Thursday’s Headlines: Harvard’s Liberal-Arts Failure is Wall Street’s Gain
Despite calls from Ivy League presidents, newspaper columnists and student activists, graduates at top-tier universities continue to flock to investment banking jobs upon graduation. A Businessweek story suggests that liberal arts graduates have few options, as their degrees arm them with few marketable skills: “Wall Street—like a few other professions, including law, management consulting and Teach for America—is taking advantage of the weakness of liberal arts education.” The story explains:
The economic determinists say this is no mystery. Finance, law and consulting pay high salaries—much higher than most other options on the table. It would be strange, given the financial incentives, if these graduates weren’t going into such high-paying fields.
The social determinists say these students are simply following their tribe. Finance, law and consulting employ smart, high-status individuals in desirable urban locales. Because Ivy League graduates are smart, high-status individuals who generally want to work and live among people like themselves, it makes sense that they take the road more traveled.
In 2011, 17 percent of Harvard graduates chose finance jobs, making it the most popular career move at the school, while 14 percent of Yale grads and 40 percent of Princeton graduates made the same move. These figures are down slightly from the year before.
Harvard offers students a $100,000 prize to develop entrepreneurial solutions to social problems. [Bloomberg]
Private equity disbursements in Canada rose 69 percent in 2011. [Reuters]
France’s Societe Generale’s Q4 profit fell 89 percent. [NY Times]
Subprime seems to be making a comeback as prices of distressed bonds backed by subprime mortgages have seen double-digit percentage gains this year. [WSJ]
Swiss insurer Zurich said Q4 profits declined 46 percent on losses from Thai floods. [Bloomberg]
The newly affluent are undermining Chinese’s bank stability. [Businessweek]