Adderall not cocaine: inside the lives of the
young wolves of Wall Street
Source: PBS Newshour BY ANDY SWAB
First-year
analysts at America’s top tier investment banks face soul-crushing
hours,
mind-numbing
work and pain-inducing client meetings in the post-crash,
post-recession
world of today’s Wall Street.
Kevin Roose’s “Young Money” profiles eight young investment bankers at New York’s top financial firms as they navigate their way through an industry that has been heavily criticized after the crisis of 2008.
Roose, a former writer for The New York Times’ DealBook blog and author of “The Unlikely Disciple,” writes for New York magazine, which just published this adaptation from his newly-released book about the time he crashed a Wall Street secret society.
Roose gives us a glimpse into the world fresh-faced college graduates face as investment banks sober up after both bubbles and bailouts.
Before the housing boom went bust, graduating seniors from America’s top colleges poured into the world of finance. In 2006, 46 percent of Princeton University students who had a job at graduation went to Wall Street. A year later, 47 percent of Harvard University’s graduating seniors went into finance and consulting.
But things changed after the crash. In 2010, 12 percent of Ivy League seniors applied to Teach for America, and between 2008 and 2011, AmeriCorps applications have almost tripled. For Harvard’s class of 2013, only 5 percent reported they would like to still be working in finance in 10 years. The money on Wall Street is still there, but the industry has lost its luster in the minds of many millennials.
Making Sense recently spoke with Roose about his book and what life is like on the low end of the ladder for the best and brightest in investment banking on Wall Street today. The following interview has been condensed and edited.
Making Sense: This is a book about young professionals starting careers in finance in the period directly after the financial crisis of 2008. Why did you decide to write this book?
Kevin Roose: I was at a dinner party in New York and had just graduated from college at Brown University. It was a bunch of friends and friends of friends, and we were all going around the room introducing ourselves. We get to this one woman and she says, “I work downtown.” We’re all like, “Okay where downtown?” She says, “I work in finance,” and somebody says, “Well where? Where do you work in finance?” Ultimately, she says, “Well, you know, I work at Goldman Sachs,” and she sounds so sheepish about it. I thought, how fascinating. I mean, in 2005, this would have been something you would be wearing on a T-shirt. You would have been so proud to have been at Goldman Sachs. And yet in 2010, it was like having a scarlet letter.
I think that really cemented for me that something drastic had changed in the crisis, and I wanted to explore what that was.
What shocks a lot of young people when they come to Wall Street is they’ve read “Liar’s Poker,” they’ve all seen “Wall Street,” and they think that’s what it’s going to be like. A lot of them who showed up after the crisis expected champagne and caviar and instead, they had protesters outside their offices. This was not a fun time to be a banker. Obviously you can only feel so bad for them — they’re making a ton of money and they’re very fortunate to be where they are — but I think it really takes a toll on these people. It’s the difference between their expectations and the reality.
Making Sense: This book is written as a series of profiles for eight entry-level professionals who work for the biggest banks in America including Goldman Sachs, Bank of America, Merrill Lynch and Citigroup. Why did you decide to organize the book as profiles? And why keep the bankers’ identities anonymous?
Kevin Roose: I wanted to get a kaleidoscopic view of the banking industry. If I could get eight young bankers to follow, that would give me enough diversity between the different firms, the different parts of the different firms, where I could really get a complete, overarching view of what this world was like for most young people.
I decided to structure this as profiles because I wanted this to be their stories. It wasn’t my story. I wanted people to be able to see from the perspective of someone living this life and what it’s like.
I decided to keep the identities anonymous because I had to. Wall Street banks are incredibly secretive, and young employees are not allowed to talk to the media for any reason. Unless these people wanted to be fired, which they didn’t, they had to remain anonymous, so that was part of the understanding from the start, that I wouldn’t reveal their names in exchange for their openness.
Making Sense: What profile from the book do you find most powerful?
Kevin Roose: Well I think one of the most powerful parts of the book for me was a guy named Derrick. Derrick was from a small town in the Midwest. He didn’t come from a lot of money. He didn’t go to Harvard. He worked his way up and into the very elite sphere of finance. The entire time he’s moving his way up, he’s having moral quandaries about what he’s doing. He is making a lot of money — he is very successful by any traditional definition — but something about working in private equity and working on Wall Street doesn’t feel right to him.
Talking to him, I got this very complex picture of the inner life of someone who works on Wall Street, makes a lot of money on Wall Street, but doesn’t consider himself part of Wall Street in some sort of basic, structural way. So that was really interesting. I had no idea that bankers had self-doubt. You see movies like “Wall Street” and “The Wolf of Wall Street” and these are some of the most confident people in the world. But when you really ask them about their background and their lives and their work, they start opening up and a lot of them have a lot of doubts.
Making Sense: What is the psychological toll of working 60 to100 hours a week without seeing friends or family, yet making upwards of $120,000 as a 22-year-old fresh out of college?
Kevin Roose: Right, it’s hard to feel too much sympathy for people who are making that kind of money as 22 or 23-year-olds. But I will say that it occurred to me sort of halfway through this book that I wouldn’t switch places with these people even if I had the opportunity to. I mean, they work incredibly hard and their lives essentially belong to their employers for two years. One guy told me it’s not the hours that kill you, it’s the lack of control over the hours. So you can be in the middle of your friend’s wedding or a birthday or an anniversary dinner and if you get called in, you have to go — it’s a miserable way to spend your early 20s.
Even people who have made it through and come out on the other side and have been successful on Wall Street or in some other industry would tell you these are some of the hardest years of their lives.
Making Sense: It’s interesting that you call the culture that came with this explosion of growth in stocks, tech companies and hedge funds from the 1980s to 2007 “Old Wall Street.” But your book still has scenes of hard drug and alcohol use. How much of that is the profession and how much is personal choice?
Kevin Roose: It’s a much more subdued culture now. There aren’t nearly as many
ridiculous, over-the-top parties and lavish expenses, and I think people are a
lot more careful. A lot of the most profitable kinds of trading, a lot of the
most freewheeling kind of activity on Wall Street has been reined in by regulation.
Bonuses are smaller for most people, the perks have been dialed back, and so I
think, it’s much less a happy-go-lucky, the-world’s-great kind of a place.
I don’t think that “Old Wall Street” cultural legacy even needs to extend as far
back as the mid-1980s. I think that was true even in 2005 and 2006. So we’re
talking about a maybe eight or nine year transition in which Wall Street turned
from one place into something completely different.
The goal of what came out of the financial crisis was to make Wall Street a more
boring place and I think it is. I should say I expected a lot more drug use among
the young bankers. The stereotype is that they’re all on cocaine all the time. But
actually, the most common drug I heard about people using was Adderall. These
people are not taking drugs to go out and party; they’re taking drugs so that they
can stay up longer and work more. So that shocked me, and I just thought how sad:
if you’re going to be doing drugs in your early 20s, you might as well make it a
fun one.
But I do think they tend to drink more than they should, and a lot of that is maybe
a coping mechanism, but mostly it’s a social thing. This is the culture and you’re
expected to go out and have drinks with the boss. The bar is where a lot of the
social and professional propulsion comes from.
Making Sense: You mention at least one of your characters had some pretty severe
health problems due to that drinking, and others have mental and physical health
problems as well.
Kevin Roose: I’ve talked to so many bankers who not only gained weight and stopped
going to the gym while they were bankers — they just didn’t have time — but a lot
of them developed pretty serious health problems.
Last year in London, there was a Bank of America intern who had an epileptic
episode and actually died after working reportedly three all-nighters in a row.
That shocked a lot of people, and for me, the shock was that it hadn’t happened
sooner.
This is a really unhealthy industry and I think they are now realizing that and
trying to make it slightly better. It is still a macho culture, and I think the
banks are trying to pare some of this back. They’re making junior analysts take
the weekend off. They are forcing mandatory vacation days. And this has all
happened within the past year, I think, as a response to some of the things I
have been writing about in my book. So my hope is it will eventually become a
more normal working environment because you don’t want to see anyone get hurt.
Making Sense: You mention that the appeal of tech companies has grown at top
schools as the hiring and the prestige of Wall Street firms has fallen in the
wake of the financial crisis. Do you see this as a second tech bubble or are
people going into fields that offer less hierarchy and a more entrepreneurial
spirit?
Kevin Roose: I don’t know if it will burst like the bubble, but something like
that. I had a programmer say to me once, “The rule of working in tech is that
you should be wary when the ‘pretty people’ show up.”
You have bankers now who are quitting their jobs and going to work at Google a
nd Facebook and a bunch of other tech companies. Banks have lost their default
status as the place where college graduates from top schools go. One in six Ivy
League seniors now applies to Teach for America. Google is outhiring Goldman
Sachs at several of the top colleges.
Wall Street has lost its luster for this generation so I don’t think you’re going
to see this sort of massive migration every year from Harvard, Yale, Princeton,
etc., into finance like you did before the crash. For many years, it was the next
step. You went to Exeter or you went to Andover, you went to Harvard, and then you
went to Goldman Sachs. It was all very apportioned and very predetermined almost.
But now that talent pipeline is sort of breaking down.
There is an idealism among people in this generation, my generation. We do want our
work to be meaningful in a grander sense, and so I think for a lot of years, people
put that on hold in order to work on Wall Street and make money to pay back their
student loans, what have you. The theory was they would quit and do what they really
wanted to do later on. Some of them got stuck because they have the so-called
“golden handcuffs” of having high-pay and getting used to that.
But I think now people want to take that meaningful work on early in their careers.
When Goldman Sachs comes to you and says, work here for 20 years and then you can
start your foundation or do whatever you want, but Google or Facebook or another
company is saying, come with us and you can start changing the world today, I think
that’s a more attractive proposition to people who want to be socially conscious
about their work.
Making Sense: Not too many people ended up staying on the Street. Most of the
professionals you profiled either left finance altogether or entered careers in
private equity.
Kevin Roose: Well part of the frustration among Wall Street bankers is the pay
differential between being a young banker and being anything else, being a
consultant or an accountant or working in health care and the media. You were
making much more than the next category of your peers. But now, after the crisis,
I think the pay differential has come down; you’re still well paid and you may
still be making more as a young banker than you would be doing anything else, but
it’s a game of inches now, so you’re not out-earning your peers by so much that
it’s worth it.
A lot of people are saying, now wait a minute, I could be working half as hard at
a tech company or at a consulting firm and making 80 percent as much money — and
I’ll take that trade. I think it’s generally a fairly large attrition rate on Wall
Street. Not a lot of people stay in it for the long haul, but especially after the
crash these were really tumultuous years to be a young banker. And a lot of them
had expectations that weren’t fulfilled and had hopes for their pay and their
advancement that weren’t met, so I think that there’s a lot of disillusionment and
a lot of people looked around and saw people in Silicon Valley getting rich,
seemingly having a great time, and said that sounds actually better than what I’m
doing.
So Wall Street may return to a more normal climate — normal by the old standards —
someday, but I think this Wall Street is really a tough sell for a lot of young
people right now.
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