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balance here is delicate, of course. Had Microsoft been broken up and its software made generally available at lower prices, for example, middle-class Americans would have had more money to spend on, say, flat-screen TVs, while Bill Gates’s correspondingly smaller fortune might have caused him to donate less to AIDS research and other Gates Foundation priorities.)
    The lure of great wealth undoubtedly inspires great entrepreneurial zeal, to the benefit of all. Businesses need to be able to attract the necessary talent. The question is what portion of total national income must go to the very top in order to provide adequate motivation. On the evidence of what occurred after 2007, for example, it seems fair to conclude that Richard Fuld’s $500 million compensation that year failed to provide the incentive needed for him to act in ways that benefited Lehman Brothers’ shareholders and customers, and it seems doubtful that a higher sum would have produced a much better result. Indeed, it seems unlikely that he would have performed any worse had he earned just $10 million, or even a paltry $2 million.The high-stakes lure of vast sums can spur great achievement, but as Keynes observed when considering the large disparities of income and wealth in Britain in the 1920s, “much lower stakes will serve the purpose equally well.”
    Eccles’s insight is no criticism of the rich. It points instead to a different organization of the economy and society, one that allows a broader sharing of the gains of economic growth. To this end it requires that policymakers focus on the real economy, not only the financial one.

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Why Policymakers Obsess About the Financial Economy Instead of About the Real One
    September 26, 2008. “This sucker could go down,” President George W. Bush warns congressional leaders meeting with him in the White House, as he tries to wrest their agreement to a $700 billion bailout of Wall Street. A few weeks later, the most dogmatically conservative administration in recent American history—which had consistently and vociferously argued against giving anyone a helping hand for fear they’d become dependent on government—delivers the goods.“Without this rescue plan,” President Bush explains to the nation, “the costs to the American economy could be disastrous.”New Hampshire senator Judd Gregg, the leading Republican negotiator of the bailout bill, adds ominously, “If we do not do this, the trauma, the chaos, and the disruption to everyday Americans’ lives will be overwhelming, and that’s a price we can’t afford to risk paying.”
    In less than a year, Wall Street was back. The six largest remaining banks had grown larger; their executives and traders were as rich or richer, their strategies of placing large bets with other people’s money no less bold than they were before the meltdown of September 2008. The possibility of new financial regulationsemanating from Congress barely inhibited the Street’s exuberance. The Dow Jones Industrial Average had made up for some of its losses, and the financial recovery was proceeding nicely.
    But Senator Gregg notwithstanding, the everyday lives of large numbers of Americans continued to be subject to overwhelming trauma, chaos, and disruption.
    It is a common practice among economic policymakers to fervently and sincerely believe that Wall Street’s financial health is not only a precondition for a prosperous real economy but that when the former thrives, the latter will necessarily follow. Few fictions of modern economic life are more assiduously defended than the central importance of the Street to the well-being of the rest of us.
    Inhabitants of the real economy, including corporations and small business owners, do need to borrow money from the financial economy. But their overwhelming reliance on Wall Street is a relatively recent phenomenon. Back when middle-class Americans earned enough to be able to save more of their incomes, they borrowed