The Unemployed Life

Out on the Street: Good and Evil on Wall Street

“So do you wear a white hat or a black hat?” my lady asked me on our very first date at a hipster Williamsburg restaurant. I summoned my inner Nigel Tufnel and responded: “None more black.”

I remember thinking, What kind of question is that? Do you really think I am a bad guy because I work on Wall Street? If I hadn’t found her so otherwise interesting and attractive, I would have taken serious offense. I told her that I hoped my job didn’t define me. I’m also a dad with three kids. (F.Y.I. to all the divorcées out there: talking about the kids is not great first date rap.) I struggle with playing guitar. I am a good skier. And when I get my cook on I can make a mean Mexican meal (and a margarita not for the faint of heart.) In my job, I in fact considered my hat to be white. I was part of system, I reasoned, that helped finance developing countries and raise living standards. My job as a trader was to reward governments for following the best economic policies for their people and to punish those that didn’t.

That was in November 2006, when I was riding high in the midst of the most successful year I’d ever had professionally. Today there is a black cloud over Wall Street. I wonder how our first date would have gone if we had met in March 2009?

I can hear her saying, “So what you are saying is you punish governments for making bad policies, and get paid for it? Nice”

Err, umm.. check please.

People are pissed off at Wall Street. I get it. I’ve been shocked, too, at how bankrupt companies on government life support have been able to pay people at a very high rate, and some people at a mind-boggling rate.

But do all financiers deserve this vitriol? Some days, I have had enough of being considered a bad guy because I work—or worked—in finance. Everyone was overpaid and is now getting bailed out? I’m not. The deal was if you got good grades at a top college, went to a top graduate school, landed a “prestigious” job, and put in endless hours, then you would be financially rewarded. Yes, we make a lot of money. But it seems that many of the people with the most animosity agreed to a contract that didn’t involve the Wall Street slog, but not the rewards either—and it’s not like it was a secret that people in finance made piles of money.

Now I’m jobless and I’m the bad guy, and am made to feel embarrassed about having worked on Wall Street.

As I approach the six-month anniversary of my unemployment I get less annoyed at the anti-Wall Street vitriol. I’ve become desensitized to the backlash and the popular rage seems to have cooled to a simmer from a boil (and Congress seems to have shelved the 90% tax on bonuses from banks who took TARP funds). But I also am beginning to wonder if my hat isn’t as white as I thought on that cool November night in 2006. Had I drunk too much of the Wall Street cool aid? Did I buy into too much the importance of financial markets and my role, in particular?

Back in 1996, when I taught macroeconomics to undergraduates, the first class would always be about why economics is important. The most compelling example I could point to was the significant increases in quality of life of the average person in developing countries that followed modern global macroeconomic polices, relative to those that didn’t. To hammer the point home I would never mention income per capita (the traditional unit of measurement). Instead I would focus on statistics that ultimately impacted a person’s life, such calories per capita, average life span, infant mortality, education, the percentage of the population that could read.

As I moved on from academia to finance I laughed that I was like a latter day missionary, spreading the gospel of globalization on my trips to Argentina, Brazil or Turkey. But when I really examine what drew me to emerging market finance, I know that it wasn’t helping improve the standard of living for people around the world. I simply found the job interesting. I was up on current events and global politics. I was able to learn about a variety of countries intimately. I was able to travel to interesting places.  Investing in the financial markets was an ever-evolving puzzle that was fun to try to solve. The fact that I was paid handsomely to play this game didn’t hurt.

If I could rationalize my involvement in the emerging markets to be one of the good guys, does that mean that now I have responsibility for this crisis since I was part of the broader financial system? I worked in and benefited from a system that collapsed. And while most of the time I feel like a casualty, could it be that I am a culprit as well?  Where does responsibility begin and end? But what could I personally have done to make any difference?

Paul Krugman has argued that banking needs to be made boring again like it was 25 years ago. The financial incentives for many on Wall Street became perverse and as a result taxpayers were left holding the bag. Now that the compensation model is about to be overhauled, the odds of making the megabucks is a lot longer. That’s okay with me. I liked what I did and would do it for considerably less pay.  I hope that the people who are left on Wall Street are there because they actually like their day-to-day jobs. Likewise I hope that some of the holier than thou voices that are enjoying seeing Wall Street stumble think honestly about why they do what they do everyday.  Why did you decide to work in media, or become a graphic designer or even a doctor or a teacher? Was it really all altruistic? If so, god bless you, go forth and spread the good word.

Joe the Trader spent 11 years as a proprietary trader at a major U.S. bank. He has three children and currently lives in Brooklyn. Read more of his weekly Out on the Street column.

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Tags: bailout, banks, Out on the Street, The Unemployed Life, The Working World, Wall Street