I know, I know, you hate AIG and whatever other big financial institution is taking TARP money, and then turning around paying Chris Dodd empowered bonuses, having expensive junkets and generally refusing to use the capital infusion to actually make loans to worthy Americans.
Rome was the mob. So is America when we get a story fed to us for 6 straight months via the CNN/Fox News media cycle. So it’s hard to feel any sympathy for the high level employees at the financial institutions who are leaving because they can’t earn what they used to earn. Cry me some crocodile tears, right? Stone them!
Like the Bloodhound Gang once said, “you and me baby ain’t nothin’ but mammals, so let’s do it like they do on the Discovery Channel”. Which I’m interpreting here to mean that like you and me, the investment bankers do what you and I often do – we move to where there’s the most food compensation.
But wait! Talent moving away from the big investment houses/arms into smaller firms might actually be a good thing – if you can listen long enough to hear how spreading talent around leads to competition and, as a result, innovation…
From the New York Times:
“The turning point for Stephan Jung came in February, around the time bonus checks were slashed. A veteran of UBS, one of many banks tarnished by the financial crisis, Mr. Jung realized that the old Wall Street would not be bouncing back any time soon. It was time to head for the new.
“After 10 years, I did not see a future for myself,” said Mr. Jung, 42, who quit to parlay his sales expertise into a career at Aladdin Capital, a small but rising investment firm run by others who had also left some of the most venerable names in finance. There is an air of exodus on Wall Street — and not just among those being fired. As Washington cracks down on compensation and tightens regulation of banks, a brain drain is occurring at some of the biggest ones. They are some of the same banks blamed for setting off the worst downturn since the Depression.
This is certainly a concern for the banks losing top talent. But other financial experts believe it is the beginning of a broader and necessary reshaping of Wall Street, too long dominated by a handful of major players that helped to fuel the financial crisis. The country may be better off if the banking industry is less concentrated, they say.”
So, cry the crocodile tears for folks like Jung who can’t earn a cool million at the drop of a hat these days. But applaud the fact that talent on Wall Street is moving to smaller players. That distribution of top talent across more companies means competition in the sector is on the uptick, which can be nothing but good for Wall Street.
In the world of talent capitalism, I’d rather have 10,000 millionaires than 10 billionaires (with no millionaires). It tends to keep it real all the way around. Go find your million dollar salary, AIG executives of the world.
Kris, I’m right there with ya on the billionaires vs. millionaires tip, but I’m not so sure that “innovation” is what we need in the banking/finance industry these days. After all, it was “innovations” like collateralized debt obligations, mortgage-backed securities and other exotica fresh-sprung from the febrile minds of Wall Street’s best & brightest that got us into this mess.
Another home run Kris, I agree with your analogy of 10,000 vs 10 and it is exactly the case that innovation comes from the dust of destruction, BUT my main problem with the current mindset in America is that these people are being persecuted for making money and that persecution will continue wherever they go. No matter large or small, “Wall Street” is not in with the “in” crowd and they are quickly becoming the only “class” of workers who have no rights. So there may not be anymore Million Dollar Salaries available (http://dealbook.blogs.nytimes.com/2009/03/25/dear-aig-i-quit/). That my freind is Rome Burning