The Conversation: Big Changes on 'Wall Street'
How has Gordon Gekko's world changed since 1987? The geeks have won.
Sept. 23, 2010— -- As Oliver Stone's "Wall Street: Money Never Sleeps" hits theaters this weekend, how has the real-world culture of the Street changed since the fictional Gordon Gekko ruled supreme?
"What [Gekko] was doing in the movie is quaint by today's standards. It's a very different business than what Wall Street is now," said Adam Davidson of NPR's "Planet Money."
Davidson spoke with ABC's Jeremy Hubbard in today's Conversation.
When the original "Wall Street" film opened in 1987, Wall Street culture was dominated by hard-charging tough guys who brokered big deals with strong personalities. Now, 23 years later, the skills needed to succeed are entirely different.
"It's a much geekier culture now. Being smart, being able to analyze numbers and charts very quickly are really the skills that will get you ahead today," Davidson said.
Gordon Gekko's famous Motorola phone in the original movie looks like a brick by today's standards, but phones aren't the only things that have shrunk in the ensuing decades, Davidson says. Traders themselves don't have to have the same physical characteristics they needed on the rough and tumble market floor in years past.
"Being big enough to elbow guys out of the way [on the trading floor] was a competitive advantage," Davidson said. "Wall Street was still trading things in large rooms where loud guys, mostly guys, would scream things out at someone."
Today, almost no trading activity is done in person but is instead conducted over complex computer-based markets.
Because of that shift, the very nature of deal-making has changed. Instead of buying out companies Gekko style, Wall Street makes far larger profit by milking small percentages from complex financial instruments.
"If someone came to a large bank today or financial services firm and said, 'I want to do exactly what [Gekko] did, I want to do aggressive, leveraged buyouts of industrial firms and get cost savings by cutting crooked deals with union leaders,' they'd be like, 'What are you talking about?'" Davidson said with a laugh.
But one thing hasn't changed -- Wall Streeters are still making a ton of money. Adjusted for inflation, Davidson says, the average employee is making even more than they were in 1987.
Good or bad, greed is still a reality. We hope you'll watch today's Conversation.
