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Why do Harvard kids head to Wall Street? An interview with an ex-Wall Street recruit.
One of the common complaints about Wall Street is that it sucks up a lot of Ivy League talent that could be going toward more productive endeavors. The common assumption is that the students are just following the money. But, my friend, an anonymous Harvard graduate who spent some time on Wall Street says that's not always the case. An edited transcription of our conversation follows:
You went to Harvard. Then what happened?
So, I'd done a summer internship with Goldman in my third year. Then, after I graduated, I had a month off, and then I started at Goldman in the middle of the summer. There's a training program; it's about two months. And then I hit the desk.
What did you study at Harvard?
I focused on history and government and political philosophy.
And why did Goldman Sachs think that would be good training for investment banking?
Why Goldman thought I'd be good for investment banking is a very fair question. There are a lot of Harvard people at Goldman and they've put a lot of effort into recruiting from the school. They really try to attract liberal arts backgrounds. They say this stuff isn't so complicated, that you'll pick it up as you go along, that it's all about teamwork, that they have training programs. That being said, it would be very hard to get a full-time job there without a previous summer internship.
How did you end up going to Goldman, though? Presumably, as a social sciences major, you hadn't meant to head into the financial sector.
Investment banking was never something I thought I wanted to do. But the recruiting culture at Harvard is extremely powerful. In the midst of anxiety and trying to find a job at the end of college, the recruiters are really in your face, and they make it very easy. One thing is the internship program. It's your junior year, it's January or February, and you interview for internships. If all goes well, it's sort of a summer-long interview. And if that goes well, you have an offer by September of your senior year, and that's very appealing. It makes your senior year more relaxed, you can focus on your thesis, you can drink more. You just don't have to worry about getting a job.
And separate from that, I think it's about squelching anxiety in general. It checks the job box. And it's a low-risk opportunity. It's a two-year program with a great salary and the promise to get these skills that should be able to transfer to a variety of other areas. The idea is that once you pass the test at Goldman, you can do anything. You learn Excel, you learn valuation, you learn how to survive intense hours and a high-pressure environment. So it seems like a good way to launch your career. That's very appealing for those of us at Harvard who were not in pre-professional majors.
The impression of the Ivy-to-Wall Street pipeline is that it's all about the money. You're saying that it's actually more that Wall Street has constructed a very intelligent recruiting program that speaks to the anxieties of the students and makes them an offer that there's almost no reason to refuse.
Exactly. I wouldn't speak for everyone and there certainly are people who want to be in finance, but a large portion are intrigued by these jobs for those reasons. I think that's a majority, at least at Harvard. And the same goes for consulting jobs or even Teach for America. It's this limited-time commitment, the ability to get new skills. These aren't the types of things you grow up dreaming of doing, but you wear a business suit, you meet clients. It's a way of growing up very quickly. And investment banking has the added advantage that you can make money very quickly and afford a great apartment in New York, which is very expensive.
Does that trap people? It's common to talk about "golden handcuffs" in law, where people go to law school and want to do public interest law but decide they'll go to a corporate firm for a few years first. Then they get used to the lifestyle the corporate money provides and never really give it up.
The law comparison is a good one. That's the risk of it. As you said, when people leave law school with a lot of debt, they figure they'll get some good skills and good money at a top-tier firm before going to save the world. But then you have a great apartment, more responsibilities, kids. You start enjoying it. It's not even all material.
And I think it's important to point out, that things happen very quickly. Private equity firms were trying to recruit us in the first year of my two-year training program. There's this notion of the accidental banker, people who get caught up in that world and get more and more pay and find it harder to justify leaving. But the cultural effect of all of this -- and even with regulatory reform, we need to think about that -- is that a lot of people decide to sacrifice much more time than they normally would because the money is so good, and then they believe they deserve extremely high pay because they're giving up so much time. It's not malicious. But there are a lot of unhappy people who end up in that situation.
You hear this sort of thing in a lot of articles. I remember Gabe Sherman's New York magazine piece that quoted a banker saying, basically, I deserve this money -- I'm answering my BlackBerry at 2 a.m.
The question is what's the answer? Can you cut everyone's pay and hours in half so people are happier and you have more reasonable salaries? That's tough. Certain people really are crucial. But it's a bit odd when someone says they deserve to get paid so much because they answer their BlackBerry at 2 a.m. and the guy at my convenience store doesn't get to go home until his shift ends at 3:30 a.m. People on Wall Street work very hard and they feel they chose this path because there was a reward promised to them. And now, when it's being taken away from them, they get very angry. If the reward hadn't been offered to them, they feel they would've followed their passion and become a journalist or something.
The flip side of that is that the malice towards the individuals at places like Goldman is misplaced. I get where it comes from, but just like it's wrong for the banker to say they work harder than everyone else and deserve more, it's also dangerous to paint bankers as evil. Lloyd Blankfein isn't out to screw the world. Wall Street's problems are more systemic. Individuals are behind systems and leaders have a huge responsibility. And there's been some real arrogance, but the personal attacks on individuals make them defensive.
Link http://voices.washingtonpost.com/ezra-klein/2010/04/why_do_harvard_kids_head_to_wa.html
The blog post is interesting as well Why Do Harvard Kids Head to Wall Street? The Baseline Scenario
One of the common complaints about Wall Street is that it sucks up a lot of Ivy League talent that could be going toward more productive endeavors. The common assumption is that the students are just following the money. But, my friend, an anonymous Harvard graduate who spent some time on Wall Street says that's not always the case. An edited transcription of our conversation follows:
You went to Harvard. Then what happened?
So, I'd done a summer internship with Goldman in my third year. Then, after I graduated, I had a month off, and then I started at Goldman in the middle of the summer. There's a training program; it's about two months. And then I hit the desk.
What did you study at Harvard?
I focused on history and government and political philosophy.
And why did Goldman Sachs think that would be good training for investment banking?
Why Goldman thought I'd be good for investment banking is a very fair question. There are a lot of Harvard people at Goldman and they've put a lot of effort into recruiting from the school. They really try to attract liberal arts backgrounds. They say this stuff isn't so complicated, that you'll pick it up as you go along, that it's all about teamwork, that they have training programs. That being said, it would be very hard to get a full-time job there without a previous summer internship.
How did you end up going to Goldman, though? Presumably, as a social sciences major, you hadn't meant to head into the financial sector.
Investment banking was never something I thought I wanted to do. But the recruiting culture at Harvard is extremely powerful. In the midst of anxiety and trying to find a job at the end of college, the recruiters are really in your face, and they make it very easy. One thing is the internship program. It's your junior year, it's January or February, and you interview for internships. If all goes well, it's sort of a summer-long interview. And if that goes well, you have an offer by September of your senior year, and that's very appealing. It makes your senior year more relaxed, you can focus on your thesis, you can drink more. You just don't have to worry about getting a job.
And separate from that, I think it's about squelching anxiety in general. It checks the job box. And it's a low-risk opportunity. It's a two-year program with a great salary and the promise to get these skills that should be able to transfer to a variety of other areas. The idea is that once you pass the test at Goldman, you can do anything. You learn Excel, you learn valuation, you learn how to survive intense hours and a high-pressure environment. So it seems like a good way to launch your career. That's very appealing for those of us at Harvard who were not in pre-professional majors.
The impression of the Ivy-to-Wall Street pipeline is that it's all about the money. You're saying that it's actually more that Wall Street has constructed a very intelligent recruiting program that speaks to the anxieties of the students and makes them an offer that there's almost no reason to refuse.
Exactly. I wouldn't speak for everyone and there certainly are people who want to be in finance, but a large portion are intrigued by these jobs for those reasons. I think that's a majority, at least at Harvard. And the same goes for consulting jobs or even Teach for America. It's this limited-time commitment, the ability to get new skills. These aren't the types of things you grow up dreaming of doing, but you wear a business suit, you meet clients. It's a way of growing up very quickly. And investment banking has the added advantage that you can make money very quickly and afford a great apartment in New York, which is very expensive.
Does that trap people? It's common to talk about "golden handcuffs" in law, where people go to law school and want to do public interest law but decide they'll go to a corporate firm for a few years first. Then they get used to the lifestyle the corporate money provides and never really give it up.
The law comparison is a good one. That's the risk of it. As you said, when people leave law school with a lot of debt, they figure they'll get some good skills and good money at a top-tier firm before going to save the world. But then you have a great apartment, more responsibilities, kids. You start enjoying it. It's not even all material.
And I think it's important to point out, that things happen very quickly. Private equity firms were trying to recruit us in the first year of my two-year training program. There's this notion of the accidental banker, people who get caught up in that world and get more and more pay and find it harder to justify leaving. But the cultural effect of all of this -- and even with regulatory reform, we need to think about that -- is that a lot of people decide to sacrifice much more time than they normally would because the money is so good, and then they believe they deserve extremely high pay because they're giving up so much time. It's not malicious. But there are a lot of unhappy people who end up in that situation.
You hear this sort of thing in a lot of articles. I remember Gabe Sherman's New York magazine piece that quoted a banker saying, basically, I deserve this money -- I'm answering my BlackBerry at 2 a.m.
The question is what's the answer? Can you cut everyone's pay and hours in half so people are happier and you have more reasonable salaries? That's tough. Certain people really are crucial. But it's a bit odd when someone says they deserve to get paid so much because they answer their BlackBerry at 2 a.m. and the guy at my convenience store doesn't get to go home until his shift ends at 3:30 a.m. People on Wall Street work very hard and they feel they chose this path because there was a reward promised to them. And now, when it's being taken away from them, they get very angry. If the reward hadn't been offered to them, they feel they would've followed their passion and become a journalist or something.
The flip side of that is that the malice towards the individuals at places like Goldman is misplaced. I get where it comes from, but just like it's wrong for the banker to say they work harder than everyone else and deserve more, it's also dangerous to paint bankers as evil. Lloyd Blankfein isn't out to screw the world. Wall Street's problems are more systemic. Individuals are behind systems and leaders have a huge responsibility. And there's been some real arrogance, but the personal attacks on individuals make them defensive.
Link http://voices.washingtonpost.com/ezra-klein/2010/04/why_do_harvard_kids_head_to_wa.html
The blog post is interesting as well Why Do Harvard Kids Head to Wall Street? The Baseline Scenario
