Calvin Trillin: Wall Street Smarts

[BREMPRO]

A tall drink from Mr. Trillin to be taken with a grain of salt-and a snifter of truth.

"IF you really want to know why the financial system nearly collapsed in the fall of 2008, I can tell you in one simple sentence.”

<snip>

“The financial system nearly collapsed,” he said, “because smart guys had started working on Wall Street.” He took a sip of his martini, and stared straight at the row of bottles behind the bar, as if the conversation was now over.

“But weren’t there smart guys on Wall Street in the first place?” I asked.

He looked at me the way a mathematics teacher might look at a child who, despite heroic efforts by the teacher, seemed incapable of learning the most rudimentary principles of long division. “You are either a lot younger than you look or you don’t have much of a memory,” he said. “One of the speakers at my 25th reunion said that, according to a survey he had done of those attending, income was now precisely in inverse proportion to academic standing in the class, and that was partly because everyone in the lower third of the class had become a Wall Street millionaire.”

full op-ed: http://www.nytimes.com/2009/10/14/opinion/14trillin.html?_r=1

[JuniperLea]

1. I just read that! Hilarious!

Scary too.

[fiorello]

2. Paul Krugman's comment is priceless

http://krugman.blogs.nytimes.com/2009/10/15/smart-guys-and-wall-street/

Im a little late on this great Calvin Trillin piece, but it accords with my own more specialized memories from grad school. The year I got my PhD (1977), there was a very clear ranking of desirable career paths. The best economics grad students went into academic jobs; the middle went to the Fed or the IMF; the bottom went, poor souls, to Wall Street.

Even then this meant an inverse relationship between academic ranking and income, since new assistant professors were paid only around $15,000, equivalent to a bit more than 50K today. But the prestige differences more than offset the pay differentials, at least as we saw it then. And one thing that¿s hard to convey is how boring business seemed in the 1960s and 1970s. ("Ive got just one word for you: plastics.")

But even a decade later, it was the guys who went off to investment banks who were buying the third homes, while the top students were trying to eke out their incomes with an occasional consulting gig. And it wasnt just the money: business stopped being so boring, and was even getting to be fun for some people. The old conviction that the academic life was the ideal definitely began to fray at the edges.

Did the influx of smart people bring on disaster? That¿s a longer story. But the change in who went where is utterly real.

[BREMPRO]

3. Krugman rocks! always honest, insightful, intelligent and speaks truth to power.n/t

[bertman]

4. Excellent post, BREMPRO. And thanks for the Krugman followup, fiorello. Rec