5 Reasons Why People Hate Wall Street
Wall Street is a street in lower Manhattan in New York City.
It is the home of the New York Stock Exchange and is considered the world’s financial capital. In addition, the term “Wall Street” encompasses anything finance-related and is not geographically limiting.
Anyone working in financial companies, investment banks, hedge funds, private equity funds, managing or selling financial products is considered to be working on “Wall Street.”
Key Points
- The average American considers the financial industry corrupt (Mainstreet).
- The busy people who work on Wall Street are also perceived as greedy.
- The industry was primarily responsible for the 2008 financial crisis.
- The industry facilitated the housing market bubble and subsequent crash.
- The industry is responsible for the student loan crisis.
Why do people hate Wall Street?
There is a general perception that people on Wall Street earn more money when compared to non-financial jobs.
According to Business Insider, the average bonus for a Goldman Sachs employee was $95,000 in 2020. The average person salary was $428,000 compared to the US average of $56,516.
These differences are one of the contributing factors why Wall Street types are generally not liked.
You can argue that the higher education needed for a financial job combined with above-average working hours and related stresses is the appropriate remuneration. Also, it is not easy to get a job on Wall Street.
The competition is intense, and the industry is selective.
Why is Wall Street so infamous?
Wall Street has become synonymous with greed and corruption due to some financial institutions’ unethical practices and the financial industry’s role in causing the 2008 financial crisis.
Investment bankers in high finance (big finance) were perceived to have been borrowing money (other people’s money) to inflate a national housing bubble.
In 2008, the federal government bailed out some of the largest banks on Wall Street, including Goldman Sachs, Merrill Lynch, and Morgan Stanley. This led to public outrage, as many believed that the government was using taxpayer money to bail out wealthy bankers who had caused the financial crisis.
The bailouts were profoundly unpopular and further fuelled the public’s perception of Wall Street as a symbol of greed and corruption.
There have been some reforms implemented since the financial crisis, but many people believe that not nearly enough has been done to change the culture on Wall Street. Also, no bankers went to jail due to the financial crisis.
This again led to public outcry, as many believed the bankers should have been held accountable for their actions.
What actually happens on Wall Street?
The financial industry and institutions are responsible for various activities, including investment banking, trading, asset management, and research.
Investment banking refers to the activities of firms that help companies raise capital by issuing and selling securities. Trading refers to buying and selling securities, commodities, and other financial instruments.
Asset management refers to the professional management of investment portfolios. Research refers to the analysis of companies, industries, and economies.
There is a broad mix of people working on Wallstreet. Most have higher education and go through rigorous interviews just to get a job.
While the average salary on Wallstreet seems outrageously high, it should be remembered that many people in supporting roles (Personal assistants, IT, etc.) are nowhere near as highly paid as the average salary would imply.
In addition, the financial industry indirectly supports a variety of other businesses like restaurants, cleaning, and hotels, to name just a few.
What does Wall Street symbolize?
Wall Street symbolizes greed and corruption due to some financial institutions’ unethical practices and the financial industry’s role in causing the 2008 financial crisis.
In addition, Wall Street symbolizes the stronghold of capitalism, famously symbolized by the bronze bull on Wall Street itself. A bull symbolizes the typical nature of being optimistic about asset prices and the economy in general. A bear is the opposite of this definition.
Is it worth working on Wall Street?
Some people believe working on Wall Street is a great way to earn money.
The salaries and bonuses tend to be very high, and there is much opportunity for upward mobility. However, some people believe that the culture of greed and corruption is not worth the financial rewards and worry about society at large.
They think that the stress and long hours are not worth the money and that the industry is a danger to the global financial system.
The average career length on Wall Street is ten years — because the industry is very demanding and stressful, and many burn out after a few years.
What about all the destruction that the financial crisis caused?
The financial crisis (bubble bursting) was caused by various factors, including lax regulation, low-interest rates, risky lending practices, the much-maligned investment banker, and financial engineering.
Too much risk-taking within banks is also viewed as one of the reasons which caused the financial crisis.
The scale of the crisis ultimately led the government and the central bank to bail out many banks. A decade later is still very unpopular with the average American (Mainstreet) outside the financial services industry.
What was the Wall Street crash, and why was it so important?
The Wall Street crash was a stock market crash that occurred on October 29, 1929.
It was the most devastating stock market crash in United States history, leading to the Great Depression. As Wall Street is closely linked to the rest of the economy, the stock market crash ultimately led to high unemployment and a faltering economy.
According to the History Channel, approximately 15 million people lost their jobs during the Great Depression. The Depression led to widespread unemployment, poverty, and social upheaval.
Is Wall Street the heart of America?
Some people believe that Wall Street is the heart of America because it is the center of the financial industry. Without finance, the argument goes, the fast growth, expansion, and many new economic and scientific improvements would not have been possible.\
It is the engine that keeps the world going, funding ideas, helping allocate capital with savings, and improving everyone’s livelihood on balance.
Is Wall Street crooked?
Some people believe that Wall Street is crooked because of the unethical practices of some financial institutions. For example, some bankers engage in insider trading when they use information that is not publicly available to make trades.
Insider trading is illegal, but it is difficult to prosecute. Additionally, some banks have been accused of fraud and fined for their role in the financial crisis. Others believe that Wall Street is not crooked and that the industry is essential to the economy. They think that the financial industry provides vital services and that the industry is regulated to prevent fraudulent activities.
Final thoughts
The financial industry is seen as a symbol of greed and corruption. This is due to some financial institutions’ unethical practices and the financial industry’s role in causing the 2008 financial crisis.
In addition, the people who work on Wall Street are often seen as greedy. This is because they are paid high salaries and bonuses and are often seen as responsible for the financial crisis. Because of the banks’ risks, many view the financial industry as dangerous to the global financial system.
These risks can lead to financial crises, like the one that occurred in 2008. As the financial crisis has shown, there was little impact on banks and their management as they were bailed out, and nobody faced any persecution for their role in the crisis, one of the main reasons Wallstreet still carries a negative image to this day.
