Kevin Roose, a former reporter for DealBook, has been at New York magazine since 2012, writing about the more offbeat aspects of Wall Street’s culture.
He recently returned to DealBook for a conversation about his new book, “Young Money,” which comes out on Tuesday.
Mr. Roose followed eight young Wall Street workers as they navigated the world of spreadsheets and suits. Think of the book as “Liar’s Poker,” updated with iPhones and heightened anxiety about the global economy.
How did the idea for this book come about?
I started in the spring of 2010 and kept reporting for the next three or four years. I had done a book before, so I knew that it was possible, but more and more I thought that this idea deserved a bigger treatment. I graduated from college, and one of the first things I saw was this odd, post-financial crisis sector playing out. I had friends going into banking and ran into them on the street, at the gym and saw what an immense mark the crisis had made on them. And I wondered, who are these people? What happens to this age of Wall Street? Do they become card-carrying capitalists or not? I started asking around.
How did you find and choose the eight people you focused on?
I spent a lot of time in Murray Hill. I think I basically have equity in Brother Jimmy’s at this point. I asked friends and friends of friends, I went to networking events. I spent time in the Financial District, I drew on every connection I could because I wanted to find a diverse cross section. I didn’t want it to all be traders at Bank of America or kids who went to Duke. I wanted the group to be diverse.
There’s been a lot of talk about the gap in incomes and the concern that the rich are getting richer and the poor are getting poorer. You write about how things like student loan debt influenced some of the young Wall Streeters and their career choices. Is the income gap a concern for the young Wall Streeters, too?
It’s a huge factor. I remember talking to one of my sources who was saying that part of the reason she went into banking is because she had tens of thousands of dollars of student loans to pay off. Working on Wall Street was the quickest way to do that. For a lot of people who aren’t from privileged backgrounds, working on Wall Street looks like a good option.
You cite executives like Vikram Pandit and others as up-by-their-bootstraps examples of upward mobility. But recently, there’s been much discussion about whether the chances of moving up the economic ladder are lower today than they used to be. Where does this leave, say, little Pandits, rising up the ranks?
I don’t think it’s a dead idea at all. I think there is a lot more of that in this generation than prior generations. I think that Wall Street is less attached to the idea that it’s a catchall for the elite. There are fewer blue bloods than 10 years ago, and I think that’s a reflection of how professionalized it is. You can’t just walk in having majored in art history. You’re really expected to know your stuff, expected to have done an internship.
How has that professionalization affected who is going to Wall Street, though? Is that a good or a bad thing?
I think for a number of decades, there was this very odd recruiting climate where Wall Street and consulting firms became the default option for students at good schools who didn’t know what they wanted to do after graduation. If you knew you weren’t going to be a doctor, but you didn’t feel sure about your options, Wall Street was an incredibly enticing option. It created a generation of accidental bankers, and some of them did the wrong thing. I think now what you’re seeing with the competitiveness is the people who became bankers, they really want to be bankers. And I think that’s a good thing because it’s better for the banks and the rest of the economy to have people who are talented.
Your book reminds us that there was a lot of talk when President Obama was elected in 2008 that young people were inspired by his rise. Has that fizzled? In the wake of the financial crisis, did young Wall Streeters rethink the morality of their jobs?
I don’t think it’s gone back to the precrisis norm. Now, what you’re seeing is Silicon Valley becoming the default option. Going to Google is the new Goldman Sachs. I don’t know if they’re going to Silicon Valley for idealistic reasons. But it’s worth noting that so many Ivy League seniors apply to Teach for America. It shows that you don’t have to pay students a ton of money. You just have to give them something that’s structured and reliable.
Some firms are more known for this than others, but the Kool-Aid factor of working at a shop and on Wall Street over all — which of the young workers drinks it? Who doesn’t?
I think the thing about banking is, if you make it through the first two years, you can make a career out of it. Somehow, these people stay in finance or somewhere in the industry. I think most people have a moment where they choose their path in or out of a firm. A lot of people stayed.
Wall Street’s woman problem: You could have done a separate book on that. How did that translate to the young women you reported on for the book?
It’s still a problem. When you look at most incoming analyst classes, they have pretty good gender parity. But when you look up the chain, to the V.P., managing director and partner level, the ranks of women really thin out. There are some reasons for that — mentorship culture and the tension between raising a family and working one of these cutthroat jobs. Younger women have to choose whether or not they’re going to be bankers and how they’re going to go about it. It takes more strategic and sharper thinking.
Did you interview any bosses of these young Wall Streeters? There’s no shortage of complaints among older management that some of this generation feels entitled.
I did interview the bosses. I spoke to human resources people and executives at a lot of the major banks, and they did talk about that, these kids as “millennials.” They said they feel a sense of entitlement, and my response was, “Maybe these are bad jobs and that’s why they want to leave.”
Historically, when people are exposed to a downturn early in their professional lives, the sting lasts a while, both in their earning power, but also in how they view themselves as savers and investors. (See the research on the Depression babies.) So what’s going on here for young Wall Street people?
Totally. And I think that’s why these people felt so torn. They were working at investment banks making $120,000 a year while the unemployment rate for someone their age was 25 percent. The people who end up on Wall Street may be risk averse. It’s hard for them to contemplate leaving behind their paychecks and doing something more personally risky. I think the financial crisis and the rise of Silicon Valley gave them another out. They could take some risk without losing the cachet.
One of my favorite parts of the book is when you crashed the Kappa Beta Phi chapter meeting. Do you think these secret societies fade out? To be honest, the way you wrote about it, it reminded of “The Flintstones” and that group that Fred and Barney frequented wearing the funny hats.
It sounds like an outtake from “The Wolf of Wall Street.” It felt like a period piece from the 1980s. It’s really disappointing when you think that the financial crisis would have made people more cautious about how they behave, especially those who came out of it as millionaires or billionaires. I think young people will behave better. When I told them about this, they thought it was hilarious. Maybe that’s the litmus test. In 10 years, if they all want to join, maybe that’s the sign that nothing has changed.
So are you going to follow up with these eight people in 10 years? 20 years? You could do the “40 Up of Finance.”
I would love to do that.