This is the second part of a two-part column on finance and management consulting.
First of all, the job sucks. If you take it thinking you’re going to learn valuable skills and do important work, you’re wrong — and Wall Street firms hire the most expensive public relations firms to make you believe this lie. The most important skill for any young banker is proficiency in Microsoft Excel. As Kevin Roose chronicled recently in his excellent book, “Young Money,” first and second-year employees are treated like garbage — constantly hazed, humiliated and forced to do pointless, demeaning grunt work. Their relationships are ruined and they hardly sleep. Even worse is the cutthroat competitiveness.
And even worse are the consequences of the work itself.
Often, when someone critiques Wall Street, its supporters respond by defending capitalism itself — not Wall Street in its present form. But such an argument is hard to make in the post-2008 world, after Wall Street firms intentionally “deceived its clients and deceived the public” by creating “high risk, complex financial products,” engaging in dicey mortgage lending and profiting from wild speculation, according to a 2011 Senate study.
This behavior continues. As journalist Adam Davidson wrote, a number of leading economists, including several at New York University, have noted that “a significant part of Wall Street’s business has shifted from serving the financial needs of the nation to profiting from ‘regulatory arbitrage’ — making money by playing with the rules of the game.” Wall Street firms have increasingly stopped advising companies or helping them raise money — instead, they make money only for themselves. Goldman Sachs derived 46 percent of its revenue from trading, while only 22 percent came from investment banking, according to the 2013 earnings report. And Goldman is no outlier. Besides, this emphasis on regulatory arbitrage can make markets dangerously volatile.
And this behavior is not merely the consequence of shady actions. In their relentless pursuit of profits, Wall Street firms casually and consistently commit crimes. In the midst of the financial crisis, for instance, several big banks made a pattern of foreclosing on the homes of active service members, which is illegal as well as immoral. In recent years, many banks, including Wells Fargo, Bank of America and Citigroup, admitted to illegally laundering billions for narco-terrorists. HSBC, in addition to laundering money for drug cartels, helped move money to finance Hezbollah — and it continued to do so even after one of its own employees lodged complaints with both the government and HSBC itself.
But this column is not an argument against Wall Street itself. It is specifically an argument against Yale kids going off to work there — even if they work there for only two years, as so many of them do.
Some may claim that these high-paying jobs are a way for the underprivileged to pay off their loans or help out back home. That’s a nice fantasy, and, occasionally, it’s true. But Wall Streeters frequently come from high tax brackets, largely because the firms recruit so heavily at places like Yale (a school dominated by rich people). And I don’t even think the money is the main motivation. I fear people go work on Wall Street because they are ignorant about many of its problems, and because it’s the easy thing to do — the well-defined, well-paying route. It’s laziness. It’s a lack of creativity.
One of the many results of going to Yale is that society treats you as if you are better than everyone else. Of course, this is a misguided, terribly unfair situation, but it is reality: Yalies get the best jobs, get all the advantages. Surely with such great, unwarranted advantages comes some degree of responsibility. Surely there are better things Wall Streeters could be doing with their time.
We live in a country still rife with prejudice — not to mention income inequality — and in a world that’s facing war and strife and an impending environmental Armageddon. Is taking a job on Wall Street — a job you will probably hate — really the greatest amount of good you can reasonably be doing? Can we really afford to keep sending kids to bask in opulent social uselessness? Surely your economics textbooks told you about opportunity costs. Furthermore, by taking a job on Wall Street, you are cementing your place among a soft, privileged elite. You are helping only rich people get richer. Even if for just two years, you are a cog in a machine that is both hopelessly broken and ruthlessly efficient.
If you go work on Wall Street, or, for that matter, in management consulting, you are not a progressive. If you go work in these industries, you have forfeited the right to be proud of what you do. If you go into finance or consulting, you are doing harm.
Scott Stern is a senior in Branford College. His columns run on Monday. Contact him at firstname.lastname@example.org.