Wall Street snapping up college minds in US "brain drain"
By Antje Passenheim Nov 8, 2011, 6:31 GMT
Cambridge, Massachusetts - The JFK Jr Forum is abuzz with the top thinkers of the future.
Students converge on Harvard University's Kennedy School of Government to discuss current events in multiple languages, to work on their laptops or just to meet for a bite to eat.
The glass-clad, tower-like meeting point in the heart of the small town of Cambridge, Massachusetts, forms part of Harvard, the oldest and richest university in the United States. Those who make it here have made it.
They will be shaped to address the 'immense challenges' of our times, political science professor Jack Donahue says: 'Our job is extremely urgent, to develop ideas, to address the changes and to reconcile the conflicts - to develop a cadre of students who are equipped to address these conflicts.'
However, while America's elite universities are investing in the policymakers and entrepreneurs of tomorrow, the financial market is snapping up the best minds they produce, with increasing numbers of graduates thinking Wall Street instead of Washington.
A major factor is the exploding price of higher education, leaving graduates desperate to earn as much money as they can as quickly as they can. The situation leaves many experts warning of a 'brain drain' in the US.
'Long term, I want to work in foreign policy for the US government,' says California native Graham Walters, a Kennedy School of Government student.
The goal of the Kennedy school is to spawn young talent for the public-service sector - an aim that is all the more important in times of a global financial crisis.
'The worst of the times are the best of all times. The challenges are immense, but it does mean that our chances to contribute are higher than in peaceful times,' Donahue says.
Harvard role models such as the late US president John F Kennedy and current President Barack Obama have shown how it can be done.
Fewer and fewer elite students, however, can afford their dream. University fees, books, food and housing at Harvard cost about 60,000 dollars per year. Despite numerous scholarships, it is not uncommon for graduates to finish college with debts of 200,000 dollars.
'Imagine, for the first time in history student loan debts are higher than credit card debts in this country. They will top 1 trillion dollars this year,' essayist Eliot Weinberger says. 'American university education is so expensive that these kids are all graduating with hundreds of thousands of dollars in debt - and they feel like they have to make that money.'
Up until the 2008 financial crisis, 'something like 80 per cent of Harvard graduates went into financial services,' he says. 'So all of these bright people, who used to become doctors or writers or anything, went into financial services.'
Even after Wall Street was humbled, corporate recruiters are still going after the best. Harvard engineering student Andreas had just started his second year of studies when the investment bank Goldman Sachs surprised him and some fellow students with an invitation to New York.
'They told us: We would like to get to know you,' Andreas says. 'They paid the flights, food and accommodation in New York for everyone.'
There were meetings and speeches in which the Wall Street bankers sent a clear message.
'They wanted the most brilliant minds from the university - regardless of whether they were musicians, literati, engineers or business economists. They just wanted all of those who could think the best,' Andreas says.
Those are exactly the people who will be in the private sector when the public needs them to be forging political solutions or devising innovations, says political scientist Jacob Hacker, director of Yale University's Institute for Social and Policy Studies.
'I worry about the brain drain that is occurring at the top of our institutions as really creative, smart people are being pulled into the financial world, because there are so many rewards there,' he says.
'I would like people to be making things and innovative new products rather than making things up like ... credit default swaps and new and fancy derivatives that largely allow investors to make a lot of money in short-term activity, rather than creating great value for our economy overall.'
Many top universities are trying to fight this trend. They offer tuition reductions when students commit to entering the public-service sector for a certain period after graduation.
Programmes are available to make it easier for students to move from the public service into the private sector.
'The theory there,' Donahue says, 'is that if our students are confident that they will be able to go to (consulting firm) McKinzie when their children get expensive, they would be able to feel safe going to the Government Accountability Office or to run for Congress when they first come out of Harvard.'