Greed isn't good. Greed isn't right. So says Michael Douglas, in a public service announcement for the FBI that asks viewers to become whistleblowers if they witness securities fraud or insider trading. Not sure how often the public sees those things. But man! Douglas clearly isn't one with the Gekko character anymore! There's always been a bit of cult around Gekko — amoral Wall Streeters who took the greed-is-good message with zero irony. Can't help but think that even Douglas won't be able change that.
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Graduating Harvard University students attend commencement ceremonies in Cambridge, Massachusetts. Elite colleges like Harvard have steadily increased their efforts to admit low-income students in recent years.
Ezra Klein has an interesting but also exasperating piece at Bloomberg View about how the Ivy League continues to send graduates into high finance, law, and consulting because an Ivy League education doesn't prepare those students to actually do anything with their lives.
I'm not kidding.
Let's allow Klein to present the case in his own words:
Wall Street -- like a few other professions, including law, management consulting and Teach for America -- is taking advantage of the weakness of liberal arts education.
For many kids, college represents an end goal. Once you get into a good college, you’ve made it, and everyone stops worrying about you. You’re encouraged to take classes in subjects like English literature and history and political science, all of which are fine and interesting, but none of which leave you with marketable skills [emphasis mine]. After a few years of study, you suddenly find it’s late in your junior year, or early in your senior year, and you have no skills pointing to the obvious next step.
What Wall Street figured out is that colleges are producing a large number of very smart, completely confused graduates. Kids who have ample mental horsepower, incredible work ethics and no idea what to do next. So the finance industry takes advantage of that confusion, attracting students who never intended to work in finance but don’t have any better ideas about where to go.
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GREECE, ATHENS - FEBRUARY 12: Demonstrators throw pfire bombs to riot police during violent protests in central Athens February 12, 2012. Thousands of demonstrators clashed with police as the Greek parliament prepared to vote on a new and deeply unpopular EU/IMF austerity deal, to secure a 130 billion euro bailout, aimed at saving Greece from bankruptcy and what Prime Minister Lucas Papademos warned would be "uncontrollable economic chaos". (Photo by Milos Bicanski/Getty Images)
He doesn't go quite as far as I did yesterday when I said that the ongoing European debt crisis has spawned a series of financial coup d'etat, with democracy being subjugated to the needs of markets. But at Project Syndicate, Kemal Dervis lays out a similar case:
Beyond the specific problems of the monetary union, there is also a global dimension to Europe’s challenges – the tension, emphasized by authors such as Dani Rodrik, and Jean Michel Severino and Olivier Ray, between national democratic politics and globalization. Trade, communication, and financial linkages have created a degree of interdependence among national economies, which, together with heightened vulnerability to financial-market swings, has restricted national policymakers’ freedom of action everywhere.
Perhaps the most dramatic sign of this tension came when Greece’s then-prime minister, George Papandreou, announced a referendum on the policy package proposed to allow Greece to stay in the eurozone. While one can debate the merits of referenda for decision-making, the heart of the problem was the very notion of holding a national debate for several weeks, given that markets move in hours or minutes. It took less than 24 hours for Papandreou’s proposal to collapse under the pressure of financial markets (and European leaders’ fear of them).
Recent surveys show that a large percentage of graduates from the nation's top schools are taking jobs in consulting or financial sector.
UPDATE: The time is now, California grads! This is from Gabe Sherman's big New York Magazine piece on the end of Wall Street's bonus bonanza: "'If you’re a smart Ph.D. from MIT, you’d never go to Wall Street now,' says a hedge-fund executive. 'You’d go to Silicon Valley. There’s at least a prospect for a huge gain. You’d have the potential to be the next Mark Zuckerberg. It looks like he has a lot more fun.'"
NPR ran a piece today about how too many graduates of the nation's elite universities are going to work in either finance or consulting. At some prestigious schools, such as Harvard, Yale, and Princeton, the percentages are alarming. The story cites a survey of 2010 Harvard grads that found close to half of graduates were planning on heading for the green meadows of big money.
California's top schools aren't immune to this trend. Far from it. Stanford sends plenty of students into finance, as does Cal-Tech. However, they aren't yet at quite the same levels as their East Coast brethren.
Leave it to a designer educated in California to create what might be the best explanation of the Wall Street financial crisis. Jonathan Jarvis graduated from Art Center College of Design in 2009 and got hired by Google. He was recently asked back to the prestigious art and design school — perhaps best known for schooling car designers — to elaborate on his experiences at Art Center and beyond and accept an award, but also to talk about "The Crisis of Credit Visualized."
It's a superb piece of information delivery. If you want to understand why everything went horribly, horribly wrong in 2008, just watch it (the entire animation lasts about 11 minutes — a miracle of concision). What's truly impressive is that Jarvis says that he knew nothing about finance before undertaking the project.