The Wall Street Culture: Enjoyment, Recession and Job Security

For every mythology, book, or movie in existence about Wall Street, most Americans remain unfamiliar with the inner workings of huge banks and the motivating factors for workers in these institutions. The nebulous lifestyle on Wall Street, in addition to fabled huge incomes, make it difficult to understand the bailouts, the recession and the housing bust that still the country up to date. That is more notable, given the fact that individuals who lead America down the financial collapse escaped with little punishment. There are several aspects of Wall Street cultures ranging from elitism, distorted incentives, bizarre rituals for interns, and smartness culture. One notable feature is that Wall Street prefers reputation over impressive academic credentials. Hence, students from Ivy League institutions have a higher employment rate over those from lowly rated universities with better academic scores. While Wall Street maintains a positive public image, a closer analysis of its inner workings reveals a contrary picture of the institution.

Most people consider the culture of Wall Street as one characterized by smartness. However, the smartness culture is not only a feature of wall street, but it is also a currency and the motivating factor productive of a global reputation as well as profit accumulation (Ho 40). There are two aspects of the smartness culture. The first one is elitism, which stems from people working on Wall Street who perceive themselves as the masters of the universe (Ho 40). The second aspect emanates from characteristics of ethics and hard-work resulting from elitism synced with the super competitive nature of workers on Wall Street (Ho 41). These two facets comprise what wall street perceives as a culture of smartness. The drive to achieve tremendous success in the financial sector, coupled with a profound work ethic at all costs, is the acceptable and encouraged characteristic of Wall Street workers (Ho 44). Wallstreet bankers view any contrary perspective as being less than brilliant and no up to par with the standards of wall street.

In a field where everyone feels threated by poor job security, one must produce excellently to maintain their well-paying jobs. Most investment bankers are talented in wowing their clients. High brainpower is essential to impress clients and to convince them to positively perceive the bank’s products and later invests in them (Ho 43). Today, technology influences the marketability of various skills, and this makes brainpower an essential feature. In fields requiring brainpower, Wall Street creates business models that depend on the impression of brainpower to wow clients. That places a premium on hiring from a few universities with outstanding international brand equity. Brilliant students graduating from non-Ivy League learning institutions might be excellent at developing spreadsheets (Ho 47). However, boasting of a panel of analysts from Ivy League institutions like Harvard University is crucial when selling high-cost financial assets with uncertain stock value.

With the devastating effects of the recession, many would expect that this financial downfall would change Wall Street as an institution. However, as noted by former employee Polk, little changed despite the expectations from the public for transformation at Wall Street (White 1). Polk argues that distorted incentives remain the primary challenge with Wall Street. Workers receive huge incentives for better performances but receive minimal or no individual punishment if they lose large sums of money (White 1). Hence, workers have profound motivation to pursue huge risks for tremendous profits since they know their efforts have no downside if they fail. After the recession, the government bailed out prominent banks, but the executives of these institutions received no punishment (White 2). If these individuals had experienced the pain of losing jobs, then banks would have resorted back to the organizational structure used in the 1980s.

Interns, enjoying their work, is another culture present on Wall Street. That is because they have little work by which people judge them. As a result, several weird things occur on the trading floors. Polk notes that the interns’ main task is learning the operations at the institution and thus minimal actual work for the interns to accomplish (White 2). Therefore, socially standing out is the way for the interns to stay relevant. That contributes to the usually bizarre rituals, such as instances where senior employees offer junior interns five hundred dollars to eat every item in the vending machine (White 2). In some other cases, they offer the interns four hundred dollars to consume thirty-five doughnuts in one minute. The interns feel pressured to fit in or impress their seniors, and that is why they undertake such things (White 2). These rituals help them to build their reputation since they have no other contribution to the business.

Before the 1980s, all prominent investment banks were distinguished from consumer banks, and each operated as a partnership. That meant every partner felt any financial loss of the bank underwent a financial loss (Mandis 2). The association also involved deferring much of the compensation awarded to executive bank staff for years. That created enormous incentives for individual workers to monitor their colleagues’ actions and raise the alarm when they noted any abnormality (Mandis 2). This form of interdependence can shift the attention back to ethical standards from legal to behavior ones. While such a move might mean losing some gifted employees, in the long run, this approach will enhance trust among workers. Adopting this approach would help restore public confidence in Wall Street (Mandis 2). There have similar moves towards quarterly income metrics and public stock markets. The pressure to increase earnings each year has contributed to the present state of the stock market.