Living and working in the New York region's financial-media complex in 2009 means daily, compulsory attendance at a gathering of the glum. The economy may be shrinking at a 6 percent annual rate, but finance and media have contracted by about 30 percent. For the past year, the daily routine has meant sitting in a depopulated office (assuming you still have a job); following the latest grim news of magazine closings, buyouts, and layoffs; and commiserating with friends, family, and neighbors. And, of course, the angst extends far beyond directly affected companies. Finance dominates the area's economy to such a degree that everybody—lawyers, accountants, real estate brokers, waiters, retailers, and cab drivers—have all been affected.
Of course, one can try to get away to sunnier, more mellow climes. But the usual havens aren't offering much succor. Florida—like New York, except the catastrophe is real estate. Mexico? Um, not now. But last month, I found an unexpected haven: the Midwest. Each semester, the University of Wisconsin School of Business brings in a journalist-in-residence for a week, usually from New York. The theory: Students and professors benefit from the perspective of someone who is chronicling the workings of the world they are studying remotely.
But the benefit was greater for me than for the students. The four days in Madison functioned as a kind of detox. I left thinking the university should turn the Fluno Center for Executive Education into a sort of clinic. It could do for stressed-out financial and media types what Minneapolis' Hazelden does for the drugged-out: offer a safe, friendly (if chilly) place to escape the toxic influence of New York.
Madison struck me as blessedly detached from the ailing financial sector. Of course, Wisconsin is suffering along with the rest of the nation. Its unemployment rate in March was 8.5 percent. But Madison, with its three-legged economic stool of education, state government, and health care, is faring somewhat better. More significantly, the business school isn't having a dark night of the soul, as so many of its Eastern counterparts are.
Columbia Business School and the University of Pennsylvania's Wharton are basically satellites of Wall Street. Half the students have memorized the partnership roster at the Blackstone Group the way I once knew the lineup of 1970s-era Cincinnati Reds. An MBA from Columbia or Harvard or Wharton is basically a leveraged bet on a student's ability to make it in finance. You pay a ton of money, most of it borrowed, so that you can land a really high-paying job with one of the big investment banks or private-equity firms that visit campus. By their second year, most MBA students at Wharton are already scoping out the Hamptons for the second homes they know they'll be able to buy in a few years. But with the gilded pipeline to Wall Street temporarily shut down, the rising MBAs are suffering the kind of existential crisis more generally associated with comparative literature majors. The New York Times last month ran an article about students at Wharton who were suddenly at sea. Some were considering working for nonprofits!
But in Madison, the vibe is much different. The television in the business school's lobby was set to Headline News, not CNBC. The only mention of toxic assets was an ironic one—on a T-shirt. When I walked into undergraduate finance classes and asked, "How many want to go get a kick-ass job on Wall Street and make a ton of money?" not a single hand was raised. The students are mostly kids from Wisconsin studying the basics—management, accounting, corporate finance. Some plan to stay in-state and find a job with a small business or with one of the big local firms: Kohler, S.C. Johnson, Kohl's, Harley-Davidson. Many head to Minneapolis or Chicago for jobs with consumer products companies. The University of Wisconsin boasts of having as many alumni who are CEOs of big companies as Harvard does. Yes, Chicago has its big options exchanges. But the Wisconsin students don't seem interesting in moving money around. That happens in the East. ("Instead of being the warm center of the world, the Middle West now seemed like the ragged edge of the universe," as Midwest native Nick Carraway put it in The Great Gatsby, "so I decided to go East and learn the bond business.")
The finance graduate students I had lunch with knew about CDOs and hedge funds but mostly as academic subjects. When I met with a small group of undergrads in an entrepreneurship course, they presented interesting ideas about online businesses, not financial engineering. Private-equity magnate Henry Kravis, CNBC anchor Erin Burnett, and JPMorgan Chase CEO Jamie Dimon could probably sit down at State Street Brats and chow down unnoticed and unbothered.
While the faltering economy has dampened job prospects, the meltdown on Wall Street hasn't caused these students—or their faculty—to reconsider the utility of studying accounting or corporate finance. It could be because they haven't been asked to risk as much personally as MBA students back East. At one forum, a student groused about rising tuition, much to the disbelief of the business school Dean Mike Knetter, who knows from expensive education. (He was trained as an economist at Stanford and taught at Dartmouth before returning to Wisconsin.) Knetter, a Wisconsin native, pointed out that even if it was rising, tuition here is still a huge bargain. In-state MBA students pay $11,500 per year, plus living expenses, while undergraduate tuition is about $8,000 per year. (At Wharton, by contrast, tuition for MBAs is $50,000, and total costs are $80,000.)
Compared with the costs of high-end executive detox retreats, like the one run by former Time Warner CEO Jerry Levin, Wisconsin is a bargain.