Widespread superciliousness, arrogance, narcissism and class-consciousness permeate Wall Street at all levels—which is partly incubated in business school.
The Wall Street Psychologist’s Gyroscope advocates that the individual remove these blinders and embrace the humility that provides clarity. A sense of entitlement is a mind trap. The humble individual can think more objectively and reverse course more easily than the overconfident narcissist.
American humorist Calvin Trillin provided an interesting take on the genesis of the 2008 Wall Street debacle in an opinion piece that ran in the New York Times.[1]
Trillin was sitting in a New York City pub waiting for a friend and he struck up a conversation with a fellow patron about the financial system’s collapse of 2008. This individual, a Wall Street veteran, was convinced he knew the source of the market’s implosion.
“I’ll tell you what happened. Smart guys started going to Wall Street.”
He added:
“…one of the speakers at my 25th reunion said that, according to a survey he had done of those attending, income was now precisely in inverse proportion to academic standing in the class, and that was partly because everyone in the lower third of the class had become a Wall Street millionaire.”
“Did you ever hear the word ‘derivatives’?” he said. “Do you think our guys could have invented, say, credit default swaps? Give me a break! They couldn’t have done the math.”
“Why do I get the feeling that there’s one more step in this scenario?” I [Trillin] said.
“Because there is,” he said. “When the smart guys started this business of securitizing things that didn’t even exist in the first place, who was running the firms they worked for? Our guys! The lower third of the class! Guys who didn’t have the foggiest notion of what a credit default swap was. All our guys knew was that they were getting disgustingly rich, and they had gotten to like that. All of that easy money had eaten away at their sense of enoughness.”
“So having smart guys there almost caused Wall Street to collapse.”
As a humorist, Trillin succeeds in making light of this situation; yet, I believe there is some valuable extrapolation to be done with his commentary.
Wall Street is a sophisticated environment that can be wildly lucrative and attracts some of brightest minds on earth. However, money has a seductive power that can lull the individual or large groups of speculators, into a false sense of security.
And, it is not just Trillin who makes this observation. “Enron: The Smartest Guys in the Room” is a 2005 documentary film based on the best-selling book of the same name by Fortune magazine reporters Bethany McLean and Peter Elkind. The title of the book—chronicling the 2001 collapse of Enron and the subsequent criminal trials of top executives—facetiously pokes fun at seemingly brilliant minds inability to avoid the most notorious collapse in the annals of corporate America.
[1] “Wall Street Smarts,” by Calvin Trillin, NY Times October 14, 2009