Disaffected ex-Goldmanite Greg Smith clearly possessed a Puritan streak bordering on the Messianic and this led many to immediately, reflexively discount his New York Times op-ed. Particularly tiresome were the “What did you expect? You were playing with the big boys” reactions borne of equal parts chest-thumping self-congratulation (“only some of us really know its a war out here”) and a sense of betrayal (“don’t shit where you eat”).
Binary interpretations are most digestible in the media and the fact that no one’s motivations are unconflicted, least of all Mr. Smith’s apparently, was tossed aside as a matter of convenience. There are, I suppose, a small group of professionals who head to work each morning 100% convinced in the validity of what they do and the commensurate compensation that results. The rest of us mortals consistently measure the balance between the cost of employment – in terms of time, family stress, the shit-eating from senior psychopaths – and the financial and social-related rewards.
Finance as an industry is different from most in its aspirational qualities – few people grow up dreaming of managing a slaughterhouse but tens thousands diligently hit the books dreaming of becoming the next Steve Cohen. Those successful at reaching a major trading floor or investment banking department usually spend the first week in awe of their surroundings, one assumes with a feeling similar to the first time a freshman football player runs out of the tunnel on game day in front of 100,000 screaming fans. It is, or was for me at least, the realization of a dream.
When you bust your ass to achieve something it is extremely difficult not to become fully invested in the mythology that drove you there. Disillusion takes time. In the first couple of years, when the veterans make sidelong cynical comments you sneer back and classify them as bitter old men on their way out. Furthermore, you’re a peon and the worst of the conflicts are hidden from you.
As with any field, with experience the view changes. You take notes in meetings where the sole agenda is how to hide fees from clients, the Head of Retail decrees caveat emptor on triple dip broker strategies stuffing fee-based accounts with products with huge initial commissions. The trade desk openly front-runs big retail orders and this is carefully steered from regulatory view. The negative side of the motivation ledger begins to get filled out but still, on balance you are doing the work you want to do.
In cases where the money climbs in near-perfect inverse correlation with disaffection, this makes things more difficult still. New house, new Merc, new spouse, private school for the kids are all within a responsible budget at current salary levels. Not if you change industries though – there just aren’t that many options where $500K is worst case scenario. This is particularly true if the primary skill set is predicting asset prices in a largely virtual world.
It would be stupid to suggest that the above scenario covers everybody in finance. There is no shortage of satisfied professionals in the industry who correctly assume that they provide an honest, highly difficult and intellectually challenging service in the support of clients and the economy at large. It does seem, however, to cover the experience of Mr. Smith and to some extent my own (although my reasons for quitting the previous position were much different than his). I would argue furthermore that this arc – initial wonderment and satisfaction steadily eroded by cumulative disgust - is extremely common among financial professionals. Most current employees have been fortunate enough to find a position where the visible self-serving skullduggery of their employers remains at low levels acceptable to them. A minority are greedy scumbags who don’t care. But there are a number, larger than outsiders might think, who feel like Greg Smith likely did last year, trapped by circumstance in an environment markedly different form the one they expected. And, for the courage to jump off the bandwagon while accepting the self-immolation of his career, and for publicly doing what he felt was the right thing (misguided or not), I give him credit. Good luck to him.