Columbia B School loves Wall Street, still

R. Glenn Hubbard. (Columbia University Press)
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Avi Zenilman

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Columbia University Business School has always been close to Wall Street—a career pipeline to the companies that control finance, from Goldman Sachs on down. And nothing that has happened recently—not the meltdown of 2008, or the subsequent vilification of Wall Street in American society, or, now, the substantial overhaul of the rules by which government will regulate the financial industry in the future—has changed that.

It's not that the school didn't seek to reposition itself somewhat after the seismic events of the past two years. The president, R. Glenn Hubbard, a conservative academic economist and veteran of both Bush White Houses, rapidly ordered a curricular response to the crisis, and in December 2008, he took to the pages of Forbes to address the failures of business schools, focusing on the value of good management.

“They failed so miserably and in such a way that many business schools have been called into questions for their perceived roles in creating such leaders,” he wrote.

But the students, many of whom signed up for Columbia B school to be fast-tracked into high-paying positions on Wall Street, clearly haven't regarded the crisis as something that actually changes all that much for them. Among business school attendees, President Obama's call for the flower of America's youth to choose engineering instead of finance, and warnings by experts that the garish, pre-meltdown levels of executive compensation couldn't last, have been met with a robust skepticism, or at least an unwillingness to let any of it affect their pursuit of a Wall Street salary.



In the course of interviewing students about how (or whether) the B-school culture had actually changed, multiple students, at different levels of comfort with their career arcs, pointed me toward a widely discussed December 2008 Bloomberg column by Michael Lewis on the difference between a job and a calling. All of them disagreed with his argument that "the money that attracted you to Wall Street will probably not return for a long time."

It's as if there simply isn't time for the profound reconsideration of life choices that would be required if they actually did believe it. "We are all on a hamster wheel," said a student who asked not to be named, lest she damage her job prospects.

Maybe it shouldn't surprise anyone that the country's changed attitudes about Wall Street haven't trickled up to the Ivy League's strongest bastion of pro-Street sentiment. Maybe the culture was too entrenched and the money was too good for generalized doubts about the wisdom of giving 20-somethings control of billions of dollars to translate into structural change, and so the focus at the school is not so much on feeding students a into new field or rebalancing the economy. Maybe the school is attempting to do rightor do better, anywayin ways that don't actually alter its relationship with Wall Street, like by layering enough practical common sense into the classroom so that its graduates won't be too swamped or deluded when it's their decisions that can make or break the economy. But for all the hype about tech start-ups and green business, banking is still very much a default option for its graduates.

"Columbia Business School’s relationship with Wall Street is seamless," said Warren Devalier, a M.B.A.-application consultant and leadership coach based in Tokyo, who previously worked at Exxon and as a managing director at Chase Manhattan Investment Bank. "Its practitioner-adjunct faculty contribute in live-time the action of finance and real economy, and its students bring to the party their professional experiences in deal-making. This is the quintessential strength that marks Columbia a notch ahead of other B schools in the field."

One way of explaining the relationship between Columbia University School of Business and Wall Street is to point out that the school was founded by a banker. (His name was A. Barton Hepburn, it was 1916, and he was the president of Chase Manhattan Bank.) When Hank Paulson moved from his perch as C.E.O. of Goldman Sachs to join the Bush Administration as the Secretary of Treasury in 2006, it made sense that he gave his first speech to the faculty and students of the business school. When the financial nerve center of the world is just a subway ride away, it’s not hard for geography to become destiny, and the school has always been a center for investing and finance, just like Stanford is bound up with Silicon Valley. Its most famous graduate, Warren Buffett, schooled in the art of value-investing by the legendary professor Benjamin Graham, actually left the city, but he made his name as a manager of money, not people.

On the section of the school website advertising 12 famous alumni, along with Buffett and leveraged-buyout billionaire Henry Kravis (whose firm gained notoriety as one of the chief antagonists in the financial classic Barbarians at the Gate), the list includes the head of the Red Cross, two C.E.O.s that run public companies not involved in finance, and two Citigroup executives. When Meyer Feldberg finished his 15-year stint as dean in 2004, he joined the 52 percent of the graduating M.B.A. class in the financial services industry (or maybe it would be more accurate to say the quarter that went into management consulting), taking a job as a senior adviser for Morgan Stanley.

His replacement was the current president, Hubbard, whose 2006 work on a think-tank committee with former Goldman Sachs president John Thornton calling for a reconsideration of regulation was so well-received by the Treasury Secretary that it became known as the Paulson Committee.

Despite Hubbard’s personal beliefs, Columbia has not become the University of Chicago, an academic center of loud, aggressive, free-market purity. (His main initiatives were the creation of the Center of Social Intelligence, which emphasized people skills, and expanding the entrepreneurship programs.) The affinity between Wall Street and Columbia was driven by proximity, donations and a sense that students could get the best kind of real-world experience—complete with enormous signing bonuses—less than a half-hour away.

Then, in 2008, the financial sector nearly took down the entire American economy, and it seemed like the process that swiftly conveyed half of Columbia Business School's students directly from graduation to a six-figure jobs in Wall Street might cease to be. The meltdown was supposed to have been a game-changing event. Why go to Wall Street, where the jobs were both scarce and held in increasingly low regard, when you could start a new company, or even a charter school?