Part of the problem, the Goldman vet explains, is that there’s a vast divide between where the public is and where the bankers are. The public registers how fundamentally the system has changed; the bankers are far from getting to that point. “When I talked to my friends in November and December at firms like Goldman, they would tell me, ‘If the government doesn’t bail us out, we’re going down.’ They really thought they were going to zero, and without exception, they all forget that now,” he says. “They forget that their company’s stock was going to zero. It’s a state of delusion; they don’t remember those days. The flip side of that is, every guy except the Goldman guy remembers that Goldman was bailed out.”
I asked him what will happen if Congress succeeds in regulating compensation. “These guys will not work on Wall Street,” he says flatly. “People go to Wall Street out of greed. When I was interviewing for jobs, frequently some form of the question came up: How much do you want to make money? If my answer was something like—and it wasn’t—but if my answer was, ‘I’m here for intellectual betterment,’ their response might have been, ‘University is a great place for you.’ They want people who think ‘I’m greedy, I want to be a billionaire.’ That was viewed as a really good thing.”
The greed won’t disappear, of course. “The smart people are going to make money in good times and bad times,” one investment adviser tells me. “They’ll figure out how to game the system,” says the former Bear Stearns managing director. “You may get a new set of players. This may be a movement back to partnerships and boutique firms. This could be their moment.”
There’s a vast woundedness now on Wall Street, which is hard to contemplate after the period of triumphalism so recently ended. In this conversation about money, there’s a lot to work through. Just months ago, the masses kept what anger they had to themselves, and the bankers were close-lipped about what they thought they were owed by society. There wasn’t much of a dialogue about the haves and have-nots and who was entitled to what. For the privileged, it was a lot more comfortable when things remained unspoken. Almost more than the loss of money, they are concerned with the loss of status and pride.
“I was at a cocktail party on Friday. Some guy said to me, ‘You work on Wall Street? How’s that working out for you?’ ” says the JPMorgan banker who was forced out in a recent round of layoffs. “There was a little bit of nastiness there.”
It was a feeling I heard a lot as I spoke with Wall Street bankers, analysts, and traders. They had believed Wall Street was where the winners of American capitalism went. Now they were feeling shamed for their work. “You wear a nice suit on the subway, and people look at you,” the former JPMorgan VP continues. “I know it’s not wrong to be an investment banker in New York these days, but I get that feeling. Now anyone who made money on Wall Street has done the American people wrong?”
Could this really be the new pecking order? A future where banking is boring, salaries are capped, taxes are high, and—worst of all—you get to carry the blame for the Great Recession of ’09? It’s almost too much to bear.
“I always thought what I did was somewhat honorable,” the mortgage-investment banker recently told me. He had been trading Fannie Mae and Freddie Mac securities he thought were triple-A- rated investments until his fund blew up and put him out of work. “Suddenly, the simple fact I work on Wall Street means that I’m a bad person? You know, I lost my job. I’m more of a victim.”