Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits (15 page)

I SPENT SEVERAL
weeks covering Occupy Wall Street, and in the process of interviewing participants and observers about what was happening in Zuccotti Park, I got a fairly clear sense of what the protests were about, and where it fit into the historical continuum of populist economic movements. But the impact of the movement, and its implications for the future of Wall Street, didn’t really sink in for me until I met Marina Keegan.

Marina was a twenty-one-year-old senior at Yale, where she studied English and was training to be a writer. She wrote poetry, plays, and columns for various student publications, and had apprenticed under Harold Bloom, the famous literary critic and Yale professor. She had done a junior-year summer internship at the
New Yorker
, and had gotten an offer to return there full-time after graduation. But in the fall of her senior year, she turned her attention to what she saw as one of the most problematic elements of Yale’s student culture: the Wall Street recruiting process.

As target schools go, Yale is no Princeton or Wharton, but it is still home to one of the most highly sought-after student populations for Wall Street. Roughly 20 percent of the Yale graduating class typically goes into business and finance, and among Yale alumni in the industry are such heavyweights as Steve Schwarzman, the billionaire cofounder of the Blackstone Group. All the major banks, as well as many large private equity firms and hedge funds, recruit on campus, with a flurry of information sessions, résumé drops, and group interviews.

To Marina, the fact that 20 percent of her classmates might become investment bankers seemed like cause for mourning. That fall, she saw dozens of her friends head to the on-campus information sessions for big banks and consulting firms, dressed in suits and fake smiles, and every time it saddened her. What, aside from the money, was so great about Wall Street that students with such diverse interests and talents—budding artists, architects, literary critics, filmmakers, education reformers, scientists, and computer programmers—were all willing to drop their ambitions and follow a path of mundane corporate climbing?

That fall, Marina asked dozens of her friends, acquaintances, and professors about their thoughts on the finance and consulting recruiting process, then folded the results into an essay for Yale’s weekly news magazine, in which she elucidated her concerns. She wrote:

Marina’s essay blew me away. I wrote to her and asked her if she could adapt it into a short article for DealBook, the financial news site at the
Times
. She agreed. Then she invited me to see the recruiting phenomenon for myself.

I arrived in New Haven on a stormy Wednesday in late October and met Marina, along with a group of her friends, many of whom had gotten involved in the Occupy New Haven movement. As the rain poured down outside, eight of us sat in an empty classroom and talked about the effects the Wall Street recruiting process had on campus culture.

“I get the appeal of i-banking,” said Alexandra, a senior and one of Marina’s friends. “It’s comfortable for people who are used to succeeding within the system, at a string of prestigious institutions. There’s a path laid out, and finance is the next step on that path.”

“It’s like living at Yale for two more years,” Marina added. “You’re working with a bunch of smart kids in a highly structured environment. It’s like you never left campus.”

Marina’s friends agreed that financial institutions should be allowed to set up booths at career fairs and hold information sessions on campus, just like any other employer. But they also wanted to remove the stigma associated with questioning the career choices of their classmates. They wanted to make “banking,” if not a dirty word, then at least a career field that was subject to ethical scrutiny like any other.

“It needs to be reframed by our campus as a moral question,” Alexandra said. “It’s weird that we’re not allowed to call someone out on the fact that they’re brilliant and passionate, that they love working with preschool children or whatever, and that they’re going to a bank instead.”

“I’ve been saying to people who are planning to go into finance, ‘I’m disappointed in you,’” Marina said.

In the two months since Marina’s original essay ran, students at many other top-flight colleges had begun raising questions about the dominance of financial recruiting on their campuses. Offshoots of the Occupy movement had organized several student protests, including one at Princeton, in which a group of students interrupted a J.P. Morgan information session. The protesters rose from their seats midsession and shouted in unison: “Your predatory lending practices helped crash our economy, we’ve bailed out your executives’ bonuses, you’ve evicted struggling homeowners while taking their tax money.…In light of these actions, we protest the campus culture that whitewashes the crooked dealings of Wall Street as a prestigious career path.”

At a Goldman Sachs information session the following night, the Princeton protesters repeated their grievances, and added a message to their fellow students:

“Dear Fellow Princeton Students, we are here to ask you for a moment of reflection. Deciding on a future career path is difficult. It deserves serious introspection. When you came to Princeton as a wide-eyed freshman, you probably didn’t dream of working at Goldman Sachs. What happened? We are all privileged to have made it to Princeton. However, our talents will be wasted if we send all our best and brightest to Wall Street.”

Marina and some of her friends had gotten into the protesting spirit, too, and had organized a group to stand outside a Morgan Stanley information session, with signs that read “Morgan Stanley is boring” and chants that included “Take a chance, don’t go into finance!”

All over the Ivy League, the Wall Street recruiting process, which had once been as anodyne and accepted a part of the academic calendar as midterms and finals, had taken on the tenor of a student-on-student battle.

“I teach financial markets, and it’s a little like teaching ROTC during the Vietnam War,” Robert J. Shiller, a professor of economics at Yale, told me that fall. “You have this sense that something’s amiss.”

There have been industry-centric and company-specific protests on college campuses before. In 1967, students at Harvard and other schools protested the recruiting efforts of Dow Chemical, the company that made much of the napalm that was being used in the Vietnam War. In the early 1970s, Stanford University banned Goldman Sachs from recruiting on campus for five years, after a black Stanford Graduate School of Business student named James E. Cofield Jr. filed a lawsuit against the firm, claiming that it had racially discriminatory hiring practices that kept him from getting a job there. And after the Iraq War in 2003, students at many top-tier schools protested Lockheed Martin, Halliburton, and other military and weapons companies.

But the Wall Street protests of 2011 were different from other corporate recruiting tiffs, in that they were equally addressed to the companies that were doing the objectionable things and the students who were considering working for those companies. At Harvard, a young alumnus named David Weinfeld wrote an op-ed titled, “Boycott Wall Street,” in which he urged Harvard students not to occupy Wall Street, but to “simply give up pursuing an occupation on Wall Street.”

Weinfeld wrote:

At Stanford, two student columnists called for the school to “prepare more students for socially productive careers in public service, entrepreneurship, and scientific research,” rather than “serving as the vocational training center for reckless banks and hedge funds.” And at Duke, another finance feeder school, a majority opinion of the student editorial board added its voice to the growing chorus:

Some finance executives, asked about the effects of the Occupy movement on their firms’ recruiting abilities, shrugged the entire thing off, implying that the anti-recruiting backlash had extended only as far as the op-ed pages of the student newspapers and radical campus groups. Morgan Stanley CEO James Gorman emphatically denied that the financial industry’s massive unpopularity made an impression on incoming recruits.

“That is not a constraint, it’s not going to be a constraint,” he said. “There will always be somebody who says, ‘Well, I always wanted to be an investment banker, but I’ve had this sort of moral epiphany, and now I’m not.’ I mean, it’s ridiculous.”

But I’d heard differently from some top industry hiring managers, who said that the Occupy protests and the campus banking backlash they inspired had forced them to change their pitch to college students.

“The way you speak to the audience now is different,” one top hiring manager said. “It isn’t the audience of five years ago, where they’re, like, ‘It’s Wall Street, it’s a job, great—I’ll get on the merry-go-round.’ They’ve now heard other things. So we’ve had to take a step back and say, ‘Are we speaking to them in a way they care about?’”

Statistically, Wall Street banks were, in fact, losing their sway on top college campuses. At Harvard, the percentage of seniors with jobs at graduation who went directly into financial services fell from 28 percent in the class of 2008 to 17 percent in the class of 2011. At Princeton, where 46 percent of seniors with jobs at graduation were once Wall Street–bound, that number shrunk to 35.9 percent in 2010. Those numbers fell, in part, because crisis-stricken banks had shrunk their workforces. But the moral and reputational fallout of the crisis had also had an impact.

I decided to find out for myself exactly what was going through the heads of new Wall Street recruits by going to an event that would be filled with them—the annual Goldman Sachs fall recruiting session at Yale.

I arrived at the Omni Hotel in downtown New Haven to find several dozen nervous-looking Yalies picking at lukewarm sesame chicken strips, cheese puff pastries, and beef skewers. The room was decked out in Goldman blue, and a four-foot-tall vertical sign stood in the corner, with a message that read: “How will you make an impact?” In my wrinkled suit, I must have looked enough like a nervous analyst-in-the-making so as not to stick out. (Goldman’s recruiting sessions, like those of all other major banks, are typically not made available to the media—I was counting on being able to pass undetected.)

After more students filed in, the lights dimmed, and a video began playing.

“We…are…Goldman…Sachs,” it began.

After the video finished, a group of Goldmanites—many of whom were Yale alums—took the stage to speak about their jobs in greater detail. What followed was a half-hour of corporate agitprop, stuffed to the brim with bromides and b-school jargon.

“We play an important part in moving the economy forward by linking investors and capital with businesses and governments,” one employee raved.

“We are a global company, which literally puts a world of opportunity at my fingertips,” another employee said.

“There are not a lot of places where junior professionals’ opinions really matter,” a third added.

Much of what was said mirrored what I’d heard at Morgan Stanley’s Wharton session a year earlier. There were promises of real-world responsibility, vague hints of the immense workload that was expected of first-year analysts, and talk of “exit opps” after the two years were up. As usual, there was no mention of the money a first-year analyst stood to make—only generalities about the “generous” compensation package and “eat what you kill” pay philosophy.

But there was something new, too—a set of questions about morality and ethics that hung in the air, just out of reach. No students asked the Goldman recruiters, flat-out, if working on Wall Street was immoral. (To do so would be the quickest way to talk yourself out of a job.) But over and over again, the recruiters made reference to Goldman’s “corporate integrity,” as if they were shadow-boxing with an imaginary Occupier in the room. By addressing concerns about its morality, even obliquely, Goldman was showing that the events of the past few months had caused it to sweat.