4 ms·

When I was newly out of college, other professional salaries were roughly on a par with bankers - but the difference skyrocketed from c 1990 on, leading to prob

When I was newly out of college, other professional salaries were roughly on a par with bankers - but the difference skyrocketed from c 1990 on, leading to probably one of the biggest misallocations of talent and resource in the West in the last 200 years This wouldn't have been such a big problem except for the fact that (1) academia collapsed, becoming unviable as a career, during the same time, and (2) housing prices skyrocketed due to competition from the banker douches, meaning that standards of living declined substantially for the lawyers, doctors, etc. If these two things hadn't happened, I doubt that the people "lost" by the other professions would care that a few under-cultured jackasses in suits were pulling down millions. People don't go into academia or engineering expecting to be rich, but they expect to be solidly middle-class, which isn't available when mid-sized houses cost over $500k. “The system”, he says, “filters out the thoughtful and replaces them with the faithful.” This is a really great insight, and it reminds me of Ron Suskind's "Without a Doubt", on the "faith-based" presidency of George W. Bush. I think the Strauss and Howe model of cyclical history (see: Generations, The Fourth Turning) is fairly accurate. Third Turnings are characterized by confusion, socioeconomic stagnation/reversion, and rampant inequality; Fourth Turnings, by crisis, hardship and rapid social evolution. The last 3T was approximately 1914-1928, with a 4T from 1929-1946. We crossed the 3T/4T interface again some time during the Bush presidency. Do I think that the recent spell of inequality fortells a second Great Depression? Not necessarily. On the other hand, it was obvious even in 1995 that something was going to break in American society, and that we had to have a crisis in order to muster the will to move forward. The crisis came about 10 years earlier than I expected, but I have a lot of faith that we'll handle it well, given that we made an exceptionally good choice for President in 2008.

puzzle-out 18y ago
Points (1) and (2) can also be seen in psychological/cultural terms - academia used to be seen as a respectable career choice, but with the rise of the bankers there was more family pressure on young people to 'use' their talents - which mean't making money in the City - otherwise you could be seen as wasting them, and letting down your family. One further point: academia in the UK got a lot of kudos from the 2nd world war and academics role in the enigma code, which is now running out.
- time_management 18y ago
  Points (1) and (2) can also be seen in psychological/cultural terms - academia used to be seen as a respectable career choice, but with the rise of the bankers there was more family pressure on young people to 'use' their talents - which mean't making money in the City - otherwise you could be seen as wasting them, and letting down your family. Really? I am utterly surprised by the thought of anyone choosing finance over academia for fear of "letting down the family". I grew up thinking of "Wall Street" as an uncultured and not very respectable profession. My dad was disgusted when I told him (2003, during my junior year in college) that I was considering Wall Street as a profession. My parents both wanted me to get a PhD, and strongly insinuated that finance would be a waste of my talent. I come from a family of inventors, architects, and writers, so although I grew up solidly middle-class, and my parents would've been happy with my choice had I been a high school teacher, the thought of me working on Wall Street was seen as a massive "step down" into unpreftigious nouveau-riche territory. (I softened my view toward Wall Street upon moving to New York; a lot of quants are brilliant, educated, and cultured people. I still do look down, reflexively, upon any "profession" connected to real estate. I can honestly say I'd never marry a woman who worked in RE, and only a woman from a real estate family if she had been purified through an elite college, a filter I otherwise don't care about in the slightest.) I'm surprised that upper-middle-class UK families don't have an even stronger blue-blooded prejudice against "working on the exchange". Growing up, I always understood being an intellectual (academics at the pinnacle) as the epitome of preftige, and investment banking as the thing you did when your family lost its money/standing and you needed to buy it back by sacrificing ten years of your life to something unpreftigious but lucrative.
  - anamax 18y ago
    > I still do look down, reflexively, upon any "profession" connected to real estate. I can honestly say I'd never marry a woman who worked in RE, and only a woman from a real estate family if she had been purified through an elite college, a filter I otherwise don't care about in the slightest. Because Ghod knows that folks who build buildings are the lowest of the low. > I'm surprised that upper-middle-class UK families don't have an even stronger blue-blooded prejudice against "working on the exchange". Growing up, I always understood being an intellectual (academics at the pinnacle) as the epitome of preftige, and investment banking as the thing you did when your family lost its money/standing and you needed to buy it back by sacrificing ten years of your life to something unpreftigious but lucrative. In other words, the blue-bloods and the wannabees are essentially parasites and that's a good thing. Napoleon was defeated by the "nation of shop-keepers", not the professional poets. The blue-bloods marched working men into machine gun fire, kicking soccer balls and talking about their halcyon days at Eton. The mechanics and engineers invented tanks.
yummyfajitas 18y ago
(2) housing prices skyrocketed due to competition from the banker douches, meaning that standards of living declined substantially for the lawyers, doctors, etc. I don't think it's fair to complain that "banker douches" raised house prices. There were plenty of non-bankers getting in on the housing price bubble. There were enough people that this TV show (http://www.aetv.com/flipthishouse/ http://www.aetv.com/flipthishouse/) was viable. Incidentally, academia is solidly middle class and successful academics can easily buy a home. Tenured professors have almost no risk of default or prepayment and banks give them great loan terms as a result. Another point of comparison: my Ph.D. adviser attracts plenty of golddiggers. By the way, why all the hostility ("banker douches", "under-cultured jackasses") towards people who chose a different career path than you?
- time_management 18y ago
  I don't think it's fair to complain that "banker douches" raised house prices. There were plenty of non-bankers getting in on the housing price bubble. The housing price bubble was a national phenomenon that can't be pinned on bankers, but New York got hit especially bad, because of Wall Street, and has been slower to right itself than the rest of the country. One-bedroom apartments in Manhattan are still renting above $2000 per month. Incidentally, academia is solidly middle class and successful academics can easily buy a home. For outright stars, this is true, but the stars of other professions can easily buy several houses, so no point is made here. Hell; in finance, utter mediocrities can buy apartments overlooking Central Park. And if you know anything about academia, you'll know that you do have to be pretty much a star to achieve even a middle-class income trajectory relative to age. Getting into a top-10 PhD department is a hundred times more competitive than any MBA program, and the average student out of such a program (to say nothing of those who have to settle for upper-middle or middling grad programs) struggles to get even a mediocre post-doc in the middle of nowhere. I've heard that the average PhD from a selective department will write 70 applications to secure one or two offers. The mere fact of finishing a PhD program, for what it's worth, puts on in the top third or so of entering grad students, already the cream of the undergraduate crop. By the way, why all the hostility ("banker douches", "under-cultured jackasses") towards people who chose a different career path than you? Meh, I'm fine with quants and quantitative traders, but I don't consider them "bankers". I don't have much use for the 23-year-old douchebags who make a mess of Stone Street and expect to be treated as an elite caste because they're investment bankers. They're also not very smart; if they were, they would demand more interesting work than standard analyst fare, and get fired for their "sharp elbows". I know a few truly intelligent people who went into banking, but most of them found the environment hostile and either shot for quant/trading, or left finance altogether. The types of people who thrive in hierarchical corporate environments tend to be, on the whole, pretty useless; this isn't particular to bankers, but universal.

puzzle-out 18y ago

Points (1) and (2) can also be seen in psychological/cultural terms - academia used to be seen as a respectable career choice, but with the rise of the bankers there was more family pressure on young people to 'use' their talents - which mean't making money in the City - otherwise you could be seen as wasting them, and letting down your family. One further point: academia in the UK got a lot of kudos from the 2nd world war and academics role in the enigma code, which is now running out.

time_management 18y ago
Points (1) and (2) can also be seen in psychological/cultural terms - academia used to be seen as a respectable career choice, but with the rise of the bankers there was more family pressure on young people to 'use' their talents - which mean't making money in the City - otherwise you could be seen as wasting them, and letting down your family. Really? I am utterly surprised by the thought of anyone choosing finance over academia for fear of "letting down the family". I grew up thinking of "Wall Street" as an uncultured and not very respectable profession. My dad was disgusted when I told him (2003, during my junior year in college) that I was considering Wall Street as a profession. My parents both wanted me to get a PhD, and strongly insinuated that finance would be a waste of my talent. I come from a family of inventors, architects, and writers, so although I grew up solidly middle-class, and my parents would've been happy with my choice had I been a high school teacher, the thought of me working on Wall Street was seen as a massive "step down" into unpreftigious nouveau-riche territory. (I softened my view toward Wall Street upon moving to New York; a lot of quants are brilliant, educated, and cultured people. I still do look down, reflexively, upon any "profession" connected to real estate. I can honestly say I'd never marry a woman who worked in RE, and only a woman from a real estate family if she had been purified through an elite college, a filter I otherwise don't care about in the slightest.) I'm surprised that upper-middle-class UK families don't have an even stronger blue-blooded prejudice against "working on the exchange". Growing up, I always understood being an intellectual (academics at the pinnacle) as the epitome of preftige, and investment banking as the thing you did when your family lost its money/standing and you needed to buy it back by sacrificing ten years of your life to something unpreftigious but lucrative.
- anamax 18y ago
  > I still do look down, reflexively, upon any "profession" connected to real estate. I can honestly say I'd never marry a woman who worked in RE, and only a woman from a real estate family if she had been purified through an elite college, a filter I otherwise don't care about in the slightest. Because Ghod knows that folks who build buildings are the lowest of the low. > I'm surprised that upper-middle-class UK families don't have an even stronger blue-blooded prejudice against "working on the exchange". Growing up, I always understood being an intellectual (academics at the pinnacle) as the epitome of preftige, and investment banking as the thing you did when your family lost its money/standing and you needed to buy it back by sacrificing ten years of your life to something unpreftigious but lucrative. In other words, the blue-bloods and the wannabees are essentially parasites and that's a good thing. Napoleon was defeated by the "nation of shop-keepers", not the professional poets. The blue-bloods marched working men into machine gun fire, kicking soccer balls and talking about their halcyon days at Eton. The mechanics and engineers invented tanks.

yummyfajitas 18y ago

(2) housing prices skyrocketed due to competition from the banker douches, meaning that standards of living declined substantially for the lawyers, doctors, etc. I don't think it's fair to complain that "banker douches" raised house prices. There were plenty of non-bankers getting in on the housing price bubble. There were enough people that this TV show (http://www.aetv.com/flipthishouse/ http://www.aetv.com/flipthishouse/) was viable. Incidentally, academia is solidly middle class and successful academics can easily buy a home. Tenured professors have almost no risk of default or prepayment and banks give them great loan terms as a result. Another point of comparison: my Ph.D. adviser attracts plenty of golddiggers. By the way, why all the hostility ("banker douches", "under-cultured jackasses") towards people who chose a different career path than you?

time_management 18y ago
I don't think it's fair to complain that "banker douches" raised house prices. There were plenty of non-bankers getting in on the housing price bubble. The housing price bubble was a national phenomenon that can't be pinned on bankers, but New York got hit especially bad, because of Wall Street, and has been slower to right itself than the rest of the country. One-bedroom apartments in Manhattan are still renting above $2000 per month. Incidentally, academia is solidly middle class and successful academics can easily buy a home. For outright stars, this is true, but the stars of other professions can easily buy several houses, so no point is made here. Hell; in finance, utter mediocrities can buy apartments overlooking Central Park. And if you know anything about academia, you'll know that you do have to be pretty much a star to achieve even a middle-class income trajectory relative to age. Getting into a top-10 PhD department is a hundred times more competitive than any MBA program, and the average student out of such a program (to say nothing of those who have to settle for upper-middle or middling grad programs) struggles to get even a mediocre post-doc in the middle of nowhere. I've heard that the average PhD from a selective department will write 70 applications to secure one or two offers. The mere fact of finishing a PhD program, for what it's worth, puts on in the top third or so of entering grad students, already the cream of the undergraduate crop. By the way, why all the hostility ("banker douches", "under-cultured jackasses") towards people who chose a different career path than you? Meh, I'm fine with quants and quantitative traders, but I don't consider them "bankers". I don't have much use for the 23-year-old douchebags who make a mess of Stone Street and expect to be treated as an elite caste because they're investment bankers. They're also not very smart; if they were, they would demand more interesting work than standard analyst fare, and get fired for their "sharp elbows". I know a few truly intelligent people who went into banking, but most of them found the environment hostile and either shot for quant/trading, or left finance altogether. The types of people who thrive in hierarchical corporate environments tend to be, on the whole, pretty useless; this isn't particular to bankers, but universal.