One of the big problems with this is that it sent many of our best and brightest into careers shuffling paper around rather than doing something worthwhile for society, like say engineering or medical research. That’s much less so today.
For instance, this anecdote, from the lede:
Like nearly 30% of Massachusetts Institute of Technology graduates in recent years, Ted Fernandez set his sights on finance. Though he majored in materials science and engineering, he was wowed by tales of excitement from friends who went to Wall Street.
But when he stopped by an investment bank’s booth at a job fair a year ago, it was eerily empty. The booth belonged to Lehman Brothers Holdings Inc., and the date was Sept. 18, three days after the 158-year-old bank filed for bankruptcy. Now Mr. Fernandez, 22 years old, is getting a master’s in engineering at M.I.T. and aiming for a career in solar-power technology.
That’s good for all of us. And it’s expected to continue, the Journal reports:
The White House Council of Economic Advisers expects finance and insurance jobs to decline to 4.1% of the work force in 2016 from 4.8% at the end of last year, a point at which many were already gone.
Check out these stats from Haaahvard:
Harvard’s 2009 graduating class shows the shift in career directions. Those entering finance and consulting tumbled to 20% of graduates this year from nearly twice that in 2008 and 47% the year before, according to a survey by the university’s newspaper, the Crimson. Fifteen percent this year planned to go into education — up by half from last year — and the proportion going into health care doubled to 12%.
And this is just beautiful to see on A1 of The Wall Street Journal:
Even a modest of shift of talent could have an effect on society. When smart people become entrepreneurs, “they improve technology in the line of business they pursue, and, as a result, productivity and income grow,” said a study by economists Kevin M. Murphy, Robert W. Vishny and Andrei Schleifer in 1990. By contrast, they said, allocation of talent to professions such as finance and law — where returns come from distribution of wealth from others rather than wealth creation — leads to lower productivity growth, fewer technological opportunities and slower economic growth.
“Some professions are socially more useful than others, even if they are not as well compensated,” the economists said.
Amen to that. Applaud the Journal for telling hard truths to its core audience.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at email@example.com. Follow him on Twitter at @ryanchittum.