All the Young Bankers

Why does Germany have an engineering shortage while U.S. engineers are forced into "sales"? If our engineers didn't go into sales, they'd be unemployed. It also puzzles me how, in 2008, German industry, with an ever higher euro, keeps outcompeting the U.S. in sales abroad. The Germans are actually looking for more than half a million skilled workers, including 100,000 engineers. So at a Chicago Chinatown restaurant on a Wednesday night, I asked my friend D., who's in industrial sales, "Why, with the euro so high, do the Germans put so much more effort into manufacturing?"

"Aw!" he said. "The Germans aren't doing much. The only reason they're ahead of us is that we're just doing nothing. I mean, we aren't developing any new products--while the Germans, occasionally they try something. It's all the bean counters. The financial people." The guys who run U.S. business, D. explained, aren't interested in engineering, in developing new products. All we develop are new and more complex financial instruments.

By coincidence, I went up to Boston that week and saw friends from law school. Their kids now graduate from places like Harvard and Yale. I asked their kids what they planned to do.

"I'm going into finance."

"I'm going into finance."

"I'm going into finance."

Later K., at her 60th birthday party, told me one daughter was in a prestigious law school, but guess what her second daughter was doing.

"She's going into finance."

"How did you know?"

They're at Morgan Stanley. They're at Goldman Sachs. After Teach for America, they go to work for Chase.

You may have noticed that plenty of these young hedge-fund managers are kicking in to the party of the left. In fact, being from Harvard, Yale, Brown, and Princeton, they really are on the left, such as it is.

But do they all have to work at Morgan Stanley?

When I came back from Boston last month, I groaned about this to a lawyer friend, whose daughter, he said, now does "wealth management" for a bank. "You only have to have $150 million," he added, before you can be one of her clients.

I've read that at Yale, 40 percent of graduating seniors go to grad school, 30 percent go off to foundations, and 30 percent go off to business, primarily investment banking--as an analyst, say, at Goldman Sachs. So, of those who blow off law or med school, half the kids go off to manage wealth while the other half end up begging them to turn it over to their foundations. Either way, it's a career in "wealth management."

It's these under-30 wonder kids that Democratic Party leaders are already having to hit up for money. Of course, there should be campaign-finance reform, but the problem isn't solved simply by saying, "I won't take their money." The bigger problem is that these young plutocrat-to-be liberals from Teach for America already have so much clout in shaping the political message of the left.

One day, all we may care about is who heads the Fed. Indeed, under the very nice Ben Bernanke, the Fed has seized broad new authority for regulating the whole economy, to make sure that no one in the financial sector ever gets to fail. That's the new social contract: In Tribeca, at least, no kid will ever lose his (or her) first (or second) condo.

Of course, I like the young banker kids more than the old right-wing ones. But the kids who manage people's wealth aren't going to lead us into a new Age of Jackson or a second coming of the New Deal. Whose Democratic Party is it, anyway? Should the party belong to a Yalie who was in Teach for America before joining Morgan Stanley, or to a kid with a GED working in a mall?

Now, the global banks headed by our best and brightest are moving in to do the same bean-counting on the Germans, too. But thanks to their labor laws, the Germans still have a few built-in checks on the growing power of these banks. (See Robert Kuttner's "Continental Drift" on page 23.) German corporations are engineered internally to give a "voice" to workers who have skills. Their corporate model may be doomed, but at least that's not yet clear.

Indeed, in the past month, Horst Kohler, the president of Germany, called out the global banking system as a "monster." Fritz M√ľntefering, the former vice chancellor, called the bankers "locusts." Over here, this faint echo from our own Age of Jackson now sounds so uncouth to our ears.

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