housing market had that as a factor.  The number of bedrooms, bathrooms, and square footage per capita had increased a lot, as people's standards increased.  It may be that many people feel they have enough house, or maybe even too much, and are shifting to other things.  Such a shift of course exposes the shakiest business practices first, such as sub-prime mortgages and so on.I believe that there are two other industries that are also due for some shrinkage, and they are education and health care.  Both of these are, like housing, heavily intertwined with the financial industry through loans and insurance.