Roger Cohen writes:
When I taught a journalism course at Princeton a couple of years ago, I was captivated by the bright, curious minds in my class. But when I asked students what they wanted to do, the overwhelming answer was: “Oh, I guess I’ll end up in i-banking.”Paul Volcker says:
It was not that they loved investment banking, or thought their purring brains would be best deployed on Wall Street poring over a balance sheet, it was the money and the fact everyone else was doing it.
But why do freshmen bursting to change the world morph into investment bankers?
“I guess the bottom line is the money. You could be going to grad school and paying for it, or earning six figures. And knowing nothing about money, you get to move hundreds of millions around! No wonder we’re in this mess: turns out the best and the brightest make the biggest and the worst.”
According to the Harvard Crimson, 39 percent of work-force-bound Harvard seniors this year are heading for consulting firms and financial sector companies (or were in June). That’s down from 47 percent — almost half the job-bound class — in 2007.
"We need fewer financial engineers and more electrical and chemical engineers and civil engineers to take care of our infrastructure. Too much of our talent into the false castle of the financial world.Tom Friedman writes:
The market is now consolidating this industry, with the strong eating the weak, which will impose its own fiscal discipline. Good. Maybe then more of our next generation of math geniuses will think about going into engineering the next great global industry — energy technology — rather than engineering derivatives.I often wonder whether the US economy does a good job of allocating the resources of its best and brightest. Are they placed in positions where they can benefit society the most?
My belief is that smart financial engineers do add value to the economy, but they get paid more than the value they add. A financial engineer might add $100,000 value of additional value to the economy, but they get paid $1 million to do it. While the overall size of the economy goes up, everyone but the engineer is $900,000 worse off. Renewable energy engineers on the other hand add much more value then they get paid. They might add $1 million of additional value to the economy, but get paid $100,000 to do it.
The one silver lining to this financial mess is that I believe lots of smart people are going to be moving from the financial world to industries where their talents will add more value to society.