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Thursday, February 5, 2009

Finance in the News for February 5, 2009

So while I was worrying about the ethics of my free lunch courtesy of textbook publishers, the New York Times was getting ready to post its story on the new paradigm shift in executive perks.
Read the article here.
Here is the juicy first paragraph:
Country club dues, gym memberships and personal assistants. Home security systems, chauffeur service and parking. And, of course, all those private jets to ensure the comfort and safety of the boss.

ERGGGG. I need a personal assistant. And I don’t even use the gym at the school where I work, because faculty and staff must pay a hefty fee, almost equal to the cost of local gyms.

And another juicy tidbit here.

[Note: when I click on the links they don't work; so you may have to copy/paste. Help!
Edit: Links should be working now.]

There may well be a slippage in the appeal of Wall Street careers as the pay differential with other professions declines. Over the years, for example, there was a big increase in the percentage of graduates of Harvard who went into finance. Two Harvard economists, Lawrence F. Katz and Claudia Goldin, studied the career choices of undergraduates since the 1960s, finding that the share entering banking and finance rose from less than 4 percent to 23 percent or so in recent years.

Surveying graduates from the 1960s through the 1990s, they found that Harvard graduates who chose careers in finance made three times the pay of their peers, adjusting for grade-point averages and test scores.

“We see a huge shift into finance over the years, and Harvard students clearly respond to economic incentives,” Mr. Katz said. “I certainly don’t think it was a pure love of finance that drove people into the field.”

When I reported the gist of this to Mr. Dr. Frugal Scholar, who was sitting in a comfy chair reading Thoreau for a course, he said, “Oh, I guess maybe people go to Harvard out of career ambition rather than out of intellectual interests.”

Do you agree with that?

And what do you think, dear readers, about all the finance in the news? Should we just tune out? Or go “Ergghhh.”

And, really, we're so lucky to be able to sit in comfy chairs and read wonderful books as part of our job.


Anonymous said...

I was never motivated by the big bucks, but I must confess that there HAVE been moments in academic, when I compared my income with my siblings, that I wondered about my choice(s). Literature has been some consolation...and for the first time in years, my American Literature survey is FULL, so possibly the tide is beginning to turn.

Duchesse said...

We should read, read, examine what's in those mutual funds some of us hold, ask questions, write letters and go to annual shareholder's meetings and ask more questions.

At a lecture I attended, the speaker said that in Japan the CEO legally cannot receive more in compensation than 12 times the lowest-paid worker.

Frugal Scholar said...

@Terri--I realized that my attraction to teaching is temperamental as well as intellectual. I can't sit still, need to walk around a lot, hate when people tell me what to do, like to work when I want to . . . I have the only job where that's possible.

@Duchesse--Hey! I like the Japanese idea. The sense of entitlement here is a real shocker. There was a New Orleans Ponzi scheme uncovered a few days ago--all the woman's investors, like Madoff's, received statements. that's what is scary to me.

The Fabric Bolt said...

This is a tricky one. First, if the politicians would actually read and listen to the financial news, maybe they would make some intelligent decisions, however I highly doubt that will happen. I sit and work at my computer with the morning foxnews on every morning, so I hear it all.

The other thing is, do we really want the government to dictate what our potential is? I do not like anything which is represented by Obama's reign, particularly the leaning toward the government being in charge of banks, finances and now various companies.

Sure, call me pessimistic, however I also view myself as realistic. I was a college student in the 1980's and I saw many people get good jobs when all I could get was a $6.00/hour gig, which led me to teaching. Even that has been destroyed by the government. I will never get another teaching job as long as the economy is the way it is....according to the payscales I am too expensive.

Oh well, I babble, good post and I think that upright citizen would pay attention to the news every days (at least the right-leaning individual would).

Frugal Scholar said...

@Fabric--I do hope you get to teach again, if that is what you want to do! Thanks for your thoughtful comment, as always.