While a rag-tag group of young activists were setting up tents in Zuccotti Park, New York Magazine writer Kevin Roose was occupying Wall Street with a very different mission: to get inside the lives of Wall Street’s new recruits. From the other side of the barricades, Roose finds himself immersed in a world of over-worked and morally bewildered young bankers. He writes about his experience in his new book, Young Money – Inside the Hidden World of Wall Street’s Post-Crash Recruits.
Justin Wedes sat down with Kevin via Skype recently to ask him about his multi-year dive into the depths of Wall Street:
JW: This isn’t your first book. Before Young Money you went undercover to a semester at “America’s Holiest University”. Tell me about that.
KR: That’s right. Liberty University, which was founded by basically the most conservative televangelists in America.
JW: Tell me about how this experience was similar or dissimilar to the last book you wrote.
KR: One of the things that attracted me to Wall Street as a topic, in 2010 when I started the book, is that it’s an area that many people feel very strongly about but that there wasn’t much actual information about out there.
We’ve all read the books and seen the movies about the financial crisis and we feel like we understand what the CEO’s of these big firms were doing and how they acted/reacted. But no one had really ever gone inside the trenches, to the 1,000’s of young people who come to Wall Street to start working their way up the ladder. I was curious after the crisis: why would any 22 year-old want to do this?
Also, how are they educated? How do you take someone fresh-faced and turn them into a Wall Street banker?
JW: You followed eight Wall Street recruits, right?
KR: Yes, and they were all doing this unauthorized. These firms did not permit me to talk to their employees, but the employees took a chance anyway even though they knew they could have been fired for talking to me… They’d be fired within 10 minutes.
I changed all of their names. I changed some details about them. That was part of the terms of participation. They said, “Look we’ll be open with you, but you have to protect us.”
JW: So what were some of the common threads you discovered as you were shadowing these eight young Wall Street bankers?
KR: We tend to think of Wall Street as this go-go, happy place where the cocaine and the champagne run freely and everyone is having the time of their lives. But for the eight young people…It’s hard to feel sorry for people who are making so much money, but I almost did start to feel sorry for them. They’re working 100 hour weeks. There’s this thing called the “Banker 9 to 5” where you get in at 9am and you work until 5 am the next morning, so a twenty-hour shift. They were just completely miserable.
JW: We have what’s called the “Occupy Wall Street 9 to 5”, but it’s in a media tent in the middle of Zuccotti Park. You mention Occupy a few times in the book. Question: What was it like to be on the other side of the barricades?
KR: I think Occupy was a turning point for my book and a lot of the people in my book because it came about halfway through my reporting. For the CEOs at the big banks, I don’t think many of them truly paid attention. It wasn’t really on their radar. But for the young people – imagine, you’re 22 years old and you’ve just gone to work for a big investment bank. Many of your friends and roommates are involved in the Occupy movement. There’s a lot of cognitive dissonance there. I talked to one guy who was working at Goldman Sachs who said, “It’s very weird to be on this side of things, to be the one in the office looking out at the protests, and knowing that they’re protesting, in some part, what I’m doing.”
So I think it was very odd for them and it also led to some real social fallout where people had gotten used to not talking about what they did when they went out. I talked to several of them who said they no longer say they’re a banker when they go out to bars. There’s too much of a stigma attached.
JW: Interesting. I’m trying to compare this to some of the experiences I’ve documented as an independent journalist covering Occupy protesters in the various different encampments across the country. You know, one of the critiques of OWS was that it was largely young, white, well-educated people. And that’s not, obviously, the entire truth. At the height of the movement we did see a beautiful cross-section of Americans. But I still believe that to be a very legitimate critique. Many of these young people at Occupy protests may have come out of the same elite or second-tier universities that your bankers came from. What kind of emotions and comparisons did that evoke when you spoke to them about Occupy?
KR: Well, there’s one scene in the book where I go up to Yale University during their sort-of Wall Street recruiting season. Traditionally, about 25% of their graduates go to work on Wall Street. I went up there during the height of the protests and there was actually an Occupy Yale movement had sprung up. Part of what they were doing was challenging their classmates, saying “Why are you going into finance? You are a talented film-maker or a talented historian or there are any number of things you could be doing. You went to Yale. You can have your pick, so why are you doing this thing that seems so useless.”
They actually stood outside the recruiting sessions of big banks like Morgan Stanley holding signs that said things like DON’T GO INTO FINANCE or MORGAN STANLEY IS BORING!
I think it really had an effect. I talked to one Yale professor who compared it to ROTC recruiting during the Vietnam War. He said, “There’s this real feeling that there’s a tension brewing and that something is very amiss when we have students sort of turning against their fellow students.”
JW: It sounds like on college campuses this was a real dialogue that was happening. Do you get the sense that on Wall Street this was happening as well, or did these banker’s lifestyles insulate them from some of the critiques of their career?
KR: It certainly didn’t insulate them from criticism, because they started to lie about where they worked when they went out beyond their finance bubble. I think there’s an interesting phenomenon that I observed among these eight young finance bankers where I observed that there’s a kind of compartmentalization going on. They have these very demanding jobs that require attention to very small details and doing Excel spreadsheets and making PowerPoint presentations. That takes up the majority of their brain cells. It’s very rare that they have the time or the energy to step back and contemplate the sort-of bigger issues: “What am I doing with my life? Is this creating value?” It’s almost like triage in their brains.
“Maybe I have misgivings about this, maybe I sympathize with the Occupy movement, but right now I have this Excel spreadsheet due in ten minutes and if I don’t get it done my boss is going to scream at me so I better get the excel spreadsheet done and worry about the big picture stuff later.”
JW: Did you get the sense that their bosses – in other words the Associates and the higher-ups – sensed a kind of hesitation amongst these young recruits? Did they respond in any way?
KR: There’s a huge change in morale right around the time of the Occupy movement and part of that was because of things going on in the financial sector: you had layoffs, bonuses that were shrinking, firms that were closing. This was a bad time for Wall Street regardless of what Occupy was doing. But then you add Occupy to it and I think it created a crisis of conscience and a sort of self-awareness that hadn’t been there before in young people worked on Wall Street. People asking themselves “maybe this isn’t what I want to do with the rest of my life.”
In the book, I talk to at least a handful of people who saw that as a moment where they realized “maybe I want to be starting a tech company” or “maybe I want to be working in something that’s a little closer to my passion”. I think that was something that banks were a little late to catch on to. Now they’re trying to catch up and deal with it and stop the brain drain.
JW: At Occupy Wall Street we saw a couple of what I like to call the “Wall Street defectors”. Alexis Goldstein is a good example. She’s been an outspoken critic of Wall Street since she left Wall Street to join Occupy. Are there more of these now, leaving Wall Street at a young age to join tech companies, or non-profits or government?
KR: I don’t think any of the eight people that I followed join the Occupy movement and it would surprise me if they did because I think they’ve all moved onto new jobs or are still on Wall Street. I would say that going to Silicon Valley, as so many people of done, is a form of protest. It’s not always easy to see that. To a lot of people that just looks like following the money. But if you really ask people why they’re doing this – why this shift is happening – it turns out that a lot of people want to feel good about what they do. They don’t want to have protesters outside their window. They don’t want to be hated for trading derivatives or what-have-you. That reflects a shift in the millennial consciousness. You have people that not only want to make a lot of money but also want to feel good about what they’re doing for the world while they’re making it.
JW: Has Wall Street’s culture changed since 2008?
KR: Yes, absolutely. I think Wall Street has changed in many ways. It’s obviously not a total change and I would say more change is needed. But I would say the lessons being imparted to young people – some of the bosses are still hanging on to the old Wall Street culture. But I talked to one analyst who put it pretty succinctly. He said this isn’t like the days of 2007: the bosses who do cocaine off a stripper’s ass are not there anymore. This is a very different financial sector than the one that existed in 2006.
JW: Now, at the same time, you documented sneaking into the Kappa Beta Phi secret society dinner at the St. Regis. Could you talk about that and perhaps how it shows that Wall Street’s culture isn’t changing?
KR: So the Kappa Beta Phi dinner was one of the most ridiculous things I’ve ever seen. It was a secret society of Wall Street executives formed in 1929 during the Great Depression. It’s a sort of friar’s club for the 1%.
So I snuck into this. I was the only reporter who has ever gotten in the door. I sat there and watched as these millionaire and billionaire financiers, dressed up in drag, told off-color sexist and homophobic jokes. Actually, one of the young analysts that I later told about it said it sounded like something Occupy would make up as propaganda for the movement because it was so evil. These people were just laughing about the bailouts and doing skits about the Occupy movement. It was one of the most offensive things I’ve ever seen purely on a citizen level.
I was depressed and thought “OK, perhaps Wall Street hasn’t changed” but when I talked to the young analysts they thought it was as ridiculous as I did. So that cheered me. That made me think that maybe the next generation is going to be a little bit better because they weren’t asking “Where do I sign up?” but rather “This is totally ridiculous. I can’t believe this exists. What a terrible idea!”
JW: So there was a different sentiment amongst older and younger bankers. I have to ask, though, for all of the thousands of Occupy supporters out there who want to know: What did they say about Occupy? What does it reveal about them?
KR: There was one skit with a guy who runs a bond investing firm who went down to Zuccotti Park with a camera – this was a pre-taped skit – and he found a guy with a face tattoo and he said, “Wash it off! Get a job!” and stuff like that.
There was another skit where there was a private equity executive and a hedge fund executive who were sort-of role-playing. One was dressed up in tie-die and raggedy clothes as an Occupy sympathizer and another one in a suit as a 1%’er and they were tossing back and forth lines like “Why don’t you take a bath, you dirty hippy?” and “We need to create jobs!”. It was very offensive.
JW: Have there been any repercussions from that event from any of the people that you quoted?
KR: Not officially, but one of the people who made a homophobic and sexist joke about Hillary Clinton and Barney Frank had to issue an apology because he’s a Trustee at the University of Richmond and the students were outraged.
JW: It’s interesting because one of the main tenets underlying the Occupy movement is this notion of transparency. That if we could peak into this top-secret Wall Street culture people could judge for themselves what they think about it. Does your book do that?
KR: Absolutely. That’s why I wrote it. I wanted to get inside this world and I was sick of just reading about CEOs filtered through the press apparatus. Forget the stereotypes, forget The Wolf of Wall Street. What are these people actually doing and what are they like? These are the stories of eight actual people who work in finance. It’s the story of their lives and what they actually think about their work. And for me it was totally fascinating and I hope that other people will feel the same way.
JW: I have to agree there, Kevin. I think the book is absolutely eye-opening and it’s actually a very human account of what is going on. It’s very easy to abstract and say “Wall Street is this” or “Wall Street is that” but Wall Street is made up of human beings, many of them young people…
KR: Totally! Corporations are people! [both of us laugh]
JW: Of course, my friend! [sarcastically]
KR: I think it’s important to separate the institutions from the individuals.
JW: I think some of the people on this end may want to see some accountability for the individuals instead of just accountability for the institutions, but that’s a whole other question…
We talked about “has Wall Street changed?” In some ways it has, and in some ways hasn’t. But after reading your book, it’s clear that the young people on Wall Street have changed. In what ways have they changed, and does it reflect a larger change in young people in this country today?
KR: Absolutely. I think the change that’s coming to Wall Street is a demographic tidal wave. It used to be for many years that if you went to Princeton, or Harvard or Yale orPenn – one of these Wall Street “feeder” schools – you went to Wall Street just because everyone else did it. Even if you were an art history major or a music major you could still get a job at a big Wall Street bank by virtue of where you’d gone to school. For many years it was sort of the default option. That’s not really true anymore. Those that are going there now are the ones who truly want to be bankers. It’s no longer the catch-all for Ivy League graduates. It’s a little more professionalized. It’s not the kind of crazy go-go atmosphere it used to be.
My hope is that when the people who are young today are running the show, they’ll remember what it was like to be in the industry when finance was under the gun.
JW: I agree with you, but when I see the struggles of young bankers who are upset because they only got a $20,000 bonus it seems a bit petty in the context of the broader picture of the economy. Can you abstract from the experience of these eight young people any kind of statement about the larger population? Many people would probably say that they never even had the opportunity to be in the shoes of these young bankers.
JW: What do you see as the broader difficulties facing not just young Wall Street recruits but young people in general?
KR: Well, obviously, it’s a tremendously hard time to be young in this economy and youth unemployment is still high and we’re having all sorts of trouble still that’s a result of the crisis. The thing that buoyed me and gave me a bit of optimism is that they weren’t just pre-occupied with making money. Some of them were. But for most of them, money was not the foremost concern when they were thinking about their lives and what they want to accomplish.
One guy who talked to me is in private equity – living the dream, on the surface - and he said to me “The guys who really do shit in the world, the sort of Mark Zuckerbergs, the guy who created Instagram… those guys are not just sitting around in an office making Excel spreadsheets. They’re out there in the world making stuff. So if there’s one note of optimism about the next generation, it’s that they’re not just satisfied making a six-figure paycheck. Many of them, I would venture to say most of them, want to do something more productive.”
JW: Kevin Roose, everybody. Author of Young Money – Inside the Hidden World of Wall Street’s Post-Crash Recruits. Check out this book, it’s great. Thanks, Kevin!
KR: Thank you for having me!
Justin Wedes is a Zuccotti, activist, educator, media-maker and community organizer. He is a stubborn optimist and sometimes-workaholic. You can read more about his work at his blog.