Culture of Wall Street


The Ethnography of Wall Street University
of Minnesota assistant professor of anthropology Karen Ho went to work on
Wall Street when she was a graduate student and returned to conduct research on the
culture of Wall Street shortly thereafter. In her book, Liquidated: An Ethnography of Wall
Street, Ho describes a culture of high risk, high reward that has contributed
to the current financial crisis. The typical profile is of a very privileged,
elite university graduate that are from many backgrounds even though
the majority are Euro-American. But you have Asian Americans,
Latinos, African Americans as well. But also as you get higher up in the echelon
of Wall Street, the less diverse it gets. In terms of women and men
there are, at the lower levels, there are about 50-50 women and men. Obviously as you increase, given that the
environment is rampant with a lot of race and sex discrimination, and class
discrimination, there is less and less diversity as you go higher up in the ranks. The institutions that they pull from are about
five to ten of the most elite universities in the U.S., so most Wall Street recruits
are from Harvard and Princeton, Wharton, some of the other ivy leagues and other comparable institutions,
such as MIT and Stanford. And what their strategy is in doing that
is to say that we are recruiting the best and brightest, the most privileged people
on the globe – that they often say. Part of that is to give them a kind of pedigree, so that it legitimates what
they do in terms of the markets. They don’t have that much real world experience,
and yet they are being charged with the futures of corporate America, with
investment management. So certainly one could argue that it’s
their pedigrees that they are after, not necessarily their smartness
with regard to finance. Their culture has been central
to this crisis precisely because Wall Street investment banker’s culture
of liquidity favors rampant job insecurity. Investment bankers are in constant
threat of losing their own jobs. At the same time they are
incredibly highly compensated, not only by salary, but by their bonus. And their bonus is not dependant on the
long-term strategy and long-term performance of their corporate clients, it’s
actually dependant on how many deals that they are actually able to pull through. They push, for example, these
sub prime mortgages through, where many of these mortgages don’t
have long-term sustainability. And yet they know if they make their profits
this year, they get a really high bonus and they might be out of their job anyways. So, their kind of culture is crisis
invoking and crisis producing. About the AIG Bonuses: Were you surprised? I wasn’t, and AIG which is an insurance
company, and part of what is going on is that the Glass Steagall Act was dismantled
in the late 1990s and what that means is that insurance companies, which for most of
the 20th century were prevented from gambling and speculating in the financial
markets – actually now are. And that’s the point of what all the
press about governmental deregulation, is that those institutions
that used to be protected from the risky capital markets,
are now knee deep in it. In particular, what happened
with AIG and the bonuses, is that many of the bonuses actually
went to AIG’s financial wing, it’s financial derivative wing,
and these are precisely the people who absorb the culture of Wall Street. Many of the bankers and the traders
in their financial derivatives wing, are Wall Street produced, Wall Street
grown, and they brought them in, in order to generate these
kinds of record profits that they were seeing through
the sub prime market. So what they were doing at AIG in this
particular wing was issuing and inventing and promoting and selling
these credit default swaps. In the past 30 years, so much of the
fortunes and the benefits and security of many Americans have been outsourced to
the stock markets, to the financial markets, and so many of us, even though we might
disagree with what Wall Street is doing, even though we might have a critique of Wall
Street, our retirement plans, or our savings, or our children’s college education
is tied to the stock market. So in many ways, Wall Street is holding
the stock market hostage, as a way to say, “we actually need to be bailed out.” And any kind of recovery
needs to come through us. And so because of that complicity
that both Americans at large as well as the government have in
Wall Street succeeding, our critiques might not actually
have that much bite in it. Now the danger is that Wall Street gets
bailed out and we don’t dismantle the kind of bubble culture that got us
into this mess in the first place.

10 Comments

  1. NEXUS MINDWARPED AMERICA. said:

    Too many 'erms' for my tender pallette.

    April 10, 2009
    Reply
  2. af796 said:

    a very shallow analysis…i'm sure average youtube use will find this intellectually stimulating though

    February 20, 2010
    Reply
  3. Chuna Fish said:

    Actually, most of the partnership managing committee members or commercial killer managing directors are from mediocre ny local schools; they just worked their asses off to achieve the American Dream. It's their kids that end up going to UPenn Wharton, Harvard, MIT etc. Those 99% percentile IQ's aren't guaranteed to make it big. They usually fall prey to the think tank culture who aren't concerned with amassing vast fortunes, and waste their genetic advantages on abstract theory and naysaying.

    June 10, 2010
    Reply
  4. kurd55 said:

    I'm gonna get her book! Excellent!

    Oh, and yeah, Republicans are scumbags.

    October 25, 2010
    Reply
  5. Karen Ho said:

    too shallow…

    June 7, 2011
    Reply
  6. cultcrit said:

    shallow? It's a university relations video. Read her book for the analysis. Excellent.

    November 30, 2011
    Reply
  7. Sid Kaskey said:

    Excellent book. Read it Karenkwanyu before judgment.

    May 26, 2012
    Reply
  8. SuitedBunny said:

    No shit, Sherlock Ho.

    October 8, 2012
    Reply
  9. NovemberRain said:

    She does her research

    November 19, 2016
    Reply
  10. Abba Dabba said:

    What she says makes so much sense. Every organization has its own culture and this culture plays an integral role in a corporate/governmental entity's behavior. To try to analyze an entity or an incident within one, without examination of its culture is like going to the doctor for a checkup where only your heartbeat is listened to, and the doctor then proffers a diagnosis as to your the state of your overall health.

    July 29, 2018
    Reply

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