Wall Street bonuses grew only 3 percent last year to $28.5 billion, following a 19 percent surge in 2013.
"What's too easily forgotten is that the pay in finance is high precisely because very few have the talent necessary to work on Wall Street in the first place," he writes.
"Where there's profit and high pay, there are always and everywhere innovators seeking a piece of the lucrative action. That compensation in financial services remains high is a certain market signal that the work being done is rather unique, and thus hard to imitate or automate."
This next part of his argument will undoubtedly shock — and infuriate — those who disagree with Tamny.
"What should concern readers isn't a nominally lucrative bonus pool for Wall Street, but the sad fact that it's not much higher. Profits and bonuses on Wall Street are a function of those in finance successfully directing the savings of the citizenry to a better use," Tamny states.
"For the economy to be healthy, we need Wall Street to be in top shape. Yet bonus-pool growth in 2014 was slower than it was in 2013 and 2012. This is very unfortunate. If we love companies and jobs, then we must also love the capital allocators who make both possible."
When it comes to the institutions of Wall Street, while bank stocks may have underperformed the overall stock market over the past year, they represent an attractive investment now, says ace bank analyst Dick Bove of Rafferty Capital Markets.
The KBW Bank (stock) index has generated a return of just 6.9 percent for the last year, compared to 13.8 percent for the S&P 500.
But the lagging performance of bank stocks doesn't reflect any fundamental problems with the banks' business, Bove tells
CNBC. Book values, dividends and earnings are rising, except for those banks with litigation expenses
And, "if you look at 2015, all three of these things are going to be up again," he predicts. "The question is when will investors get comfortable enough with the banking industry to start buying stocks again, because from a fundamental standpoint these stocks are unbelievably cheap."
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